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Industry Minister Tony Clement says the government will overturn a CRTC decision on internet usage-based billing unless the telecommunications agency watchdog reverses course. ((Adrian Wyld/Canadian Press))

The CRTC must reverse its decision that ends unlimited internet access plans offered by smaller internet providers or the federal government will intervene, Industry Minister Tony Clement says.

Clement told reporters Thursday that he and Prime Minister Stephen Harper sent a clear signal Wednesday night "that we do expect the CRTC to reverse its decision and to basically go back to the drawing board on this issue, and if they do not do this, we wanted to make it clear cabinet would take its responsiblites to do the same."

Clement said he heard from Canadians on the issue.

"It's a huge issue for a country that wants to move forward on the internet for jobs, for creativity, for innovation," he said. "[We] felt the CRTC ruling would have a huge impact on consumers and would hurt small businesses, would hurt innovators and creators."

Clement said that while he understands bandwidth capacity is a problem, usage-based billing "is the wrong way to do it — to force a business model on independent service providers if they do not want to use that business model."

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Clement also defended the government's intervention on a decision by the CRTC.

"There is always a healthy balance and tension between a regulator that is appointed and a government that is elected, and I'm sure 90 times out of a 100 the regulator may get it right. But there are times when we, acting on behalf of the government, have to weigh in. That's our responsibility and that's our role."

And as he has done several times in the last 24 hours, Clement took to Twitter to explain the decision Thursday afternoon: "[O]f course there are challenges ahead to give consumers more Internet access at reasonable cost. But CRTC decision wasn't the answer," he tweeted.

Revealed intentions Wednesday

Clement made his decision public Wednesday evening on the social media tool.

Asked by the CBC's Rosemary Barton through Twitter whether it's true that Clement would overturn that decision if the Canadian Radio-television and Telecommunications Commission does not back down, the industry minister replied: "True. CRTC must go back to drawing board."

Clement's comments came as CRTC chairman Konrad von Finckenstein is set to testify  before a House of Commons committee on Thursday.

Many small internet companies rent network access from Bell and then resell it to consumers or businesses at a discount. These small companies had been able to offer their customers unlimited internet access at a set rate.

But the CRTC recently ruled in favour of Bell, which wanted to put usage caps on the companies that rent its internet access. None of the big internet service providers such as Bell offer unlimited plans.

Bell had argued that extending usage-based billing to wholesale customers was necessary to discourage excessive internet use that caused congestion on its networks.

The ruling means these smaller internet companies can no longer offer unlimited usage plans. Their customers will now have to pay based on how much data they upload to and download from the internet.

The CRTC also said Bell would have to provide the smaller companies a 15 per cent discount on its rates.

According to Michael Geist, Canada research chair of internet and e-commerce law at the University of Ottawa, four per cent of Canadians use a smaller internet provider.

The larger providers have had user-based billing in place since 2006. User-based billing is not regulated by the CRTC, which only regulates the tariffs at which smaller providers buy their internet access from Bell.

But consumer and internet advocates have been lobbying hard against the decision, which they said would lead to higher prices and snuff out competition among internet service providers (ISPs.)

They also argued it would prevent consumers from taking advantage of new services such as Netflix, which allows users to stream high-definition movies and TV episodes over the internet to their television for a monthly flat rate.

OpenMedia.ca, a non-partisan group that drafted an online petition against usage-based billing, welcomed Clement's comments.

"Considering the lack of details, and a huge spectrum of possible actions before the government, OpenMedia.ca vows to increase the pressure until we see an end to unreasonable internet usage fees, and big telecom is held accountable to the public," the organization said in a press release Thursday.

More than 357,000 people had signed the petition as of early Thursday.

4 p.m.: Live updates from committee

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