The CRTC wants public comments on what kind of wholesale pricing plans would be most beneficial for consumers. ((Canadian Press))

Canada's internet regulator has launched a formal online public consultation on how companies like Bell and Rogers should charge independent ISPs for network access.

The consultation, announced Thursday, is part of a review the Canadian Radio-Television and Telecommunications Commission is holding of previous decisions it made that allowed Bell to impose specific usage-based caps on its wholesale customers and charge them extra per gigabyte fees if they exceed those caps.

Small ISPs rent network access from larger ISPs to create internet packages to sell to home and business internet users.

The CRTC sets certain terms and conditions for the way large cable and telephone companies offer network access to the small ISPs who are their wholesale internet customers in an effort to boost competition in the Canadian retail internet market.

Usage-based billing

Large ISPs charge their customers based on usage-based caps that specify the maximum  bandwidth they can use for internet activities like streaming video, talking on Skype or uploading and downloading data. Customers who exceed the cap pay "overage" charges of up to $2.50 per gigabyte unless they bought insurance.

Large telecommunications and cable companies have argued that usage-based billing is necessary to reduce network congestion and discourage heavy internet users from using an unfair amount of bandwidth. They say their wholesale customers must be charged usage-based fees similar to the ones their retail customers are charged.

However, consumer advocates say imposing the caps and extra fees on small ISPs would lead to higher internet prices, discourage the use of new services such as Netflix and make it impossible for smaller internet providers to offer different packages than large ISPs, utlimately reducing competition and consumer choice.

Netflix allows people to stream unlimited high-definition video over the internet to their TVs for a monthly fee and uses a large amount of bandwidth.

In light of that goal, the commission is seeking comments answering the questions:

  • How do you think large cable and telephone companies should charge independent ISPs for the use of their networks?
  • What kind of wholesale pricing plans encourage innovative products and services that benefit consumers?
  • What kind of wholesale pricing plans encourage network investment by large companies and independent ISPs?
  • What kind of wholesale pricing plans would be most beneficial for consumers?

Comments are being accepted at a special online consultation website until June 24.

Earlier in the review, the CRTC had sought comments by mail, fax and online as part of its regular consultation process, asking more specific questions about usage-based billing and whether an online public consultation should be part of the proceedings. The deadline for those comments was April 29.

The review also includes a public hearing in Gatineau, Que., on July 11.

The CRTC announced the review in February following a huge public outcry over its usage-based billing decisions.

The consumer internet lobby group Open Media had collected hundreds of thousands of names on a petition against the decisions and the NDP, Liberals and Conservatives had criticized the rulings.

Industry Minister Tony Clement said that he expected the CRTC to reverse the decisions.