Bell moved in April to eliminate mandated access to its network by small internet service providers. (Paul Chiasson/Canadian Press)

Bell Canada Inc. is moving to impose download limits on customers of independent internet providers, an act the smaller firms say is designed to eliminate broadband competition and prevent the introduction of new television services.

The Montreal-based company, which cut its own Sympatico customers off from unlimited downloading last year, has proposed extending that plan to firms renting portions of its network in order to provide their own services. That would include a number of smaller wholesale ISP customers such as Chatham, Ont.-based TekSavvy Solutions Inc., Cobourg, Ont.-based Eagle.ca, Mississauga-based Acanac Inc. and Ottawa-based National Capital Freenet.

The limits would range from two gigabytes per month for customers with slower connections of 512 kilobits per second up to 60 GB for those with the faster speeds of five megabits per second, according to Acanac president Paul Louro. Customers who exceed those limits would incur extra charges, much like cellphone subscribers do when they surpass their monthly minutes.

Rocky Gaudreault, president of TekSavvy, said Bell's proposal was unacceptable because it would eliminate the last way in which the smaller wholesale ISPs can differentiate their services.

"This is very much making us little more than a reseller," he said. "We would become mini-Sympaticos."

Louro told CBCNews.ca the repercussions would be even greater because some of the smaller ISPs are getting big enough to start installing their own equipment in Bell's telecommunications offices, which will allow them to offer not only super-fast broadband but also internet-based television. Such a service, known as Internet Protocol Television or IPTV, would require much more capacity than the proposed 60 GB limit and would compete directly with Bell's own ExpressVu satellite television offering.

"It seems like a way to limit our growth so this won't happen," he said. "No ISP at this point can offer IPTV — you're looking at hundreds of gigs, not 60."

Bell officials could not be reached for comment.

The company has taken several steps toward eliminating the smaller ISPs' ability to compete over the past few months, the firms say. Bell began slowing the speeds of its own Sympatico subscribers using peer-to-peer applications such as BitTorrent last November, then extended the practice to its wholesale customers in March, prompting a dispute that is before the Canadian Radio-television and Telecommunications Commission.

The smaller companies, through the Canadian Association of Internet Providers, say Bell is breaking telecommunications law through its speed "throttling" and have asked the CRTC to force an end to the practice. CAIP has also said Bell is forcing the throttling onto its members so that they aren't able to offer a competitive advantage, or faster speeds, than Sympatico.

Bell says its hand was forced in introducing the throttling and download limits because of growing internet usage and abuse of peer-to-peer networks by a small percentage of customers.

The CRTC is expected to rule on the dispute by October.

Rules of access no longer needed: Bell

Bell also has an appeal before the Federal Court of Canada to scrap CRTC-mandated access of wholesale customers such as TekSavvy, Eagle.ca and Acanac to its network. Bell says the high-speed internet market is highly competitive and regulated rules of access are therefore no longer necessary.

Smaller ISPs were given access to the networks of phone companies in the first place because the incumbents held a natural infrastructure monopoly, which was initially built through taxpayer funds when they were government-owned.

Louro, posting on DSLreports.com, said the only good news for customers is that the download limits — if they are imposed in January, as proposed by Bell — will not affect current clients. So long as customers do not switch ISPs, they will continue to have unlimited downloading.

He also said Acanac is exploring the possibility of allying with other small ISPs to install its own equipment in Bell's communications offices, which would allow them to bypass Bell's forced download limits.

"We prefer not to do this alone," Louro wrote.

Installing equipment in Bell's buildings is a risky proposition, Gaudreault said, until the outcome of the company's court appeal is known.

"The question then becomes, what next?" he said.