Canadians Face Data 'Usage-Based Billing'

TORONTO -- Looking to thwart foreign broadband competition, Canada’s broadcast regulator has OK'd local cable and phone giants rolling out broadband usage meters.

The CRTC approved an application by Bell Canada to introduce a so-called “usage-based billing” system for wholesale Internet service providers (ISPs) that purchase services from the phone giant.

The move was immediately panned by ISPs for reducing competition in the Canadian broadband delivery market.

“Requiring competitive Internet service providers to mirror Bell’s retail usage based billing plans and rates will remove competitive choice from the market, to the detriment of consumers” Matt Stein, a spokesman for the Canadian Network Operators Consortium, representing ISPs, said.

But getting Canadians to pay by the byte to view video online, and incur excessive usage charges, comes as they increasingly soak up bandwith to download movies and TV shows from iTunes, the newly-launched Netflix Canada service and other foreign video portals.

Bell Canada, Rogers Communications and other traditional Canuck players have long maintained hard caps on data usage by Internet access customers.

Those bandwith caps were reduced in September just as Netflix entered the Canadian market with a $7.99 all-you-can-watch online plan as part of its first-ever international expansion.

Foreign competition for domestic broadcast players is only expected to grow as Apple TV, Boxee, Google TV and other emerging digital players put Canada in their cross-hairs.

Netflix Canada codes its content offering to guard against subscribers bumping up against bandwith caps with their movie and TV show consumption.

But with Canadians increasingly foregoing TV schedules and channels to view video on their computers, smartphone and tablets, the CRTC has bowed to demands for excessive usage charges to clamp down on bandwith hogs.