Last week in the Financial Post, Bell’s Mirko Bibic suggested that a number of myths in the usage-based billing (UBB) debate need busting. We agree, but the ones that require busting are those of Mr. Bibic’s making, because the simple fact is that UBB is an anti-competitive and innovation-squashing cash grab.
Here are some of the real myths that need busting.
Light users subsidize heavy users. If this were the case, you would think there would be a similar response around the world, not just in Canada. Yet only Canada seeks to impose a usage-based billing system on the wholesale Internet market to combat this supposed inequity. The CRTC itself acknowledged that all costs associated with the provision of Internet services are recouped by the flat-rate component of the service. This myth is equivalent to arguing that apartment rents should be based on the number of people living in a unit, because the rent of the person living alone subsidizes the cost of an apartment occupied by two people. UBB is a punitive measure because the marginal cost of higher use is miniscule once the network is in place. It has been acknowledged as such. This makes Canada seem like one of the few countries in the world that want to discourage access to the Internet.