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Canada Anger Rises on Web Data Limits

1 Feb, 2011 By: Erik Gruenwedel

An online petition reportedly denouncing Canadian regulatory efforts authorizing data limits imposed by the country’s cable and telecommunication operators on its subscribers has swelled to more than 200,000 signatures, according to Reuters.

Late last month the Canadian Radio-television and Telecommunications Commission approved initiatives by cable operators and telecommunication companies to charge subscribers extra when they exceed (download) more than select monthly data limits — typically from 20 gigabytes to 60 gigabytes.

Data limits came about shortly after Netflix last summer launched a streaming-only service in Canada, which some critics believed could expedite so-called “cord cutting” by subscribers looking to downsize monthly bills with less-expensive, Web-based entertainment.

AT&T, Verizon and other telecommunication companies joined cable operators looking to impose data limits, charging subscribers for overages.

Netflix CEO Reed Hastings, in a recent letter to shareholders, said the company is fighting excess charges domestic ISPs (notably Comcast) are imposing on it and/or content delivery networks (CDN) it works with, including Level 3 Communications.

“We think this inappropriate,” Hastings said. “As long as we pay for getting the bits to the regional interchanges of the ISP’s choosing, we don’t think they should be able to use their exclusive control of their residential customers to force us to pay them to let in the data their customers’ desire.”

In addition, Hastings said Netflix would aggressively fight efforts by wired ISPs to shift consumers to $1 pay-per-gigabyte programs versus current capped limits.

The CEO said ISP costs to deliver a marginal gigabyte, which is about an hour of streaming, from one of Netflix’s regional interchange points over their last mile wired network to the consumer is less than a penny.

“There is no reason that pay-per-gigabyte is economically necessary,” Hastings said. “It would be grossly overpriced.”

Indeed, Federal industry minister Tony Clement will reportedly review the CRTC decision forcing smaller ISPs to adopt the same usage-based billing as larger services Rogers Communications, BCE Inc. and Shaw Communications.

“As Canada’s industry minister, it is my job to encourage an innovative and competitive marketplace and to ensure that Canadian consumers have real choices in the services they purchase,” Clement said in a statement.


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