February 5 2011

Canadian Businesses Up In Arms Due To Internet Usage Caps

Posted on the 03:51 pm under Internet by Darren Boyer

Canadian businesses are feeling the squeeze of costly fees should they go over the limits now officially approved by CRTC. In Canada, many Internet customers have strict limits on the amount of data they can download and upload.

This policy is not new. Internet users have had to watch the bandwidth for what they download for some time now, and businesses have made their anger known regarding the restrictive download limits for Internet plans and charges for going over the limits. One local business, with 25 office staff, was levied over $2,000 per month for several months due to an internet usage cap imposed by their internet service provider. So in order to avert these fees, some companies have attempted to sidestep the caps by focusing on “unlimited use” plans that have been offered by smaller companies who resort to leasing space over the networks of their larger counterparts.

Creativity will likely be stifled.
In this new age of using online videos to drive home points to constituents, it’s not unlikely that the fees will severely stifle the ability of businesses to be able to utilize videos without passing on the fees to the customer.

Nicolle Morton’s company is known for making websites — very impressive ones that tantalize the clients’ whims and whimsies through the use of creative graphics and video — and they found themselves running into the strong arm of regulations and fees. Ms. Morton will readily confess that she is worried that Internet providers appear to be getting more stringent on disruptive online technologies just so they can have their own profits increase. What are the consequences? Companies will need to cut back on innovation. Ms. Morton relayed to Iain Marlow, telecom reporter for Globe and Mail, “We’re not going to make it bigger, better, more beautiful, more interactive, if this keeps up,” she says. “It’s kind of a sad time.”

One local Internet provider, Eastlink, has no plans to implement usage billing on its 15 MBps internet service.

Businesses are not the only ones being affected.
Consumers are now becoming increasingly frustrated as they bump up against download limits while trying to gain entertainment online along with connecting gaming consoles to the Internet. It hardly seems fair for Canadians to have to put up with this, especially when they happen to glance at their closest neighbors in the US and see that Internet provider Comcast doesn’t put a cap on downloads lesser than 250 gigabytes. To put that in perspective, that’s just about 125 movies.

On a conference call this week, a financial analyst asked Netflix CEO Reed Hastings whether he was concerned that the introduction of usage-based billing means Canadians would have to absorb larger Internet bills in order to use his company’s service. “We’re definitely worried,” he said. “That is potentially a significant negative for Netflix.” And they’re not the only ones to be worried.

Canadian regulators may feel they are justified in imposing caps and penalties; however, this does nothing but fuel the anger that companies and consumers alike feel when they bump up against these regulations. It seems as though everyone is united that it’s all due to economics that this is happening, but that doesn’t make anybody feel better about the situation.

Written by Darren Boyer

Darren Boyer

Darren Boyer is the founder and president of pcit.

Related Posts: