Is your monthly cable bill about to increase - again!

Shaw planning to implement UBB as early as this summer 'Through the course of our consultations with our customers, I think what we’ve seen from that is a recognition that the principal of "if you use more, you should pay more" holds true,' Shaw chief executive Bradley Shaw said. (Reuters/Todd Korol)

Matt Hartley
April 25, 2011

One of Canada’s largest Internet providers appears to be planning a move towards a metered pricing model for Web access, a move which has drawn swift condemnation from critics of so-called usage-based billing practices.

During a conference call with shareholders on April 13, executives with Calgary’s Shaw Communications Inc. alluded to plans to implement a usage-based billing (UBB) regime on its Internet customers as early as this summer.

Until recently, Shaw had managed to largely avoid the UBB firestorm that erupted earlier this year following CRTC’s January 25 ruling that effectively allowed larger Canadian Internet service providers (ISPs) such as BCE Inc.’s Bell Canada to impose the same bandwidth caps and overage fees on the the third-party ISPs which lease networks space from them, as they do on their own retail customers. In February, Shaw announced plans to hold a series of public consultation meetings with its customers before going ahead with any kind of usage-based billing.

However, it now appears that after meeting with its users, Shaw appears set to go ahead and implement some form of UBB on its retail customers.

“We are of the mind that we still have a tremendous upside in terms of pricing power on our Internet services and through the course of our consultations with our customers, I think what we’ve seen from that is a recognition that the principal of ‘if you use more, you should pay more’ holds true,” Shaw chief executive Bradley Shaw is quoted as saying in a transcript of the call from April 13.

“But we believe that as we work our way through some of the feedback that we received from them that there really is a win-win for our shareholders (as all of) their customers in the way that we offer our tiers of Internet services.”

Mr. Shaw said the company would have more to say about its new pricing and packaging plans in the “late spring, probably May, early June.”

“People have said to us, let’s not divide the internet product today,” Mr. Shaw said.

“Let’s figure out how to create a world class internet experience and then we can figure out how to do pricing and packaging from there. So, we think it would be reasonable to get further clarity before we’re going to go back and talk to some more customers about it, you’ll probably read about it on the social media like you seem to be reading about all the stuff, which is great and probably have more formal announcements end of May or early June.”

However, critics of UBB are slamming Shaw’s decision to go ahead with plans to implement new pricing schemes.

OpenMedia.ca — the populist organization that launched the Stop The Meter protest campaign, which garnered nearly half a million online supporters — accused Shaw’s executives of using “skewed language” and misrepresenting the views of its customers by claiming that users would be happy with UBB.

“Shaw expects Canadians to forget the outcry surrounding usage-based billing,” OpenMedia founder Steve Anderson said in a statement.

“This display of hubris is insulting not only to those who attended the consultations, but also to the half-a-million citizens who added their names to the Stop The Meter petition.”

The CRTC’s January ruling on so-called UBB enabled the country’s largest Internet providers to impose the same bandwidth caps and overage fees on their wholesale customers as they currently employ with their own retail customers.

In late March, Bell backed down and pulled its initial application to the CRTC, instead, putting forth a proposal for a new pricing model known as “aggregated volume pricing.”

Under a new proposal submitted to the CRTC, Bell would charge third-party ISPs for the total amount of data they use, and do away with overage charges for individual users on those networks. The move puts more power back into the hands of the wholesale ISPs which can then tailor their pricing structures accordingly, according to Bell.

Some of Canada’s largest ISPs have argued the caps and overage fees are necessary to fund future network upgrades and innovation, while critics of the initial ruling claim it is anti-competitive and essentially forces smaller ISPs to offer the same services as their larger competitors.

mhartley@nationalpost.com