So there’s lots of talk recently about Usage-Based Billing for internet service in Canada. While it’s very easy for geeks like me to get passionate about the details, I want to focus on why this matters to everyone.

Let’s start here:

You should only be paying $7.99 for TV service.

Across the US, people are beginning to cancel their cable and satellite TV service and opting instead for internet TV services that let you watch what you want, when you want, wherever you want. It’s cheap, it’s convenient, and it’s a much better experience than the one you’re paying Bell or Rogers many times more for today. The going price is $7.99.

To be fair, all of that video needs to flow over the Internet and it costs money to build and maintain the Internet pipes which carry that content. More specifically, it costs an extra $0.03 per gigabyte.

In plain English, every time you watch a TV show or movie online it costs your internet provider about three cents. If the trend south of the border continues northwards, then more and more of us will start to cut the cord and all those three cents will add up pretty quickly. Somebody has to pay for that.

So Bell Canada went to the government asking for permission to charge more. Alright, cool, I can respect that, this stuff isn’t free. They went through the long process, made their argument to a group of regulators who are there to watch out for Canada’s best interests, and they ended up with, wait for it… $2.00 per gigabyte. For everyone.

What?!?! Who the heck agreed to a 6000% markup, and who agreed that basically every single DSL Internet provider in the country had to charge the same price? Well you did of course, through the people who you elected.

Imagine for a minute that we mandated a sweeping 6000% markup on other items you use every day, like milk. Head out every day to your local Loblaws, drop a c-note on a 2 litre carton of milk, and enjoy the cool refreshing goodness™. Every store in the country, $100 milk, with no alternatives, because the government thinks it’s in your best interest. Thanks government!

While the spin doctors have done an excellent job of portraying internet usage as a problem for only a small number of pimply-faced teenagers stealing internet porn from their mom’s basement, that’s not what this is about. It’s really about you, and making it so expensive to use the internet that you’ll never even consider the alternatives that are just around the corner.

You will continue to pay those huge TV bills to Bell & Rogers

You will drive to Rogers Video in the snowstorm to rent a DVD

You will dutifully continue to lock into that bundle to save $5 off your TV, phone, and internet

This has nothing to do with the cost of providing internet service. Three pennies? Sure, here you go, please excuse the pocket lint.

No, this has everything to do with ensuring that your entertainment dollars continue to flow to Bell and nobody else. All of those amazing competitive services that the rest of the world enjoys, they require fast and cheap internet. If Bell controls access to the internet, well then Bell controls access to the competition. And if somehow you could pull off a scam where you could control all of your competition AND enjoy a 6000% markup while doing it then by golly you should get a frickin’ award! It’s pure evil genius!

But surely nobody would be naive enough to let you get away with it, would they?

Unfortunately that’s exactly what has just happened.

You should only be paying $7.99 for TV service.

You’re not.

You never will.

Because you live in Canada.

And your government thinks $100 is a fair price for milk.

Kudos to MP Tony Clement for pushing back on this one.

Disclaimer: Obviously there are far more complexities and intricacies involved here, I’ve deliberately simplified the math. For the details I refer you to Michael Geist’s blog. Click here for one of his articles which does a very good job of explaining the detail.