Canada's internet regulator has launched a review of decisions that would have eliminated unlimited internet plans and drastically lowered downloading limits for customers of small internet service providers.

The CRTC confirmed Tuesday it is re-examining its rulings on the way small internet service providers – and therefore their customers – are billed by large ISPs like Bell, and is seeking public comments as part of that review.

Usage-based billing Large ISPs charge their customers based on usage-based caps that specify the maximum amount of bandwidth they can use for internet activities like streaming video and movies, talking on Skype or uploading and downloading data. Customers who exceed the cap pay "overage" charges of up to $2.50 per gigabyte unless they bought insurance. Bell says usage-based billing is necessary to reduce network congestion and discourage heavy internet users from using an unfair amount of bandwidth. However, consumer advocates say imposing the caps on small ISPs would lead to higher internet prices, discourage the use of new services such as Netflix and make it impossible for smaller internet providers to offer different packages than large ISPs, utlimately reducing competition and consumer choice. Netflix allows people to stream unlimited high-definition video over the internet to their TVs for a monthly fee and uses a large amount of bandwidth.

The CRTC had earlier given Bell the green light to charge its wholesale internet customers — small ISPs that rent network access from bell in order to create retail internet packages for their own customers — based on the same usage-based caps as Bell's own retail internet customers. The smaller ISPs would be forced to pass those on to their customers.

The decisions led to a public uproar and prompted Industry Minister Tony Clement to announce last week that if the CRTC didn't reverse its decision, the government would.

"The great concern expressed by Canadians over this issue is telling of how much the internet has become an integral part of their lives," CRTC chair Konrad von Finckenstein said Tuesday in a statement.

He had indicated to the Commons committee on industry last week that the CRTC already planned to review the ruling and delay the implementation of usage-based billing for smaller internet providers, which was to begin March 1.

As part of the review, the commission will seek public comments until April 29 through an online form on:

How to make sure ordinary consumers served by small ISPs don't have to "fund the bandwidth used by the heaviest residential internet consumers."

How to ensure small ISPs offering "competitive alternatives" to large ISPs can continue to do so.

Whether small ISPs should be required to buy a minimum amount of bandwidth per retail customer when purchasing network access wholesale from large ISPs, and, if so, what that minimum should be.

Whether the CRTC should hold an online consultation as part of its review.

Whether the CRTC should hold an oral public hearing as part of its review.

Shaw surveys customers

Also Tuesday, Shaw Communications announced it will ask customers over the next two months to participate in an online discussion about bandwidth use and billing.

P.O.V.: Have you ever been overcharged by your internet service company? Take our survey.

"Bandwidth is not unlimited and that is the crux of the issue," Shaw president Peter Bissonnette said in a news release.

"There are many potential solutions to this challenge and we're asking for our customers' help to build a solution that works for everyone."

Shaw said it will not consider implementing usage-based billing until the consultation with customers is complete.