Despite the fact that bandwidth costs for ISPs are dropping as fast as user traffic rates rise, many ISPs still face congestion problems at the last mile, and Bell Canada is no exception, as internal data recently showed. Not content with simply throttling P2P traffic for ten hours a day, the company has just announced plans to impose usage-based billing on the small ISPs that buy wholesale access from Bell. In some cases, the "free" monthly limit will be as low as 2GB. No, that's not a typo.

News of the move began to percolate through online forums this week as small ISPs expressed outrage over a practice that could make them even less competitive with Bell, and it then expanded (a bit) into blogs and outlets like the CBC. The Canadian government requires Bell to lease access to other firms because of its infrastructure dominance, but Bell recently extended its P2P throttling techniques from its own ISP service (Sympatico) to wholesalers as well.

This spawned its own outrage, as the small ISPs argued that Bell was forcibly removing one of the main ways that they could distinguish themselves from Sympatico (no throttling!). The news that Bell would institute caps on new wholesale user accounts was seen as another attempt to undermine the small ISPs, which will soon have one less selling point (unlimited downloads!). Some wholesalers complain that this simply makes them, in effect, into mere resellers of Bell's own service.

Fairness is in the eye of the beholder

In Bell's view, however, the move is about fairness. To understand why, let's take a step back: when small ISPs purchase wholesale access from Bell, they don't pay by the amount of information transferred. Instead, they purchase "aggregation links" that are rated by capacity (i.e., size of the tube) rather than bits transferred (i.e., the amount of water that is pushed through the tube each month).

So, for purposes of example, assume an ISP purchases a 1Gbps wholesale link from Bell Canada. In a given month, the ISP could push anywhere between 0GB and 324,000GB—and the ISP would pay the same amount to Bell. It's then up to the ISP to make sure this capacity is enough to serve its users; if not, the ISP buys additional links.

Bell claims that these links are seeing much heavier usage than in the past. The company tells Ars it plans to shift to usage-based billing (UBB) soon in an attempt to deal with the "tremendous growth (and expected continued growth) of bandwidth consumption."

Bell's plan is to offer new wholesale accounts a set amount of included "free" transfer; after hitting that limit, ISPs (and therefore users) would have to pay by the amount of data transferred. For 512Kbps users (the lowest speed), the limit is 2GB a month; for 5Mbps users, the limit is 60GB a month, according to the CBC.

Bell tells us that UBB is "just one element, along with investment and network management, of our three-pronged approach to insuring our network continues to operate at optimum levels." Which, rather surprisingly, sounds like Bell will continue to throttle P2P apps.

"Let the traffic flow"

The entire idea is of course anathema to the ISPs. Tom Copeland, who heads the coalition of small ISPs known as CAIP, tells Ars that UBB is the wrong way to go. It's "not a carrier class method of doing business," he says. "Carriers buy capacity on networks and they utilize that capacity in a manner that allows for the efficient delivery of products and services. The wholesale vendor of such a facility shouldn't interfere with the delivery of the product or service nor should they apply what amounts to a surcharge when an end user decides to make use of the product or service."

But if Bell is going to implement UBB, Copeland calls on the company to remove "speed profiles and traffic shaping from the equation. Let traffic flow."

Bell Canada has no real interest in offering the services that make its own competition possible, though, and is in fact asking the government to remove the mandatory wholesale access provisions altogether due to all the "competition" in the ISP space. Without line-sharing, of course, much of that competition could disappear, as it did in the US when telco line-sharing rules were repealed.