The amount of video or data that can be streamed or downloaded by some internet customers under their current price plans is being cut almost 90 per cent following a recent CRTC decision.

Starting March 1, customers who subscribe to five-megabits-per-second internet service with Teksavvy will only be able to use 25 gigabytes per month in Ontario and 60 gigabytes per month in Quebec instead of 200 gigabytes per month, the company said in an email to customers over the weekend. If they exceed the new caps, they will have to pay hefty surcharges.

In addition, the company will no longer offer unlimited internet packages.

Similar notifications have been going out to thousands of customers of other internet service providers, as regulations require consumers to be given 30 days notice of such changes, said Tom Copeland, chair of the Canadian Association of Internet Providers. The organization represents about 50 small internet service providers across the country.

Listen CBC's Spark discusses usage-based billing with: Steve Anderson, founder and national co-ordinator of OpenMedia.ca, a group that has drafted a petition against usage-based billing.

Mirko Bibic, senior vice-president of regulatory and government affairs at Bell Canada.

The Tekksavvy email cited the decision by Canada's telecommunications regulator "forcing all independent DSL and cable internet providers to substantially match incumbent (like Bell) usage rate caps."

The Canadian Radio-television and Telecommunications Commission ruled last week that Bell could charge its wholesale customers, mostly smaller internet service providers, based on the same usage-based billing schemes as it uses for its retail customers, provided the wholesale customers get a 15 per cent discount relative to Bell's retail customers. It also ruled that the new usage-based billing should be implemented starting March 1.

The notification has outraged users such as Michael Nicula, founder of an internet-based federal political party called the Online Party of Canada, who says his monthly usage is about 100-150 gigabytes a month. That means he will have to switch to a more expensive plan or pay large excess use surcharges.

"Why would we pay more for the same service?" he asked Monday.

The decision means his party, which conducts all its meetings online, will have to abandon plans to stream high-definition video of its meetings because some people may not be able to afford the internet costs, Nicula added. The party was founded in October and is in the process of formally registering as a political party with Elections Canada.

However, it has already begun taking a stand on issues. It released a statement Monday denouncing the CRTC usage-based ruling, based on a vote involving some of its 1,000 or so members. So far, the vote has been unanimous, but it remains open.

Other providers likely to follow: CAIP

Copeland said the new usage-based billing decision affect tens of thousands of DSL internet customers in Ontario and Quebec, where Bell sells its services wholesale.

However, he expects the decision to soon result in similar bandwidth caps from wholesale ISPs in other provinces, such as Telus in western Canada and Bell Aliant in Atlantic Canada.

"In the marketplace here in Canada, it's monkey see, monkey do," he said.

Customers of small ISPs that offer cable internet will also likely be affected, he added.

Large cable internet providers had already passed on internet caps to their wholesale customers, but that hasn't been enforced until now, Copeland said. He suggested that will likely change.

The short deadline for implementation chosen by the CRTC has left Bell and small ISPs scrambling to meet it, Copeland said.

The CRTC has agreed with arguments from large ISPs such as Bell and Rogers Communications that usage-based billing is a way to encourage heavy users to reduce their usage. The major internet providers, including cable giant Rogers, had argued that it is needed to deal with booming online traffic and increased network congestion as people do more online — including downloading music and watching movies and television programs.

In October, the commission gave Bell the green light to impose usage-based billing on its wholesale customers. However, it did not release details of the wholesale rates until last week.