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10/26/2012

CRTC to large ISPs: Tell Canadians how much their Internet really costs

Could this be a turning point for Canadian Internet users? The CRTC has just instructed large ISPs to tell us how much the Internet really costs.

Large Internet companies such as Bell, Rogers, and Shaw own lots of the Internet infrastructure in Canada, which was expensive to develop. They sell Internet service to smaller companies who can't afford to develop these huge networks, so that they can then resell Internet services to consumers like you and me. This provides more competition in the market, which hopefully keeps prices down. 

When they make these wholesale agreements, they have to report them to the Canadian Radio-television and Telecommunications Commission (CRTC), which regulates communications in Canada. They have had to report how much it costs them to provide Internet services, so that the CRTC can understand markup costs when they are resold.

In the past, the CRTC has allowed these large companies to report that information confidentially, but in its filing today, it said that they will have to start revealing the actual figures to the public.

This means that for the first time, we will get to find out how much it costs large Internet companies in Canada to provide us with Internet service.

This should make activist groups very happy, because they feel that Canadians have been gouged for years by companies making unreasonable profits just for providing a basic Internet pipe. In a much contested report, Michael Geist, law professor at the University of Ottawa, estimated that it could cost as low as eight cents per gigabyte to provide Internet services, once the capital cost of the network had been factored in.

Yet Canadian companies routinely charge many times that for a gigabyte of Internet service. That cost goes up, when you consider that not all of your regular monthly bandwidth will actually be used.

There will be some things that the large ISPs won't have to reveal, such as the demand for their services, and some of the underlying costs, such as labour and capital expenditure, for example. Nevertheless, this will give Canadian consumers a much better picture of how much it actually costs to deliver their broadband. 

How much do you pay for your Internet service? And how does it stack up against Mr Geist's eight cent per gigabyte estimate? 

Danny Bradbury, MSN Tech & Gadgets

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Danny BradburyDanny Bradbury

Danny Bradbury is a technology journalist with 20 years' experience. He writes regularly for publications including the Guardian, the Financial Times, the Financial Post, and Backbone magazine. Danny also writes and directs documentaries.

Maurice CachoMaurice Cacho

Maurice Cacho is a Toronto-based journalist mixing his love for tech with a passion for news. He's also CP24's Web Journalist and appears daily on CP24 Breakfast and weekly on the channel's tech show, Webnation, discussing tech news and trends.

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