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CityWest defends the need for new usage-based billing

Prince Rupert’s lone Internet service provider, CityWest, is defending its decision to institute usage-based billing despite a nation-wide public backlash against usage billing on Internet.

Prince Rupert’s lone Internet service provider, CityWest, is defending its decision to institute usage-based billing despite a nation-wide public backlash against usage billing on Internet. CityWest executives say that the move is the fairest option available, and that most people who aren’t using more than 75 gigabytes a month could actually see their bills decrease rather than increase, while heavy users’ bills will go up.“Our profits are declining year after year after year. And the reason that profits are declining is that the consumption of bandwidth is going up...There is actually a minority of customers who are consuming the majority of the bandwidth,” said Chad Cunningham, marketing director for CityWest.A national debate over usage-based billing was sparked early last month with a CRTC decision that critics say would have allowed the big telecom companies to force smaller ISPs who rent space on their networks to drop their unlimited access Internet plans, eliminating the competitive pressure for the big companies to keep  theirs.CityWest points out that it does not rent space on anyone’s network but buys bandwidth from Telus outright, so it would have been unaffected by the CRTC decision. But the public backlash to the decision was fueled mainly by the prospect of consumers losing unlimited access Internet, not what small ISPs were being charged. CityWest also has no competition, which leaves Rupertites without any alternative. Cunningham points out that CityWest is doing the same thing in other towns.“I understand that some people might be concerned that we’re abusing this dominant position in the market, but we’re not.  We’re running the same policy across the board, whether it’s a competitive market or not,” said Cunningham.One criticism of usage billing has been that the extra charge for an extra gigabyte is often much larger than the actual cost of providing that extra bandwidth. CityWest says that it isn’t so in their case.“People say it’s pennies per gigabyte. It’s not pennies per gigabyte in Prince Rupert; we pay $158 per megabit, that’s per month. It’s very expensive, probably eight to 10 times more expensive than anywhere else,” said Cunningham. How those numbers turn into the proposed $2 charge per extra gigabyte and how much of that charge would be profit for CityWest, neither Cunningham nor CEO Rob Brown knew. Cunningham says that the plan won’t be put in place until a web portal is put up that will allow customers to be able to track how much data they are using. It should be noted that a similar tracking program being used by Bell was found to give inaccurate readings.Cunningham and Brown defend the decision as being the only solution to the bandwidth problem that doesn’t punish customers who have been keeping their Internet usage within a reasonable limit. Other options considered were putting off needed bandwidth upgrades that could affect service quality, or restricting bandwidth to certain users or applications such as Netflix and internet  videos. CityWest plans to go ahead with usage billing unless they see evidence that customers would prefer one of the other options more. Customers are encouraged to send their comments to CityWest by e-mail to ubbinfo@cwct.ca