Will Canada penalize cord cutters?

If you’re Canadian and already upset you can’t watch content that’s blocked in this country, or frustrated your internet bill keeps getting higher as you watch more online content, it might get worse. Canada is experiencing an interesting struggle right now between emerging online business colliding with traditional cablecos, particularly when it relates to open web and Net Neutrality.

Cable TV and Internet providers in Canada, such as Rogers and Bell, currently implement a form of User Based Billing on their customers by putting a cap on internet use, and then charging additional $2 per GB when they go over (even though bandwidth costs are dropping). Customers who didn’t wish to go with User Based Billing used to have an option to sign up with other internet providers, some of whom purchase their bandwidth from larger ISPs at a bulk rate. Not anymore, though – the CRTC last week allowed Bell, Shaw and Rogers to place a cap on these wholesale suppliers, meaning these independent ISPs must cap their plans at 25GB a month. To put it in perspective, that’s about five HD movies from iTunes, without even touching your email, YouTube or Skype.

The major ISPs say this is an important step to prevent those who use a lot of bandwidth from creating congestion. The CBC reports, however, on-demand video services provided by Rogers and Bell do not fall under these caps, meaning you can watch a bandwidth-hogging TV show on Rogers On Demand Online without fear of additional cost, but try to do the same with Rogers’ competitor Netflix, and you could see your internet bill jump.

Here’s a good explanation from the CBC’s George Stroumboulopoulos.

OpenMedia.ca, a NFP site, is collecting signatures to encourage the CRTC and government to rethink its stance on allowing these companies to meter the internet.  Backlash against bandwidth caps appears to be growing in Canada, with the site gaining approximately 110,000 signatures in the last week. I’ve included the petition here for anyone interested:

The same organization’s website points to further CRTC discussions on the merger of BCE and CTVGlobemedia. Michael Geist writes a fantastic article on what this merger should be addressed during discussions, alluding to the recent takeover by cable giant Comcast of NBC Universal in the States. Whereby the FTC stipulated that merger must support net neutrality and could not negatively impact growing competition from companies such as Hulu and Netflix, Geist is concerned the CRTC isn’t addressing these same concerns in Canada.