Thursday, April 7, 2011
The UBB Deception: Usage Based Billing in Canada Explained
Posted by Jason Dunn in "Digital Home News" @ 09:30 PM
This is one of more easier to understand videos when it comes to the issue of Usage Based Billing - UBB - and what it really means. I'm putting this on every site in the network because if you're in Canada, you need to understand what's happening (everyone else in the world might find it interesting). Now that one of the ISPs here in Canada has admitted that the pricing of their plans is not linked to actual use, the logic behind UBB start to become even more baffling. We know the motivation is money, but as a "small c capitalist" I believe there's room for plenty of profit while still being fair to your customers. The model of usage-based billing we use in society for buying clothes and food should be applied in the same way for a data connection.
I looked up AT&T's overage caps for instance last week, and found that they were charging customers $4 for 20 GB of use once they were past their data cap. That's 20 cents per GB, which - if the estimate of 1 penny per GB is accurate - represents a 2000% mark-up. Any company on the planet would be thrilled with a 2000% mark-up, right? Not the Canadian ISPs, who want to charge around $2 per gigabyte once the user blows past their data cap (which is surprisingly easy to to do if you have a small data cap). That's some serious mark-up!
I used to think that data caps weren't a big deal - I'm online many hours a day and rarely got close to my data cap - and I even argued with Hooch about this UBB thing not being a big deal. I've since done a 180 degree turn on this issue. The incredibly low data caps I've seen ISPs implement in Eastern Canada (25 GB? Pft!) - along with the totally crazy per GB data overages - tells me that the big ISPs are not interested in being reasonable, or in being satisfied with something as paltry as a 2000% mark-up. This is a serious problem for Canadians who use the Internet even moderately.