2011 03 28
The New Aggregate Volume Pricing Proposal
The Companies have created an aggregated volume pricing (AVP) proposal, toreplace the previous UBB model, with the following principles in mind.-
AVP is not linked to individual user thresholds and should have no impact onhow wholesale Internet Service Providers (ISPs) market their retail.-
AVP ensures that those who use the least are not subsidizing those who usethe most.-
AVP is an economic Internet Traffic Management Practice (ITMP)designed such that all ISPs have an incentive to manage usage of the shared network.-
The economic ITMP is designed to incent investments inaugmenting and building access networks, and-
Last but not least, the economic ITMP transparently matches wholesaleISPs' willingness to pay in proportion to their usage of the network thus putting them incontrol of the economic ITMP.
Under the AVP proposal, GAS (both legacy and FTTN) would be composed of twocomponents;
a flat-rated access fee and the AVP. The AVP can be pre-purchasedin blocks of single terabytes (TB). The Companies note that under the new AVPproposal, AVP charges will apply to legacy and FTTN Residence GAS, but not tolegacy and FTTN Business GAS.
The proposed rate for a single TB is $200 (which effectively approximates a rate of $0.195 per GB). If the ISP's total aggregate monthly traffic volume exceeds the levelof TBs it pre-purchased, the ISP will be charged $0.295 per GB of usage in excess of the pre-purchased TBs. Consistent with the principle of predictability, such anapproach encourages an ISP to monitor and manage its traffic and pre-purchase itsintended usage. However, the ISP still pays a low fee on a GB basis (not a TBbasis) for each GB that exceeds its pre-purchased estimate.
For GAS-FTTN, each ISP will be charged an access rate in conformity with theCommission's determinations in TRP 2010-632. However, in recognition that thecost study filed on 30 November 2010 for FTTN speeds included certain costs of usage in accordance with Telecom Decision CRTC 2010-802,
Bell Aliant Regional Communications, Limited Partnership and Bell Canada – Application to review and vary Telecom Decision 2010-255 concerning usage-based billing for Gateway Access Services
(Decision 2010-802) dated 28 October 2010, the Companies areproposing new access rates for GAS-FTTN that are lower than those previously filed.The revised access rates are based on costs which exclude all usage costcomponents. Under the AVP proposal, each ISP would instead pay for the totalusage its customers collectively generate each month through the AVP. A detailedexplanation of AVP is provided in the Companies' comments submitted in TelecomNotice of Consultation CRTC 2011-77,
Call for comments, Review of billing practicesfor wholesale residential high-speed access services
(TNC 2011-77), filedconcurrently with this application, under separate cover.
In accordance with paragraph 78 of TRP 2009-657, the application of economic ITMPson wholesale services is to be evaluated using the ordinary pricing principles for rateapprovals. At paragraph 137 of Telecom Decision CRTC 2008-17,
Revised regulatory framework for wholesale services and definition of essential service
Charges such as Installation, Dry Loop, service charges (one time or monthly recurring charge) and AHSSPI(the port charge) continue to apply with no changes to their rates.