IP: [broadband] Bell Canada DSL streaming media tax

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Rich Persaud <persaud () Autometa com>
Organization: Autometa Corporation
Date: Thu, 16 May 2002 11:27:56 -0700
To: Cory Doctorow <doctorow () craphound com>
Cc: Dan Gillmor <dgillmor () SJMercury com>, Dave Farber
<farber () central cis upenn edu>, Brian Zisk <zisk () well com>, Justin Chapweske
<justin () onionnetworks com>
Subject: [broadband] Bell Canada DSL streaming media tax

Cory,

Following up on yesterday's conversation on Northpoint DSL.  Bell Canada
has imposed a 5GB monthly bandwidth cap on consumer DSL, charging $7.90/Gb
for traffic exceeding the cap, and raising prices 10%.  The primary impact
will be on users of streaming audio & video.

    http://isp-planet.com/cplanet/tech/2002/prime_letter_020515.html
    http://www.dslreports.com/hosted/sympat

Note that SBC (Pacific Bell) of Texas is the largest (20%) shareholder of
BCE (which controls Bell Canada).  SBC has been sued by an association of
California ISPs for presenting restrictive contracts that would give
control of the DSL pipe to SBC, for SBC-only video content services.

    July 2001: http://news.com.com/2100-1033-269357.html
    April 2002: http://news.com.com/2100-1033-872932.html

SBC is applying similar logic in Canada, via BCE & Bell Canada.  Since a
competitive DSL market never emerged in Canada, BCE/SBC are using bandwidth
caps (instead of ISP contracts) to control streaming media distribution in
Canada.

Although consumer-visible bandwidth pricing can help the broadband
industry, this pricing model makes no distinction for network topology.
For example, P2P transfers from "nearby" DSL peers will require *zero*
backbone traffic (no transit costs to Bell Canada), but will be full-price
to the consumer.

Users will be charged the same price for traffic to China and traffic to
their next door neighbor.  More importantly for SBC/BCE, users will pay the
same fee for traffic to BCE or Disney.com.  However, Disney must pay for
backbone transit to BCE, while BCE can serve video from a server on their
local network.

This creates a market for SBC/BCE-hosted edge caches of video content (a la
Akamai).  What about P2P traffic?  *Both* P2P customers must now pay fees
for P2P content distribution, even when their P2P software is aware of
network topology (e.g. http://open-content.net ) and does not require use
of a long-haul circuit.

Rich


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