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Shaw move on Internet billing draws fire

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Critics of usage-based billing for Internet services are slamming Shaw Communications Inc., (SJR.B-T) plan to “clarify” its Internet pricing and packages late this spring, including a possible move to ask heavy users of its services to pay more.

On a conference call with analysts on April 13 to discuss the company’s second-quarter results, Chief Executive Officer Brad Shaw said there will be announcements about Shaw’s Internet pricing strategy in May, or possibly in early June.

“We still have a tremendous upside in terms of pricing power on our Internet services,” Shaw president Peter Bissonnette said on the call. “And through the course of our consultations with our customers, I think what we've seen from them is the recognition that the principle of, if you use more you should pay more, holds true.”

The consultations Bisonnette referred to were a series of 34 public meetings held by Shaw in February and March. At these meetings in B.C., Alberta, Saskatchewan, Manitoba and Ontario, the company asked customers for their views on usage-based billing, or UBB.

The debate gathered steam in January, when the Canadian Radio-television and Telecommunications Commission approved a proposal by BCE Inc. that would have let the communications company raise prices for smaller Internet service providers that lease space on its network. Bell proposed charging so-called “overage” fees based on the amount of data downloaded by individual customers on smaller providers such as Teksavvy. Following a public outcry over higher Internet fees that attracted political attention in Ottawa, Bell proposed instead that it would charge smaller players for overall data they use, not for each individual user who goes over a set limit.

“We do not – haven't charged a customer yet for usage space,” Shaw’s Bissonnette told analysts during the call. “Not one of the customers who came to those consultations was saying to us that ... if you do something, we are going to leave to go to a lesser-performing Internet service. ...This was really just a value and a price situation for them with respect to a threshold ... and a desire to know what they are paying on a monthly basis. And we think that we can address that through the manner in which we offer our tiers of Internet services.”

“We are certainly going to clarify our pricing and packaging plans probably in the late spring,” Shaw said.

But an organization that lobbied against UBB has criticized Shaw, pointing to the comments during the call as evidence of “skewed language” the company has used to characterize its customers’ views.

“Shaw expects Canadians to forget the outcry surrounding usage-based billing,” said Steve Anderson, founder of Openmedia.ca, in a statement on Sunday. The group launched a “Stop the Meter” petition encouraging Canadians to speak out against metered Internet prices. It says roughly 500,000 people signed the petition.

“This serves as a reminder that Big Telecom companies are not going to move on their own,” Anderson said in the statement. “We need smart policy that restructures the telecom industry so it works for Canadians again.”

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