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BCE CEO Cope Says UBB Accounts for Almost All Internet Revenue Gains

By Michael Geist

When Bell's Mirko Bibic appeared before the Standing Committee on Industry to answer questions on usage based billing last month, he focused on the "fairness" associated with the billing approach. Using the word "fairness" seven times, Bibic mixed congestion, heavy users, and fairness with responses such as:

As for small businesses, which are generally on the same network as residential users, what you have is really a case where the congestion during peak periods is largely a residential phenomenon. It's in that area that we've addressed the usage-based billing issue, and all we're asking the CRTC for is to follow a fundamental principle of fairness. If we asked 97% or 98% of Canadians if they would be prepared to pay more so that the 2% of heaviest users pay less, I'm pretty sure of what the answer would be.

While Bell emphasized fairness once UBB became a political hot potato, the company had a far different emphasis when discussing UBB last year with financial analysts.  In an August 2010 quarterly call, BCE CEO George Cope stated:


our data revenue growth was 3.8% for our Residential Services business, particularly driven through an increase in Internet ARPU of 3.3%.  And interesting, almost all that increase now coming from usage based billing as the demand for Internet use explodes through the use of video services, and we're continuing to see an increase in the revenue per customer.

Three months later in November 2010, Cope noted:

our residential services had an excellent revenue quarter from a data perspective, as well, with data revenue growth of 5%, driven principally by the bandwidth usage revenue being up 83% year-over-year.

Why is Bell doing this? Apparently it isn't about fairness, congestion or heavy users. In response to a question on the issue, Cope states:

as we see a growth in video usage on the internet, making sure we're monetizing that for our shareholders through the bandwidth usage charges

While there is nothing wrong with Bell maximizing revenues for its shareholders - that is what it is supposed to do - no one should be under the illusion that UBB is anything other than a revenue maximization strategy in a market with limited competition, not one premised on fairness or network congestion.

Full post as published by Michael Geist on March 21, 2011 (boomark / email).