OTTAWA - The CRTC will delay implementing its controversial ruling on Internet billing practices while it reviews the decision which raised hackles in the online community.

But the Harper government says if the Canadian Radio-television and Telecommunications Commission comes back with the same plan, they will be overruled.

Commission Chairman Konrad von Finckenstein told a House of Commons committee on Thursday that the introduction of usage-based billing for wholesale customers will be delayed for at least 60 days beyond the proposed March 1 start date.

This will give the regulator time to review the decision after considerable public outcry. Von Finckenstein also noted that at least one telecommunications company had requested a delay because it wasn't ready to implement the new billing practice.

Von Finckenstein insisted however that the decision to conduct a review wasn't made because of concerns raised by Industry Minister Tony Clement and Prime Minister Stephen Harper.

But his announcement did little to placate the politicians.

"Regardless of the outcome of the CRTC review, under a Conservative government this ruling will not be implemented," Industry Minister Tony Clement said.

"This particular take by the CRTC on this policy is not acceptable to our government, so we are looking for a different approach," he added.

Von Finckenstein said the review will seek to verify that the decision protects customers and penalizes only the minority of people who are heavy consumers of Internet services.

"We are convinced that Internet services are no different than other public utilities and the vast majority of Internet users should not be asked to subsidize a small minority of heavy users," he told the committee.

"For us, it is a question of fundamental fairness."

Most residential Internet customers already have usage-based billing.

Major companies like Bell and Rogers place a cap on how many gigabytes a person can download for a set fee, before additional charges are tacked on.

But smaller providers were able to offer unlimited plans because they didn't pay by the gigabyte for the data they buy off the larger companies.

The CRTC ruling changed that.

The large providers say the charges help them build capacity on the network, but critics said the ruling stifles competition and small business.

A "Stop the Meter On Your Internet Use" petition, circulated through site OpenMedia.ca, was shared on Facebook more than 130,000 times and tweeted out nearly 11,000 times.

But von Finckenstein estimated that only 500,000 Canadians use independent Internet service providers and an even smaller number than that would be considered heavy users who would be hit by the new rules.

He said that in 2009, Canadians used an average of 15.4 gigabytes per month.

Some lower-end high speed accounts offered by Canada's large ISPs offered almost double that per month.

Much of the outcry over the new billing practices pointed to extra charges that could stem from more people streaming larger amounts of video over the Internet. The practice -- especially for high definition video -- eats far more bandwidth.

Additional usage charges can be as much as $5 per GB for the cheapest plan, depending on the provider.

"We believe there should be choice," Clement said.

"If an Internet service provider wants to offer unlimited access for a flat fee, they should be allowed to offer that in our marketplace. And what this CRTC decision was doing was eliminating that possibility and that's what we found unacceptable."

While the CRTC is an arms-length agency, the Broadcasting Act does give the cabinet power to overturn its decisions if it decides they are against broadcasting policy.

The problem, said Liberal technology critic Marc Garneau is that the CRTC gets backed into a corner because they lack clear policy direction.

He said despite what Clement might say about wanting a digital economy for Canada or wanting to encourage innovation and competition, the Industry Minister's not saying that to the CRTC.

"He is not communicating that guidance to the CRTC so that it can make decisions that actually are in harmony with the government

"If that was done, then there would very rarely be any reversal of CRTC decisions."

Clement has waded into the battle between large and small companies before.

Last year, he asked the CRTC to review a 2008 decision that required big telephone network owners, such as Bell and Telus, to offer smaller wholesale companies the same Internet speeds that they offered.

But the CRTC stood by its ruling.