CRTC Comes Down Soft on Promoting Net Neutrality

George Nathanael is a JD candidate at Osgoode Hall Law School.

Last week the Canadian Radio-television and Telecommunications Commission (CRTC) released a policy dealing with the traffic management practices of internet service providers (ISPs). Though an important report that outlines the CRTC’s views on how it will resolve issues that fall directly within the realm of the network neutrality debate, it is uncertain if the new requirements will have real teeth and so it may potentially have very little effect on the current state of affairs that is the cause of the debate in the first place. Michael Geist’s blog contains a good summary of the decision’s major elements, which include a framework for determining whether a particular internet traffic management practice (ITMP) is legitimate, requirements for disclosing new practices to users, and guidelines for when throttling is allowed.

With respect to retail services, ISPs are generally allowed to maintain ITMPs in order to manage traffic or respond to network congestion without having to notify the CRTC.  This includes both economic ITMPs (such as charging fees for internet services that correlate to user consumption) and technical ITMPs (such as limiting the quantity of data that particular users transmit and accept). For both, it must be the case that the ITMP employed meets certain requirements, such as having a valid purpose (i.e. managing traffic broadly speaking), meeting that purpose, and having negative consequences that are “as little as reasonably possible”. Additionally, technical ITMPs are to be used as a last resort where other methods “would not reasonably address the need and effectively achieve the same purpose as the ITMP”.

The use of the word “reasonably” within the above framework, and the fact that it is essentially at first up to the ISPs to decide if their ITMP is necessary, is what primarily puts into question the strength of this directive. The onus is on consumers to launch a complaint to the CRTC if they believe that an ITMP is unjustified. Because of the somewhat open-ended nature of the framework, this gives telecommunications companies less of an incentive to invest in network infrastructure to cope with congestion problems, as they can instead focus on fitting various ITMPs to the framework, which would be to the detriment of quality service.

ISPs will also be required to disclose information about upcoming technical ITMPs to their retail customers 30 days before they are implemented. Disclosing new practices does not seem like it will be of much use to customers considering that most contracts for internet services are much longer than a month. Furthermore, even though the CRTC previously “concluded that the retail Internet service market was sufficiently competitive to protect the interests of users”, my sense is that many consumers would disagree. There is a 60 day notice required for a primary ISP to disclose the same type of information for its wholesale services, which are used by secondary ISPs. Considering that the secondary ISP must still notify its customers 30 days in advance before it adopts a new ITMP, this gives them only 30 days to come up with a new business plan that accounts for the effects of the primary ISP`s ITMP. Smaller companies are at the whim of the primary ISPs that control the networks, namely Bell and Rogers.

Bandwidth throttling is a particular type of technical ITMP that works by essentially slowing down a user’s internet connection. Section 36 of the Telecommunications Act prohibits an ISP from “control[ling] the content or influenc[ing] the meaning or purpose of telecommunications carried by it for the public” without prior approval from the CRTC. It was ruled that this only applies to time-sensitive traffic (such as real-time video or audio, video conferencing, and VoIP messaging), since it is this type of traffic where throttling has such an influence. This means that throttling of other types of transmissions, such as peer-to-peer file sharing will not require prior approval. However, it was noted that slowing down non-time-sensitive traffic past a certain threshold can in fact be deemed as blocking/controlling the content, which would require approval. To me economic ITMPs, like usage-based billing, seem to be much more fair in theory, but in practice can lead to overall higher prices for consumers. An OECD report that was released this past summer indicates that internet services in Canada are already relatively expensive, as shown by such stats like Canada being 26th out of 27 developed countries surveyed for average monthly subscription prices of high-speed connections.

As is evidenced by the majority of the posted comments on a CBC article covering this matter, many consumers are not too pleased with this policy. In the decision the CRTC seems to imply that it wishes to interfere with market forces to the minimum extent necessary. However, considering the CRTC’s own admission that “[t]he availability of the Internet has had a profound impact on Canadians and has fundamentally changed the communications landscape”, perhaps it should be less wary of free market doctrines when fulfilling its role as a regulatory body. The Federal Communications Commission in the U.S. seems to want to adopt tougher rules against ISPs down south. As this decision’s effects (or lack thereof) are felt by an increasing number of Canadians, it is likely that the net neutrality debate will continue on until consumer interests are weighed more heavily.

  1. I think that you may be right with your view on the discretionary and/or powers granted to ISP by the CRTC on its policy on Net Neutrality. However, how do you respond to the argument of of large Canadian ISPs that network management does affect Net neutrality. Also, do you feel that taking away an ISPs ability to manage its network, will result in worse service for a large number of customers?

  2. I agree that network management affects net neutrality since specific types of ITMPs will affect some users and not others and there also may be a greater affect on particular applications. I also don’t think that the solution is to completely take away an ISP’s ability to manage its network, as that could have detrimental effects as you pointed out. As was mentioned, the major problem is that the ISPs are at first given a lot of discretion to decide if a new ITMP is reasonable, and they do not even have to report all of their ITMPs to the CRTC. It seems to me that this leaves open the opportunity to continually charge fees for services that are not delivered as specified (i.e. higher bandwidth that is rarely realized). Simply put, I think it’s reasonable to expect that ISPs will focus on the bottom line of profits, and like most businesses they will practice within the outermost limits of regulatory frameworks. The CRTC should step in and take a more active role considering that only a few big ISPs dominate the market and they control a service that has become vital in the everyday lives of Canadians.

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