Canadian regulators denies Internet 'traffic shaping' complaint

by Matt Hartley and Simon Avery, Globe and Mail

Canada's telecom regulator has denied a complaint brought forth by a consortium of independent Internet service companies over how Bell Canada manages or “shapes” Web traffic on the network space which it leases to third-party providers.

But the regulator is planning public proceedings to examine the traffic management techniques of Canadian telecom companies.

Although the complaint, which was brought forth by the Canadian Association of Independent Providers was denied, the Canadian Radio-television and Telecommunications Commission said that Bell will now be required to notify third party companies at least 30 days before making changes to the performance of the network space it leases to them.

The CRTC said that the public hearings will begin in July, 2009, and that anyone interested in submitting comments to the proceedings must do so before Feb. 16, 2009.

“Based on the evidence before us, we found that the measures employed by Bell Canada to manage its network were not discriminatory,” said CRTC chairman Konrad von Finckenstein in a statement. “Bell Canada applied the same traffic-shaping practices to wholesale customers as it did to its own retail customers.”

The country's biggest communications company responded by saying it was pleased that the regulator has agreed that there is no need to intervene in the management of broadband networks.

“Certainly there was a lot of misinformation at the start of this when CAIP first filed its application,” said Mirko Bibic, Bell Canada's senior vice president of regulatory and government affairs. “But my experience has been that the average user actually does understand and appreciate that this network management practice is good, if it is going to ensure that bandwidth hogs aren't going to be allowed to crowd out the average user.”

CAIP – an industry group consisting of independent Internet service providers (ISPs) – complained to the CRTC in April that Bell was slowing certain traffic on the network space it was leasing to them.

Bell contends that it needs to manage or “shape” certain types of Internet traffic to ensure that a relatively small number of users employing peer-to-peer downloading programs that consume large amounts of bandwidth aren't bogging down the network for regular users.

The process is similar to allocating certain lanes on a highway to slow moving trucks to ease the flow of traffic in other lanes.

CAIP alleged that Bell is illegally managing their subscribers' traffic and choking out competition. Many of the independent ISPs promote unlimited bandwidth caps and supporters of CAIP say Bell's practices fly in the face of the unwritten rule of net neutrality, which states that all Internet traffic be treated equally and free of network management practices.

Thousands of letters supporting CAIP poured into the CRTC throughout the summer, from both average Canadians as well as technology heavyweights such as Google Inc.

According to one source within the CRTC, the commission had never seen such a response to an Internet access issue.

As well, the federal NDP party has pledged to make net neutrality an issue in the coming session of Parliament.

Bell Canada says managing peer-to-peer traffic in peak usage periods is essential for avoiding network congestion. It is just one of three tools available, Mr. Bibic said. Investment to upgrade networks is essential, and ISPs need to set prices based on speed and capacity offered, rather than offering unlimited data. Bell Canada invests more on its network than any other Internet service provider, he said.

The CRTC agreed with Bell that Canadians' increased interest in bandwidth-heavy Web applications, such as online video, has led to congestion on Internet networks.

“CAIP's application asked us to only consider the specific issue of wholesale traffic shaping within a specific context,” Mr. Finkelstein said.

“The broader issue of Internet traffic management raises a number of questions that affect both end-users and service providers. We have decided to hold a separate proceeding to consider both wholesale and retail issues. Its main purpose will be to address the extent to which Internet service providers can manage the traffic on their networks in accordance with the Telecommunications Act.”

The CRTC said the public proceedings which are due to begin next summer will look at how changes in bandwidth use has led to network congestion, which technical and business options are available to telecom companies who need to manage their networks and the impact of both on end users.

The goal of the proceedings will be to establish specific criteria for when it would be permissible for telecom companies to employ measures to manage or shape Internet traffic.

Last summer, the head of the CRTC said the government may need to step in to establish laws surrounding “traffic shaping” or risk further disagreements.

“The CAIP complaint is really only the tip of the iceberg,” Mr. von Finckenstein told a telecom conference in June. “Sooner or later – hopefully later – this is going to evolve into a major consultation ... It seems to be inevitable.”

Rogers Communications Inc. has faced similar criticism in the past for its own traffic shaping policies, which it argues are necessary to prevent network congestion.

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