18 months on, industry divided on effectiveness of CRTC net neutrality policy

Nearly 18 months since the CRTC adopted its Internet traffic management practices (ITMP) policy, industry experts are divided on its effectiveness in securing net neutrality. Some suggest that the commission needs more powers to investigate and enforce the policy. Others say the CRTC has not faced serious enough cases to warrant the use of a full stable of existing powers. The CRTC adopted its regulatory policy for Internet service providers’ (ISPs) traffic management practices in October 2009. It recognizes that “some measures are required to manage Internet traffic on ISP networks” and allows ISPs to manage Internet traffic at the retail level without prior approval. Under the policy, the commission can review ISP practices “based on concerns arising primarily through complaints by consumers.” Patricia Valladao, a spokeswoman for the CRTC, said the commission has received 32 complaints since the policy was adopted. Most of these have been about throttling, especially concerning ISPs’ disclosure. Valladao said carriers are not permitted to affect time-sensitive traffic without prior CRTC consent. She said CRTC investigations follow complaints, although she couldn’t say whether any action had been taken against ISPs. But both John Lawford, legal counsel with the Public Interest Advocacy Centre and Tom Copeland, chair of the Canadian Association of Internet Providers’ board of directors, say the complaints system is insufficient. “We all know how successful that complaints system is,” Copeland said. “It takes forever and a day to get anything done. It’s not an efficient way to implement policy.” Lawford said most people simply don’t have time to determine what the problem is with their networks and file complaints. The CRTC should follow-up with carriers on its own, Copeland said, on a quarterly or semi-annual basis, to determine if and where congestion is happening and whether it warrants traffic management. Bell Canada Enterprises Inc. spokeswoman Jacqueline Michelis said the commission is monitoring compliance. “The CRTC has very clear rules and enforcement with regard to net neutrality,” she wrote in an email. “For example, the CRTC asked Canadian ISPs last year to demonstrate how they had complied with transparency principles, and also requires ISPs like Bell to demonstrate compliance with the ITMP framework in response to individual complaints.” David Elder, who practices communications, competition and privacy law with Stikeman Elliott in Ottawa, said the CRTC has some powers at its disposal under the regime. The commission can issue orders that can be registered with the Federal Court of Canada and enforced as contempt. “I think part of what may be happening is that there are just a lot of people who don’t like Internet traffic management practices—period—and will complain and do complain about their mere existence,” he said. “But if there was a case where an ISP was in contravention of the commission’s expectations or rules, I think the commission on the telecommunications side has more than adequate enforcement tools to deal with it.” Those tools include appointing inquiry officers, holding hearings, and designating inspectors to verify compliance, he said. “But I think these are very extreme tools that have not been used a lot by the commission, mostly because I don’t think they’ve found it necessary to use them in order to get compliance. In my view, all the tools are there should they need to be used. What’s not clear to me is whether there’s really a case of non-compliance that warrants the commission having to resort to some of these tools.” Lawford said the real problem with the CRTC policy—what he calls its “evil, enduring legacy”—is its green light for economic traffic management measures that have resulted in usage-based billing. “The real nasty story of ITMPs is how they’re destroying the wholesale Internet market. That’s why we have this UBB thing going on,” Lawford said. “All the UBB is predicated on it being an Internet traffic management practice, an economic ITMP … And I don’t think the commission saw that one coming at all.” But the CRTC says its net neutrality policy has not led to economic traffic measures. “UBB was in put place by many ISPs prior to the decision, so it was not as a consequence of the policy but more to the fact that it was a retail pricing strategy, and we did not regulate it,” Valladao said. The commission’s traffic management policy states that, “Economic practices are the most transparent ITMPs. They match consumer usage with willingness to pay, thus putting users in control and allowing market forces to work.” Michael Geist, the Canada research chair in Internet and e-commerce law at the University of Ottawa, this month blogged about the need for the CRTC to adopt new guidelines for usage based billing, guidelines that he calls Internet Billing Usage Management Practices, or IBUMPs. The guidelines would expand on the CRTC’s net neutrality policy, which Geist wrote “left economic ITMPs largely unregulated, effectively giving the Commission’s blessing to UBB. Given recent marketplace developments, it is increasingly clear that was a mistake.” Geist calls for four additional policy conditions that would apply to retail usage based billing: ISPs should be required to prove that usage-based billing addresses specific network congestion concerns. To make usage-based billing as unrestrictive as possible, consumers should have the option for “rate-limited” accounts, which limit speeds when usage caps are exceeded, as opposed to the caps and overage fees they face now. If ISPs are using traffic shaping and still face congestion, they should be required to explain why. The CRTC should have the authority to examine overage charges in markets where both cable and DSL Internet providers use usage-based billing to protect against price gouging. Lawford said economic traffic management has been an unintended consequence of the commission’s net neutrality policy. “These economic ITMPs are really just pricing, and it’s really just retail pricing,” he said. “They used it in a very clever way to justify their own billing preferences. Then, to impose them on other people, is really quite a stunning move. The real failure of this ITMP decision was this bit about, ‘You should try economic ITMPs first.’ They didn’t think how that would distort the market, and it really has.” While the policy implies that economic measures would eliminate the need for “throttling,” Lawford said ISPs are now managing traffic and charging for usage, what he calls “double dipping.” “If you’re addressing your congestion there, then that pricing you don’t need,” he said. “But they do both. It’s totally cheating. They’re charging you for dropping traffic.” Lawford said the policy has also unintentionally discouraged ISPs from investing in their networks. Michelis said Bell is “dealing with the explosive growth in Internet usage” in various ways. “In order to ensure that all our customers have the best experiences possible, Bell employs measures such as major network investments, pricing approaches such as usage based billing and traffic management,” she said. Ken Engelhart, senior vice-president of regulatory affairs at Rogers Communications Inc., said in an interview that his company only employs traffic shaping for upstream peer-to-peer file sharing, which the ISP manages at all times of day. “Usage-based billing is an economic ITMP so it will curb usage and it will ensure that the very heaviest users are not driving huge investment expenditures,” he said. “The traffic shaping, as I mentioned, is also an ITMP, for the upstream, not for the downstream.” Rogers recently responded to traffic management complaints from customers playing the online interactive game World of Warcraft. Engelhart said the company worked to resolve the issue with the manufacturers of both the game and Rogers’ traffic-shaping equipment. “We put a patch in to correct the problem. But the game has since changed, the problem has re-emerged, so now we have to get a new patch and it won’t be ready until June,” he said. On the bright side, Lawford said Canadians are much better off than Americans, where net neutrality rules proposed by the Federal Communications Commission (FCC’s) provide more flexibility for wireless services. In Canada, the CRTC has included wireless services in its regulations. Last week, the U.S. House of Representatives voted in support of a resolution that said it “disapproves” of the FCC’s net neutrality rules. Approval of the same resolution by the Senate could nullify the FCC’s ruling, but the White House is expected to veto such a move. “I think overall we’re actually in a good spot,” Lawford said. “We don’t have very good monitoring of what ITMP are being respected. We have this wholesale mess, which we brought on because of this economic ITMP mess, but overall, we’re better off than the states by a million miles.” mburgess@thewirereport.ca

18 months on, industry divided on effectiveness of CRTC net neutrality policy

Broadcast | April 12, 2011

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