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The Bell Wake-Up Call

By Michael Geist

For months, I've been asked repeatedly why net neutrality has not taken off as a Canadian political and regulatory issue.  While there has been some press coverage, several high-profile incidents, and a few instances of political or regulatory discussion (including the recent House of Commons Committee report on the CBC), the issue has not generated as much attention in Canada as it has in the United States.  I believe this week will ultimately be seen as the moment that changed.  Starting with Rogers new pricing schedule without much needed transparency on its traffic shaping practices, followed by the CBC's BitTorrent distribution of Canada's Next Great Prime Minister, and now the revelation that Bell has quietly revamped its network to allow for throttling at the residential and wholesale level, there is the prospect of a perfect storm of events that may crystallize the issue for consumers, businesses, politicians, and regulators.

The reported impact of traffic shaping on CBC downloads highlights the danger that non-transparent network management practices pose to the CBC's fulfillment of its statutory mandate to distribute content in the most efficient manner possible. This should ultimately bring cultural groups like Friends of the CBC into the net neutrality mix. Moreover, it points to a significant competition concern.  As cable and satellite companies seek to sell new video services to consumers, they simultaneously use their network provider position to lessen competition that seeks to deliver competing video via the Internet.  This is an obvious conflict that requires real action from Canada's competition and broadcast regulators.

The Bell throttling practices also raise crucial competition issues. 

The CRTC has tried to address limited ISP competition by requiring companies such as Bell to provide access to third-party ISPs that "resell" Bell service with regulated wholesale prices that lead to a measure of increased competition.  Indeed, there are apparently about 100 companies that currently resell Bell access services.  Many have made substantial investments in their own networks and have loyal customer bases that number into the tens of thousands.

Those same companies have expressed concern to Bell about the possibility that it might institute throttling and thereby directly affect their services.  Until yesterday, Bell had sought to reassure the companies that this was not their plan. For example, in response to a question about network speeds to resellers, it told the CRTC in 2003 that:

the throughput will be determined by the customer's user network interface (UNI) access circuit capacity rather than the Peak Information Rate (PIR) setting.  Of course, Bell Canada reserves the right to implement a PIR rate in cases of troubleshooting or to protect the network infrastructure from congestion resulting from malfunctioning or mis-configured equipment or malicious hacking.

The new throttling system has nothing to do with troubleshooting, malfunctioning equipment, or malicious hacking, but rather involves speed limits for a particular class of traffic.  Moreover, for months Bell has been installing "deep packet inspection" capabilities into its network.  Sources advise that the company was regularly asked about its intentions and that it consistently assured ISPs that throttling would not apply to wholesale services. Now that the company has dropped that pretense, the business community is left to wonder whether it will soon target business VPN traffic or broadcasters like the CBC for their streamed traffic.  This represents a fundamental reshaping of the Internet in Canada as we pay (literally) for the dire lack of competition and independent ISPs gear up for likely legal challenges.  Regardless of those outcomes, it will become increasingly apparent that the regulators and politicians can no longer remain silent.  Nor should Canadians.

Full post as published by Michael Geist on March 26, 2008 (boomark / email).