Last week, many in the Internet community were outraged by a U.S.
Federal Communications Commission proposal that would significantly
undermine net neutrality. The commentary on the (still unpublished)
U.S. proposal says it all - The FCC's New Net Neutrality Proposal is Even Worse Than You Think
, Is Net Neutrality Dying
, How Open Will the FCC's 'Open Internet' Really Be?
, Goodbye, Net Neutrality: Hello, Net Discrimination
, and Net Neutrality Dead for Good?
. The FCC responded with its own post
that did little to assuage the concerns, stating that the U.S. rules will propose:
1. That all ISPs must transparently disclose to their subscribers
and users all relevant information as to the policies that govern their
2. That no legal content may be blocked; and
3. That ISPs may not act in a commercially unreasonable manner
to harm the Internet, including favoring the traffic from an affiliated
Transparency and no legal blocking are hold overs from the earlier Open
Internet order. The third issue is where net neutrality would be harmed
as the FCC is proposing to shift toward a "commercially unreasonable"
standard for treating similar content in different ways. That approach
would certainly permit paid prioritization, where deep pocketed content
owners could pay to have their content sent on a fast lane, while
everyone else is stuck on the slow lane. Moreover, given that the
earlier Open Internet order was struck down by a U.S. court, even
transparency and content blocking presently fall through the cracks.
Given the widespread attention to the U.S. developments, many have been asking about the impact in Canada.
While some speculate
that Canada won't escape the FCC approach, there are ongoing
about the CRTC net neutrality case involving mobile
video, and lingering concerns about CRTC
, the reality is that Canada's net neutrality rules
are broader in scope than the U.S. proposal. The Canadian net neutrality rules and their enforcement are certainly not perfect, but the
Canadian rules (called Internet
traffic management practices
or ITMPs) are better than those found in the U.S. and may provide a
competitive advantage for Internet companies seeking a market
without paid prioritization.
Compare the U.S. FCC three rules with the equivalent in Canada.
First, the CRTC
requires transparency about how ISPs manage traffic on
the Commission directs all primary ISPs, as a condition of
providing retail Internet services, to disclose to their retail
customers, clearly and prominently on their websites, information
related to their technical ITMPs. The ISP must also reference its
online disclosures in relevant marketing materials, customer
contracts, and terms of service. Online disclosure should include
the following information:
- why ITMPs are being introduced;
- who is affected by the ITMP;
- when the Internet traffic management will occur;
- what type of Internet traffic (e.g. application, class of
application, protocol) is subject to management; and
- how the ITMP will affect a user's Internet experience,
including the specific impact on speeds.
Second, the CRTC policy and the law make it clear that content
blocking is unlikely to ever be approved:
The Commission notes that the majority of parties are in
agreement that actions by ISPs that result in outright blocking of
access to content would be prohibited under section 36 unless
prior approval was obtained from the Commission. The Commission
finds that where an ITMP would lead to blocking the delivery of
content to an end-user, it cannot be implemented without prior
Commission approval. Approval under section 36 would only be
granted if it would further the telecommunications policy
objectives set out in section 7 of the Act. Interpreted in light
of these policy objectives, ITMPs that result in blocking Internet
traffic would only be approved in exceptional circumstances, as
they involve denying access to telecommunications services.
Third, paid prioritization - which would result in two-tier speeds
based on payment - would face a very tough regulatory road in
of the Telecommunications Act provides that:
No Canadian carrier shall, in relation to the provision of a
telecommunications service or the charging of a rate for it,
unjustly discriminate or give an undue or unreasonable preference
toward any person, including itself, or subject any person to an
undue or unreasonable disadvantage.
The CRTC has confirmed that this provision applies to Internet
services. The statutory language, which incorporates unjust
discrimination, undue preferences, and unreasonable prefrences is
clearly broader in scope than the proposed FCC Open Internet order.
As for its application to net neutrality issues, the CRTC's ITMPs
Where an ITMP does result in discrimination or preference, the
Commission considers that establishing that the ITMP is carefully
designed and narrowly tailored is important in an evaluation of
whether or not the discrimination or preference is unjust or
The framework for analysis requires the ISP to:
Describe the ITMP being employed, as well as the need for it and
its purpose and effect, and identify whether or not the ITMP
results in discrimination or preference. In the case of an ITMP
that results in any degree of discrimination or preference:
- demonstrate that the ITMP is designed to address the need
and achieve the purpose and effect in question, and nothing
- establish that the ITMP results in discrimination or
preference as little as reasonably possible;
- demonstrate that any harm to a secondary ISP, end-user, or
any other person is as little as reasonably possible; and
- explain why, in the case of a technical ITMP, network
investment or economic approaches alone would not reasonably
address the need and effectively achieve the same purpose as
Paid prioritization would face an uphill battle under this analysis.
Moreover, the slow lane of Internet traffic might also face
regulatory challenges were an ISP to slow down content in order to
create a difference between the two delivery speeds. The
Commission has ruled that:
In the case of time-sensitive audio or video traffic (i.e.
real-time audio or video such as video conferencing and voice over
Internet Protocol (VoIP) services), ITMPs that introduce delays or
jitter15 are likely to cause degradation to the service. The
Commission considers that when noticeable degradation occurs, it
amounts to controlling the content and influencing the meaning and
purpose of the telecommunications in question. Accordingly, the
Commission finds that use of an ITMP resulting in the noticeable
degradation of time-sensitive Internet traffic will require prior
Commission approval under section 36 of the Act.
While Canadian businesses operating in the U.S. market will be
affected by the potential loss of net neutrality (creating a
potential trade barrier), the Canadian Internet market remains
subject to CRTC rules, not the proposed FCC Open Internet
order. Canadian ISPs might always try test the CRTC rules with
paid prioritization (much like they are testing
), but for the moment the CRTC's net neutrality
rules are stronger than those in the U.S.
The CRTC has also left no doubt that it has the power to regulate
net neutrality. By contrast, in the U.S., the FCC has botched
the issue by treating the Internet as an information service rather
than as a communication service. With that statutory background, the
Commission adopting a consumer-oriented perspective, and the
government seemingly willing to continue
against the major telecom companies, Canada may
have a competitive advantage when it comes to net neutrality.