The Canadian Press is out this evening with an important story that reveals the government's true view on net neutrality. Based on documents obtained under the Access to Information Act, they provide a clear picture of an Industry Minister and policy makers content to leave the issue alone, despite acknowledging that major telcos such as Bell and Telus are "determined to play a greater role in how Internet content is delivered" and that "they [Bell and Telus] believe they should be the gatekeepers of content, with the freedom to impose fees for their role."
The documents were prepared for the Minister in anticipation of questions that might arise after Videotron President Robert Depatie mused publicly about a new tariff or fee for carrying content. The departmental response as contained in a Question Period Card:
"The Internet is not regulated in Canada. There is no regulation of the relationship between Internet service providers and the providers of Internet content. There is currently considerable discussion in the industry about the implications of telecommunications companies who provide network and Interent service taking a greater role in determining how Internet content will be delivered and at what cost, if any. The Telecommunications Policy Review Panel reviewed this issue in its March 2006 report. My department is continuing to examine and assess the recommendations, including the issue of net neutrality, that were made in this report."
While that may be the official line, the documents reveal very different thinking behind the scenes. The Question Period Card continues:
"Canadian telecommunications companies, like Bell and TELUS, are increasingly determined to play a greater role in how Internet content is delivered. As the carriers of the content, they believe should be gatekeepers of the content, with the freedom to impose fees for their role. There is considerable debate in the U.S. about the relationship between content providers and Internet service providers. Last summer, telecom companies were successful in gutting a net neutrality law specifying that providers of physical infrastructure could not have any say over the content and services flowing over their networks. Congress is currently reviewing that decision. The question raises complex issues of the interests and benefits to consumers, and businesses. It would be premature at this time to draw any conclusions."
The clear acknowledgment by the government that the major telcos are intent on becoming gatekeepers for content with the prospect of levying additional content-based fees, strikes at the heart of net neutrality concerns. The Minister is obviously aware of this issue, yet unmoved about the need to act.
More troubling are two additional documents found in the same ATIP. One is a backgrounder that leaves little doubt that government policymakers are presenting a version of net neutrality that is hostile towards those arguing for action. Policy makers "neutral" review of the public policy perspective includes the following commentary:
"Many commentators note that the net neutrality debate is both broader and more complex than it is typically framed by advocates and opponents. First, the Internet has never been truly neutral or equitable with respect to data transmission. Throughout its evolution, new applications and users' growing requirements have necessitated changes to many aspects of Internet design and operation, including the introduction of non-neutral operating procedures, such as preferential content arrangements, filtering and blocking to control network abuse, as well as 'traffic shaping' in order to ensure an acceptable service level for all subscribers, despite the bandwidth-demanding activities of some users.
Additionally, the debate goes beyond equitable treatment of Internet traffic to encompass market efficiency issues. It has been argued that regulating the Internet to maintain equity in data transmission may come at the cost of impeding competitive market outcomes. If consumer preferences are demanding Internet applications that require higher quality data transmissions along with greater reliability, rigid net neutrality legislation may prevent such innovation. As well, content suppliers may wish to negotiate arrangements with carriers in order to ensure that appropriate bandwidth is made available for specific applications that they may wish to offer (e.g., medical applications, HDTV). The other side is that the prioritization of content risks discrimination against small content producers and creates a tiered Internet. Note also that previous business models that attempted to limit consumer access to content (e.g., AOL, Compuserve, otherwise known as 'walled gardens'), have failed, so ISPs have little incentive to do so. Finally, the debate raises the topic of business models for network infrastructure investment. Some argue that, without differentiated treatment, there may be no incentive to pay for the actual costs, resulting in under investment."
Note that this is the neutral policy discussion (immediately afterward are the positions of ISPs and carriers on the one hand and net neutrality advocates on the other). The discussion is indistinguishable from the telco positions, including claims of reduced innovation, the suggestion that ISPs don't have the incentive to tier content, and that network infrastructure may not be created with net neutrality legislation. Moreover, the net neutrality position is completely understated, with no references to the lack of competition, the lack of transparency, and only one example – Telus blocking content – when there are many others that could (and should) be raised.
The last document is the most telling. A net neutrality questions and answers document prepared for the Minister dated November 16, 2006, it leaves little doubt about the government's current thinking on the issue:
Q. How do you respond to comments from ISPs, such as those by Videotron's Robert Depatie, arguing that the ability to control, prioritize or block specific data transmissions is necessary in order to ensure quality of service, and to encourage investment in broadband networks and content deployment?
A. Currently, there is a wide range of contractual arrangements between ISPs and on-line service providers, and a range of technical measures have been put in place by ISPs which affect traffic patterns on the Internet. Some of these technical measures ensure that heavy use by some users does not unduly limit access by others. Other measures ensure that appropriate capacity is available to handle video and other applications which place high demands on network infrastructure. In many respects, these measures respond to marketplace demand. The government is following the ongoing discussion within the industry about network neutrality. It would not be appropriate to comment on one company's views.
Q. Is this [the Videotron comments] consistent with the recommendations made by the Telecommunications Policy Review Panel?
A. The Telecommunications Policy Review Panel reviewed this issue in its March 2006 report. It recommended in favour of ensuring consumers are able to access publicly available Internet applications and content of their choice by means of all public telecommunications networks providing access to the Internet. My department is continuing to examine and assess the recommendations, including the issue of net neutrality, that were made in this report.
Q. What is your position on net neutrality?
A. There is a lot of discussion about network neutrality, but no agreement on what this really means, whether there is a need for any government action, and if so, what form that action should take. Market forces have served Canadians well when it comes to the Internet. Public policy must consider a number of aspects of this broad issue, including:
- consumer protection and choice
- enabling market forces to continue to shape the evolution of the Internet infrastructure, investment and innovation to the greatest extent feasible
At this point it is premature to adopt a position on net neutrality. The Internet is moving so fast that caution is warranted before interfering with market forces. As with other things related to Internet policy, the first principle should be to 'do no harm'".
The shorter version of the prepared Q & A – we think blocking or prioritizing content may be acceptable, we recognize it is inconsistent with the recommendations of the Telecommunications Policy Review Panel, and we don't care because we plan to the leave the issue to the dominant telecommunications providers. This is not – as some suggest – about letting freedom reign. It is about leaving Canadian consumers and the Canadian Internet vulnerable to a two-tier Internet and providing tacit approval to those telecommunications companies that actively engage in network discrimination.