Canada seemed lost when it came to Internet policy a little over a decade ago. The government showed scant interest in the technicalities of Internet services and the Canadian Radio-television and Telecommunications Commission stood idly by as leading Internet providers engaged in traffic shaping to limit speeds of some applications and mused openly about new fees for the right to transmit content to subscribers. Internally, government policy makers were seemingly untroubled that telecom companies were gearing up to be gatekeepers of Internet content.
My regular Globe and Mail column notes those early Internet policies are unrecognizable today as Canada has emerged as a world leader in supporting net neutrality, the principle that all content and applications should be treated equally and that choices made by Internet users should be free from ISP or telecom interference. The policies do not guarantee Internet success – no law does – but it signals a clear commitment to placing consumers and creators in the Internet driver’s seat.
The foundation of Canadian policy lies in four CRTC decisions that address practices such as managing Internet traffic to limit speeds for some applications or creating pricing plans that “zero rate” certain content that does not count as part of monthly data consumption caps. CRTC policies now restrict these practices, recognizing that net neutrality preserves the “common carrier” approach for ISPs and encourages marketplace competition and innovation based on price, speed, and quality of networks.
The support for net neutrality in Canada – it has also been endorsed at the political level with Canadian Heritage Minister Mélanie Joly promoting the policy as a competitive advantage – comes just as the United States moves in the opposite direction. U.S. President Donald Trump has been prone to policy flip-flops, but his regulator has begun the process of rolling back open Internet rules backed by questionable claims that “Internet service providers do not appear to offer ‘telecommunications’.”
The U.S. Internet policy reversal extends to privacy as safeguards limiting the ability of ISPs to collect, use, and disclose subscriber Internet activities have been discarded. By contrast, the Privacy Commissioner of Canada ruled in 2015 that Bell’s plans to use subscriber information for targeted advertising without express, opt-in customer consent violated the law.
The U.S. model shifts unprecedented power to a handful of giant telecom companies. Indeed, the removal of privacy protections was justified on the grounds ISPs were unable to compete with Internet companies such as Google and Facebook in using the personal browsing habits of customers for advertising purposes.
Notwithstanding dire warnings that Canada can ill-afford to diverge from the U.S. on Internet and telecom policy, the truth is there have long been significant differences between the two countries. On the regulatory front, Canadian law features safeguards against unjust discrimination, undue preferences or controlling the content of communications.
The Canadian market is exceptionally insular, dominated by domestic companies with little penetration from large, foreign players, whose attempts to enter the market have generated lobbying campaigns by Canadian incumbents to keep them out. Canadian companies have generally greeted the net neutrality framework with support (Rogers Communications supported restrictions on zero rating plans) or indifference (Bell says it already complies with the rules) and there is little reason to believe regulations will have a significant impact on long-term plans to invest in their networks.
Meanwhile, Internet companies have reacted to the U.S. developments with alarm – hundreds recently signed a letter opposing rolling back net neutrality rules – and the Canadian approach may provide an attractive alternative.
Most notably, Canadian consumers and creators will benefit in the long-term from the net neutrality policies. The CRTC noted that the evidence showed that zero rating offers were typically limited to high-end plans, thereby doing little to increase affordability of wireless services. Moreover, the European experience indicates providers that do not zero rate offer better prices and larger data allowances.
In other words, everyone pays for data, even where providers advertise “free” data for some content. What distinguishes the Canadian net neutrality approach from the U.S. model is that it is consumers and creators, not telecom companies or ISPs, that are in control when it comes to using the Internet.