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What the Canadian Government Really Thinks About Net Neutrality

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Tuesday February 06, 2007
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.
Comments (23)add comment

fedge said:

...
Bottom line: I pay to access the internet as supplied by my ISP. The websites I visit also pay to access the internet. My ISP is simply an access point to the internet. My paid account should allow me to access what sites I desire without any preference dictated by the ISP. When the ISP starts messing with my internet "feed" then it's time for me to get a different ISP.
February 06, 2007

j ally said:

Rogers actions are an argument for Net N
As of February 1st, Rogers are now throttling bittorrent for even encrypted transfers. Prior to that, they throttle VOIP SiP protocols to promote their owner Rogers VOIP service over competitors.

They've basically killed these protocols completely, for legitimate and illegitimate use. Talk about an argument for net neutrailty or what; these companies are basically telling us we need it to stop actions like these.
February 07, 2007

AlB said:

Deja Vu
Another example of teleco behaviour with no competition.

First Rogers and Telus bought up their cell phone comptetitors and then jacked the rates for their cell phone users.
Now that they have finished eliminating the small ISPs they are prepared to do the same to Internet users.
February 07, 2007

Kevin McArthur said:

Neutrality.ca
J ally,

"Prior to that, they throttle VOIP SiP protocols to promote their owner Rogers VOIP service over competitors."

Do you have any evidence of this. I've heard this before but it has been entirely conjecture.

We track net neutrality violations in Canada on the Neutrality.ca site and would welcome any evidence that you can produce on this.
February 07, 2007

a guest said:

NOW do you get it?
Michael, many of your readers argued that enabling ISPs to block any sites that a private organization deemed to be kiddy porn would lead to the ISPs abusing their new-found powers.

You responded that you were confident thatsuch power would never be abused.

Michael, now that the other shoe is about to drop, how do you feel?
February 07, 2007

Matt L. said:

...
UNBELIEVABLE!

This government is just too damn corrupt to be given a pass on this issue.

First it's the threat of losing fair-use copyright protection and now the government, without ANY PUBLIC HEARINGS or a clear electoral majority has handed Canada's Internet future to the very robber barrons the continue to exploit their customers with their telco monopolies.

And to think... these same telcos want to form a consortium to provide a Canada-wide WIFI network!

Were are the opposition parties on this issue? Who the hell is representing average Canadians.
February 07, 2007

Gerry said:

...
Anytime someone says "content provider" when talking about the Internet, they totally miss the point of the net. Net users cannot be classified into providers and consumers.

Other than that important point, I don't mind if some ISP does not provide net neutrality; what I want and what I think we need is last-mile-neutrality. Only one last-mile provider (the telco) needs to allow other ISPs access to its last mile link. The others (cable, fibre-optics, wireless) can force their users onto their own ISP. This means (1) not enough competition in the last-mile business; (2) not enough competition in the ISP business, especially for uses in some poorly served areas; and (3) fewer innovative packages for users. I don't mind if some ISP wants to provide a package with some traffic blocked or given priority, as long as I can choose among many ISPs, and as long as the last-mile is totally neutral.
February 07, 2007

kyle said:

...
Being blocked from site isnt my primary concern. Its when they say, 50.00 for basic cable, +$10 for BT, +$10 for any pr0n, +$20 for any network utilities (FTP, UDP, ICMP, etc.)

Here comes the nickel and dime-ing.
February 07, 2007

Mathieu said:

...
This is totally unacceptable!
We already pay for internet service and they aren’t cheap ..And now they want us to pay more to access certain sites?
This is totally bullshit!

Like Matt L. say in is comment it’s UNBELIEVABLE!! When is the public the Canadian not the guys that get paid 200 000$ to vote against net neutrality I guess they all have action in those ISP and there getting small envelopes put under there desk to vote against it.

What next on there table a new rules for TV broadcaster that will allow them to add flag between TV show that will block you from changing channels unless you pay more for a service that will give you access to zap channels in between TV show… where is our world going..

People want freedom of access they don’t want to pay more for service that they already have and that is totally free, the right to surf the internet and access what ever they want.

What is the next step a great Canada firewall like China? Common peoples wake up! This is totally unacceptable.

I wish and support Net Neutrality!
I am not a supporter of the current government and from what I read I can only say that they are corrupt and they have no clue what the majority of Canadian wants. Ask them what they want if they are against it then …. But I cannot see the majority of Canadian voting for a law that will put chains on the internet users and there wallets..

VOTE FOR NET NEUTRALITY! SUPPORT THE FREEDOM OF SPEECH!
AND THE FREEDOM OF THE INTERNET
WE ARE NOT LIVING IN NORTH COREA OR CHINA AND WE DON’T WANT TO BE IN CHAINS LIKE THEM.
February 07, 2007

LANjackal said:

a thinker
"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."

The only thing I've ever recalled consumers preferring is more bandwidth. Period. ISPs are trying to defend their plans by pointing to "demand" that they can show virtually no proof of.


"Some argue that, without differentiated treatment, there may be no incentive to pay for the actual costs, resulting in under investment."

Again, pure nonsense. ISPs do not currently deliver their services for free. If they really do need the money, then hike the bill. Just be aware that their competition may decide not to.


Another problem with the ISPs' argument: Let's assume they get their way and create a tiered internet. What if everyone decides to go for Top Class service? Then the ISPs are back to square one - there's no way they could possibly guarantee QoS to all the Top Class clients. But they're getting paid to. So all they've managed to do is weasel more revenue out of their customers for something they can't possibly hope to deliver. None of this is about investment in infrastructure. It's about essentially being able to run a licensed scam.


What I'm about to say may run into the region of Game Theory, but I'm pretty sure than once the Top Class clients realize they're paying for essentially nada, 2 things may happen:

1 - the ISPs raise Top Class prices to continue guaranteeing QoS to those who can pay. Some Top Class clients drop out due to the higher fees
2 - Some Top Class clients drop out anyway after realizing that their traffic isn't really being prioritized anyway

I deliberately excluded adding new capacity as an option because, unlike 1 and 2 above, it can't be done overnight. This is another reason why the ISPs' argument for a tiered net is crap. Either way, the ISPs lose Top Class clients.


And yet another thing: most of internet traffic isn't YouTube or Google Video- it's P2P. Thus, not only is a tiered net a solution to a problem that doesn't really exist, it's likely that the businesses who spring for it may not see any significant demand for the content relative to "renegade" traffic anyway. Again, the tiered business model comes crashing down.


It's for these reasons - and the fact that I despise government control over technology - that I still believe we should hold of on net neutrality legislation and simply allow the ISPs to see their tollway business model crash and burn. That would be a more powerful and permanent lesson, and it wouldn't require any hard-to-erase laws.
February 07, 2007

Jocko said:

Moriarty
I'm curious about how much the Canadian Tax payer has paid to build out the existing infrastructure.

Direct grants to programs like Schoolnet, R&D tax credits to networking companies and ISP's etc. equates to a public investment in the infrastructure of this country. As many enlightened jurisdictions understand, a free and open Internet is a necessary public utility that should be accessable on the same level as roads,and water.
February 07, 2007

Andi said:

Father of three
I've avoided Videotron and all ISPs who decide to block what type of use I can make of my connection…even if they offer higher performance.

I know my limits in terms of bandwidth and stick to it. Instead of using the few gigs/megs of free storage these ISP offer, I want to run my own small server to share my pictures with friends and family, why should I use or pay for services I don't like nor want? As long as I have a choice I will be happy with the way things are.

Bottom-line let's use the road system as an analogy. Private companies build them, the government runs them and make up fundamental rules such as the speed limit, and other rules of the road, but you get to drive where ever you want using the vehicle of your choice provided it meets Canadian standards.

When people start to care too much about something, undoubtedly government will step in.
February 07, 2007

p said:

...
Question: How many time will it take for the Office of the Auditor General to know how much Pierre-Karl (really) contributed to Industry Minister electoral campaign ? Will it be before or after the next federal elections ?
February 07, 2007

Darryl Moore said:

...
"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."

WHY??? This statement is non-sequitur. How will requiring the ISPs to treat everybody the same prevent the development of these technologies. Just the opposite might be true. If everyone has equal access to the Internet then you will get a lot more experimental and open source initiatives that would not be feasible in a market that charges a premium on necessary bandwidth and lag.

The only thing that will be accomplished by not having a neutral Net is that the cost to offer these services will ensure that only the established industry will be able to do. This is an issue of business models and anti-competitiveness. The big boys are getting support for their preferred model, and it is going to be at the expense of other equally valid ones.
February 07, 2007

Nedder said:

...
Net neutrality would make it illegal for Rogers to use traffic shaping, i.e throttling bit torrent. If that happened, their network performance would degrade, especially in over-subscribed areas. They might actually have to do some upgrades on their crappy network then.
February 08, 2007

Matt L said:

Net Neutrality Advocate
Here's a way that every Canadian in their community can ensure Network Neutrality.

Every telephone pole, cable and gas line run on, over or through PUBLIC land. In order to do this they need Municipal easements which allow them access. These easements are under the direct control of locally elected politicians. So....

What every Canadian community needs to do is to amend their Municipal easement codes and/or agreements to include network neutrality guarantees. No guarantees. NO EASEMENTS. It's that simple.

This issue needs to become a grassroots, local issue. We have got to inform and educate local politicians on the incredible economic damage these telcos could inflict on small communities by setting up digital toll roads.

One comment noted that the Internet is not about content providers and viewers. This language is coming from the telcos who want to impose the monoculture, closed garden model of the broadcast cable industry on the Internet.

No Net Neutrality Guarantees. NO PUBLIC EASEMENTS!
February 08, 2007

a guest said:

...
I think most people here are only looking at the issues this causes on the near side.

It's not only a matter of the ISP which provides your home or work Internet connectivity, but those that provide the content you demand, and those that -carry- that content.

It doesn't matter if you stick with Mom & Pop's DSL service, your traffic still needs to cross the large networks owned by the large, profiteering companies.
February 08, 2007

Darryl Moore said:

throttling should be illegal
Nedder said: "Net neutrality would make it illegal for Rogers to use traffic shaping, i.e throttling bit torrent. If that happened, their network performance would degrade, especially in over-subscribed areas. They might actually have to do some upgrades on their crappy network then."

You're absolutely right, and the ISPs argue that they wont be able to afford to do so and that is why they need this two-tier system. What they wont tell you is that the other option under net-neutrality laws would be to charge everybody (surfers and content providers equally) for the amount of bandwidth they consume. They already play at this with some ISPs enforcing download caps, but it is not their preferred business model because then their own content will have to be on an equal footing with everybody else. Gasp.
February 08, 2007

Kevin McArthur said:

Neutrality.ca
Darryl, _exactly_, and Shaw et all already have a cap. 60 gigs/mo. I don't need that much, nor do most people. But we should be selling transfer on the per-gig model just like we sell wireless minutes.

Consumer rates for bandwidth are currently between 30 to 70 cents a gigabyte depending on who you buy it from. If you buy in bulk like Shaw et al do, you can get that for 3-7 cents a gigabyte.

10x markup seems more than reasonable to me.

At a reasonable 30 gigs/mo and 50 cents a gig you're talking $15 in bandwidth charges and a reasonable 'system access fee [read support]' on which they can compete on, say $9.99? $25 for broadband seems like a pretty good price to me. So why is the cost so high? Greed my friend.

Those who use bittorrent to download all their content should pay $1/video for the privilege of congesting the net (assuming a 1:1 share ratio, 50 cents a gig, and a 500meg file)

If billed in this fashion, then the motivation to the isp to have fast pipes is directly equated with your ability to quickly consume that bandwidth. The more bandwidth they add on, the faster you can consume your traffic allotment.

Transfer, Bandwidth, System Access Fees. Lots of room for competition here. Nothing in Net Neutrality would hinder this type of competition. What it will do is stop the extortion of customers and content producers on a per-site, per-service, per-application basis, which would destroy the internet.

February 08, 2007

fung0 said:

Rogers Throttling?
Just thought I'd mention that I'm on Rogers, and use both VOIP (Primus) and bittorent with no problems. I'm in downtown Toronto... can't speak for other areas.

As for paying extra... Why? I'm already paying for premium bandwidth; I expect to be able to use it. They can raise their rates (they do all the time), but allowing my ISP to discriminate regarding HOW I use it is the end of open competition in online services.
February 09, 2007

Bill Reid said:

Just a smoke screen
I agree with Kevin. This whole Net Neutrality is not about getting funds to upgrade the network. It does not take a rocket scientist to figure out that people who download enormous amounts of data should pay a higher price. Why telcos and cablecos do not attempt to recover their costs from these bandwidth hogs has always puzzled me.

Of course charging for throughput does have issues. Viruses, botnet attacks, spyware, etc. can create heavy loads which are difficult for a user to completely prevent.

The argument about the need for increase revenue is a smoke screen. The telcos and cablecos really want to control content. They do not want to be in the business of just delivering bits.

On a related note, Cringely (PBS) proposed an interesting thought. He was saying that Google owns or controls a lot of fiber. He suggests that their plan may be to directy connect to the large ISPs. This would mean that all Google traffic would not transit the Internet. This would be a big saving to the ISPs.
February 09, 2007

Kevin McArthur said:

Neutrality.ca
"Viruses, botnet attacks, spyware, etc. can create heavy loads which are difficult for a user to completely prevent."

There is a suspend button on my cable modem. If people are worried they can hit the button. Further, after a few people get a big bandwidth bill from a virus, it will be more easy to quantify the dammage viruses do, and instead of the ISPs picking up the bill [and passing it along to everyone else], maybe it would make consumers take some responsibility for keeping viruses and worms off their machines by keeping their systems up-to-date.

Just like disabling international long distance on modem lines, you should be able to set a hard-cap on your transfer usage at the ISP too so you don't go over because of a virus or whatever.
February 10, 2007

Dan said:

We need to petition!
This is crap! All these big ISP's advertise "Unlimited Internet access" for a monthly fee, NEVER do they even say there is possibility of other charges (BANDWIDTH)!
How do these companies get away with charging to have something & then charge you to use it! "Talk about double dipping your customers!" Kinda like the cell phone companies "Bell Mainly" how can they make you sign your name to all there terms & crap then few months later completely change it! Now there charging for service + charge you to send txt & they charge to receive txt!! What the hell? Do you think the post office would get away with making you pay to send your mail & then Make the receiving recipient pay to receive it to!

Fine you companies need to change services to keep up but I don't think they have a rite to change any existing accounts!
Not without drawing up a new contract anyways!
April 23, 2009

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