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Bell's 'Throttling' Plan a Threat to a Competitive Net

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Tuesday April 01, 2008
My weekly technology law column (Toronto Star version, Vancouver Sun version, Ottawa Citizen version, homepage version) focuses on the competition concerns raised by Bell's throttling plans.  I begin by noting that the CRTC has long acknowledged that Canadians enjoy limited competition for high-speed Internet services.  In response, it has supported independent ISPs by requiring incumbents like Bell to provide wholesale broadband Internet service at regulated rates. While it is difficult to price-compete - the Bell wholesale pricing creates an effective minimum price - independent ISPs such as Chatham-based Teksavvy and Ottawa’s National Capital Freenet have carved a niche in the Canadian market through attention to customer service, innovative bundling approaches, targeted network investments, and community ownership.

Last week, this important piece of the Canadian Internet connectivity puzzle learned that its future viability has been put at risk due to Bell's plans to "throttle" its wholesale services. Last year, Bell began installing "deep packet inspection" capabilities into its network.  The DPI capabilities - which allow ISPs to identify the type of content that runs on their networks - did not go unnoticed by the independent ISPs since DPI is also used to "throttle" Internet content by scaling back the amount of bandwidth allocated to particular applications.

While Bell employed these throttling technologies with their own Sympatico customers, some independent ISPs sought assurances that it would not be applied to the wholesale services.  Sources advise that Bell responded positively that its plans were limited to its own customers, consistent with its 2003 assurance to the CRTC that it would only engage in limiting bandwidth for wholesale services "in cases of troubleshooting or to protect the network infrastructure from congestion resulting from malfunctioning or mis-configured equipment or malicious hacking."

Notwithstanding those commitments, earlier this month Internet chat boards began to buzz with rumours of throttling among independent ISPs.  A Google Maps mashup was created, documenting instances of reduced bandwidth that stretched across the province.  Late Friday, John Sweeney, Bell’s Senior Vice-President of Carrier Services, sent a letter to the independent ISPs acknowledging that it has implemented bandwidth management from 4:30 pm to 2:00 am for its wholesale customers.  Sweeney admitted that peer-to-peer applications will not work as fast during this period, but argued that "a majority of end users will experience an increased level of satisfaction."

While much of the initial commentary has focused on the implications for consumer rights, that discussion misses the more important aspect of this story, namely that Bell’s plans undermine the Internet’s competitive landscape by raising three competition concerns.

The effect on ISP competition, particularly in Ontario and Quebec, points to the first competition issue.  Simply put, wholesale level throttling lessens the ability for independent ISPs to differentiate their services and therefore compete in the marketplace. Indeed, critics argue that this is intentional since Bell's decision to throttle its own residential customers enabled the independent ISPs to attract dissatisfied subscribers and gobble up market share.  By throttling everyone, Bell may be trying to recapture those lost customers.

The second competition concern is the effect on ISP services such as the secure virtual private networks used by companies and video streaming employed by many broadcasters.  With DPI and throttling in place, Bell may soon be positioned to implement premium pricing for services that business currently takes for granted, thereby raising costs and cutting independent ISPs out of the picture.

The third competition concern brings a cultural dimension to the issue.  The major ISPs claim that throttling is needed to ensure better quality of service to all customers, yet it also has a significant effect on the video marketplace.  Cable and satellite companies have begun to sell new video on demand services to consumers, which compete directly with video distributed over the Internet. For example, last week the CBC used BitTorrent to distribute one of its programs, yet some subscribers reported that the episode took hours to download.  The slow speeds were no accident.  Rather, they were a direct result of ISPs limiting available bandwidth, something they do not do for their own video services.

These obvious conflicts point to the glaring need for action from Canada’s competition and broadcaster regulators.  Recent regulatory attention to the issue in the United States has paved the way for commitments to treat content equally.  Canadians deserve - and should demand - nothing less.
Comments (29)add comment

Mike said:

...
Michael, I just read your column in the Ottawa Citizen. Thank you for bringing attention to it, we need much more exposure to get results and this is a good step.
April 01, 2008

Ed said:

...
I read your column in the Toronto Star. Please continue to bring attention to this and give it a voice.
April 01, 2008

Michel said:

Oh please not the self-righteousness tru
I would LOVE to have some competition at my home. I am near downtown Montréal, and my choices are one. Bell and all ADSL-based systems are not available due to bad telephone lines (I get pristine signal, but get cut every 5 minutes), that leaves me to Videotron. Look is nice too, but doesn't offer bidirectionality, so I would need to have a phone line to upload to Look. If I have these problems and I'm half-hour walking distance from old Montréal, I can imagine what is the situation elsewhere. I also am using VOIP services. It's weird on how we had such a plethora of problems with Videotron precisely the moment they started offering their Voice over Cable service... it climaxed firday Dec. 22nd 2006 when somewhere in the line all Videotron clients weren't able to connect to my VOIP provider. Isn't it strange, just before christmas break. I digress.

On topic, at work, we are using server hosting services, they have more than a few ten thousands clients, probably the same as Bell has wholesale clients. We are NEVER being limited in bandwidth, no matter what is happening. We do have a phone call happening quickly, though. If something happens, my personal phone rings and I get to choose what's to happen with my bandwidth, do I throttle it, do I close the infringing port, do I pause some service. But anyways, I am paying for the bandwidth. My friend once got a call their service was using their monthly bandwidth allotment in a matter of hours. After having determined it was wanted business, he decided to leave the system working, and pay the extra money. How I choose to use my bandwidth money is mine, though, and if I'm creating congestion, so be it, if it's by malicious hacking, so be it. It's mine, and I do what I please with it. That's for the CRTC assurance.

For the majority of satisfied clients, I am not a normal client. I upload a lot, I use VPNs a lot, I do "weird things", I use services like (ooh) ping and (eek) traceroute. That's my job. I got started doing these on the Internet very early on. Right now, paying for the service would not be a problem for me (except morally), but I see many newcomers in Internet programming would have a hard time do these in their basement, like I used to do. Most new protocols would not be able to be implemented due to these restrictions. That's stifling innovation to the best, for no reason more than money, as usual.

So let me rephrase my net-neutrality stance. I work sometimes from home (VPN), I use a 3rd party phone carrier (VOIP), I play games like WoW (weird protocols), I am managing many servers and networks from wherever I am (weird protocols again). Never am I using more than 5% of my Internet connection bandwidth allotment if I count weekly, I am almost never using my whole download/upload capacity, but my access will be stifled as a scapegoat. And even if I wanted to pay premium, I couldn't provide more, since even a premium plan with my ISP would not guarantee me the access I want, as they are putting all their clients in the same mould, if not even throttled by their upstream provider.
April 01, 2008

Teacher look pension fund to b said:

Teacher look pension fund to buy BELL
if the teachers pension looks ot BUY bce im sure these issues must come to play they might end up buying into a company with amssive legal issues,
would a teachers rep tell WE the PEOPLE of canada that they would force the end of these bad policies and return the internet of canada to a competitive end , perhaps investing if they seek to prove so in some of canada's alrger 3rd party isps LIKE TSI, who has a wonder plan to recruit users that bell cannot hope to match.
Why is it bell has to outsource to india there tech support ( way cheaper then here ) and yet still cant compete with TSI who has canadian Tech support?
Why is it the teachers pension would invest in such a anti canadian company?
Why is it they would invest in the harm of all of canada?
Why is it they would endorse BELL's treatment and misuse of contractual laws?
Why is it they would endorse harrassment of BELL's customers?
Why is it they endorse a company that can't keep its word?
WHY WHY WHY?
more we push this angle the more it will NOT happen BSE needs to be sold and we should not allow it, the banks are having hard time lending the cash, and ill hazard that bell is massively bleeding customers right now.
it become sofficial that when they ( BSE) threatened to sue me for using a govt banned application of a p2p application i video/audio taped the conversation and you can hear me laughing.
I left them instead of sueing htem for slander/liabel/breach of contract/fraud/what else?
now heres reasons not to be with bell
A) they are source of traffic shaping
B) unless you work an after noon shift or not at all ( as i do not) you might as well buy dial up account as ALL you max is 384Kbit NOT the advertised 7000megabit or 5000 megabit.
C) tech support with bell is horendous, ive tested this and got 4 differant answers for one question and insome case snever got a proper answer / rememdy at all.
D) TSI for example pays me 1$/month to get new customers
guess what i have free internet almost now.
E) IF your patriotic you should support companies whose tech support is in canada ( TSI again and most if not all 3rd party ISPS )
F) i have been saying the 3rd party isps ought to form a union and begin helping each other to make a new network. The idea would have a Charter that would for bid traffic shaping and when you sell 5 megabit unlimted
you have to be able to have or give 90% of that max based on the number of accounts that you wish to sell.
Even 80% is better then 5% bell gives us 12 hrs of the day when we all most use it.
G) something else is up, if there network is so poor that they need ot reduce it 95% for 12 hrs which is also 95% of the time its used, then i hazard to say that someone hasnt been upgrading as htey said and if they have just what exactly are they upgrading for and whom.
H) SAC 5$ liscense fee with these speeds is now NOT DOABLE its now cheaper to buy a dvd then use the internet and in fact if you cant get on in the time its unshaped then getting anyhting even free stuff now just became undoable.
I) as a software game developer , I am now FORCED TO USE
bit torrent as a distribution model asn i do not have bandwidth to out stuff myself over and over again even if TSI allows me to run servers.

In short ask your teachers why they want to screw canadians and give them this website.
In short do not support rogers or bell, go with 3rd parties for a better stronger canada!!!!!!!!!!!!!!
April 01, 2008

up it said:

upload it
hahahaha
Teacher look pension fund to said:
"it become sofficial that when they ( BSE) threatened to sue me for using a govt banned application of a p2p application i video/audio taped the conversation and you can hear me laughing. "

PLEASE OH PLEASE Upload that for all to listen to and enjoy!
April 01, 2008

Section 8 said:

Section 27
I was looking at Golbergs blog and in it he says this:
=======
The standard test for discrimination or undue preference is found in Section 27(2) of the Telecom Act. "A carrier cannot unjustly discriminate against a competitor or confer an undue preference to itself or any of its customers."

"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."

he then goes on about how Bell is treating everyone fair.
========

BUT, Bell is not throttling its Bell-Aliant customers. Is this treating all wholesalers fairly like Bells own customers?

No, its not. It failed Goldbergs litmus test.

TY for noticing Bell isn't playing fair Mr. Goldberg.

When will the competition bureau or industry Canada or the CRTC step in?

Bell is not throttling its own, but forcing a throttle on teksavvy and other wholesale internet providers.

Why is that?
Hmmmm
April 01, 2008

mr peepers said:

...
About the only thing I can do about this is to cancel as many Bell services as I possibly can and encourage my friends, family and co-workers to do the same and so that is what I will be doing until this situation is rectified - hopefully others will do the same.
April 01, 2008

Jardine said:

CBC Radio Ontario Today
The CBC Radio One show Ontario Today had a segment this afternoon on net neutrality and the throttling Bell and Rogers are doing. Rogers didn't want to talk to them. Bell had a spokesman on who said the usual "we're just balancing our network so everyone can enjoy faster speeds" spiel. Then they brought on a lawyer from a group in Ottawa (the name of which I've forgotten, but they're for net neutrality). He made some good points that I hope got across to the general audience. They took listener calls and the last caller was Rocky from Teksavvy.
April 01, 2008

Dave said:

Bell is throttling its own
Bell Sympatico does throttle its customers, I have been throttled since last october or november. About one month after I re-signed up with them.

This summer I'm breaking all ties with Bell.
April 01, 2008

Paul said:

...
Do the wholesale regulations for broadband come under common carrier rules, or contract carrier rules? It seems to me that if the broadband infrastructure comes under common carrier rules, then traffic shaping wholesale connections would violate the regulations.
April 01, 2008

the privacy act prevents me said:

the privacy act prevents me
sorry guys if it seems im stirring the pot but when i am known by name by them and i out those tapes i will be in big trouble via the privacy act.
So as i said i am keeping the video/audio's and i have over 40 of them all from november 12th right to the day of the incident only 4 are admissible by legal standards and yah im going to out those still id rather not tip the hand as im still technically a bell customer (phone ) which btw changes in a few days ( HI to TSI )
TSI is saving me 30$ to what bell would charge.

OH and dropping the bell express vu, seems htey are so concerned as to have me chat with them for almost 2 hours ( and it was taped ) to which i have borught every concern i noted on all th epages i have visited including dslreports.com.
to which they not only offered me a discount of 20% but a new pvr/digital box that has 2.5 times reocding time LOL. so in effect bribe me to stay. Also i can use the other recoder and hook it up else where and get both free rentals for a year.
Seems the heat is on peeps. The 1st thing out of here mouth was after i said id be droping due to the sympatico ISP policy "oh no not another due to that..."
where i was paying almost 81$ i decided to stay and Enjoy one division of bell thats going right and even gave htem a few suggestions about how to tag tv eps so you can record all eps feature works better.
i dont mind rewarding a good division but said no matter what im droping the phone as a measure of protest about the isp stuff.
Watch them try and bribe me too that will not work
unless they drop my price more then TSI which with TSI saves me 9$ a month.
so since all this began ill be saving
21$ a month on internet ( TSI)
9$ a month on phone (TSI)
15$ a month on tv(ExpressVu)

45$ hrm
all bell needs do now to ruin themsleves is screw expressvu and thats it
April 01, 2008

a guest said:

...

Campaign: Stop The Throttler
http://stopthethrottler.ca
April 01, 2008

x said:

x
so what do we do?
this is absolutely insane.
they're using monopoly of cabling to destroy all their competition.
cable traffic shapes as well

HOW DO I GET TRUE, UNFILTERED ACCESS TO THE 5 MEGABIT CONNECTION I PAY FOR????
WHO DO I WRITE ABOUT THIS?
HOW DO I FIX IT? MOVE TO EUROPE?
April 01, 2008

fedge said:

...
I already dumped Bell's home phone and was about to dump Sympatico but where do go now if TSI's service is corrupted by Bell as well?
April 02, 2008

Todd Sieling said:

...
Another excellent writeup of the issue as it stands at this point. I think business customers have a very clear choice when it comes to internet service: they can go with Bell, and risk machine-guessing of whether or not their access is throttled at any given time, or they can take their money to ISPs that will provide the service they offer unambiguously and fairly. Any business that depends on Internet access should steer clear of Bell until they can depend on uniform and reliable access.
April 02, 2008

HTTP bittorrent ( BELL CANT SH said:

AND DONT SAY I DONT HELP CANADA
Scope of development project
The scope of this project extends to all users connecting to the World Wide Web
using the Mozilla Firefox browser. This extension software that we are developing can be
easily downloaded from the internet and installed with the Mozilla Firefox browser. It is
being designed to be used only for HTTP protocol hence will not interfere in the working
of other protocols. In case it encounters FTP or any other kind of download mechanism,
it will not take any action and the default proceedings of the Mozilla Firefox browser will
come into effect.

NOTE i hate to say to bell i told you so and you'd be fraking shocked whose making this.
April 02, 2008

HAHA said:

HHAHAA
"In case it encounters FTP or any other kind of download mechanism,"

OHHHH like traffic shaping software....

btw im not outing a url to get this...yet.
I hate to say it how much did the noobs spend on this shaping.

April 02, 2008

a guest said:

RoBaer
I just read your column in the Toronto Star. A succinct and well placed argument. I think its the framed the concerns of traffic shaping and net neutrality into a language and context the "layperson" can relate to (finally). I am hopeful that this prong of the defense will bring the CRTC into action on this cause and get the playing field level once again. Thanks Michael... and keep it up.
April 02, 2008

Rob said:

...
As a shareholder and customer of Bell I must I am very disappointed in the direction that this once great Canadian company has taken over the past few years.
From laying off of Canadians not only in tech support but all telephone support personnel to throttling of bandwidth and fee creep on my Bell bill.

It is becoming quite clear that Bell is trying to maximize profits to maximize share prices to make itself more attractive to potential buyers. As a share holder I am thrilled that they are trying to maximize profits. However it doesn't take a genius to figure out that you can only push your customers so far before they start leaving. Once this happens your revenue begins to fall and you start looking for more ways to compensate for that lost revenue (modem rental fees, bandwidth throttling, TV package price increases to name just a few steps already taken). I fear that as Bell continues to implement these measures to compensate for lost clients they will continue to drive more and more clients away.
Right now I think we are seeing early adopters leave Bell and while this segment surely makes up a tiny portion of Bell's client base it is a litmus test for the future of Bell.

I have seen a few comments and been asked a couple of times of why should we bother to leave Bell if the independent ISP's are being throttled by Bell as well. First off not all independent ISP's are reliant solely on Bell for their Bandwidth, if I remember correctly AllStream (AT&T Canada), Primus, MCI (Worldnet), Cognet, TORIX and Ottix all provide backbone connections in Canada. Secondly you would be supporting Bell in vastly reduced capacity, instead of paying all you money directly to Bell Canada you would only be paying a portion of your money to Bell in the form of ISP bandwidth purchases. And lastly you would be supporting a local Canadian company of your choice who employs local Canadians perhaps even your neighbour.
If enough customers leave Bell then perhaps other shareholders will stand up and demand action be taken by the Board of Directors to fix the situation. Unfortunately I think most shareholders are looking towards the buyout and wanting to get the most money they can. Given the current economic climate towards lending money I think the buyout will fail and we will be left with a company that is a shell of it's former self.

What Canada needs is true competition not just in the internet market but the Phone and Cable industry as well. Canada is currently beholden to Shaw, Rogers, Cogeco, Vidotron, Telus, Primus and Bell for it's Internet, Telephone and Cable/TV options and non or very few actually compete against one another. Canada's media market is in fact much closer to an Oligarchy rather than a free market.
April 02, 2008

John said:

Dump Your BCE
Reply to Rob
I just dumped about $12K worth of BCE at about $35. Was this a financially stupid move. Yes it was. However, I could not stomach having investments in company that chops away internally in order to make themselves look more financially attractive. Its no way to run a business and in the long run I know my investment will suffer. Any potential buyers should take note. In the long run its a money losing process
April 02, 2008

R. Peciulis said:

...
Meanwhile, Bell appeals the CRTC ruling.

"Bell said such regulation is no longer necessary now that there is enough competition in phone and internet markets".

Not even Orwell could come up with such classic doublespeak. What a disgusting company.

April 02, 2008

Moofo said:

Telecoms in Canada
Not only in the High Speed Internet business, the entire telecom industry need to be dereglemented. The government protected local companies for too long and every sector is now filled with Cartels (Bell, Telus, Rogers anyone ?) or companies with monopolies.

As the most taxed country and less tech toys in north america, we have the right to have proper prices for telecom services.

Let's sack Bell. Instead of upgrading to ADSL 2+, they spent money dimishing service for everyone.

A Teksavvy client
April 02, 2008

NCF member said:

...
I want high-bandwidth internet-based applications to run well, and throttling is a threat to that, no matter how little I do of it. Thus I would prefer bandwidth thresholds rather than throttling.

Do the right thing, CRTC -- stop Bell from wiping out their competition.

I want the market to offer services packages that differ (isn't that the only true evidence of competition?). Bell is threatening that -- they apparently want a world with only one service offering (from only two providers, Bell and Rogers).
April 02, 2008

Monoploy said:

Bell Abusing its Monopoly
Check this,

Bell Canada Inc. is calling on the courts to scrap mandated access by competitors to its network, a move that could jeopardize some smaller companies that sell phone and internet services.

The CRTC on March 3 reiterated that third-party companies should continue to be able to rent telephone companies' networks in order to provide their own customers with phone and internet services. The regulator considered this network access as essential for smaller companies to offer their services, and for some of them to survive.

In its appeal, Bell said such regulation is no longer necessary now that there is enough competition in phone and internet markets.

[ link ]

This has gone to far. WHAT is the problem with our government and the Industry Minister?

Time for change.
April 02, 2008

a guest said:

Throttled in Rural Saskatchewan
LOL Welcome to my nightmare. I have been a customer of Xplornet for 2 years and throttling is just a matter of principle with them. Satellite has a latency problem so p2p and torrents are not even the issue. Yet they maintain the same mantra of a few bad apples ruining it for everybody.

So... why throttle? Why not a simple solution like a bandwidth cap. Go over and pay even more. I would, for myself, be happy with 50 gigs and $1 per gig for over usage. Need more? Subscribe to a higher package.

I pay 100 percent of my bill each month and I should expect a consistant level of service. When I want what ever slice of the bandwidth pie I want it now, by the mouthful, not by one mere crumb at a time. For those bandwidth hogs who feel they need the whole pie... put your money where your mouth is and pay for it.

Stories abound of late of the internet slamming to a grinding halt in the next ten years where speeds will be back to where we were with dial up. Ten years? LOL Here it is folks, by design. Don't let them pretend they are doing us all a favor in letting them maintain that they are doing it for the sake of all. What, are we all suddenly little children?

By going green... by taking responsibility for ourselves for how much we feel we need to download may we preserve the internet backbone we have today and let the big isp's worry more about building a new one for the future instead of trying to put their resources in putting the choke on us now. Quit treating us all, your customers, like we are all equally the problem. Make us part of the solution. Your only success so far is in pissing us off!!
April 02, 2008

Mike said:

...
I'm paying an arseload of cash for a capless business DSL connection with a static IP for my home, and I can no longer use remote desktop and my VOIP telephone at the same time. Thanks Bell, you assclowns.
April 03, 2008

Pat said:

...
People have to action this in a unified fashion - dump all Bell services and tell them why AND gripe to your MP and the CRTC. Contact the media (Marketplace, W5, whoever) and spread the word. If it's not actioned it will be the typical Canadian gouging scenario foisted on an uncomplaining public and then it becomes a defacto "standard" - consumers end up getting less for more. The best way to penalize Bell is to attack their revenue base, and don't follow the Canadaian way and leave it to somebody else - action it together!
April 03, 2008

aardvark said:

aardvark
Eventually, we'll just encrypt all communications... rendering low-level packet analysis throttling technology useless. Unless, the telecom decides to throttle ALL encrypted communications.
April 04, 2008

Liam said:

Bell\\s Torrent of Unhappiness
You are absolutely right, but in order for this to work we need way more exposure! The article in the papers was a good start, but we NEED a lot more people to sand up and put this cold, hart-less company to the grave!
April 27, 2008

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