Internet law in Canada has evolved significantly over the past decade with the introduction of new privacy, e-commerce, and copyright legislation. One constant, however, has been governmental support for a hands-off, self-regulatory policy approach for Internet service providers (ISPs). Given the rapidly changing online environment, it is time to re-examine that position.
Support for self-regulation was premised on two key issues. First, ISPs argued that they operate much like “common carriers” and therefore should not be held responsible for the data that traverses their networks. This argument resonated with many public interest organizations, who feared that stricter oversight might lead to content regulation and greater online censorship. Second, both government and the ISPs were anxious to foster marketplace competition and therefore kept regulations to a minimum so as to encourage new entrants and greater consumer choice.
The content regulation argument remains true today. Policies that encourage ISPs to monitor or censor network traffic on the basis of its content are both unworkable and dangerous. While there have been proposals in Canada that focus on content regulation – for example the recent suggestion that ISPs exert greater control over content to combat child pornography– after considered analysis proponents have typically sought more effective alternatives.
Regulatory oversight on the content side of ISP activity is only one side of the coin, however. The flip side, which holds the potential for greater governmental oversight, is the ISP’s network or carrier function.
This should not be confused with “regulating the Internet”. Rather, new oversight focuses on service provider accountability consistent with that found in many other sectors of the economy. In fact, the government has long been involved in network oversight. For example, the Canadian Association of Internet Providers, Canada’s largest ISP association, asked the Canadian Radio-television and Telecommunications Commission in the late 1990s to force larger ISPs to modify their retail activities and to sell them high-speed residential Internet access at wholesale rates. The CRTC agreed, issuing an order designed to foster greater competition.
Building on that history, there are at least four reasons for Ottawa to open the door to more aggressive regulatory involvement.
First, the marketplace assumptions of the 1990s that focused on encouraging new market entrants are no longer valid. While the consumer market for dialup Internet access is indeed competitive – hundreds of ISPs operate across the country – there is far less competition in the high-speed Internet access market.
In fact, consumers that have access to broadband (it still remains unavailable in the majority of Canadian communities), are likely to have no more than two choices with a single cable or DSL service provider. The limited competition means that both options are strikingly similar in price and service, leaving consumers vulnerable to new restrictions such as the introduction of bandwidth caps.
Second, as I highlighted several weeks ago, there are troubling signs that ISPs may engage in packet preferencing, by blocking or slowing data coming from competing sites or services. This concern has become a reality in the United States, where Vonage, the leading independent Voice-over-IP provider, has claimed that some ISPs are blocking its Internet telephony service. Its complaint to the Federal Communications Commission led one ISP to agree to stop the practice. Yet soon afterwards the company reported that it believed that a second ISP was doing much the same thing.
Given the hostility demonstrated by Canadian ISPs such as Videotron to independent services, there is a real threat that the same conduct may gravitate north. With this issue unlikely to disappear, government may need to intervene to preserve the neutrality of the network.
Third, from spam to spyware, the Internet has been hit with a growing variety of harms that negatively impact the usability of the network. Although virtually all ISPs claim to combat such ills, the truth is that some ISPs do much more than others. For example, late last year AOL reported that by implementing a series of technical solutions, it had greatly reduced the amount of spam reaching its customers.
Without a binding code of conduct (as is found in other jurisdictions such as Australia) there is no guarantee that other ISPs will similarly fight spam. This allows those that harbour spammers and that fail to implement much-needed technical reforms to free ride off the efforts of others and to transfer the costs of combatting spam and spyware to all Internet users. A stronger regulatory environment could be used to pressure all ISPs to do their part.
Fourth, the federal government’s lawful access plans, which will reportedly require ISPs to implement new interception capabilities and to hand over subscriber information without a court order, places Canadian ISPs into the position of being critical guardians of sensitive personal information. While ISPs will no doubt take their obligations seriously, some groups fear that privacy and civil rights will take a back seat to the cost concerns associated with the government’s proposals. If Ottawa’s plans go ahead, regulatory oversight might provide an additional layer of protection against privacy breaches and data misuse.
Given the evolving Internet environment, Canada would do well to reconsider its regulatory approach to ISPs. In fact, now is a particularly opportune moment for such consideration since Senator Donald Oliver has introduced a bill that includes an ISP regulatory framework and Industry Minister David Emerson has recently committed to a full review of Canada’s telecommunications law, providing an ideal venue to address ISP issues.
While the principles that underpin ISP policy – robust competition, consumer choice, network neutrality, a strong anti-spam commitment, and appropriate protections of customer data – are no doubt shared by most of the Internet community, the best way to achieve those goals have changed. The Internet has evolved and so too should our policy approach to ISP accountability.