Vonage Requests CRTC Investigation Into Shaw VoIP Charges

Update: I have now had the chance to read the Vonage filing which is better described as a request for an investigation as opposed to a complaint.  In fact, Vonage concludes its submission by arguing that "Shaw' s QofS Service has the potential to greatly damage nascent competition for local VoIP services across its serving territory.  Vonage Canada is of the view, however, that not enough is known at this point about the Shaw service in order to formulate an appropriate regulatory response."

Original posting:

Vonage Canada has filed a complaint with the CRTC against Shaw over Shaw's VoIP premium surcharge. The cable company charges a $10 "quality of service enhancement" fee for VoIP users, which Vonage is characterizing as a VoIP tax.  Vonage argues that because it "competes directly with the telephone services of the network operators that also provide the high-speed Internet access, the incentives to discriminate against us are clear. This will result in less innovation, less choice and higher prices for Canadian consumers in the long run."

This could become a hugely important case since much of the two-tier Internet is based on similar enhancement fees for either customers or web services. The CRTC mistakenly declined to address the net neutrality last year in its VoIP decision, despite considerable evidence that this was an emerging issue that could have debilitating effect on the Internet.  In the months since that decision, both the telcos and cable cos have openly discussed their plans for a two-tier Internet.  While it appears that Vonage has focused primarily on the need for greater transparency with the Shaw fee, this has opened the door to the CRTC becoming more engaged on network neutrality.
Update II: Vonage raises a long list of questions including:

a. What does Shaw's QofS Service consist of, from both a technological and service implementation perspective;

b. is Shaw's QofS Service properly viewed as an enhancement to Shaw's high-speed retail IS, or as a companion to local VoIP service;

c. does Shaw's QofS Service, in fact, deliver on the promise of enhancing a customer's use of the local VoIP service of a third party VISP;

d. if Shaw's QofS Service does, in fact, enhance a customer's use of this service, does it do so to any significant extent;

e. what is the justification for a recurring charge to the customer for a service that it appears, may consist of a one-time configuration of the Shaw-approved cable modem used by the customer to obtain Shaw's retail IS;

f. what is the take-up rate – past, present and likely future, of the Shaw QofS Service, and what is the likely effect of the service on competition in local VoIP services; and

g. what measures might be appropriate to ensure the Shaw QofS Service does not allow Shaw to discriminate unjustly among customers and against third party VISPs, e.g., the mandating of the QofS to all Shaw higher-speed Internet access customers, the ability of IS resellers or VoIP providers to resell the QofS Service, and on what terms and conditions, or other measures.  

A case well worth watching.


  1. Fduquette says:

    As the CRTC is a regulator of media, their net neutrality mystifies, given the net is a convergence technology, not a paradigm shift. Why should other media sources be governed where the internet is not.

  2. ludditelounge says:

    Abuse of Dominant Market Position?
    In a market that has been carved up nicely amongst very few players, the QoS charge looks to me like an abuse of power.

    If the cost of carrying packets goes up, apply for a general rate increase and ensure everyone has access to the same quality of service.

    Trouble/Benefit is, there is enough granularity in the network to turn QoS on/off at will.

  3. Joe Parent is correct when he affirms that Shaw should increase its network capacity instead of prioritizing bandwidth use based on the clientele paying a quality of service fee. much like companies like AOL want to do with email, Shaw seems to be attempting to implement a two-tier VoIP system.

  4. There is no guarantee for VOIP quality when it goes out of your local network. The fee is a load of bull.

  5. These, and other similar issues will continue to plague the telecommunications industry over the next year or so, as service providers begin to realise their demise into “bit-pipe” providers. Google Video, VoIP and net neutrality debates will all add fuel to the fire. ISP’s need to give careful consideration to their terms of service, and what they are really trying to provide. The reality is that we are all consumers of a best-efforts internet service, and as services capable of differentiating from simple file transfers, email, web access begin to emerge into the mainstream – such as VoIP and video-on-demand, we will realise that the networks are not capable of delivering these services for the masses the way they are built today. Investment into bandwidth to prevent degredation will be necessary, and must be funded. The services that drive QoS requirements must be the services that fund them, leaving the best-effort internet intact. No VoIP premium means best-efforts VoIP, and as long as service providers are regulated to enforce the same rules on their own services as those of their competitors, the world will go on.

  6. bstrosberg says:

    Packet prioritization
    The real abuse here is the cable companies targeting services that are painful to the consumer if they degraded. Typical users do not care if they have to restart a bittorrent session to download music – they do care if their long distance telephone service is poor. Typical VOIP traffic consumes about 64kbit per conversation using a non-compressed, companded G.711 codec, while a peer to peer music/movie/video theft session can consume the whole pipe – 300Kb or more.

    Consumer level VOIP is not a major abuse vector for ISPs – but QoS is more critical. If the issue is capacity, target services that are actual abusers of capacity.

    The issues here are political and business-related, not technical. The pipeline providers are generating technical smokescreens to obscure non-technical conflict.

  7. Andy Freeman says:

    When is a difference not a difference?
    Even if Shaw does give better service to folks paying the QoS fee (probably by purposefully degrading service to other customers, but I digress), what are the odds that they negotiate, that is pay for, better service for those packets as they cross other networks?

    If they don’t, the QoS doesn’t help because other networks is where those packets spend most of their time.

  8. New Service = New Fee
    I’m going to take an opposing stance here. Handling pioritized packets takes additional infrastructure and new equipment. I believe Shaw is within their rights to recover this cost from their consumers.

    While QoS is not strictly necessary for VoIP, it obviously makes for better voice streams by reducing latency and jitter. A standardized QoS service that I could use for any low latancy need is something of extra value over the standard best-effort nature of IP, and I would be willing to pay for that.

    The part I have problem with is if Shaw is competing with other VoIP providers and using this as a cost differentiator. If that is their business plan, then I too see a need for regulation. Perhaps the IP transport business should be separate from the VoIP business with separate financial goals and accountability.

    When the medium and the media are run by the same entity, there is always a potential for abuse. Take Sony and their rootkit fiasco as an example. AOL-TimeWarner as another…

  9. Chris@montreal says:

    From my understanding of QoS, it would certainly make a difference at times if Shaw is in the not uncommon practise of overbooking, where not all customers could possibly use their allotted maximum bandwidth at one time, and would prioritize them over other types of traffic during congestion. However, should a (or all) customer be guaranteed the use of a certain amount of bandwidth at any time then why should they pay a premium when the carrier has created a pinch by not expanding their capacity accordingly. A capacity crisis would indicate that they are doing swift business and should be perfectly capable of investing more in their network to do more business as such services become everyday market opportunities.

  10. Cable modems
    When you purcharse a cable modem through your local cable company (even DSL) what I do on the internet is my own business. If I choose to browse the web 24 hours a day 7 days a week is my business because that is what I paid for.

    VoIP phones fall under this same category. If they can charge a tax because I am using my cable modem to make phone calls and they want me to pay them to use their phone system (but its to expensive) that is just plain wrong. Why stop their then? Why not charge me for doing FTP, IRC, IM and Email as well.

    Bandwidth is Bandwidth and they adverstised unlimited bandwidth. As long as I am not breaking any laws then their are 100% in the wrong in implementing this tax! They are just trying to force their customers to use their other products.

    *cough* Windows *cough*

    Can’t use one dominance to get you another one. Been decided in USA Courtsh and EU courts already!

  11. Don’t judge too quickly
    Lots of people are crying abuse, and ‘VoIP tax’ etc. It doesn’t appear that any of these claims have any basis.

    Shaw has to implement QoS on their network if they want to offer their own VoIP service. That’s just how Cable VoIP (aka “PacketCable”) works.
    The fee appears to be an OPTIONAL service. They are acknowledging that users will continue to use competing VoIP services, and are offering to provide the same QoS perk to users who are willing to pay for it.
    They are definitely NOT actively impairing competing traffic. They are not requiring people to pay extra — if you don’t pay extra, you get the same service you’ve always gotten.

  12. When does an ISP become a content Provid
    I think this the real beef, once the providers start treating packets differently depending on content, they are really not INTERNET support providers anymore.

  13. The biggest problem…
    The biggest problem I found with this is that the QoS problem only occurred after Shaw’s own brand of VoIP (Shaw Digital Phone) came into effect in a given area.

    I live in a little town outside of Calgary, and for the longest time, my VoIP phone worked perfectly. No problems whether I was on it at 7PM on Friday night or 3AM on Wednesday morning. Then Shaw’s Digital Phone system became available, and my QoS dropped significantly. Then Shaw came out with this thinly-veiled “VoIP Tax” and it’s caused an uproar.

    The thing is, all was fine before they implemented their system in my area. So charging me a recurring $10.00 / month fee is rediculous, for a QoS I had already payed for using my internet service through Shaw.

    The other big problem is that at the moment, my VoIP phone is my primary phone, with my cell being my backup. With this QoS problem, my phone conversations are frequently frought with “What was that ?”‘s. What should happen if, for example, I have an emergency in my household, and need to dial 911. My cellphone’s dead, and I have this QoS problem with my VoIP phone. The operator at 911 will sit there thinking it’s a prank call, and my emergency will be all the worse. They are interfering with the possibilities of emergency conversations, and that is against the law.

    Too bad Vonage hasn’t used that in their arguments (that I’ve heard of). It’s reason for a class-action suit that would win. Coxcom down in the USA lost a suit on those same grounds.

    Something to think about.

  14. Pat de Zeeuw says:

    Lobby the CRTC
    I invite all users of voip technology to complain to the CRTC. Perhaps our collective efforts will put a greater sense of urgency to a ruling that will better reflect the needs of the masses. I invite all of you to start today with your letters of complaint to the CRTC. This so called “quality of service enhancement” fee for VoIP users is nothing more then a fleecing of the masses because our regulatory bodies are not doing their job. I encourage you all to start contacting the CRTC on mass. Act now and let us bring change where it is needed!!!!

  15. Oddly enough Shaw internet users in major cities have been recieving really poor quality of service for the last 10 days during the peak hours of telephone usage.

    [ link ]

    What is interseting here is that internet users seem to be having their connections throttled during these peak phone usage time.

    Coincidence? Or perhaps someone is robbing bandwidth from Peter to pay Paul.

  16. I have been watching for news re: Shaw’s lawsuit against Vonage Canada since it was filed in Calgary in June 2006. At this point, nobody seems to be reporting anything about the case. Does anyone have any news to share?

    The cynical part of me thinks that Shaw and Vonage are going to settle out of court and will likely cut a deal whereby Shaw will not hinder any Vonage VoIP traffic in exchange for a payment of a premium (“network usage fee”?) by Vonage Canada to Shaw. This way, Vonage users would not need to pay for Shaw’s laughable QoS Enhancement Service (which really does nothing to improve QoS based on comments on various internet discussion boards) because Shaw would not subject them to traffic shaping.

    Does that sound far-fetched or is it a probable scenario?

  17. QOS on voip is a scam