CRTC Network Management Hearing, Day Five: Telus, Cogeco, Barrett Xplore

Day five of the CRTC's network management hearings featured at trio of ISPs, each offering a different perspective on network management issues: Telus (DSL), Cogeco (cable), and Barrett Xplore (satellite).  While the three presentations provided a valuable reminder about the differences in network architecture, each had its own important moment.

The key Telus moment came during questioning from Commissioner Len Katz about the impact of the managed IP network (ie. Telus IPTv) on the public Internet.  Katz expected to hear that there was no impact, yet Telus admitted that there was an effect.  In other words, this is one big pipe and the managed traffic can have an impact on the IP traffic.  This is a crucial admission since it highlights how Internet-based activities compete on the same pipe as managed IP ones.  In other words, a video on the public Internet effectively competes with a video offered on a video-on-demand service and throttling of the Internet-based video necessarily raises competition concerns.

The Cogeco presentation served to emphasize that without rules, carriers will be free to throttle or limit bandwidth, regardless of any concerns about congestion.  This came through when Cogeco was twice asked why it continually traffic shapes on a 24 hour, 7 day per week basis, rather than when there is actual congestion.  The response was essentially that it is their network and they are entitled to do as they see fit (assuming that the throttling is legal).  The Commissioners should take note that the Cogeco policy and response demonstrates that this is not – as von Finckenstein suggested earlier in the week – a hearing about dealing with network congestion since policies like that employed by Cogeco bear no direct relationship to network congestion.

The Barrett Xplore presentation was highlighted by an attempt to play the P2P blame game.  The company began by explaining how it needed to manage traffic to deal with bandwidth hogging applications like BitTorrent.  Yet when asked why its disclosure policy did not reference shaping of P2P traffic, the company admitted that its traffic management policies were not P2P specific.  Rather, anyone using too much bandwidth (based on the company's assessment) would find their connection throttled.  In other words, Barrett Xplore has a bandwidth problem, not a P2P problem, yet P2P provides a convenient excuse.

Today's summary was compiled by Sean Murtha, a law student at the University of Ottawa.  Other coverage available from the National Post liveblog and twitter feeds (CIPPIC, me). [update: National Post and articles]

CRTC Net Neutrality Hearing – Day 5, Friday July 10th, 2009

TELUS Communications Company

Michael Hennessey, Senior Vice President, Regulatory & Government Affairs

Hennessey began by stating that practices only relating to the public internet, and do not apply to managed wireline or wireless practices (or "ITMP"s).  He noted that TELUS does not currently impose any specialized traffic management practice however, this does not imply that TELUS would not invoke traffic management if congestion became more of a problem than it currently is.

TELUS noted that in 2009, it will spend $950 million on "next generation hybrid fibre and wireless HSPA networks because we need to be more competitive".  However, he noted that this is not the only solution to capacity challenges, and that traffic management innovation and consumption-based pricing are other potential ways to manage capacity. Hennessey explained that TELUS is troubled by the statements of some parties that assume that all that needs to be done to keep up with traffic is to keep investing with no guarantee of a return.  He said that it is "simply nonsense" to insist on the one hand that ISPs should invest more in capacity, and then suggest that that capacity must be shared, at a discount, with other ISPs that are not incented to invest, and worse still, that do not think there should be any restriction on the amount of someone else’s bandwidth they consume.

TELUS argued that regulation can increase risk for telecommunications companies.  The threat of new regulation that could constrain ability to earn a reasonable profit is a scary thing for ISPs. Basic issues are easy to identify and address: everyone agrees that access to an open internet is a good thing.  Everyone agrees that some action by ISPs to block certain things, such as spam, is a good thing.

TELUS urged the commission not to put a "one size fits all" regulation for all networks.  It does not impose any traffic management, but if it adopted such practices, then any ISPs using that platform would be subject to those technical measures.  As a result, ISPs wanting greater control would have to invest in their own platform. TELUS does not disagree with the CRTC outlining broad principles, however they oppose the calls for ex ante tests or rules of general application governing any aspect of the provision of internet access services – this would be "a recipe for unintended consequences".

Hennessey concluded by stating that if there is a problem of undue preference, then it should be brought forward, and dealt with.  Let’s not create new rules, or new committees, without proof of harm.  The same reality that all ISPs face is that Canadian internet users expect to be able to go anywhere they want.  The CRTC should be vigilant when it comes to undue preference, but, equally, it should be as vigilant in ensuring an environment that allows fair forms of discrimination.


Chairman von Fickenstein
Mr. Von Fickenstein noted that, in its opening remarks, TELUS included a large qualifier by stating that "TELUS does not currently use traffic management techniques, but that does not mean that it will not". Should there be an ex ante requirement? Mr. Von Fickenstein noted that the CRTC’s usual way of dealing with this is ex post (i.e. after a complaint has been made).  However, should we rule out ex ante rules?

TELUS argued that the CRTC should focus on fact, things that have already happened.  The representatives pointed out that because the internet is vibrant and dynamic, we should deal with things as they arise, and not try to deal with hypothetical situations before they arise.  TELUS said that you would not want to develop ex ante rules.  There is not an overwhelming body of evidence to justify, currently, an ex ante approach.

Commissioner Lamarre
Should ISPs be considered a "public utility".  She said she had a difficult time not seeing ISPs as a "public utility", or providing the equivalent of a "public utility".

Public utility rules were meant to deal with monopoly providers, and because there is competition in the form of many ISPs, this is not the same.  While the service (i.e. internet) is equivalent to a public utility, the form of how it is provided is not a public utility, because of the competition.

Lamarre –
Does TELUS feared regulation on the engineering of their networks?

TELUS believes that the management of the wireless networks will be very different from the wire line networks, and as such fear blanked regulation that might be well matched to one form, but not applicable or a good fit for another network.  Concerned that there must be a differentiation made between wireless networks and wire line networks.  The CRTC must be careful about applying too much rigidity at this stage.

Lamarre –
TELUS stated that most customers have no interest on the traffic management decisions of telecoms.  Where is the example of this?

Mr. Hennessey noted that TELUS "sticks to its guns" in believing that the vast majority of internet users do "not care how things work".  While internet users care about Michael Jackson’s death and funeral, the overwhelming majority of Canadian internet users do not care how things are done.  While people are following these hearings in the news, on blogs and on twitter, that is a very slim percentage.

Lamarre –
Do you think most users would care if these traffic management changes infringe their privacy rights, or would impact their privacy?

Of course users would care about that.  What TELUS is looking at is dealing with congestion management.  From the customer’s perspective, what TELUS is trying to do is provide better service.  Moreover, TELUS recognized federal privacy legislation, and noted that there is already a mechanism in place to deal with invasions of privacy rights.  Carriers have to ensure that they do not break federal privacy legislation.

Lamarre –
Would TELUS agree that anything the CRTC crafts here should have at its goal protecting the privacy rights of users?

Hennessey stated that "I would put it a little differently, which goes back to TELUS’ fundamental point that anyone should be able to access anything on the internet which is legal."  However, he noted that we want to avoid duelling forms of legislation (i.e. highlighting the fact that there is already privacy legislation in place). If a privacy issue arises, it should be dealt with by the existing mechanism, which is the privacy commissioners.  He noted that TELUS would "put the boots" to anyone in their company who created a traffic management process which infringed users privacy rights. TELUS admitted that privacy is not something they have really prepared to discuss, because right now it is not an issue for them, because they do not currently impose any traffic management processes (but they acknowledged that it is certainly a live issue). If the CRTC were to come across a privacy concern with the way an ISP conducted its traffic management, then in practice, the CRTC should not ignore the issue.  However, there is a concern about overlapping jurisdiction with existing privacy legislation.

Vice-Chairman Leonard Katz –
Would any growth within TELUS take away capacity from the public internet service?

TELUS is always trying to increase its capacity for the public internet.

Katz –
-However, what if TELUS was not able to expand capacity for some time – could a decision be made where TELUS favours IP management, or something else, to the detriment or exclusion of the public internet?

-TELUS struggled to give an answer which was satisfactory to Mr. Katz on this point.  However, they stated that theoretically, "if push comes to shove" and a choice had to be made, TELUS would favour the public internet.  They noted that we have to remember that this is a competitive marketplace – there is not wisdom at all in degrading the service, because TELUS customers do have other options in the form of other ISPs, because of competition within the industry.

Katz –
-Mr. Katz noted that TELUS said that they do not currently have traffic management in the retail/wholesale is this a business reason or a technical reason?

The network is set up in such a way that the retail and wholesale network is integrated, and it is very difficult to differentiate between the two.  For a large portion of the network, it would not be possible to differentiate between the – different parts of the network are in different parts of evolution, so it would be difficult if not impossible to segregate them.

Katz –
Mr. Kutz pointed out that Bell has been able to do this with their networks.  He asked TELUS to include in their final submission to the CRTC documentation about whether or not they can differentiate between the two networks.

Commissioner Timothy Denton –
-Mr. Denton asked whether it is TELUS’ view that there is no wholesale price which could be established which would make retail competition legitimate?

-At this point, a price that reflects the total cost that TELUS has to bear when it makes an investment risk would be appropriate.  There might be a price at which such leasing would be accessible.  Mr. Hennessey explained that the CRTC should continue to have the power to deal with unjust preference in the wholesale market. 

Commissioner Timothy Denton –
Clarify the term "next generation network", as it was used in TELUS’s oral submission.  "In your view, is "next generation network", as the term was used in your submission, connote a specialized term of art that needs to be explained?"

By that we mean cutting edge technology that can increase capacity and speed on our networks.

Denton –
Many of the parties that have appeared before the CRTC have expressed concerns about "application specific traffic management measures", which really dealt with the balance of power between creators, carriers and consumers.  He wanted to know if TELUS sees that aspects of application specific traffic management are legitimate?
TELUS answered that while we they do not practice this today, they feel that they are legitimate, as long as they do not result in anti-competitive dealing or materially degrade the internet service of users.  They are not prima facie illegitimate.  As an example, traffic management may be used for high priority public alerts, if such a system were to be developed (this is an example of traffic management for the public good).

Cogeco Cable Inc.

Yves Mayrand, Cogeco, VP Corporate Affairs

Cogeco began their presentation by noting that, in short, as an ISP, Cogeco acts in both retail and wholesale access services.  It stated that they currently employ traffic shaping measures as part of their network management activities.  At a certain point, Cogeco faced no choice other than implementing "traffic shaping measures as part of our network management activities". Cogeco acknowledged that this was not an "arbitrary decision", but was made as a result of P2P applications that consume a disproportionate amount of bandwidth.  Cogeco seeks to ensure fair and sustainable usage of the available bandwidth among the end-users on their internet network.

Cogeco identified the "key issue" of this proceeding "is to determine if the Internet Traffic Management (ITM) practices used by the Canadian ISPs, mainly the traffic-shaping measures implemented by Cogeco are used in accordance with the Act". Cogeco acknowledged that "for the foreseeable future" they would continue to rely on technical management tools to protect our network and ensure fair and manageable use among all Cogeco’s retail and wholesale end-users of their network.

Cogeco also summarized how their traffic-shaping tool worked:

  • It is not applied on the downstream, but only on the upstream.
  • It is carried out solely on P2P applications that are based on bulk transfer protocols, such as Bit Torrent applications.
  • Is not interfering with the content transmitted which is always delivered without change to the recipient.
  • It is not applied in a manner to block or disrupt the telecommunication, but has only the effect of slowing down the transmission of P2P traffic.
  • It is inspecting the header and payload of each packet to the minimum extent required in order to identify the specific signature of P2P protocols; and
  • It is agnostic to any personal identifiers. (Cogeco reaffirmed this several times during their submission, that they were agnostic towards personal identifiers).

Cogeco maintained that the traffic-shaping measures they used did not give them access to personal identifiers.  As they stated "to be clear, we have no idea of the identity of customers subject to traffic shaping".  It is impossible for Cogeco to use personal information for targeted marketing campaigns.  While some information is captured through traffic sharing, Cogeco also said that it was their position that no regulatory measures designed to regulate Canadian ITM practices are required at this time. In conclusion, Cogeco noted that they "see no reason for additional rules to ensure the protection of personal privacy at the present time".


von Finckenstein –
Surely if it is restricted on the downstream side, it would impact the upstream side as well. Is that not the case?

Cogeco –
While it may have a marginal effect (i.e. if one customer is downloading from another customer who is uploading), but, for sure, that effect would be marginal.

von Finckenstein –
Is this being done to all P2Ps, or does Cogeco distinguish between P2Ps?

Cogeco –
We distinguish by focusing on file transferring P2Ps (like BitTorrent), and not some real time P2Ps, like Skype.

von Finckenstein-
Is this throttling applied on a 24 hour basis? Why does it have to be applied across the board, even when there is not a congestion problem? Mr. Von Finckenstein noted that there is not a 24/7 need, and if the issue is congestion, then why apply the same management practices when congestion is not an issue?

If we are employing this tool, why should we provide any possibility for by passing the management tool they have created? The fear is that if they limit it to certain times, then there may be unexpected spikes in use at that time.

Why does Cogeco rely on a technological response to the congestion problem (i.e. traffic management) rather than an economic response.  Is there a state of dissatisfaction with economic measures, as opposed to technological measures?

We have just begun to impose usage billing, so we do not have data on that yet in regards to congestion.  Also, Cogeco noted they were not convinced that usage billing or "economic measures" will cover all situations or new developments on the internet.

Denton wanted further clarification on the question already asked by the Chair, about why Cogeco feels the need to throttle on a 24 hour basis, when there is not a 24 hour need?

Cogeco –
Cogeco does not see what purpose there would be in doing this.  They have the technology already in place, and why should they create a window of opportunity for bypassing it?

Denton –
After noting that Cogeco said in its introductory statements that they did keep some information that they collected during traffic-shaping, Mr. Denton also noted that Cogeco said that they did not keep this information for a long period of time.  How long does Cogeco keep information it captures through its traffic-shaping mechanism?

Cogeco –
Generally, the information on traffic patterns is not kept for longer than 30 days.  The data is used to characterize what is on the network, and is used to improve it.

Denton –
-Mr. Denton asked why there is the need to keep an eye on upstream traffic, as Cogeco does?

Cogeco –
Upstream network is far more limited than downstream (it is a much more finite resource).  Also, there is further information in the confidential section of their submission.  Also, Cogeco manages this because of its inordinate ability to use the resources on the upstream, and this is simply not a concern for the downstream.

Commissioner Molnar –
Commissioner Molnar referenced what Cogeco said in their oral submission, that, on the wholesale side, Cogeco sees no reason to extend the notification requirements imposed on Bell to cable ISPs, as the circumstances are quite different.  Commissioner Molnar asked why should TPIA customers not be made aware in a timely manner what impact Cogeco’s decisions would have on them?

It would be perfectly in order for TPIA service providers to provide their own customers with the same type of information which Cogeco gives to its own customers.  Cogeco noted that its suppliers are very aware of the tools that they use, so they are not hiding anything from them.  There is no unjust or unfair treatment of the TPIA customers. Cogeco noted that, to date, there have been no complaints by wholesale clients on their management tools.

 Is it right to notify wholesale customers as to changes to internet management, so that they can in turn alert the end users who will be affected?

Cogeco :
Cogeco answered that while they tell their own customers about any changes, if their wholesale customers are not made aware of any changes to their internet management tools, then they would be happy to forward them the same information.

Barrett Xplore Inc.

C.J. Prudham VP, General Counsel for Barrett Xplore

Ms. Prudham wanted to focus on traffic management from the perspective of a small ISP which focuses on rural communities. She noted that Barrett Xplore works in every province and every territory, under the Xplorenet brand name, using fixed wireless and satellite technologies.  Barrett has invested over $140 million. While the use of traffic management is important to all ISPs, it is especially vital to a small company like Barrett.

While interveners have suggested that all ISPs need to do is spend more money to deal with network congestion, that is a preposterous position, and it would threaten Barrett’s ability to provide broadband service in rural communities. Prudham noted that "as challenging as it is to expand fixed wireless networks, expanding satellite capacity is positively daunting".  Any physical upgrades to satellite networks is an extremely expensive, long term process.

Barrett believes that each ISP should be permitted to adopt traffic management tools that are consistent with its particular circumstances, network configurations and business models.  That way, all ISPs, especially smaller ones like Barrett, will be able to employ appropriate tools to manage traffic at peak usage times to ensure that best possible quality of service for all customers.

While some interveners have suggested that carriers are discriminating against certain types of applications (like Bit torrent), Barrett offered the following points:

  1. Since existing capacity is finite, the network cannot always carry all of the traffic presented to it an acceptable speed.
  2. From a business perspective, Barrett cannot thousands of customers off its service in order to carry the excessive volumes of traffic presented by a few of its customers at a given point in time.
  3. To discriminate against bandwidth hogging applications is not unjust or unreasonable under s. 27(2) of the Telecommunications Act – it is an entirely justifiable response to the use of a shared network by a large customer base.
  4. The traffic management technologies used in these circumstances are not directed at individual users or individual applications.  They are directed at excessive use of bandwidth at peak periods and are applied without discrimination to all customers who subscribe to a given service level.
  5. As long as customers are made aware of service limitations when they subscribe to the service, these traffic management tools are both reasonable and necessary.
  6. Without these tools, affordable services would not be viable for the rest of the customers and there would be no business case for the extension of services to rural and remote areas of Canada via satellite or terrestrial wireless networks.


Prudham then discussed the 6 specific issues that the CRTC had identified in their June 5th letter to interested parties:

Acceptable Internet Traffic Management Practices – Ms. Prudham noted that Barrett believes that each ISP should be permitted to adopt and implement traffic management practices that are appropriate to its circumstances.  In their view, there is no "one size fits all" traffic management technique that would be appropriate to all ISPs.  According to Barrett, the only criteria the CRTC should use to determine whether a particular traffic management practice is acceptable is to "assess whether the use of the technique complies with the 3 principles highlighted earlier: transparency, non-discriminatory treatment (i.e. treating like-traffic the same) and non-interference with the meaning of content."

ISP Disclosure – Barrett noted that they are "an advocate for transparency", and stated that each ISP should provide notice to its customers of the traffic management practices that it employs.  This does not mean setting forth in great detail in a contract, as Barrett simply advises its customers that there are limitations on their use of its service, and directs them to a website with further information.

Privacy – Barrett does not think that traffic management practices raises privacy concerns, as Barrett does not collect, use or disclose personal information when employing traffic management techniques, like DPI.  There is no evidence that the personal privacy of internet users is impacted by traffic management practices.

Wholesale Services – Barrett does not think there should be a rule limiting the use of traffic management practices with respect to wholesale services.  They believe such a rule would be unnecessary, and traffic management is an issue that should be left to commercial negotiations between parties.

Mobile Wireless Carriers – Barrett does not believe that there is any need for the CRTC to adopt rules specifying which traffic management practices are acceptable in relation to wireless carriers.  Each mobile wireless carrier must have the ability to adopt traffic management practices that best fit its network configurations and the capacity demands made by its customers.

Scope of Section 36 of the Telecommunications Act – In Barrett’s view, the analytical framework the Commission should adopt with respect to section 36 is twofold.  First, a party that alleges that a certain traffic management practice contravenes section 36 should be required to demonstrate that the ISP has, in fact, exercised some control over the content of the telecommunications or influenced the meaning or purpose of the telecommunications.  It is only after the factual burden has been met that an ISP should have any obligation to defend its practices and demonstrate that controlling the content or influencing the meaning of telecommunications is appropriate or necessary in the circumstances.


von Fickenstein –
Is it true that Barrett can reach any potential consumer in Canada?

Barrett –
Yes that is true, we can reach every Canadian.  There are greater capacity issues in Southern Ontario and Quebec, but Barrett is working to increase its capacity.

Molnar –
Ms. Molnar inquired about where Barrett controlled the ITMPs? What influence does Barrett have on the use of the traffic management?

Barrett –
While Barrett controls the economic measures, at no point does Barrett control the technological measures (at this point). However, Prudham noted that Barrett has input on the technological measures, but the final decision is out of their hands.

Molnar –
Ms. Molnar asked whether the internet management controls which are currently in place work on a 24 hour time frame (i.e. are they always operating)?

Barrett – While the controls themselves are in place 24/7, the controls are different at different times.  As an example, the controls are more stringent at peak times, and less stringent at less peak times.

Molnar –
As essentially a "reseller" is Barrett concerned about disclosure by the upstream provider? Have you ever been in a situation where your end user has complained about changes by the upstream provider?

Barrett –
Our upstream provider has always been forthright, and we have had no complaints from out end users at this point.  Also, Ms. Prudham pointed out that she thought that this type of disclosure was best left to private commercial dealings between the small ISPs and their upstream providers.

Lammare –
Ms. Lammare asked about privacy issues. Does Barrett dispose of any personal information which is gathered during traffic management?

Barrett –
The vast majority of Barrett’s data is aggregate data, and is not individualistic.  With respect to individual data, if the customer triggers the limit, that will be recorded on their file.

von Finckenstein-
Will Barrett slow down users who "excessively" use applications, such as Bit torrent?

Barrett –
Yes.  However, the system resets each hour, so it is true that if a user is "excessively" using an application, then they can be slowed down.


  1. Jason Walton says:

    Software Designer
    “that this is not… a hearing about dealing with network congestion”

    This should also further underscore that this IS a hearing about competition. When you ask a business, “Why do you do X?” in a healthy market you expect the answer “Because this is what our customers demand of us.” as opposed to “Because even though our customers hate it, it’s legal, so why not?”

  2. Scott Michaud says:

    Soooooooo Bull?
    Denton wanted further clarification on the question already asked by the Chair, about why Cogeco feels the need to throttle on a 24 hour basis, when there is not a 24 hour need?

    Cogeco –
    Cogeco does not see what purpose there would be in doing this. They have the technology already in place, and why should they create a window of opportunity for bypassing it?


    I don’t buy their “It will make peaks there” — because they then could shift their throttling. They want to manage all traffic going through their network… for content.

  3. A Simple Analogy
    It would be nice if we the people could talk to the CRTC and have them listen. What the ISPs are doing is wrong. When trying to explain it to non-tech savvy people, I use this Analogy.

    “The ISPs are like an Airline who over-books an airplane, but instead of moving the extra people onto another Airplane, they make all the seats on the first airplane smaller so they can jam more people in”

    It seems to do the trick, and these non-tech savvy people understand how wrong it is.