Michael Geist

The CRTC’s usage based billing oral hearing concluded yesterday with a final decision expected some time in the fall.  This long post focuses on the shift in CRTC thinking on the state of broadband competition in Canada but wonders whether it comes too late to make a difference. For many years, the CRTC has steadfastly maintained that the Canadian ISP market is competitive. For example, in the net neutrality decision from October 2009 it stated:

Consistent with the current regulatory approach, under which the Commission has granted forbearance for retail Internet services, primary ISPs may continue to apply ITMPs to retail Internet services as they consider appropriate, with no requirement for prior Commission approval. This approach remains valid due in part to the large number of existing ISPs. A change in the approach would amount to interference with market forces and would result in inefficient regulation, which is contrary to the Policy Direction.

The current CRTC FAQ says much the same thing:

A retail customer is the end user who purchases access to the Internet. The CRTC does not regulate rates, quality of service issues or business practices of Internet service providers as they relate to retail customers. This is because there is enough competition in the market that retail customers can shop around for service packages.

The view that the Canadian Internet services market is competitive has shaped virtually every recent important CRTC decision on broadband regulation. Given its longstanding view that the market was competitive, the frustration felt by independent ISPs, businesses, and consumers simply didn’t resonate with the commission. That led to a decade of decisions on TPIA (the cable access for independent ISPs) that rendered the market practically unusable for independent ISPs. It led to years of delay on speed matching, which effectively left independent ISPs with slower, uncompetitive speeds to offer potential customers. It led to the decision to block ADSL-CO, which would have allowed independent ISPs to co-locate closer to the residential customers. It led to the net neutrality decision, which encouraged ISPs to use “economic ITMPs” such as usage based billing without restriction. Finally, it led to the approval of wholesale usage based billing, which came within days of implementation before the public outcry ground it to a halt.

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