Wednesday, March 26, 2008

 

Is Bell wholesale internet acting anti-competitive?

BellA reader sent me a note asking if I had any views on a recent Michael Geist posting that deals with an allegation that Bell's wholesale internet service is throttling traffic.

In the interest of being responsive to a loyal reader (are there more of you out there?), these observations are dedicated to "GS".

In his post, Professor Geist describes the issue as:
third party ISPs that buy their connectivity from Bell ("resellers") are being left with irate customers who are suddenly subject to packet shaped services.
Michael posted the original news on Monday in response to chat room activity. He provided an update on Tuesday saying:
Bell has now reportedly confirmed that full throttling will be in place by early April. It claims that it is entitled to do so based on its contractual terms. Note that several people have written to emphasize the anti-competitive effects of this policy, given its impact on resellers servicing the business market.
Anti-competitive is a strong term. His readers' comments on the blog are even stronger, with some suggesting that criminal charges should be filed. Others suggest nationalizing the internet - "Is the internet any less important that highways?"

Let's try to look at this away from the hysteria.

What does it mean to say that there will be full throttling in place by early April? Does anyone really believe that no traffic will get through? Or, does it mean that Bell will apply the same types of traffic management to all of its customers, retail and wholesale? That is what a news report seems to be saying.

What can be meant by accusing Bell of anti-competitive behaviour.

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.
It seems to me that no one has said that Bell is providing its own customers with a different quality of service than that provided to its wholesale customers. Wouldn't that be the first test? Then we could see if there is even a preference, let alone an undue preference.

It is worth looking at a number of cases where the CRTC has found that certain types of discrimination may exist, but are not unjust. Or, finding that certain preferences are not undue. I have written about some of these findings over the past two years - such as in Decision 2006-61, dealing with cable company VoIP versus over-the-top VoIP.

One of the affected resellers, Teksavvy, has been indicating in chat room postings that they do not believe in throttling traffic. In that case, I would suggest that the time has come for ISPs to start building out more of their own networks, if they want to remain true to their beliefs.

If an ISP is going to rely on reselling other carriers' services, then its own beliefs are less relevant than the delivery practices of the underlying carrier.

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Comments:
Well - I suppose it would be inappropriate if I didn't comment! Again, thanks for your thoughts. Now, I'll offer my view from the "street".

As with most cases where contract law, public regulation, and government oversite are mixed, the result is that clarity is obfuscated and the "correct" answer is rarely the one that would seem appropriate. This results in a populace that is confused, mislead, and ultimately frustrated. For example, you indicate cases that are neither unjust nor undue. We unwashed masses don't appreciate the difference.

What we do appreciate - and we are fairly certain - is that in the end the consumer gets screwed while the corporate interests are supported.

The outburst of emotion and "hysteria" from consumers stems from the fact that (here in Ontario, can't speak for the rest of the country) we are yet again herded into the corral that the two-headed Rogers/Bell oligopoly has created. There are no alternatives available. We thought there were, but it was a ruse. Bell was able to recruit resellers to extend their revenues. Then they changed the rules without any prior notification to either the resellers or the consumers. Is this protection for consumers who felt that they were exercising their market leverage?

In the Panel's view, the purpose of a customer access rule should be consumer protection, and there should be a strong emphasis on ensuring that customers have the information required to make informed choices. In this way, the rule would promote the efficient operation of market forces.

So, while the actions of Bell might be legal, they don't pass the smell test.

Do the leadership at Bell and Rogers have any appreciation for the frustration level of their clients? They are operating a duopoly built on the infrastructure that the public allowed them to construct in monopolistic environments. And now we expect potential competitors to build out their own infrastructure at market costs?

Yes, there is hysteria here, but in my view it is simply a matter of the chickens coming home to roost. I haven't taken the time to look up Bell's financials, but Rogers states their adjusted net income for 2007 at over $1BILLION! Meanwhile, they simply do not have the resources to provide unthrottled bandwidth to their clients who pay the monthly toll with no viable option to take their business elsewhere?

So a duopoly with total market control plus little likelihood of effective regulatory oversite = hysterical consumers.

Fortunately for the corporate concerns we sheep will huff and puff for a few weeks, then tire, weaken, and return to corral where we belong. We will then be told what we are allowed to do, how to do it, and how much we will be allowed to pay for the privilege.
 
Your view of the wholesale business and the role of regulation is so simplistic and naive that it really really makes me smile.

I wonder if you would dare to state whether you are somehow directly or indirectly related to a Telco incumbent, to let us put your comments in the proper context. Contractor, consultant, etc. That could explain it.


Jean Paul
 
Thanks Jean Paul. I do not hide behind a cloak of anonymity: my CV, client list, experience, etc are all on my website... you don't have to dare me - just read.

I think you'll find that it is hardly a naive view of wholesale markets or the role of regulation.
 
Interesting thread. There is much that is opaque about this episode. Despite all the heat about "throttling", it is rarely accompanied by much light about just who is doing what where in the network.

A question, therefore, from another of your readers, anonymous though I must remain.

Apparently the service that Teksavvy is buying from Bell is Bell's General Tariff 5410. A quick read through the tariff page turns up stuff about providing DSL and backhauling it to a wire centre. Presumably Bell is choosing to do this over IP, since otherwise the whole traffic-shaping business could not arise. The tariff doesn't forbid Bell from doing so and, technically, there are indeed good reasons why they'd want to deliver it as IP in order to benefit from economies of scale. (Though, with P2P users destroying TCP sessions right and left, there are good reasons why they wouldn't want to, too. That's another debate.)

The question, then:

Is there a tariff where Bell will pick up the DSL data and deliver to a wire centre as layer 2 data (ATM, Ethernet, whatever) rather than run it as IP?

That, it seems to me, is what Teksavvy and so on are looking for. As far as I understand it -- and I would be the first to admit there's a good likelihood I'm missing something, but let me try and work this through -- there is certainly an argument to be made that a layer-2-only service would better serve the market failure for which GT 5410 is the remedy, as outlined most recently in paragraphs 73-77 and 83-86 of the Essential Facilities decision.
 
If an ISP wants to use Bell loops for its own ADSL based high speed Internet service without worrying about Bell traffic shaping/network management, they can co-locate in Bell Central Offices (requires investment) and utilized unbundled loops (available under the Bell Carier Access Tariff).

Alternatively ISPs can use tariff item 5400 - ADSL Access Service (line sharing with local service) but again, they would have to invest in backhaul from each of Bell Central Office of which there are hundreds.

ISPs that do not want to make substantantial (and likely foolish) overbuild investments will just have to live with sharing Bell's backhaul network and play by Bell's rules.
 
Well, no -- the CRTC's rules, not Bell's rules. Were Bell making the rules, there wouldn't be any tariffs, as there is no incentive for Bell to create them. That's the CRTC's job.

It sounds like you're saying that while tariff item 5410 makes ADSL access plus backhaul available on a per-customer basis, which Bell has chosen to implement at layer 3 (IP), no equivalent layer 2 service exists. You can get the access segment with tariff item 5400, but there's no tariff for carrying it to another wire centre on a per-customer basis. So, if you want the layer 2 stream, you have to instead pick an increment of bandwidth to lease and hope you've got enough customers in the service area to justify the interoffice bandwidth you're leasing.

Is that about right?
 
If you want a layer 2 stream with aggregation and backhaul, you should investigate Bell tariff item 5420 otherwise known as HSA.
 
First off, let's fix the reference to the appropriate Bell Tariff item 5410 - the earlier link provided by a commenter went to a one page modification to the tariff, rather than the complete tariff.

Second, here is the link to item 5420, referred to by another anonymous helper.

Any ISPs that actually want to do these network arrangements can feel free to get in touch with me, and I will hook you up with our associates who can help with the access arrangements.
 
This is a bit confusing. How exactly do tariffs 5410 and 5420 differ? Are they equivalents, except that 5410 is at layer 3, and 5420 at layer 2? Is that why 5420 seems to be priced much higher?
 
HSA-pppoe is being throttled by Bell.


Not sure about non-pppoe, but I believe it is.
 
If both the 5410 and 5420 services can be IP-traffic-shaped then, obviously, the person above is incorrect -- neither is a true layer 2 service.

It's pretty clear that the key to understanding all of this is in understanding (1) just what the tariffs cover and don't cover, (2) what the CRTC's goals were in requiring those tariffs, and (3) whether the tariffs meet those goals.
 
GT Item 5410, Gateway Access Service, is an aggregated Layer 2 protocol based on PPPoE and L2TP (PPPoE from the client PC to the Bell LAC (aggregation server), then L2TP tunnels carrying PPP sessions to the service provider's LNS). Bell is intercepting the L2TP tunnels coming out of their LAC using Deep Packet Inspection, and decoding the Layer 3 information encapsulated within, and rate shaping this traffic.

GT 5420, High Speed Access Service is a Layer 2 service with an individual ATM PVC between the subscriber and the service provider's point of interconnect (the AHSSPI). The rates and charges associated with it make it unreasonable to use for residential services. As far as I know, it is currently not subject to DPI and shaping, as it does not pass through a LAC, which is the point where Bell has installed the DPI equipment.
 
"This is a bit confusing. How exactly do tariffs 5410 and 5420 differ? Are they equivalents, except that 5410 is at layer 3, and 5420 at layer 2? Is that why 5420 seems to be priced much higher?
Posted by Anonymous Anonymous : 5:06 PM, March 26, 2008

HSA-pppoe is being throttled by Bell.


Not sure about non-pppoe, but I believe it is.
Posted by Anonymous Anonymous : 9:35 PM, March 26, 2008
"
We currently use some Tariff 5420 Links with our clients and ALL of these links are currently sub-par at best. Our clients are synced at 5mb/sec yet they can only get 1.5-2mb/sec out of their links.

When the link was initially installed, it was FLAWLESS: No packet loss, 500+kb/sec transfer rates, first hop latency of 8ms average, everything ran smoothly. Several weeks later, after a service outage, boom, 1-3% packet loss and speed of no more than 170kb/sec, latency of over 45ms ON THE FIRST HOP and a service that VoIP can't even function with. The clients are paying Much more money for the layer 2 circuits and can not support VoIP cause of the ATM layer that is broken on Bell's side. We have asked them to fix on numerous occasions and they say nothing is wrong. We replace the circuits several times, lasts about several weeks of fast speeds and no packet loss, then WHAM! broken again.

The clients are now using the CHEAPER 5410 circuits with PPPoE to handle their VoIP lines cause the tariffed 5420 solution fails miserably.

We can't do much about these issues cause Bell's tech team just seem to not understand their own infrastructure anymore to fix the problems.

As for the ISP's issues with the throttling, Bell Canada has to provide AHSSPI links to ISPs in accordance to General Tariff 5410 but now with the Interference from Bell Canada, these links can not be used to their full potential. Bell stated that Peak Information Rate (PIR) associate with PVCs will be eliminated when an ISP is converted to the tunnel switching architecture. In this manner the throughput will be determined by the ISP's user network interface (UNI) access circuit capacity rather than the (PIR) setting with Bell Canada reserving the right to implement a PIR rate "IN CASES OF TROUBLESHOOTING or to protect the network infrastructure from MALFUNCTIONING or MIS-CONFIGURED EQUIPMENT or Malicious hacking."

With Today's problem, Bell's solution does not coincide with the ruling. Excessive P2P traffic is not a malfunction, mis-configuration or malicious Hacking.
 
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[…] There’s an interesting training workshop coming up in the eBay workshops board on Tuesday 18th March - Drop Shipping, the myths, the facts, the strategies is a must-attend workshop in my opinion. Before attending, read this earlier blog post about drop-shipping, and this one about the Doba-MoneyBookers tie-up. […]
 
I agree with your point Most users compliant a significant decrease in download speeds,they are unable to complit their downloads.
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