The issue of indirect regulation came up again in last week’s internet traffic management decision.
The issue: how does the CRTC impose regulations on service providers that aren’t carriers? So, the CRTC created two new definitions to distinguish between “secondary ISPs” (defined as service providers that don’t own their own facilities and therefore aren’t regulated as carriers; and, “primary ISPs” that own transmission facilities and are therefore more easily brought before the CRTC as carriers under the Telecom Act.
The CRTC assumed that “secondary ISPs” must get access to their customers by dealing with at least one “primary ISP” and so the Commission ordered all “primary ISPs” to include a contractual obligation for their wholesale clients (ie. “secondary ISPs”) to agree to abide by the rules.
This is problematic on a number of levels.
First, as I described last week, the requirement doesn’t capture secondary ISPs that don’t deal with a primary ISP. It is quite possible for an ISP to do all of its wholesale buying through another secondary ISP. Alternatively, there may be colocation companies that are carriers, but not ISPs. The latter can be dealt with by simple rewording of the order; let’s face it, the use of the term “primary ISP” instead of “carrier” was to appease the “secondary ISPs” who may have found the term “reseller” to be pejorative. It isn’t as simple to go after second tier “secondary ISPs” (should they be called “tertiary ISPs”?).
More fundamentally, what happens if a secondary ISP is in breach of its contractual obligation? How does this get enforced?
In the absence of meaningful regulatory oversight, will an industry association enforce a code of conduct to provide assurance to Canadians? Still, the CRTC didn’t believe a voluntary code offers sufficient consumer protections. Don’t customers of secondary ISPs deserve the same protections?