The action at the CRTC is focussed on the future of broadcast distribution as the Commission has filled the rest of this month with its hearings that run through April 28. Those hearings may determine the level of consumer choice and the costs that might be incurred in offering a tailored delivery service.

At the end of the month, the CRTC will be releasing its multi-year plan for its review of social and other non-economic regulatory measures for the telecom side of the house, subsequent to the timetable that was part of its first public notice of the year.

Last year, the CRTC released an action plan for a review of its regulatory measures in the wake of the Minister’s policy direction.

Some of the items were dependent on the establishment of the Telecommunications Consumer Agency:

In Telecom Decision 2007-51, the Commission stated that certain social regulatory measures (for example, privacy safeguards and obligations, retail quality of service rate rebate plan and standards, and Consumer Bill of Rights) would be prioritized for review subsequent to the establishment of a telecommunications consumer agency.

Which social obligations would you put first on the CRTC’s agenda?

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CRTC

The internet is a shared resource. Different access providers begin mixing traffic at different places, but sooner or later, my internet gets mixed into yours.

The CAIP application to the CRTC seems to acknowledge this shared nature with its reference (at paragraph 50 of its application) to the description of the Gateway Access Service its members resell, a description complete with a graphic of a cloud – a sign that the resource is being shared.

Cloud, network, virtual channel. All of these are distinct from terms like private, dedicated or other ways to denote an unblocking and congestion-free connection. A private circuit is expensive but can be more susceptible to network failures; shared, switched or virtual circuits are more affordable and can often allow for routing around blockages.

In CAIP’s application to the CRTC, I noticed that it couldn’t resist the common fallacy of misquoting from the Report of the Telecom Policy Review Panel. [I pointed out this common problem in a blog posting more than a year ago.]

The CAIP application (paragraph 91) quoted the report as recommending that the Telecom Act should be amended

to confirm the right of Canadian consumers to access publicly available Internet applications and content of their choice by means of all public telecommunications networks providing access to the Internet.

But CAIP neglected to complete that passage, which was in fact one of the formal recommendations from the TPRP. Recommendation 6-5 continues with

This amendment should

(a) authorize the CRTC to administer and enforce these consumer access rights,
(b) take into account any reasonable technical constraints and efficiency considerations related to providing such access, and
(c) be subject to legal constraints on such access, such as those established in criminal, copyright and broadcasting laws.

Part (b) seems to be designed to take into account the technical realities of the internet as a shared network resource – even for the Gateway Access Service used by CAIP members to resell Bell internet.

Different applications place different demands on network capacity. Some have no tolerance for latency (delay) in delivery of messages. Two-way interactive applications like voice and gaming are examples of applications that need low latency. Others, like streaming video or music, use buffering to self-manage a certain amount of latency: the application can stockpile the next few seconds of media content in order to absorb the effects of some of the latency in the delivery from the source. For other applications, such as file transfer and email, latency can cause frustration but not loss of functionality because the data transfer requirements are not real-time in nature.

If customers want to be able to make VoIP phone calls, play network games, watch streaming video, listen to internet radio and capacity is running short, what do you do? Do we think the balance of convenience should put these applications at risk in order to shave some time off bulk file transfers?

Treating all bits the same means that real-time applications will become non-functional in times of peak traffic.

What kinds of technical constraints are reasonable in managing shared resources?

A commenter asked if The 2008 Canadian Telecom Summit will explore the use of P2P technology for legitimate and productive purposes. We have a panel planned for June 16 examining Entertainment and Content over Broadband, including speakers from CBC, the NHL, MTV and Bell Sympatico. Given the events of the past few weeks, it should be an interesting discussion.

The Canadian Association of Internet Providers (CAIP) filed an application to the CRTC asking for Bell Canada to be ordered to provide their customers with preferential service at wholesale rates.

Why do I say that? Well, the application acknowledges that Bell had already begun to apply network management controls on its own customers. Why then would CAIP say that Bell is being discriminatory when it seeks to treat all traffic the same way?

The CAIP application covers a lot of ground. It is somewhat surprising that CAIP has asked for Bell to reply in just four days when so much material needs to be covered.

We will soon see what timetable the CRTC sets for the response.

As part of the regulatory training you have come to expect on these pages, let me provide a primer on how to file and answer a general complaint.

The CRTC’s telecom rules of procedure, has a number of Parts. Part I is General; II is for tariff filings; III is for general rate applications (anyone remember those days?); etc. Part VII covers everything else that isn’t covered under the other parts.

CAIP filed its complaint under Part VII. Normally, a company has 30 days to answer a Part VII application. CAIP has asked for an answer in 4 days and has asked for interim relief – for Bell to immediately cease its network management of wholesale traffic.

There is a three-part test (established by a couple Supreme Court legal precedents) in order to grant interim relief:

1. there is a serious issue to be determined;
2. the applicant would suffer irreparable harm if relief is not granted; and,
3. the balance of convenience, taking into account the public interest, favours granting the relief.

I’d suggest that all of us can accept the first part. It is not so obvious that either of the other parts hold water under serious scrutiny. Lifting network management controls will result in a degradation of service quality for all ISP customers. CAIP’s application fails to consider an alternative scenario for managing a finite resource.

The CRTC has set service standards for dealing with applications. This one appears to fit as a Type 2 Part VII application, one that raises significant policy issues. It would therefore call for a fairly lengthy decision period by the CRTC and as such, one must again question why it is appropriate to have an abbreviated process. CAIP itself sent a legislative alert by email earlier today that points to the importance of this issue:

The “throttling” reduces speeds by as much as 90 percent – and marks an important milestone since the outcome will provide a clear answer on whether Canadian law currently protects net neutrality or if legislative reform is needed.

While we might like shared networks to be non-blocking with infinite capacity, that simply isn’t possible. The traffic being managed represents a significant and growing share of network capacity, as attendees at The Canadian Telecom Summit heard last year in a presentation from Sandvine.

What kinds of technical constraints are reasonable in managing shared resources? Should operators take steps to protect the integrity of streaming video and music, voice and gaming, even if it means delays applications that are less sensitive to latency?

We’ll be looking at all aspects of net neutrality at a special session at The 2008 Canadian Telecom Summit on June 18.

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Bell, CRTC, CAIP, Canadian Telecom Summit

A reader sent me a link last week to a piece that doesn’t speak highly of net neutrality. Clyde Wayne Crews wrote an article called “Dumb Pipes, a Dumb Idea: Net Neutrality as 21st Century Socialism” that calls for legislators to reject “nut” neutrality.

Elevating the principle of mandatory net neutrality above the principle of investor ownership and wealth creation in pipes and spectrum deflects market forces away from the infrastructure development that we need. And we do need it: recent news notes potential bottlenecks on the Internet caused, not by anyone’s blockage, but by escalating data and video.

Did anyone else see a touch of irony in a letter to the editor in the National Post last week? The writer said if ISPs are so concerned with traffic shaping to improve customer satisfaction then they should block the scourge of spam.

My ISPs offer some pretty effective spam filters that can be turned off and on and one of the ISPs lets me apply some pretty good tuning. If your ISP doesn’t offer spam filtering, you may want to shop around. Market forces have been effective on that front.

I guess some people would say that the government should mandate dumb pipes, except for spam, viruses and the rest of the stuff we haven’t created yet.

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net neutrality

The evolution of communications regulation has been at issue recently – for telecom, broadcasting and new media. There is a camp that continues to believe that government should preserve its historical role of managing the marketplace, regardless of the availability of diverse choices in the delivery of services.

When asked about net neutrality by Charlie Angus of the NDP in the House of Commons, Industry Minister Jim Prentice replied that the government does not regulate the internet. The supplemental question asked:

Mr. Speaker, the minister’s hands-off approach to hands-on interference is bad news for the development of a Canadian innovation agenda. Net neutrality is the cornerstone of an innovative economy, because it is the consumer and the innovator who need to be in the driver’s seat, not Ma Bell, not Rogers, not Vidéotron. They have no business deciding what information is in the fast lane or what information is in the slow lane.

Will the minister come out of the Gestetner age and take action on the issue of net throttling?

To which the Minister replied:

Mr. Speaker, I think virtually all members of the House could agree that if anyone inhabits the Gestetner age, it is the New Democratic Party. Members of that party would carry our country into the economic backwater that they propose.

We have a well advanced Internet system in this country. It is not publicly regulated. At this point in time we will continue to leave the matter between consumers on the one hand and Internet service providers on the other.

It appears to be clear that that the government’s policy for telecommunications regulation is to continue with its preference to rely on market forces to regulate. Can this be applied to broadcasting?

In a CRTC decision yesterday denying John Bitove’s proposal for a new national HDTV network, there was a dissenting opinion appended from the Commission’s Vice-Chair of Telecom, Len Katz. The dissent appears to call for the broadcast side of the Commission to prepare for the kinds of regulatory reform that are being experienced on the telecom side:

I question the role of the Commission in assessing the likelihood of success of a new entrant. I believe the Commission’s mandate does not include the responsibility of managing markets. New entrants bring with them different business models. Who is to say which model will be more successful? I would prefer to leave it to the marketplace. We must not confuse the Broadcasting Act’s objectives of protecting Canadian culture and identity with protecting Canadian markets… particularly where it relates to Canadian companies, built by Canadians for Canadians.

Will HDTV Networks appeal to a Cabinet that favours a reliance on market forces in place of government regulation?