CRTC To Allow Telecoms To Throttle Web Traffic But With New Rules

Canada’s big telecommunications firms can continue to throttle certain traffic on their Internet networks but will have to follow new and possibly strict rules, the Canadian Radio-television and Telecommunications Commission said Wednesday.

In a much-awaited decision, the federal regulator established new conditions for how Internet service providers can manage traffic on their networks, but did not disallow the practice as some had demanded.

“Canada is the first country to develop and implement a comprehensive approach to Internet traffic management practices,” commission chairman Konrad von Finckenstein said in a release.

The decision impacts all Internet providers, including Bell Canada (TSX:BCE), Rogers Communications (TSX:RCI.B) and Telus Corp. (TSX:T), even though not all have placed limits on traffic.

Telus spokesman Michael Hennessy, whose company has not resorted to throttling, said the CRTC did a good job in walking the line between those who want a completely unregulated Web environment and the possible need of some telecoms to manage traffic.

“It’s critical that we continue to have an open Internet… that is a fundamental principle,” he said, adding that any throttling measures “have to be the least restrictive possible.”

The CRTC said its first preference is that Internet providers invest on increasing the capacity of their networks so they won’t be faced with bandwidth problems, caused mostly by a minority of users who stream broadband-gobbling movies and TV shows.

If providers do need to manage traffic, the commission said its preference is that they do it through imposing higher charges on heavy users, rather than throttling – limiting traffic – or degrading the signal.

But if networks believe they need to resort to throttling, the commission said retail customers must be given 30 days notice and wholesale customers at least 60 days notice before restrictions are put in place.

The regulator also said network providers cannot discriminate against wholesalers who purchase broadband in bulk and sell it retail, saying it must treat them the same way as they treat their own customers – unless they get prior approval by the CRTC.

The commission has also established a complaint mechanism for consumers.

“I don’t think it goes as far as it could have gone, but if we look at where things were a year ago when ISPs were involved in secretive traffic management practices, we now have the CRTC moving the ball forward,” said Michael Geist, a University of Ottawa law professor who specializes in technology issues.

Geist said the CRTC measures will be judged on how well it has balanced the two competing interests when the U.S. issues its proposals on Net neutrality Thursday.

“That will be the barometer for me,” he said. Geist public hearings this summer did make the case that in some cases throttling was appropriate.

The throttling issue has been on the CRTC’s plate since independent providers – wholesalers – complained that Bell was restricting their ability to deliver services to their clients, accusing the company of using its ability to control traffic to stifle competition.

Earlier in the year, the CRTC sided with Bell on their use of throttling during peak periods, but at the same time launched a review of the whole issue, resulting in Wednesday’s decision.

The commission said the new rules take effect immediately.