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CRTC Decision Creates a Canadian Framework for Net Neutrality

Yesterday’s decision by the Canadian Radio-television and Telecommunications Commission (CRTC) should be welcomed by advocates of net neutrality. Though not an ideal decision in certain respects, and continuing to make clear the need for specific, updated legislation on online connectivity and communication, it does nevertheless enshrine some of key principles of net neutrality in the CRTC’s regulatory framework.

Originating from a specific complaint against zero-rating data practices by Quebec-based ISP Videotron, the ruling builds a general framework for online traffic treatment practices which effectively bans differential treatment of data based on its origin point. In other words, ISPs, whether fixed or mobile, will no longer be able to offer packages which do not count certain preferred services or websites towards data caps, or to offer preferred speeds to these content providers.

There are, however, some details in which the framework is less effective than it could be and where future rulings will be critical to clarify and strengthen the principles laid out in this initial framework.

The CRTC derived its authority in making the decision from subsection 27(2) of the Telecommunications Act, and specifically dealt with the question of zero-rating or discounting of retail Internet traffic to consumers. Critically, the ruling does not affect the ability of ISPs to manage Internet protocol networks internally or to negotiate between each other for data and bandwidth sharing.

The Commission set out several criteria by which the decision was made, including impact on Internet openness and innovation, but with the main one being if, “the treatment of data is agnostic”; in effect, this puts neutral treatment of data at the heart of the CRTC’s decision-making process in regards to the Internet for the foreseeable future. This decision effectively means that competition between Internet providers and packages will now need to be based on a combination of price, connection speeds, network coverage and data bandwidth, rather than preferentially-treated services. In this respect, the decision builds upon and formally outlines principles underlying previous cases where service providers were forced to disclose bandwidth “throttling” practices and to discontinue using zero-rating practices for branded online television streaming.

With this said, the ruling also contains some unclear elements and potential loopholes for abuse that detract from its overall impact. The major factor is that, rather than adopting clear rules on disallowed practices, the CRTC has opted for a complaints-based approach to violations of the net neutrality framework adopted. Though there are concerns that adopting strict rules would not address quickly evolving ISP practices, creating a complaints-based framework could also lead to an access problem on the part of consumers, particularly those with low incomes or limited amounts of time. Contrary to submissions from net neutrality advocates, including some smaller ISPs, the decision stated that a new code for net neutrality was unnecessary in light of a body of regulations stemming from this and previous rulings. Again, in this respect, it falls short of a full commitment to net neutrality principles, even as it generally adheres to them. The Commission also effectively declined to rule or launch further proceedings on the question of data capping and throttling procedures, instead referring to previous decisions designed to increase network access and facilitated greater consumer bandwidth.

The CRTC’s placing of the onus on consumers to bring forward practice complaints, rather than taking a more proactive approach, is likely to make future action on emerging ISP practices more cumbersome in practice. As well, there are concerns, akin those around to the FCC’s previous use of Title II authority, that utility-like regulation of the Internet could stifle innovation. Those concerns aside, the ruling does create a framework for arguably more consumer-friendly ISP practices moving forward and one which explicitly recognize the goals of openness and innovation online.

This post was authored by Carter Vance, intern with the North American Regional Bureau, and Mark Buell, Regional Bureau Director for North America.