CRTC requires ISPs to be more transparent about their Internet traffic management practices.

October 21, 2009
News release

The Canadian Radio-television and Telecommunications Commission (CRTC) today introduced a new framework to guide Internet service providers (ISPs) in their use of Internet traffic management practices. The Commission is also requiring ISPs to inform consumers of their practices, which will help them to make more informed decisions about the Internet services they purchase and use.

"Canada is the first country to develop and implement a comprehensive approach to Internet traffic management practices," said Konrad von Finckenstein, Q.C., Chairman of the CRTC. "The centrepiece of our approach is a framework of analysis that will be employed to determine whether economic and technical practices are acceptable."

"More and more, the Internet is serving as the backbone for communication, commerce, governance, health, education and entertainment. Our framework will foster an environment where ISPs, application providers and users have the utmost freedom to innovate," added Mr. von Finckenstein.

ISPs will be required to inform retail customers at least 30 days, and wholesale customers at least 60 days, before an Internet traffic management practice takes effect. At that time, ISPs will need to describe how the practice will affect their customers' service.

To meet the changing needs of Internet users, the Commission encourages ISPs to make investments to increase network capacity as much as possible. However, the Commission realizes that ISPs may need other measures to manage the traffic on their networks at certain times.

Whenever possible, ISPs should give preference to Internet traffic management practices based on economic measures. These practices are the most transparent as they are clearly identified on monthly bills. With this information, consumers can compare between different Internet services and match their bandwidth needs with the amount they are willing to pay.
Technical means to manage traffic, such as traffic shaping, should only be employed as a last resort.

The Commission has also adopted special rules for ISPs that provide services on a wholesale basis to their competitors. These are necessary to ensure that ISPs do not use Internet traffic management practices to cause competitive harm to their wholesale customers. For both the retail and wholesale markets, the Commission will use its new framework to review practices that raise concerns or generate complaints.

Telecom Regulatory Policy CRTC 2009-657
http://www.crtc.gc.ca/eng/archive/2009/2009-657.htm

Reference documents:

News release, "CRTC opens online consultation on Internet traffic management practices," March 31, 2009 http://www.crtc.gc.ca/eng/news/releases/2009/r090331.htm

News release, "CRTC denies CAIP application, but will examine Internet traffic management practices," November 20, 2008 http://www.crtc.gc.ca/eng/NEWS/releases/2008/r081120.htm
__________________________________________________________

Backgrounder on the CRTC's framework for Internet traffic management practices
A growing number of Canadians are using the Internet for all sorts of purposes, whether they are furthering their education, creating innovative applications or starting businesses. In Canada, Internet traffic grew at an average rate of 43 per cent every year between 2005 and 2008. Internet service providers (ISPs) must sometimes manage the flow of data on their networks to prevent or respond to congestion, and to ensure that all users receive an acceptable Internet service. ISPs can employ a range of economic and technical tools to manage Internet traffic.

Key definitions

a) Economic Internet traffic management practices
ISPs can choose to manage traffic through economic measures. This means that they could charge consumers rates based on how much bandwidth they use each month, or offer discounts during off-peak hours. These practices allow consumers to make informed decisions based on how much bandwidth they want or need, and what they are willing to pay.

b) Technical Internet traffic management practices
ISPs can also use technical measures to manage traffic. These could include slowing down or prioritizing certain types of Web traffic (known as traffic shaping), as well as limiting the bandwidth of heavy users.

c) Retail Internet services
ISPs offer these services, which provide access to the Internet, directly to customers. Internet traffic management practices can affect the performance of a user's Internet services.

d) Wholesale Internet services
Many ISPs purchase bandwidth from telephone or cable companies to provide Internet services to customers. Certain traffic management practices, when applied to wholesale services, can prevent ISPs from offering distinctive services.

CRTC framework
The Commission has established a set of criteria to determine whether an Internet traffic management practice is acceptable. In the Commission's view, a practice should only be implemented if:

• it is designed to address a valid purpose, such as preventing congestion on an Internet network
• it is as narrowly tailored as possible to achieve the desired result, using the least restrictive means
• it causes as little harm as possible to the customer, application provider or the ISP that is a wholesale customer, and
• network investments or economic approaches would not effectively achieve the same purpose.

Consumer notification and privacy
If an ISP adopts a technical measure to manage traffic, such as traffic shaping, it must inform its customers in advance. This information must be displayed clearly and prominently on its website, and must describe:

• why it is being introduced
• who will be affected
• when it will occur
• what type of Internet traffic is subject to the management practice,
  and
• how it will affect a user's Internet experience, including the specific impact on speeds.

Furthermore, the Commission has established privacy provisions for ISPs that provide retail Internet services. Certain technologies associated with Internet traffic management practices can collect and use personal information without the knowledge or consent of consumers. As an added protection for consumers, the Commission has directed ISPs not to disclose this information or use it for any other purpose.

ISP actions affecting content
According to the Telecommunications Act, a telecommunications company must obtain the Commission's prior approval to "control the content or influence the meaning or purpose of telecommunications" carried over its network. The Commission does not consider such disruptive actions to be proper Internet traffic management practices, and they will always require prior approval.

An ISP would therefore need to seek the Commission's approval before it implemented a practice that would:

• block the delivery of content to an end-user, or
• slow down time-sensitive traffic, such as videoconferencing or Internet telephone (Voice over Internet Protocol) services, to the extent that the content is degraded.

When faced with these requests, the Commission will only grant its approval in the most exceptional cases.

Mobile wireless services
The Commission intends to review, at a future date, the regulatory measures that apply to wireless service providers and their use of Internet traffic management practices. In recent years, mobile wireless services have been the fastest growing component of the telecommunications industry. The number of subscribers in Canada has nearly doubled from 11.3 million in 2003 to 22.1 million in 2008. Traffic on mobile networks has also been rising as more consumers access the Internet through smartphones and other multimedia devices. Capacity on wireless networks is currently more limited than on other types of networks and an increase in traffic is likely to lead to congestion.

__________________________________________________________

For more information on broadband and technology in Muskoka, visit the Muskoka Community Network website at www.mcnet.ca