An Internet Framework to Brag About

With the United States embroiled in a heated battle over net neutrality -- millions have written to the U.S. regulator to support rules to prohibit internet providers from creating fast lanes and slow lanes that would treat similar content in different ways -- observers might want to take a closer look at how Canada has emerged as a leader in the area.

The Canadian Radio-television and Telecommunications Commission established net neutrality rules (referred to as internet traffic management practices) in 2009, relying on bedrock principles that prohibit carriers from granting themselves undue preferences or from interfering with content. The rules share many similarities with those being debated in the U.S., yet the Canadian experience illustrates that they can be used to curtail unfair practices without bringing the internet to a halt.

The most recent application of the Canadian rules came last week, with the CRTC issuing a landmark decision on the legality of mobile television services offered by Bell and Videotron. In a classic David vs. Goliath showdown, the complaint was filed by Ben Klass, a University of Manitoba graduate student, who noted that Bell offers a $5 per month mobile TV service that allows users to watch dozens of Bell-owned or licensed television channels for 10 hours without affecting their data cap.

Unfair advantage

By comparison, users accessing the same online video through a third-party service such as Netflix or YouTube would be on the hook for a far more expensive data plan since all of the data usage would count against their monthly cap. That approach appeared to grant Bell an unfair advantage over the competitor video services (Videotron was later added to the case based on similar concerns).

Bell raised several arguments in response, claiming that the mobile television services were subject to broadcast regulation (not telecom regulation) and that, in any event, the offering was good for consumers and should be encouraged.

The CRTC ruled that mobile television services effectively invoke both broadcast and telecom regulation, since a data connection is required to access the service. Indeed, it agreed with Klass that "from a subscriber's perspective, the mobile TV services are accessed and delivered under conditions that are substantially similar to those of other internet-originated telecommunications services."

Given the application of telecom regulation, the Commission examined whether the Bell and Videotron approach violated the rules that prohibit carriers from granting themselves an undue preference or created an unreasonable disadvantage for competitors. It concluded that it did, noting that the services "may end up inhibiting the introduction and growth of other mobile TV services accessed over the internet, which reduces innovation and consumer choice." In light of that finding, the CRTC ordered Bell and Videotron to eliminate the unlawful practice by the spring.

The decision was clearly grounded with net neutrality principles in mind. CRTC chair Jean-Pierre Blais, speaking prior to the release of the decision, stated that there would be "no fast and slow lanes," adding that "at its core, this decision isn't so much about Bell or Vidéotron. It’s about all of us and our ability to access content equally and fairly, in an open market that favours innovation and choice."

Evolving framework

Yet despite the endorsement of the principles of net neutrality, the decision did not apply the 2009 rules, which were viewed as inapplicable. Instead, the Commission went back to first principles to conclude that the service was simply an undue preference.

That points to an evolving net neutrality framework in Canada that includes analysis of both the net neutrality rules and the principles of undue preference. The combination leaves Canada with an even stronger net neutrality framework that better safeguards new innovative services and that will leave U.S. net neutrality advocates looking north with envy.