The Internet community has reacted with alarm in recent weeks to a U.S. Federal Communications Commission (FCC) proposal that would significantly undermine net neutrality, the principle that underlies equal treatment for all content and applications online. While the issue may seem technical, businesses and users rely upon it to ensure a fair playing field for new services and access to content.
The U.S. proposal, which is set for a vote from its telecom regulator later this month, would permit Internet providers to treat similar content in different ways as part of commercial deals. For example, large cable and telecom companies could implement a two-tier Internet through "paid prioritization," which would allow deep-pocketed content owners to pay to have their content sent on a fast lane, while everyone else is stuck on a slow lane.
The outcry against the proposed rules has been building, with more than one hundred Internet companies, including giants such as Google, Amazon, Facebook, Microsoft, Twitter, and Netflix, filing a letter with the FCC calling on it to preserve net neutrality and reject the proposed changes.
While some speculate that Canada won't escape the FCC approach, the reality is that Canada's net neutrality rules are broader in scope than the U.S. proposal. The Canadian net neutrality rules and their enforcement are certainly not perfect, but they may provide a competitive advantage for Internet companies seeking a market without paid prioritization.
Canada's 'competitive advantage'
Both Canada and the U.S. have rules that require Internet providers to be transparent about how they manage traffic on their networks and effectively ban content blocking. There are two big differences between the two countries, however.
First, Canada treats Internet providers as part of telecom regulation, while the U.S. characterizes Internet services as an "information service." The U.S. approach has created legal limitations that are not found in Canada in enforcing net neutrality rules.
Second, the combination of Canadian law and Canadian Radio-television and Telecommunications Commission guidelines ensures that paid prioritization would face a difficult regulatory road here. The Telecommunications Act states that no Canadian carrier can "unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage."
The CRTC has confirmed that this provision applies to Internet services. The statutory language, which incorporates unjust discrimination, undue preferences, and unreasonable preferences is much broader than the proposed U.S. rule and would seemingly capture a two-tier Internet that clearly places those on the slow track at a significant disadvantage.
Guidelines protect neutrality
In fact, the CRTC guidelines on Internet traffic management indicate that if there is discrimination or a preference, the Internet provider must demonstrate that it is "carefully designed and narrowly tailored." Paid-prioritization would face a difficult time meeting that standard.
Moreover, the slow lane of Internet traffic might also face regulatory challenges were an Internet provider to deliberately slow down content in order to create a difference between the two delivery speeds.
The Commission has ruled that slowing content such as Internet video "amounts to controlling the content and influencing the meaning and purpose of the telecommunications in question." That would lead to the violation of another rule under the Telecommunications Act.
While Canadian businesses operating in the U.S. market would be affected by the potential loss of net neutrality, the Canadian Internet market remains subject to CRTC rules, not the proposed U.S. regulation.
Canadian ISPs might always try test the CRTC with paid prioritization, but with the commission adopting a consumer-oriented perspective, the government seemingly willing to wage war against the major telecom companies, and the Canadian pro-net neutrality legal framework, the U.S. controversy over net neutrality seems unlikely to move north for now.