CRTC allows ISP 'traffic shaping'

FCC to rule on similar net neutrality issue Thursday

TORONTO -- Canada's TV regulator dealt a blow Wednesday to net neutrality by upholding the right of domestic Internet service providers (ISPs) to control online content and traffic.

In a much-awaited ruling, the Canadian Radio-television and Telecommunications Commission (CRTC) said major phone and cable giants can employ controversial "traffic shaping" practices to manage the flow of Internet content on their networks, but must tell subscribers when and how they are doing so.

The landmark CRTC decision comes as the Federal Communications Commission in Washington gets set to vote Thursday on proposed new network neutrality rules that will similarly codify what control U.S.-based ISPs have over online traffic.

In its Canadian market ruling, the CRTC ordered the ISPs to give notice to subscribers of efforts to "throttle," or slow down, Internet traffic.

And they must shape Internet traffic only when necessary, after "economic measures" that includes upgrading networks to ease congestion and usage limits are employed.

"Technical means to manage traffic, such as traffic shaping, should only be employed as a last resort," the CRTC told ISPs in its ruling.

Allowing ISPs to slow down Internet traffic, charge subscribers for how much bandwidth they use or offer discounts for off-peak usage, is seen by CRTC critics as violating the principal of net neutrality, where all Internet traffic is treated equally.

But the regulator defended the use of traffic shaping by ISPs to ensure continued innovation.

"Canada is the first country to develop and implement a comprehensive approach to Internet traffic management practices," CRTC chairman Konrad von Finckenstein said in a statement.

"The centerpiece of our approach is a framework of analysis that will be employed to determine whether economic and technical practices are acceptable," he added.

As part of its new policy to police the Internet, ISPs must provide customers with 30 days notice of any changes to network management, and 60 days notice to wholesale customers.

The ISPs must explain who will be affected by what type of traffic shaping, when it will occur and how it will impact Internet speeds.

The CRTC said that written notice will enable customers to make "more informed decisions about the Internet services they purchase and use."

The regulator also ordered ISPs to detail on monthly customer bills varying usage plans so consumes can compare between different Internet services and match bandwidth needs to what they can afford.

The CRTC upheld the right of ISPs to use traffic shaping after summer hearings where Bell Canada and other phone giants told the regulatory they needed to throttle serial file-sharers that greatly slow the time it takes online subscribers to legitimately transfer music, video, software and other large files.