On November 20, 2008, the Canadian Radio-television and Telecommunications Commission (CRTC) released its decision1 denying an application brought by the Canadian Association of Internet Providers (CAIP) requesting that the Commission order Bell Canada (Bell) to stop certain traffic shaping practices. At the same time, the CRTC issued a Public Notice initiating a public process to review current and potential traffic management practices of Internet service providers in both retail and wholesale service markets.2

The CAIP complaint represents the CRTC’s first detailed examination of Internet traffic shaping, an issue closely related to the "network neutrality" debate. The CAIP complaint was being considered at about the same time the US Federal Communications Commission (FCC) was pursuing its enforcement action against Comcast.3 The FCC’s enforcement action against Comcast, and its findings regarding Comcast’s traffic management practices, led some to expect the CRTC to take action against Bell’s traffic shaping practices. Instead, the Commission denied the relief sought by CAIP and dismissed its arguments that Bell’s traffic shaping practices are contrary to Bell's legal and regulatory requirements. However, the new proceeding commenced by the related Public Notice will provide the CRTC with a much broader context in which to evaluate Internet traffic shaping practices and related network neutrality issues.

The decision resulted from a CAIP application to the CRTC in April 2008 for an order requiring Bell to cease and desist from traffic shaping of its wholesale Asymmetric Digital Subscriber Line services, and in particular Bell’s Gateway Access Service (GAS). GAS is a CRTC-mandated wholesale service that Bell makes available to ISPs, who use it to provide their retail Internet services. GAS is used to carry ISP customer traffic from customer locations to points in the Bell network where the aggregated traffic generated by the ISP’s customers is handed off to the ISP. GAS is provided pursuant to a tariff approved by the CRTC.

In an earlier decision,4 the Commission had denied CAIP’s request for an interim order on an expedited basis. In Telecom Decision CRTC 2008-108, the CRTC denied CAIP’s request on a final basis.

Bell admitted that it was engaged in traffic shaping on its network, specifically slowing down the transfer rates of peer-to-peer (P2P) file-sharing applications during the period between 4:30 p.m. and 2:00 a.m. daily. Bell had introduced these traffic shaping practices for its own retail Internet service customers in October 2007, and had introduced traffic shaping for GAS in March 2008.

Alleged Violations of the Act and Commission Requirements

CAIP argued that Bell’s GAS traffic shaping violated the following provisions of the Telecommunications Act (the Act):

  • section 24, which subjects telecommunications services offered by a Canadian carrier to conditions imposed by the Commission or included in a tariff approved by the Commission;
  • subsection 25(1), which prohibits Canadian carriers from providing telecommunications services except in accordance with the terms of a tariff approved by the Commission;5
  • section 27(2) of the Act, which prohibits a Canadian carrier, in the provision of any telecommunication service, from unjustly discriminating or giving an undue or unreasonable preference to any person including itself;
  • section 36, which prohibits Canadian carriers from controlling the content, or influencing the meaning or purpose of telecommunications carried by them; and
  • the policy objective, expressed in paragraph 7(i) of the Act, "to contribute to the protection of the privacy of persons."

In addition, CAIP argued that Bell had failed to provide advance notice of network changes associated with the traffic shaping practices, and so was in violation of advance notification requirements established by the Commission.

Commission’s Analysis and Findings

In response to these complaints, the Commission identified the following issues to be resolved in its decision:

  1. Did Bell’s traffic shaping with respect to GAS violate the terms of its tariff ? and, therefore, section 24 and subsection 25(1) of the Act?
  2. Did Bell’s GAS traffic shaping discriminate in a way contrary to subsection 27(2) of the Act?
  3. Did Bell’s GAS traffic shaping violate section 36 of the Act?
  4. Did Bell’s GAS traffic shaping break any Commission rules related to privacy?
  5. Did Bell violate any Commission order to provide advance notice of network changes?

Bell argued that its traffic shaping practices were not contrary to the GAS tariff terms, and so not in violation of section 24 or subsection 25(1). Bell relied on provisions of its "Terms of Service" that prohibited customers from using Bell’s services, or permitting them to be used, in any way that prevented a fair and proportionate use by others. Bell also argued that, because of the volume and type of traffic generated by a small proportion of users running P2P software, shaping P2P traffic was necessary to prevent congestion that would negatively affect all users. The Commission accepted these arguments, determining that Bell’s GAS traffic shaping was permitted under the Terms of Service and that no violation of section 24 or subsection 25(1) had occurred.

The Commission’s support for this determination included the following rationale:

In the Commission's view, CAIP has not demonstrated that Bell Canada's methodology for determining congestion in the network is inappropriate. The Commission notes that Bell Canada, as a network operator, is responsible for ensuring that its network is operated effectively and efficiently, and considers that Bell Canada should be able to take measures in this regard. Furthermore, the Commission is satisfied that Bell Canada has established that there is congestion in its network during peak periods.6

Bell answered CAIP’s complaint that it had breached subsection 27(2) by arguing that there was no unjust discrimination or undue or unreasonable preference because Bell applied equivalent traffic shaping measures to both GAS customers and to its own retail Internet service customers. The Commission accepted this argument and rejected allegations by CAIP that Bell had introduced traffic shaping to secure bandwidth for its own services or to prevent ISPs from effectively competing against Bell’s introduction of usage-based charges for its retail Internet services. The Commission also found that there was no evidence on the record to establish that Bell had benefited from GAS traffic shaping in any other manner alleged by CAIP. Based on these findings, the Commission decided there was no violation of subsection 27(2) of the Act.

In response to CAIP’s argument that Bell’s traffic shaping activities amounted to Bell "controlling the content" or "influencing the meaning or purpose" of telecommunications traffic contrary to section 36, the Commission found that the affected P2P traffic reached the intended recipients with contents unchanged. The Commission further determined that the traffic shaping practices only involved controlling the speed of telecommunications and not its content. The Commission also held that Bell’s traffic shaping practices did not influence the meaning or purpose of the affected telecommunications. Accordingly, the Commission decided that the traffic shaping practices did not constitute a violation of section 36.

CAIP’s privacy-related arguments were based largely on concerns that the deep packet inspection (DPI) technology employed by Bell to implement the traffic shaping practices could be used to access and collect personal information of end-users without their knowledge or consent. In addition to arguing that such activity was contrary to the policy objective stated in paragraph 7(i) of the Act, it was argued that the activity also violated the Personal Information Protection and Electronic Documents Act (PIPEDA), federal privacy legislation administered by the Office of the Privacy Commissioner of Canada.

In response, the Commission determined that PIPEDA issues were outside the scope of the proceeding, that the policy objective set out in paragraph 7(i) did not impose an enforceable obligation on a carrier such as Bell, and that the GAS traffic shaping practices did not violate any other Commission rules related to privacy. In support of these determinations, the Commission noted:

… the DPI technology used by Bell Canada examines the header information of packets, which includes source and destination IP address information, in order to carry out traffic shaping. There is no allegation by any party nor any evidence on the record of this proceeding that any of the examined header information is collected or disclosed by Bell Canada or used by Bell Canada for any purpose other than traffic shaping. No parties alleged that Bell Canada has collected, retained, or disclosed customer information in its ongoing application of its traffic shaping measures.7

The last issue the CRTC considered was whether Bell’s introduction of the GAS traffic shaping practices was contrary to Commission requirements to provide advance notice of network changes. Requirements for notification of network changes were established as part of the Commission’s framework for long-distance voice and local services competition.8 These requirements were intended to ensure that network changes affecting the continuing operability of network-to-network connections and interfaces were notified in advance to permit adequate testing and reconfiguration.

CAIP argued that Bell had not provided advance notice of its traffic shaping practices, contrary to these requirements. Bell argued that, since ISPs using GAS were not required to make network changes as a result or in anticipation of the traffic shaping, the network change notice requirements did not apply.

The Commission accepted the Bell argument and found no violation of the network change notice requirements. However, as the introduction of GAS traffic shaping had generated end-user complaints that CAIP members were unable to answer, the Commission directed Bell to develop and file advance notice requirements to cover future changes that would materially affect the performance of GAS. The new requirements should provide at least 30 days’ advance notice as well as clear and meaningful information describing the changes and the impact on Internet traffic.

In the final paragraphs of the Decision, the Commission emphasized that its determinations relate solely to Bell’s GAS traffic shaping practices and the evidence filed in the proceeding. However, the Commission also emphasized the increasing importance of both retail and wholesale Internet traffic management practices, and issued Telecom Public Notice CRTC 2008-19 initiating a broader public proceeding to assess related concerns.

The Public Notice and New Proceeding

In the Public Notice, the Commission has invited interested parties to comment on Internet traffic management practices and issues generally, and has also identified a number of specific issues for comment. These include:

  1. recent and predicted growth in Internet traffic, end-user bandwidth consumption, the nature of ISP network congestion, and the different bandwidth needs and congestion-causing properties of different services or applications;
  2. alternative technical or economic solutions to manage Internet traffic, the capabilities and effectiveness of different technologies, and related advantages and disadvantages, including end-user impact;
  3. whether traffic management practices might be contrary to identified provisions of the Act (providing an opportunity to revisit many of the issues argued in the CAIP application);
  4. issues raised by traffic management practices and the policy objectives and direction that guide the Commission; and
  5. practices or initiatives being pursued in other jurisdictions and their applicability in Canada.

The Public Notice also sets out the process, including the anticipated calendar for the public proceeding. The major milestones are:

  1. parties interested in participating in the proceeding must formally notify the Commission by 19 December 2008;
  2. initial written comments are due 16 February 2009;
  3. reply comments are due 30 April 2009; and
  4. an oral public hearing is scheduled to begin 6 July 2009 (and is expected to last four days).

The Notice includes more detailed procedures for responding to interrogatories and other questions from the Commission, requesting disclosure of information filed in confidence, and requesting to make oral presentations at the public hearing.

The Notice also states that the Commission will engage an external consultant to prepare a study of traffic management technologies, and that it will conduct an "on-line consultation" to encourage broader public input.

Concluding Comments

Although Telecom Decision 2008-108 denies the relief sought by CAIP and dismisses most of the arguments raised in its application, the Decision has introduced a prior notification requirement in connection with future changes to Bell’s Gateway Access Service.

More importantly, by initiating a public consultation regarding Internet traffic shaping and traffic management practices, the Commission has provided a much broader context in which to evaluate these practices and related network neutrality issues.9