WordsByNowak

Friday represented the second anniversary of the establishment of so-called net neutrality rules in Canada, which were directives issued by the CRTC to prevent service providers from unduly discriminating against content, uses and applications of the internet. Two years on, it’s pretty clear the rules - which the regulator has touted as world leading - aren’t worth the paper (or digital bytes) they’re printed on.

Internet advocates have found the CRTC’s net neutrality framework to be wanting. Back in July, University of Ottawa professor Michael Geist uncovered a systemic failure by the regulator to enforce the rules despite numerous violations by most of Canada’s big ISPs.

The anecdotes explain it. Despite months of back and forth, including a dismissal of a complaint from a group of gamers by the regulator, cable provider Rogers is still slowing down perfectly legitimate uses of the internet, namely the World of Warcraft online game. The game makers themselves are starting to publicly bristle at this. If anything, the ongoing case proves the CRTC’s net neutrality rules are just a bunch of huffery and puffery, with no real teeth behind them.

The numbers confirm it. According to results released last week by M-Labs, a project started by Google a few years ago that lets internet users keep tabs on how their connections are being throttled, Canada has some of the highest prevalence of throttling in the world. In an accompanying essay, one of the M-Lab investigators explains that Canada’s rate of throttling is triple that of the United States, which doesn’t even have net neutrality rules.

Open Media, the advocate group that most vocally opposes net neutrality violations, celebrated Canada’s rules and unfortunately regurgitated some of the CRTC’s self-congratulatory rhetoric in a release:

On October 21, 2009, open internet supporters breathed a sigh of relief. Big telecom companies had been caught red-handed restricting access to online services, and the pro-internet community responded and prevailed. This victory brought Canada some of the strongest internet openness (net neutrality) safeguards in the world.

The group did acknowledge that Canadians are still fighting to get the rules enforced, but until that happens, it’s way to early for anyone to declare or celebrate victory. While a group such as Open Media has to sound positive in order to give its supporters hope that they are making progress, there are no two ways about it - for the past two years, net neutrality has been an abject failure in Canada.

Hot on the heels of the news that Bell Canada is cutting some of its internet throttling with wholesale customers comes some really - and I mean really - interesting data on throttling worldwide. Ladies and gentlemen, presenting the world’s absolute worst throttler (since 2008): Rogers.

According to researchers who used M-Labs, a project launched by Google in 2009 that allows internet users to keep tabs on how their service providers are slowing connections, Canada’s biggest cable internet provider has been the worst at slowing down applications, primarily peer-to-peer services such as BitTorrent, using deep-packet inspection technology.

M-Labs gives users tools to test their connections and, according to its methodology:

The column on the far right shows the percentage of times Glasnost tests indicated that the ISP was manipulating BitTorrent using DPI. The number of valid tests is important because the more valid tests done, the more reliable the results in the last column. E.g., ISPs for whom we have only 11-30 tests per quarter (only 1-2 tests per week) will be highly variable and thus less reliable than ISPs for whom we have >450 tests per quarter.

The only ISP that repeatedly showed up in the 90%-plus category with more than 450 tests: Rogers. Also bad was UPC Ireland, but it fell short in total comparisons to its Canadian cousin.

How did other ISPs compare? Well, Comcast - the company that elicited sanctions from the FCC for its throttling - only ever slowed about 49% of its connections, back in the second quarter of 2008. Bell, the Canadian ISP that has taken the most flak for slowing down connections, ironically didn’t fare all that badly compared to its main rival.

Here are the most recent results for Canadian ISPs and the percentage of connections they throttled in the first quarter of 2010:

• Shaw: 14%
• Bell: 16%
• Rogers: 78%
• Telus: 6%
• Videotron: 3%
• Bell Aliant: 6%
• Cogeco: 46%
• Sasktel: 5%
• MTS: 6%

The first three ISPs on that list had more than 450 samples, while Telus had between 151 and 450. The rest had between 31 and 150.

Here are the worst worldwide in the most recent quarter, with the sample size following:

• UPC Poland: 87%, 91-150
• KT Corp (South Korea): 84%, 31-60
• GTS Novera (Czech): 80%, 11-30
• Rogers: 78%, 450+

As the methodology states, the larger the sample size, the more accurate the result, so Rogers looks particularly poor on that list.

Given this information, is it any wonder gamers are fuming at Rogers for its throttling, which isn’t just affecting peer-to-peer traffic but also perfectly legal applications such as World of Warcraft? Isn’t it about time the CRTC - which laughably touts the world’s best net neutrality rules - got off its keester and did something?

UPDATE: Milton Mueller, the principal investigator behind the findings, wrote a paper looking at some of the results in more detail. Check out “Deep Packet Inspection and Bandwidth Management,” which compares throttling in the United States and Canada. Some interesting takeaways include the facts that Rogers and Cogeco both started throttling on the same day, July 1, 2008 (how’s that for coincidence?) and throttling by U.S. ISPs is about 11% overall, compared to 33% in Canada.

UPDATE: Some people were wondering how ISPs who say they don’t throttle, such as Telus and Videotron, showed up in the tests. According to the explanatory notes of the study, the tests seemed to generate false positives of around 10% prior to August 2009 and 4-5% after that, which pretty much matches or erases the results for the ISPs in question. If anything, the results prove those companies aren’t throttling. With that said, the error margin still doesn’t do much to improve the positions of the top throttlers.

According to a letter unearthed by University of Ottawa professor Michael Geist, Bell Canada - the company that made internet throttling a household word a few years back - is relenting in its quest to slow down so-called bandwidth hogs.

The letter, sent to smaller internet service providers that lease some of Bell’s network capabilities, says that new links coming online in November may not be subject to traffic management practices. These measures were introduced in March 2008 to:

…address congestion on the network due to the increased use of peer-to-peer file sharing applications during peak periods. While congestion still exists, the impact of peer-to-peer file sharing applications on congestion has reduced. Furthermore, as we continue to groom and build out our network, customers may be migrated to network facilities where Technical Internet Traffic Management Practices (ITMPs) will not be applied.

In plain English, some people who get their internet service from smaller providers such as Teksavvy or Acanac may soon find their peer-to-peer applications - such as BitTorrent, which many use to share music and movie files - working at full speed again.

The move is good news for customers of those companies, but it also raises several questions. Bell and a number of other big ISPs instituted throttling in the first place because they claimed that peer-to-peer traffic was causing congestion on their networks. The CRTC gave its approval to such measures, but told network owners they could use them only as a last resort. Critics, however, said throttling wasn’t about congestion at all, but rather about limiting usage of BitTorrent and the like, which competed with the big ISPs’ own television and video offerings.

Now, as Geist rightly points out, if Bell is admitting that “the impact of peer-to-peer file sharing applications on congestion has reduced” then it sure looks like Bell’s own retail internet operation is breaking CRTC rules. It also strongly suggests that every other ISP still throttling is offside as well.

Put another way, if the smaller ISPs - which are supposedly havens for the heavy-using peer-to-peer bandwidth hogs - aren’t being throttled, why is anyone? The answer is simple: The critics were right. And the longer big ISPs continue to throttle their own customers, the more right they’ll prove them to be.

The good news is that if this path is followed to its logical conclusion, Bell’s change of heart may well signal the end of throttling in Canada since ISPs don’t really have a leg to stand on anymore.

But there’s more to this. It’s a general rule that big phone incumbents, wherever they may be in the world, don’t ever make such benevolent moves without either being forced to, or without an ulterior motive. In this particular case, the driver is most likely another term that Bell helped enshrine in the popular vernacular: usage-based billing.

A quick recap: the you-know-what hit the fan earlier this year when Bell tried to foist a new billing plan onto the likes of Teksavvy et al, which would have made unlimited or large monthly usage plans prohibitively expensive. While the change would have only affected about 5% of internet users, Canadians - pissed off after years of rising bills and shrinking caps - freaked out en masse and effectively told big ISPs that they shall go no further. The government got involved and told the CRTC to re-examine its rubber stamping of Bell’s proposal.

Hearings were held this summer and the regulator is due to make a final decision soon, likely in the next few weeks. The timing of Bell’s throttling move, therefore, smells fishy.

Again, as Geist points out, the real threat to big ISPs is no longer BitTorrent, it’s Netflix and its ilk. While it was okay to combat a shady service with shady practices, throttling doesn’t work against Netflix and other legitimate streaming operations, so big ISPs have been looking to UBB as the cure for that ill.

In the face of anti-UBB furor, Bell has proposed something called Aggregated Volume Pricing to the CRTC. Without going into the boring details, it’s a preferable system to UBB for smaller ISPs because it would be cheaper and not as limiting. But still, it’s a lighter, more digestible form of usage-based billing. Call it Diet UBB.

Bell’s pulling of wholesale throttling may foreshadow what the CRTC’s decision on UBB is going to be. There have doubtlessly been discussions between the company and the regulator on the topic since the hearings this summer - a search of the lobbying registry turns up at least one meeting between Bell representatives and CRTC commissioner Leonard Katz in that time frame. (Curiously, the topic of discussion for that meeting is listed as “broadcasting,” even though Katz is the vice-chair of telecommunications).

It’s entirely possible that a quid pro quo agreement, where Bell loses on one less important front (throttling) but gains on another more important one (UBB), has been reached. In other words, it may be that the regulator asked Bell to shut down its throttling in exchange for approval of its AVP plan.

That may have a hint of conspiracy to it, but really it doesn’t. Can anyone imagine both throttling and UBB being struck down and eliminated? Come on, this is Canada. Everyone knows internet users don’t get their way here.

Of course, if such a suspicion proves correct and the CRTC does approve Bell’s modified UBB plan, all eyes will be on the government to see if it follows through on its promise to strike down usage-based billing. Mind you, they made the same threats over new text message charges a few years ago and we all know how that turned out.

One of the CRTC’s edicts last week that was cheered by consumers was the requirement of television providers to give subscribers more choice and flexibility in their packages. The order, which the TV companies must comply with by April or risk incurring an inquiry by the regulator, seems to be a direct answer to the most common complaint from subscribers, which is that they are paying for a multitude of channels yet watching only a few of them.

It’s also one of those typical kindly grandfather moves by the CRTC, which always seems to know what’s best for all of its dimwitted grandchildren. With the growing availability of TV shows on the internet, a pick-and-pay system for traditional television subscription is also the best way to protect that particular business. If consumers can pick the channels they want and pay less for them, they’ll be less inclined to cancel their subscriptions outright, which is also good for providers, or so grandpa’s thinking goes.

On the surface of it, this sounds like good news for subscribers. Perhaps they will finally be able to pick only the channels they want, thereby cutting out all the useless noise (Speed channel, anyone?).

That’s great, but anyone who thinks this will result in big savings hasn’t been paying attention to how things work in Canada. The conventional logic would mean that less channels equals less monthly charges, right? Wrong.

According to the CRTC’s annual Communications Monitoring Report, the average TV subscriber currently shells out $59 a month. That actual amount varies across providers of course, with some being higher and some lower. A quick calculation from Rogers’ numbers, for example, shows that company’s monthly bill is closer to $68. TV providers are not likely to want to significantly cut into their bread and butter.

A look at Quebec, which has had a degree of this sort of pick-and-pay system for a little while now, is instructive. The cheapest option on cable provider Videotron, for example, is a basic service plus 10 channels of the subscriber’s choice for about $39. Bell used to offer a basic package plus 15 channels starting at $40, but a quick perusal of its website now turns up only a basic-plus-30-channel package for $49. Add in a bunch of extra fees, such as a receiver or PVR rental or Videotron’s $3 charge for high-definition signals, and the final bill edges closer to between $45 and $55.

That’s getting pretty close to the CRTC’s stated average monthly bill - and it’s for a significantly slimmed-down channel package. In other words, going with such an option is a good way to carry on one of Canada’s favourite traditions: getting less for more. And here’s the kicker: as Videotron states in its fine print, at least half the channels subscribers pick must be Canadian, thanks to CRTC regulations. Say hello to the Zeste channel, whatever the heck that is.

There’s no guarantee that these are the sorts of options TV providers will bring to the table in April as their best offer for the rest of Canada, but the Vegas odds are probably pretty good that they will. In that case, will it be enough to stop subscribers from cutting the cord? Or, more importantly, will it be enough to encourage new subscribers - especially kids who are already watching most of their shows online - to connect the cord in the first place? Not likely. It shouldn’t surprise anyone, then, when grandpa ambles up off his old rocker and ends up getting involved.

The CRTC has been quite busy of late coming to the rescue of the poor, beleaguered consumer. That’s nice, but it prompts a few questions, such as: What happened? Why the change of pace? And why now?

On Wednesday, the broadcast and telecom regulator released an edict on vertical integration, or the recent trend that has seen companies that distribute things like TV shows and radio programs buy up the same producers and rights holders of those shows and programs, thereby introducing the danger of exclusive programming. The CRTC said this situation - which could potentially result in consumers having to subscribe to Bell TV to see hockey and Rogers TV to watch baseball, for example - was bad for consumers and essentially forbid it.

On Thursday, the regulator also issued guidelines on how it plans to handle complaints over service providers’ internet traffic management practices (ITMPs). The CRTC laid down its ITMP framework, which is designed to prevent ISPs from unfairly discriminating against certain kinds of internet traffic, back in 2009. The new ruling spells out how individuals can take providers to task when they feel that so-called net neutrality rules have been violated. The regulator says it will also play the name-and-shame game, where it will regularly report violators and the number of complaints it receives.

In both cases, the regulator placed the consumer front and centre. With Wednesday’s vertical integration decision, chairman Konrad von Finckenstein said: “Canadians shouldn’t be forced to buy a mobile device from a specific company or subscribe to its internet service simply to access their favourite television programs.” In Thursday’s net neutrality press release, he said: “The guidelines we issued today will help Canadians understand which practices are permitted and how to make a complaint.”

Well, well, well. Welcome to the party, CRTC. Nice of you to show up. Where have you been?

It’s hard not to be cynical about the apparent change of heart. After all, this is the same regulator who for years has been endorsing and pushing anti-consumer regulations and decisions, like the bone-headed approval of usage-based billing, the attempt to block the launch of Wind Mobile and the ongoing failure to enforce net neutrality in the first place.

It’s the same regulator whose spokesman the inimitable David Ellis quotes on his blog as saying, “We are not a consumer protection agency.”

With vertical integration, the regulator earlier this year approved Bell’s takeover of CTV with some conditions, the biggest of which was the requirement of a big investment in the production of Canadian programming. It also rubber-stamped Shaw’s acquisition of Canwest last year and launched a hearing into the effects of such vertical integration, which apparently resulted in Wednesday’s ruling.

While it’s true the CRTC placed a moratorium on any exclusive content arrangements when the Bell-CTV deal was announced in March, it didn’t take a rocket scientist to figure out that such was the end game of all involved players. Exclusive content was always at the root of the numerous billion-dollar takeovers, yet the regulator allowed them to happen anyway. Wednesday’s decision could easily have been included as a precondition to any of the deals going ahead and may have, in fact, caused some of the acquirers to think twice.

Instead, the new ruling is surely just the beginning of what will be a long and arduous battle that may go to the courts or cabinet, especially if Bell has anything to say about it, and of course it does.

On the net neutrality guidelines, well let’s just say 2009 called and it wants its complaint back. Consumer groups and politicians alike have since day one been critical of the framework for putting too much onus on internet users to prove issues and for being non-transparent. Again, these are criticisms that should have been prevented in the first place, or dealt with much sooner otherwise.

So why is the CRTC suddenly getting wise to the wants and needs of consumers? The most likely reason is because von Finckenstein and the other commissioners are getting tired of being embarrassed. On the Wind Mobile issue, the commission was thoroughly red-faced when the government overturned its decision, which led to the wireless carrier starting up. The CRTC was also caught with its pants down on usage-based billing, which resulted in a particularly embarrassing and somewhat sad grilling by commissioners of Open Media, the advocacy group that led the anti-UBB charge, during a hearing this past spring.

The truly cynical might say the new attitude is an effort by the chairman to get himself back into the good graces of the government. Von Finckenstein is reportedly seeking another term, but that seems about as likely as the vertically integrated media companies throwing their hands up and accepting the regulator’s Wednesday decision, or ISPs abandoning their throttling practices altogether.

In the end, although it’s easy to criticize the CRTC for being largely anti-consumer over the past few years, it really isn’t the regulator’s fault. Its split personality is a direct result of conflicting messages it has received from the government. When the Conservatives took office back in 2006, they told the commissioners to ease off regulating and instead let “market forces” do their thing. As I’ve harped on many, many times, with foreign ownership restrictions creating major barriers to new competitors of all stripes, market forces have never actually existed, so neither has competition in all the areas the CRTC governs.

The regulator has therefore been charged with trying to keep the chickens (aka consumers) happy while the wolves run the henhouse. No wonder it’s suffering from a major case of schizophrenia.