Summary and analysis of latest CRTC decisions: Traffic management practices and Usage Based Billing

The CRTC today issued guidelines on Net Neutrality and the ruling on Usage Based Billing. Here is a summary of the issues presented.

Net Neutrality Guidelines

Late last year the CRTC issued a public proceeding which took place in the first part of this year. The purpose was to examine ITMPs (Internet traffic management practices) adopted by ISPs such as Bell and Rogers and determine whether such practices are consistent with the Telecommunications Act. After the public proceeding, the CRTC decided to implement guidelines on Net Neutrality.

The commission based its review on the following four considerations:
1) Transparency
2) Innovation
3) Clarity
4) Competitive Neutrality

In the guidelines released by the CRTC, the following determinations were made:

1) In terms of transparency: Where any traffic management practices are in place, the ISPs must be completely transparent about their usage of such practices to customers. Economic practices are deemed as the most transparent traffic management practices.

Who defines economic practices and when they are to be used? This leaves open a door for an ISP to claim that their traffic management practice is far better economically than network investments. While it may be economical in the short term, long term requires significant investment.

2) In terms of innovation: The commission feels that network investment is a fundamental tool for dealing with network congestion and should continue to be the primary solution that ISPs use but that investment alone does not obviate the need for certain ITMPs.

Unfortunately the CRTC only saying it as a guideline does not make it happen in practice. This entire proceeding was driven by Bell’s lack of network investment. This will not change with the release of these guidelines.

3) In terms of clarity: ISPs are to ensure that any traffic management practices employed do not discriminate or provide unduly preferential treatment. The Commission has established a traffic management framework that provides clarity and a structured approach to evaluate whether existing and future traffic management practices are in compliance with subsection 27(2) of the Telecommunications Act.

Again since this is only a framework, it is not legally binding and does not indicate that it will ever be used by the CRTC to evaluate a ISPs use of traffic management practices in future proceedings.

4) In terms of competitive neutrality: For retail services, ISPs may continue to employ ITMPs without prior Commission approval. The Commission will review such practices, assessing them against the framework, based upon concerns arising primarily through complaints by consumers. Wholesale services will be under additional scrutiny. When an ISP employs more restrictive traffic management policies for its wholesale services than for its retail services, it will require Commission approval to implement those practices.

Now we get into the review of the practices. Unfortunately, if their past public involvement is any indication, there may never be investigations for complaints unless there is a good amount of complaints submitted to the CRTC on a specific issue. The CRTC typically does not like to involve themselves with the end user customers. This also does not mean that the ISP will actively monitor the traffic management policy of ISPs. Additionally there are no indications on the scope of the complaints that the CRTC will review. Finally in regards to wholesale vs. retail traffic, while this is a good thing in general, the ISP can simply match the restrictions on both wholesale and retail only making the situation worse for all customers.

Usage Based Billing

The latest ruling in the UBB fiasco concerns the application by TekSavvy and MTS to review and withdraw the interim approval on usage based billing.

The commission finds that:

1) The competitors and applications argued that there are major concerns of various costs for implementation, billing and customer complaints.
2) The competitors and applications argued that the proposed UBB implementation date of November 10, 2009 would “cause confusion in the retail market, would increase regulatory uncertainty, and would not represent effective and efficient regulation.”
3) The competitors expressed concern about the accuracy of Bell’s billing data.
4) The commission notes that Bell provides insurance plans to customers for data usage that they did not propose for wholesale customers. This clearly shows discrimination.
5) The implementation date has been extended and will be issued in the final determination as well as addressing the implementation issues.

While it is good that the CRTC is recognizing the issues associated with imposing UBB on wholesale customers, we are still left wondering if the CRTC can come to a reasonable balance for wholesale clients and end user customers. Additionally, if UBB does get implemented, will there be a process for wholesale ISPs to file complaints about billing errors?

Conclusion

While the traffic management framework provides effective guidelines on paper, there is no definitive expectation or legal requirement for the ISPs to follow these guidelines effectively and in favour of the customer. Additionally, there is a great deal of uncertainty regarding customer complaints. What scope will be applied to the review of these complaints? What process is in place to ensure that complaints are handled in a fair and timely manner?

The latest decision on usage based billing is certainly a relief to wholesale ISPs and end user customers since it recognizes that there are major concerns with the implementation of UBB however it still provides uncertainty with the resolution of these issues in the final determination. Finally, it is very disconcerting that the implementation of UBB on wholesale customers provides a competitive disadvantage and allows Bell to provide competitively superior offerings such as bandwidth usage insurance.