Canada's Failure To Actually Enforce Its Net Neutrality Rules Shows Why Focusing On Regulation Is Missing The Point

from the competition-is-the-thing dept

For many, many years we've pointed out that the debate over "network neutrality" in the US was a red herring. The discussions around net neutrality are really just a symptom of the real problem: that we lack true competition in the broadband market. Furthermore, we've noted that any attempt to put in place net neutrality regulations would likely be a failure, because of the lobbying clout of the likes of AT&T and others. The end result would be incredibly favorable to the telcos, not to the public and, in fact, we've seen glimpses of that happening already.

Adding another datapoint (or, several) to this debate is Michael Geist, who got access to information about how Canadian regulators enforced that country's net neutrality rules and discovered that regulators there basically don't enforce a damn thing. They more or less let the telcos do what they want.
Although the CRTC has not publicly disclosed details on net neutrality complaints and the resulting investigations, I recently filed an Access to Information request to learn more about what has been taking place behind the scenes. A review of hundreds of pages of documents discloses that virtually all major Canadian ISPs have been the target of complaints, but there have been few, if any, consequences arising from the complaints process. In fact, the CRTC has frequently dismissed complaints as being outside of the scope of the policy, lacking in evidence, or sided with Internet provider practices. Rogers Communications has been the target of nearly half of all cases opened in response to net neutrality complaints. In recent months, there have been multiple complaints arising from bandwidth throttling of World of Warcraft, a popular multi-player online game. Rogers initially denied any wrongdoing, only to later acknowledge that there was a problem. The company promised to address the issue, though no consequences arose and it was not forced to publicly disclose the issue.
Once again, the problem is not with net neutrality, but with a lack of competition. If you had real competition, people would choose to go with more neutral providers, forcing the market to follow. It's the lack of competition that lets telcos push for less than neutral solutions, and it's the regulatory capture that makes any attempt to legislate neutrality next to useless.
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Filed Under: canada, competition, enforcement, net neutrality, regulation

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  1. icon
    mattshow (profile), 13 Jul 2011 @ 6:39am

    Without disputing that the CRTC is useless at policing these regulations, I'd say that relying on the free market to sort things out would fail even worse. The Internet access industry isn't like other industries. There is a HUGE barrier to entry: at some point, you have to run some sort of cable to the consumers home (unless you're talking about wireless access, which Geist wasn't). Running these tables is obviously a massively expense undertaking. And do we really want/need a different cable going into our homes for every Internet access provider? Say I hate my ISP and want to change. I call up one of their competitors and they tell me "Sure, but you have to wait a year while we dig up your neighborhood to run a cable to your house". Is that really "competition"?

    So instead, we have a system where independent ISPs basically just resell bandwidth that they buy from the telcos and cable companies, using the cables that already exist. This gives the telcos and cable companies a lot of power to limit any new competition either by pricing this bandwidth ridiculously high, or by shaping the traffic flowing upstream from the independent, which affects the service the independent can offer to their customers.

    Without some form of regulation, if the telcos and cable companies decide they want to traffic shape, then there's nothing the independents can do about it. No new competitor can just pop up and start offering non-shaped access. It's a situation where we need regulation in order to promote competition.

    The CRTC complaint system sucks for two reasons. First, it doesn't prohibit traffic shaping, it just says the ISPs have to disclose that they do it. So the solution to many complaints is "Oh, there was inadequate disclosure. The ISp doesn't have to stop doing it, they just have to be better at disclosing it".

    Secondly, it puts the burden of filing complaints on the consumer, then requires them to provide evidence. The average consumer isn't capable of obtaining and providing evidence sufficient to satisfy the CRTC. So you see complaints which consist of nothing more than "My internet access is slow", which the CRTC dismisses for lack of evidence.

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