New CRTC Chair could bring change to broken telecom market

Image from Kyz on Flickr

Jean Pierre Blais was recently appointed as the new chairman of the CRTC, a move which has many in the pro-Internet hopeful for a shift away from the misguided and harmful policymaking that we’ve seen in the last few years. The CRTC is responsible for regulating the Internet Traffic Management Practices (ITMPs) of Internet service providers, i.e. making sure that lawful content isn’t throttled. However York University professor David Ellis recently wrote two blog posts arguing that current CRTC policy encourages price-gouging and an uncompetitive Internet market, while its system for enforcing its own regulations is woefully inefficient.

In his first post, he highlights three major flaws in current policy that demonstrate a preference for ISPs over consumers: that it has no neutrality, no teeth, and no transparency.

The lack of neutrality in the CRTC’s policy is clear in the language of the 2009 ITMP report: ‘net neutrality’ (a consumer concern) is only mentioned once, whereas ‘traffic’ (a supplier concern) appears 73 times.

Secondly, the policy “isn’t enforceable in any meaningful sense” making it toothless; Ellis explains that many complaints were not followed up on, while high profile cases, like that of Rogers throttling World of Warcraft, were simply closed without any consequences.

Thirdly, the policy encourages price-gouging. The CRTC believes that data caps (extra charges for over-usage) are the most transparent form of management because “[t]hey match consumer usage with willingness to pay, thus putting users in control and allowing market forces to work”. But according to Ellis, most users do not have a good enough understanding of how data caps work, and have no idea what access tier they are on or how much they are paying for broadband.

Ellis’ follow-up post tackles three myths that have allowed for these price-gouging practices to exist: the network congestion myth, the myth of a lack of complaints, and the myth that data caps will promote neutrality.

ISPs argue that they sometimes need to throttle network traffic in order to avoid congestion, and that this congestion is caused by “evil bandwidth hogs”, an assertion that Ellis says has never been supported with convincing empirical evidence. Rather, it is far more likely that network traffic becomes congested at certain times of day, much like vehicle traffic peaks at rush hour.

Secondly, the enforcement of ITMP policy relies on the idea that consumers will complain about problems, rather than having the CRTC proactively identifying and punishing breaches of its guidelines. As Ellis puts it, “the Commission decided to take no responsibility for policing its own rules”. When complaints were made, the CRTC made them unavailable to the public, so no one knew how many complaints were made, or if there were complaints at all.

Finally, Ellis points out that the data caps that the CRTC thinks will help to manage traffic congestion instead allow ISPs to profit from price gouging. As Ellis explains, charges for over-usage are not cost-based, and they are not regulated, so ISPs can charge whatever they want. In order to continue this windfall, ISPs are lowering their data caps so that consumers go over their limit sooner, and raising the over-usage penalties when they do.

With a new CRTC Commissioner, there's the opportunity for a shift away from this damaging policy. Call on the CRTC to ensure Canadians have access to an open, affordable Internet.

Read Ellis' full blog posts here, and here.

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