CAIP appears before CRTC, asks for greater competition, consumer choice, and prohibition on the use of Internet traffic management practices to wholesale services
July 13, 2009

CAIP

Ottawa, July 13, 2009 - The Canadian Association of Internet Providers (CAIP) appeared before the Canadian Radio-television and Telecommunications Commission (CRTC) on Thursday in the Commission’s hearing on Internet traffic management practices.

In its submissions CAIP argued for the need for greater competition, consumer choice, and ISP disclosure of how Internet traffic management practices influence customer Internet traffic. CAIP also provided its reasoning for why the application of Internet traffic management practices to wholesale Internet services should be prohibited.

CAIP’s highly anticipated public meeting with the CRTC left no room for disappointment as Tom Copeland, CAIP’s Chair and Christian Tacit, CAIP’s expert legal counsel made the case that the current poor state of competition and consumer choice in the provision of Internet access services is the reason for the Canadian debate surrounding the use of Internet traffic management practices.

“CAIP argued that it is competition, not congestion that is at issue,” says Michael Geist, law professor at the University of Ottawa where he holds the Canada Research Chair in Internet and E-commerce Law.

CAIP pointed out that the market for retail Internet access services is largely a duopoly between telephone companies and cable companies and reminded the Commission that according to CRTC statistics, the phone companies and cable companies serve over 95.5% of Canadian residential Internet accounts.

While the incumbent telephone and cable companies are the largest competitors for independent ISPs they are also virtually the only suppliers of the wholesale services that competitive ISPs need to provide their own retail Internet offerings.

CAIP indicated that greater unbundling of telephone and cable company networks would enable ISPs to purchase the network components they need in a manner that would reduce any alleged burden on the carriers’ networks, thereby eliminating the need for traffic management at the wholesale level and creating more diverse offerings at the retail level. Pricing for these wholesale services would be approved by the CRTC and would provide the incumbent carriers with a guaranteed and reasonable rate of return on their investments.

It was also noted that in the UK, since the phone company’s retail Internet service has been functionally separated, broadband penetration in rural areas has increased and competition is vibrant.

In its presentation CAIP also opposed the application of Internet traffic management practices to wholesale services. CAIP believes that this restricts the ability of competitive ISPs to differentiate their retail service offerings from those of the telephone and cable companies.

The use of Internet traffic management practices at the retail level can be used to enable ISPs to differentiate their service offerings from one another, thereby increasing competition, so long as ISPs make complete disclosure regarding how their traffic management practices influence customer Internet traffic. This sentiment was echoed by several other telecommunication companies during this week’s hearings.

It was CAIP’s original filing with the CRTC over a year ago and the CRTC’s subsequent decision to allow Bell Canada to continue their throttling of wholesale Internet access (GAS) to ISPs that sparked this week’s public hearing with the commission.

For more coverage and commentaries regarding CAIP’s presentation, visit Michael Geist’s blog. Further coverage may be found at CBC.ca, the National Post and the Post’s live blog.

For further information please contact:

Tom Copeland
Chair, Canadian Association of Internet Providers
905-373-9313
tom.copeland@caip.ca