October 2009

The Canadian Radio-television and Telecommunications Commission (CRTC) has issued an order saying traffic shaping is a "last resort" measure to deal with Internet congestion, network investment is the "primary solution," but no "bright line" network neutrality rules will be forthcoming. When ISPs need to control traffic levels, then, they are first encouraged to use "economic measures" as the fairest solution. These can take the form of data caps or discounts for Internet use during off-peak hours, instead of involving the ISP in discriminating among packets. Economic measures would "generally not be considered unjustly discriminatory," says CRTC, "as they link rates for Internet service to end-user consumption... Furthermore, these practices match consumer usage with willingness to pay, thus putting users in control and allowing market forces to work." Instead, the CRTC has set up a "framework" for evaluating these non-economic traffic management measures. There are few advance rules, though there are four general principles looked at in evaluating specific policies:

• Demonstrate that the [measure] is designed to address the need and achieve the purpose and effect in question, and nothing else;
• Establish that the [measure] results in discrimination or preference as little as reasonably possible;
• Demonstrate that any harm to a secondary ISP, end-user, or any other person is as little as reasonably possible; and
• Explain why, in the case of a technical ITMP, network investment or economic approaches alone would not reasonably address the need and effectively achieve the same purpose as the ITMP.

The CRTC does warn, however, that "application-specific [shaping measures] degrade or prefer one application, class of application, or protocol over another and may therefore warrant investigation."

Harold Feld writes: "Canada has now settled its definition of "reasonable network management" and set rules for traffic throttling. Amazingly, the rules the CRTC settled on for "reasonable network management" look a lot like the standard our own FCC settled on in the Comcast/BitTorrent Order, but even stronger on the notice and transparency side."

At Supercom, a trade show taking place in Chicago, panelists highlighted low broadband adoption rates as a major issue that must be addressed in the pending National Broadband Plan which will outline how the U.S. can reach the goal of universal broadband use. Roughly 96 percent of American households have access to broadband service from at least one service provider, the FCC said in a status report issued last month. But of those people, about 33 percent do not subscribe to broadband. Why? John Horrigan, consumer research director for the FCC, who was on the panel Wednesday, said the FCC is currently conducting surveys to answer that question. "We are trying to figure out why people who have access to broadband choose not to subscribe," Horrigan said. "There's a big group of users still on dial-up, and there are people who have never subscribed to an Internet service." The FCC's status report suggests that adoption rates vary by age, income, education, and race. There is some speculation that price might be a factor, which means either the cost of services is too high or the cost of computers and equipment is too high. Jim Cicconi, a senior executive vice president at AT&T, said that there are a mix of reasons why people who have access to broadband choose not to subscribe. And he argued that price may not play as big of a role as some people suspect. He said that after AT&T merged with BellSouth, the company introduced a $10-a-month broadband service to entice people to subscribe to broadband [Editor's note: actually, that was a condition of the merger]. While many customers signed up for this offer, there was still a significant number of people who didn't. In fact, some consumers continued to subscribe to dial-up service, even though that service was much slower and twice as expensive as broadband.

Apparently the Federal Communications Commission will be asking questions about managed services in the upcoming Network Neutrality proceeding. In general, managed services are ill-defined, but most carriers will tell you they include features that customers pay extra for and as such, require guaranteed levels of service — things like IPTV or virtual private networks back to a corporate office. No one paying for telco TV wants to let VoIP calls or Hulu interfere with the Big Game when they're watching it on IPTV. But the FCC apparently wants to know how far carriers can take that. If taken too far, then carriers could protect their revenue streams and get around any net neutrality provisions by allocating more of their network for managed services rather than for the public Internet. The FCC is worried that a neutral public Internet that gets forced through a smaller pipe so that carriers can invest more on upgrades and capacity for managed services won't be able to support the innovations of tomorrow. So we expect the FCC to ask some probing questions aimed at exposing how the carriers view this managed services, as well as how, from a technical perspective, they currently wall such services off. The FCC's attention on managed services is an effort to make sure that the fat pipes the carriers are building will be available for innovations that aren't delivered through a carrier-created and controlled managed service. The threat of ensuring a quality-of-service guarantee for some offerings means, at its heart, that certain traffic is shunted aside when traffic deemed to be a priority comes through.

Countering an "intense lobbying campaign" by the telephone and cable industry, 28 public interest groups today sent a letter to the Federal Communications Commission (FCC) expressing their "strong support" for the Commission's proceeding that will "ensure an open and non-discriminatory Internet." "Since its creation, the Internet was intended to be a medium controlled by users, not by network access providers. As a result, it has become the most democratic medium this country, and the world, has ever known," the letter said, adding: "The open Internet has generated billions of dollars in investment, by network operators and Web-based companies, opening up new opportunities for consumers while creating thousands of jobs." Signatories include the country's largest consumer groups and public interest groups such the Benton Foundation Common Cause and Change Congress in addition to organizations focusing on telecommunications policy.