BY PETER NOWAK — It's all-out war between independent internet service providers and Bell Canada Inc. as the smaller companies have urged the CRTC to put an immediate stop to the phone giant's interference with their traffic.

The Canadian Association of Internet Providers, which has 55 members representing about 100,000 customers across the country, has asked the regulator to issue a cease-and-desist order on Bell's throttling of their internet speeds.

Independent internet service providers are fighting Bell Canada over its policy of slowing down certain internet traffic at some times.
(Ryan Remiorz/Canadian Press)

Bell recently extended its "traffic-shaping" policy to the smaller companies that rent its network. Under traffic shaping, Bell identifies and slows down certain internet applications, such as the file-sharing protocol BitTorrent, during peak traffic periods.

CAIP says the policy harms the businesses of its members and gives Bell — which sells its own competing internet services under the Sympatico brand — an unfair advantage against them.

The group also says Bell's move violates existing regulations.

Bell's actions have "caused serious degradation of the performance and service speeds of the retail internet access and other services offered by independent ISPs," CAIP said in a filing with the Canadian Radio-television and Telecommunications Commission on Friday. "[It] threatens to cause serious and irreparable harm to the business interests of these ISPs in the form of disrupted service, business uncertainty, loss of good will and loss of customers and market share."

Since Bell implemented its speed throttling in mid-March, the group says its members have been losing customers upset by the slowdowns. The group has asked the regulator for swift intervention on the issue to prevent further customer defections.

A spokesperson for the CRTC had no comment on CAIP's submission.

Bell's move in mid-March away from unlimited usage to a system where subscribers are charged for how much they download, has given the company an impetus to limit the speeds of its competitor ISPs, CAIP said. Allowing the ISPs unlimited speeds and downloads would give them a big advantage over Sympatico, which CAIP says is why Bell is throttling access.

Forcing the speed limits onto the ISPs, however, takes away their ability to differentiate services, CAIP chair Tom Copeland told CBCNews.ca.

"The fact that they are eliminating our ability to make business decisions about how we manage our traffic puts us at a disadvantage, and therefore them at an advantage," he said.

Earlier this week, Bell filed an appeal with the Federal Court of Canada to reverse a CRTC decision in March that enshrined the rights of independent ISPs to rent its network. Bell said regulated access is no longer necessary since there is enough competition in phone and internet markets, and that it should be free to commercially negotiate those rental terms.

Bell's head of regulatory affairs, Mirko Bibic, on Friday said the company had the right to limit the ISPs' speeds to improve internet access for all customers by restraining abuse of the network, such as illegal downloading of large video files.

Bell's own retail business is  operating under the same conditions as those being imposed on the ISPs, Bibic said, so Sympatico is not getting any advantage.

"We're using technology to better balance internet traffic during peak usage periods so that all customers experience optimum service," he said. "We're taking reasonable steps in a very objective fashion to manage the issue. Wholesale and retail operations are being treated exactly the same so there is no issue about undue preference or discrimination."
Copeland said Bell's appeal is an attempt by the company to wipe out its smaller competitors.

"Bell wants to see, for the most part, the CRTC neutered to the point where nothing is regulated," he said. "The reality is, as soon as regulation disappears, they are under no obligation to negotiate with their wholesale partners."

Calls for action growing

CAIP's request adds to a growing list of organizations calling on the CRTC and government to curb internet interference by Canadian telecommunications providers. Last week, the National Union of Public and General Employees, which represents 340,000 workers across the country, also urged the CRTC to get involved while NDP MP Charlie Angus called out Minister of Industry Jim Prentice on the issue.

In February, the federal standing committee on Canadian heritage also suggested increased regulations in order to prevent the CBC from suffering a competitive disadvantage to firms such as Bell and Rogers Communications Inc. in offering television over the internet.

Prentice on Thursday told the House of Commons that the government would continue its hands-off approach to the internet.

Industry observers say the current dispute could have been avoided had the smaller ISPs taken advantage of a regulation introduced nearly 10 years ago that allows them to build out their own networks in the buildings housing Bell's telephone infrastructure. The local loop unbundling rule permits ISPs to attach their own equipment to Bell's main backbone network, thus creating a connection to customers over the crucial "last mile" that goes from the telephone buildings to homes.

"Companies which install their own equipment won't be bound by the traffic shaping of the incumbent and can even attract customers by offering non-shaped services," said Taylor Reynolds, communications analyst and economist for the science, technology and industry directorate at the Organization for Economic Co-operation and Development in Paris.

"The key, from a policy perspective, is to figure out why competitive operators aren't using unbundling more and whether there are steps the government can take to encourage it."

Many ISPs haven't built out their own equipment because Bell has been sidestepping the rules by pushing its network out of those buildings and into street-side cabinets, which they don't have regulated access to. Bell services about 60 per cent of its customers from those cabinets, Copeland said.

"We can't get close enough to the customer to be able to deploy our own [equipment]," he said.

The CRTC, in its March decision, ruled against giving ISPs regulated access to this new "fibre-to-the-node" deployment, so as to not discourage Bell from investing in it.

Bibic called the ISPs' argument a red herring since Bell only recently began pursuing the strategy and has only pushed out its network in a few areas. Bell still has to work out with the ISPs how they get access to those cabinets, but that doesn't mean regulation is needed, he said.

"Competitors should not have access to next-generation networks," Bibic said. "That's one thing [the CRTC] did get right."