Bell says the Telecommunications Act does not require the company to notify wholesale customers of its traffic-shaping policies. (Ryan Remiorz/Canadian Press)

Bell Canada Inc., accused last week by Google Inc. of breaking the law by slowing broadband connections, has fired back and said if anybody is acting as the internet's gatekeeper and furthering its own interests, it's the search engine company.

"If there is, indeed, any gatekeeping activity on the internet, which is questionable, the gatekeeping is being performed by the internet search engines, which are typically the users' window to the near-infinite content available worldwide," Bell wrote in a Friday submission to the Canadian Radio-television and Telecommunications Commission and made public on Tuesday.

In its own submission made public last Monday, Google said Bell's throttling of speeds of certain internet uses, namely peer-to-peer (P2P) applications such as BitTorrent, was not only breaking Canadian telecommunications law but also threatening online innovation. In its reply, Bell said Google's comments were self-serving and without merit.

"The commission should see these claims for what they really are: the use of policy rhetoric devoid of substance in order to promote vested business interests," Bell said in its submission, made public on Tuesday. "Indeed, the opposite of these claims is clearly the case; necessity is the mother of invention."

Bell pointed out that new methods of managing P2P traffic, such as Proactive network Provider Participation for P2P — or P4P — are currently being developed to handle the heavy loads that applications like BitTorrent bring.

"The company is confident, however, that competition and market forces will encourage, as it has already done, the development of new, better and fairer P2P file sharing applications," Bell said.

Bell's CRTC submission was the latest salvo fired in its battle with the Canadian Association of Internet Providers(CAIP), a group of 55 smaller ISPs that rent portions of the phone company's network in order to offer their own services. Bell, citing network congestion, began throttling P2P applications used by its own Sympatico internet customers last November, then extended the practice to CAIP members in March, prompting the smaller companies to lodge a complaint with the CRTC.

The regulator in May refused to issue an immediate cease-and-desist order but launched a public investigation into whether Bell was violating the Telecommunications Act by changing the terms of its wholesale agreement. CAIP has said Bell has failed to prove its network is congested and has rallied numerous supporters, including Google, consumers groups and other technology companies such as Skype, to support its case.

Bell has garnered allies in the form of fellow large ISPs Rogers Communications Inc. and Telus Corp., as well as network equipment maker Cisco Systems Inc.

In its latest submission, Bell denied it was breaking the law because its traffic-shaping policies are not a "notifiable change" required by the Act.

"As capacity management and network maintenance fall within standards and specifications within [the company's] network, the company had no obligation to notify other carriers," Bell said.

Dispute the focal point of net neutrality

The dispute has become the focal point of the debate over net neutrality, or how much control ISPs have over how customers can use the internet. Throttling by Bell and other large ISPs, including Rogers Communications Inc., prompted a protest rally on Parliament Hill in May, two private members' bills being tabled in the House of Commons, and a complaint with the Privacy Commissioner.

CRTC chairman Konrad von Finckenstein in June, however, warned that a decision on the Bell-CAIP dispute will be limited to whether there is a violation of the Act occurring, while a larger investigation into the issue of net neutrality will likely follow later.

In its latest submission, Bell continued to cite the need for confidentiality regarding the level of congestion on its network. The company has said that only between 2.6 and 5.2 per cent of its network links in Ontario and Quebec are congested at any one time, a figure that appears to be low but actually has much more effect on customers given that they often use several links at once to connect to the internet.

A number of industry analysts have suggested that any possible congestion problems could be solved simply by implementing a usage-based billing system, where heavy users of P2P incur extra charges by going over their download limit, rather than limiting their speeds. Most large ISPs in Canada already have usage-based billing in place — the majority of internet customers can download about 60 gigabytes a month — but a "multi-pronged" approach is needed, Bell says, because future demand is impossible to predict and some form of management is still needed during peak usage hours.

"It has become increasingly difficult to project with any reasonable accuracy future demand such that adjustments to corporate strategies to deal with future growth will always be required," Bell said in its submission. "Even if technology is eventually developed in order to allow for flexible pricing, there will likely remain a need to manage bursts of traffic which usually, but not always, occur during peak periods."

CAIP now has until July 17 to file its response with the CRTC, after which the public commentary period will close. Bell, however, filed its latest submission a day late and said it would not mind if CAIP did so as well. The CRTC has said it plans to make a ruling on the dispute in September.

A similar, albeit advanced situation, has unfolded in the United States over the past week. The CRTC's U.S. counterpart, the Federal Communications Commission, last week said it intends to impose sanctions on Comcast Corp. for actively blocking its customers' usage of P2P.

"The commission has adopted a set of principles that protects consumers' access to the internet. We found that Comcast's actions in this instance violated our principles," FCC chairman Kevin Martin said last week.

The FCC is scheduled to vote on Comcast's punishment on Aug. 1.