(L to R) Commissioners Candice Molnar, Len Katz, Konrad von Finckenstein (chair), Suzanne Lamarre and Timothy Denton heard from speakers representing small internet service providers and public interest groups Thursday. (Emily Chung/CBC)

How internet service providers manipulate online traffic speeds wouldn't be an issue if there were more competitors offering customers different service options, a group representing smaller ISPs argued Thursday.

"When you increase competition in the market, the whole [internet traffic management], net neutrality debate will go away," said Christian Tacit, counsel for the Canadian Association of Internet Providers. "I really do think this will take care of itself, as will the congestion issues."

He was speaking during the fourth day of hearings in Gatineau, Que., by the Canadian Radio-television and Telecommunications Commission, which is developing guidelines for internet service providers on how they should manage internet traffic, especially at times of congestion.

In particular, the CRTC is trying to determine whether practices such as throttling — selectively slowing down certain applications such as peer-to-peer file transfers — should be allowed.

Christian Tacit and Tom Copeland of the Canadian Association of Internet Providers blamed congestion partly on a lack of competition. (Emily Chung/CBC)

On Thursday, it heard from CAIP as well as two individual ISPs, Execulink and Primus, who argued that they should be allowed to apply a full range of traffic management practices to their retail customers, as those practices would allow different competitors to distinguish themselves from one another and provide more choice for the consumer in a competitive environment.

For example, Primus gives priority to time-sensitive applications such as video and voice services at specific times and network locations where congestion is detected on its network, said Matt Stein, vice president of network services for the ISP. That contrasts with the strategy applied by Bell, which throttles peer-to-peer traffic during set hours of the day that it deems peak traffic periods, he said.

However, Tacit said that to date, competition has been limited. CAIP noted that based on CRTC numbers, dominant carriers account for 95.5 per cent of the revenues from residential internet subscribers in 2007.

Tacit blamed the lack of competition for internet congestion. In a "duopolistic" environment, he said, Bell and Rogers can make more money by constraining supply.

He said there isn't true competition in the marketplace, because many smaller ISPs buy their network access wholesale from Bell, which:

• Applies its own traffic management — including throttling P2P applications — to those ISPs' retail customers alongside its own retail customers.
• Provides access to a pooled network whose infrastructure is owned by Bell so the ISPs cannot do their own network upgrades to boost capacity.

Tom Copeland, chairman of CAIP, said that limits the extent to which smaller ISPs can distinguish themselves, and the CRTC should create new rules to address those problems and boost competition.

The smaller ISPs argued that wholesalers such as Bell should not be allowed to impose their traffic management practices on other ISPs customers, because that interferes with their responsibilities and ability to compete.

"To manage a network requires the ability to diagnose problems and modify configurations. Much of this ability can be lost when the wholesaler (and competitor) technically modifies the traffic," Keith Stevens, chairman of Execulink Telecom, told the CRTC. "It's the duty and right of every ISP to manage their network."

Competition not enough: CIPPIC

Meanwhile, experts brought in by public interest advocates were skeptical that retail competition would be enough to protect internet users and companies that rely on the internet from practices that they allege are discriminatory.

Strict rules are needed to bar the targeting of practices such as throttling at particular applications or protocols except under very special circumstances, they told the CRTC, speaking on behalf of the University of Ottawa's Canadian Internet Policy and Public Interest Research Centre (CIPPIC) and the Campaign for Democratic Media.

Competition is necessary, said David Fewer, acting director of CIPPIC, "but it's not sufficient to address the problem."

Andrew Odlyzko, a researcher who heads an internet traffic study at the University of Minnesota, told CBC News that he knows of cases in the past where increased competition led to increased discrimination.

David Reed, a researcher at the Massachusetts Institute of Technology's Media Laboratory, said he is concerned that without strict rules, people or companies that develop new internet tools or applications will have to make deals with individual ISPs in order to get started, and that could be a barrier to innovation.

Steve Anderson, co-founder of the Campaign for Democratic Media and the Save our Net Coalition, said more competition will certainly help, but is something that could take years to happen.

"We need rules now," he added.

The hearings continue until July 13.