Canada Protects Net Neutrality as US Prepares to Dismantle It

It will be interesting to see how the rest of the world reacts to this issue; will net neutrality be dismantled in most countries, or will it be protected?

While the United States is poised to gut its own net neutrality rules sometime in the next month, Canadian regulators just doubled down on protecting it — and have now created some of the toughest net neutrality rules in the world. Canadian regulators had already passed functional net neutrality rules that prohibited blocking and other blatantly anti-competitive behaviors. But the CRTC this week released its full, final guidelines that take things further, effectively prohibiting giant ISPs from using arbitrary usage caps to give their own content an unfair market advantage (aka zero rating).

You might recall that back in 2013, some DSLReports.com regulars, including then University of Manitoba graduate student Ben Klass (uid://1822303), filed a complaint against Bell in Canada.

Basically, they were annoyed by the fact that Bell’s $5 a month Bell Mobile TV service — which provides 10 hours of live or recorded TV show access each month — didn’t count against user usage caps, while competing services unfairly did.

It’s not entirely dissimilar to complaints here in the States about Comcast exempting its own streaming video service from Comcast usage caps, putting competing services at a disadvantage. In Comcast’s case, the company claimed that what they were doing wasn’t violating the principle of net neutrality because the service never technically touches the larger Internet.

Bell took a different but similar approach, and tried to claim that they weren’t violating net neutrality, because the neutrality provisions of Canada’s Digital Media Exemption Order (DMEO) only apply to telecom services. Bell’s Mobile TV service, Bell claimed, is a broadcast television service and therefore not governed by net neutrality.

US regulators were happy to let Comcast tap dance around net neutrality in this fashion. And subsequent attempts to hold AT&T and Verizon accountable for using caps anti-competitively to tilt the playing field in favor of their own mobile streaming video services were scrapped by “industry friendly” new FCC boss Ajit Pai.

But in Canada, regulators sided with consumers like Klass in 2015, ruling that Bell’s video service — and the use of usage caps to give it an unfair advantage over competitors — violated the Telecommunications Act. This week’s ruling simply finalizes that decision, providing a framework for judging the anti-competitive impact of zero rating and “differential pricing” plans moving forward. An accompanying ruling also shoots down a zero rating music effort that had been cooked up by Canadian provider Videotron.

“The Commission considers that competition in the retail Internet access services sector is best served, and the telecommunications policy objectives set out in the Act are best achieved, when ISPs compete and differentiate their services based on their networks and the attributes of the services on those networks, such as price, speed, volume, coverage, and the quality of their networks,” said the CRTC.

The short version: in Canada an ISP can no longer use arbitrary (and often unnecessary) usage caps and overage fees to unfairly give its own streaming services an advantage. In contrast, U.S. regulators now firmly believe this kind of anti-competitive behavior is a great idea.

The short version: in Canada an ISP can no longer use arbitrary (and often unnecessary) usage caps and overage fees to unfairly give its own streaming services an advantage. In contrast, U.S. regulators now firmly believe this kind of anti-competitive behavior is a great idea.

That’s thanks in part to revolving door regulators. But it’s also thanks to consumers who labor under the illusion that zero rating provides them something for “free.” But if you understand that caps are entirely arbitrary, then you should realize that being “allowed” to bypass them (especially when Americans and Canadians already pay more for mobile broadband than most developed nations) isn’t a gift.

The CRTC was quick to point out that any short-term gains made by letting users enjoy cap-exemption for some services, is countered by the way zero rating distorts and damages the broader market by driving consumers unfairly to incumbent streaming services.

“The Commission considers that any short-term benefits of differential pricing practices would be greatly outweighed by the negative long-term impacts on consumer choice if ISPs were to act as gatekeepers of content through their use of such practices,” said the CRTC.

By and large, Canadian consumer advocates are pleased with the CRTC decision.

“On a technicality it leaves some wiggle room for some really creative attempts at zero-rating that can be challenged after the fact,” OpenMedia’s Laura Tribe says of the ruling. “This is a really strong step for Canada in terms of being a global leader in net neutrality.”

In short, Canada is left with some of the strongest net neutrality protections anywhere. While here in the States, the Trump administration and FCC boss Ajit Pai have decided that existing net neutrality protections should be gutted — and replaced with “voluntary” commitments that will be virtually meaningless.

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