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The fight between Bell Canada and a consortium of independent Web service providers over how traffic is allowed to flow over the Internet is "only the tip of the iceberg," for an industry that could find itself in more disputes, Canada's telecom regulator has warned.

Speaking to the sector yesterday, the head of the Canadian Radio-television and Telecommunications Commission indicated the government might need to step in to establish rules on Internet "traffic shaping" or further disagreements are likely to erupt.

Bell Canada has come under fire from the Canadian Association of Internet Providers (CAIP) over policies designed to manage the flow of content on Bell's network. CAIP - an industry group representing independent Internet service providers - complained to the CRTC that Bell was slowing traffic on the network space it was leasing to them.

However, Bell has argued it needs to manage, or "shape," certain types of Internet traffic to ensure that small numbers of customers consuming large amounts of bandwidth through peer-to-peer downloads don't bog down the network.

This argument has angered members of CAIP, who allege that Bell is illegally managing their subscribers' traffic.

Rogers Communications Inc. is facing similar criticism for shaping the flow of traffic on its network, which it argues is done to prevent congestion.

Now the CRTC may consider holding hearings to consult with the industry and devise guidelines to oversee such practices.

"The CAIP complaint is really only the tip of the iceberg," CRTC chairman Konrad von Finckenstein told the telecom conference. "Sooner or later - hopefully later - this is going to evolve into a major consultation ... It seems to be inevitable."

Proponents of the unwritten rule of net neutrality contend that all Internet traffic should be treated equally and advocate against network management practices such as shaping.

CAIP chairman Tom Copeland said he expected the CRTC to eventually broaden its investigation beyond the group's spat with Bell and he hopes the Canadian public will take note of the dispute.

"The CAIP issue is a regulatory issue," he said. "But it's not that bigger societal issue of who controls the media and who controls the pipes ... there is always a risk that those who deliver the content can also control the content."

John Lawford, a lawyer representing the Public Interest Advocacy Centre, a consumer group, said many Internet users are angry at the strategies of Bell and Rogers.

But Ken Englehart, head of regulatory affairs for Rogers, said the company hasn't seen the same reaction.

"We hardly get any complaints," Mr. Englehart said. He said peer-to-peer file sharing applications such as BitTorrent sites could squeeze other applications such as e-mail or streaming video off the network if traffic wasn't managed.

"So we give the peer-to-peer network their own dedicated lane ... and if we didn't, the network wouldn't work."

The CRTC asked Bell last month to produce evidence to support its claim that 95 per cent of its users were being negatively affected by peer-to-peer traffic emanating from as few as five per cent of its subscribers.

Speaking to the conference, Mirko Bibic, chief of regulatory affairs for Bell Canada, said the company has been forced to manage the traffic of its own Bell Sympatico users, an indicator that it's not just targeting smaller Internet service providers that use its network.