The Canadian Radio-television and Telecommunications Commission will allow internet service providers such as Rogers Communications and Bell Canada to engage in "traffic shaping" to control the amount of Web traffic over their networks, but the practice must be transparent to users and take place only when necessary.
In a decision released Tuesday, the CRTC said retail customers must be told in advance what means are being used to control Internet traffic, and how it will affect their service.
When the big telecom companies sell their services to smaller Internet providers who piggyback off their networks, there must be no competitive discrimination, the CRTC said.
Traffic shaping involves slowing down or "throttling" some kinds of Internet traffic - usually downloads - using a process that is similar to allocating certain lanes on a highway to slow-moving trucks to ease the flow of traffic in other lanes.
Internet service providers employ the practice, which slows down service to some users, to manage and prioritize online traffic during high-volume periods.
Critics say the practice violates the principal of "net neutrality," the idea that all Internet traffic should be treated equally.
In its ruling the CRTC said home customers will have to be told 30 days in advance if their service provider is going to use some form of traffic management, and how it will affect their service. Wholesale customers - such as smaller service providers - must get 60 days notice.
The regulator said preference should be given to "economic" measures, such as charging more for higher bandwidth, or giving discounts in off-peak hours. These are more transparent and allow customers to make informed decisions, the CRTC said.
Technical methods, such as traffic shaping to slow downloads, should only be used as a last resort, the commission said.
Over all, any traffic management practices should be designed to harm customers as little as possible, and used only when there is no other option, the CRTC said.
The commission said the ruling "appropriately balances the freedom of Canadians to use the Internet for various purposes with the legitimate interests of ISPs to manage the traffic thus generated on their networks...."
Service providers will be able to put traffic management practices in place on retail services without the commission's approval, but if wholesale customers are treated in a more restrictive way than home clients, the CRTC must be asked in advance.
The commission noted that service providers can only block content or slow down time-sensitive traffic, such as video-conferencing, with its approval.
Tuesday's decision follows the CRTC's rejection, a year ago, of a complaint from a consortium of independent Internet service companies over how Bell Canada managed Web traffic on the network space it leased to third-party providers.
The CRTC denied a request by the Canadian Association of Independent Providers (CAIP) for an order preventing the practice. It did, however, require Bell to notify third-party companies at least 30 days before making changes to the performance of the network space it leases to them.
The CRTC followed up with a public hearing this past summer.
At the hearing, service providers such as Rogers Communications Inc. acknowledged that they sometimes slows down users who are sharing big files, such as movies, in order to make the network work more efficiently for other subscribers.
To do so, the providers have technology that examines the kinds of communications that are going on over the network.
Critics said this kind of monitoring is an invasion of privacy, and companies could use technology to favour their own services and sites.
Rogers vice-president Ken Engelhart told the hearing that the company has no idea who is doing file sharing, what the files are, and does not manage Internet traffic to benefit its own services.