Why the U.S. net neutrality debate has not spilled into Canada

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With online video viewing soaring, the debate over whether the Internet should be divided into fast and slow lanes is growing.

This week, U.S. President Barack Obama waded into the discussion, laying down a forceful argument for protection of so called "net neutrality," a principle that says all Internet traffic should be treated the same and service providers should not be able to give preferential treatment to some content.

"We cannot allow Internet service providers [ISPs] to restrict the best access or to pick winners and losers in the online marketplace for services and ideas," he said.

His comments come as the U.S. Federal Communications Commission redrafts rules around how ISPs handle traffic. The regulator has been grappling with this since January, when a federal appeals court struck down an earlier set of net neutrality rules.

One-third of North America's prime time Web traffic is attributed to streaming videos on Netflix Inc. and YouTube, straining networks under the volume of data that videos require compared with activities such as web browsing. Carriers want the content companies to pay for the infrastructure costs associated with more traffic, while content companies say ISPs, users and content providers should share the cost equally. It's a contentious issue and when cable television host John Oliver ranted about the subject this summer, the FCC's website crashed amid the resulting wave of public comments.

The issue has become so complicated and is so fundamental to the future of the Internet that the FCC chairman is reported to be considering delaying the delivery of his revised framework until early next year.

Yet, the debate largely has not spilled over to Canada's Internet landscape. Here's a primer on why not:

First, what is net neutrality anyway?

This is the idea that all legal traffic on the Web should be treated equally and that ISPs should not slow down or speed up certain content.

The concept has ties to the principle of common carriage, which originally applied to companies such as railways and required operators to transport goods on a non-discriminatory basis. The idea was that in regulated industries that tended to have little, if any, competition, the general public should have equal access to those services.

Telephone companies have been recognized as common carriers and utilities such as electricity providers are treated in a similar fashion, with the expectation that they make their service available on a neutral basis, with no interference with who can access the service or what customers do with it.

Proponents of net neutrality believe similar expectations ought to extend to ISPs, which should be required to deliver all content equally, without offering superior service to those content providers who can afford to pay more.

What is the fight in the United States about?

In a landmark 2002 decision, the FCC ruled that broadband Internet would be treated as an "information service," which entailed lighter regulation than if ISPs were treated as common carriers. This designation became problematic for the commission in January, when the appeals court said the regulator did not have the authority to impose its net neutrality rules on those information service providers.

In the vacuum created when the court struck down the FCC's rules, Comcast Corp. reached an agreement with Netflix to ensure better-quality streaming of its content, sparking questions over the fairness of paid Internet "fast lanes."

Many stakeholders have since called for the FCC to reclassify ISPs as common carriers or utilities, which would give the commission increased regulatory power. Mr. Obama argued in favour of that reclassification on Monday, adding that the FCC should still refrain from directly setting rates.

The president said the FCC should adopt an approach that includes rules against blocking content as well as throttling (or slowing down) traffic, increased transparency around how ISPs connect with content providers and a ban on paid prioritization of certain content that would give services willing to pay a "fast lane."

An industry group representing U.S. ISPs said it was stunned by the comments and argued the approach advocated by the president abandons a tradition of lightly regulating the Internet. Carriers said the move could face legal challenges and some critics also say the reclassification argument is too simplistic and could inadvertently lead to lower-quality networks.

So why aren't we fighting about this in Canada?

In Canada, ISPs have long been treated as common carriers. The Telecommunications Act bars carriers from unjustly discriminating against any person or giving anyone – including themselves – an undue advantage. This would make it difficult for a carrier to enter into deals to give content companies "fast lanes."

In 2009, the Canadian Radio-television and Telecommunications Commission elaborated on the legislation with a policy around Internet traffic management practices that requires ISPs to disclose their practices and explain why any sort of traffic management is necessary in the first place. The policy has been used to shut down throttling of speeds for online gamers, for example, whose activities – which require far more bandwidth than the average e-mail-checking, web-surfing user – were purportedly straining carriers' entire networks.

That's not to say there haven't been further controversies north of the border. The CRTC is considering a complaint about BCE Inc.'s Mobile TV application, which lets Bell Mobility customers who subscribe to the service watch up to 10 hours per month of live and on-demand television programming with no effect on their wireless data cap. But users could face significant overage charges for streaming the same amount of content from Netflix or another online video service that Bell doesn't own. The commission must decide whether this differential treatment violates Canada's net neutrality framework. (BCE owns 15 per cent of The Globe and Mail.)