Net Neutrality in Canada

(Disponible en français : La neutralité du Net au Canada)

The Canadian Radio-television and Telecommunications Commission (CRTC or the Commission) defines net neutrality as the general principle that “all traffic on the Internet should be given equal treatment by” Internet service providers (ISPs). The Commission’s net neutrality policy specifically rests on sections 27(2) and 36 of the Telecommunications Act (the Act):

27(2) No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.

36 Except where the Commission approves otherwise, a Canadian carrier shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public.

Net neutrality attracted much attention last year after the Chairman of the U.S. Federal Communications Commission (FCC) announced plans to roll back American net-neutrality regulations.

Proponents of net neutrality argue that these regulations prevented Internet service providers (ISPs) from engaging in anti-competitive practices by manipulating web traffic. For example, ISPs can manipulate web traffic by blocking or slowing down access to lawful content to gain a commercial advantage over competitors. However, the Chairman of the FCC maintains that rolling back regulations will expand business opportunities for small and big ISPs, and encourage network investment to the benefit of all consumers.

While the future of net neutrality remains uncertain in the U.S., the FCC’s decision raised concerns over the protection of net neutrality in Canada.

Soon after the American net neutrality rules expired, and in response to a parliamentary report, the Government of Canada expressed its support of net neutrality in Canadian telecommunications policy. Doing so, the Government reiterated its endorsement of a regulatory framework the CRTC set in place in 2009, based on legislation Parliament enacted in 1993 – ten years before the phrase “net neutrality” was even coined.

The Act does not prohibit an ISP from interfering with Internet traffic per se. While the CRTC holds that while ISPs should avoid manipulating Internet traffic through technical or economic means, some interference remains lawful.

For example, an ISP can manipulate web traffic to reduce spam and malware, protect the integrity of its networks, and maintain the quality of its services during high-congestion periods. An ISP’s pricing practices may also benefit customers – such as when, as part of a “no-pay-to-pay” policy, an ISP doesn’t count the number of times a customer uses the Internet to access and manage her account against monthly data caps.

The Commission must therefore examine ISP practices on a case-by-case basis, in response to a complaint or on its own initiative. The CRTC enacted two policies under which it determines whether an ISP acts consistently with sections 27(2) and 36 of the Act:

  • Telecom Regulatory Policy CRTC 2009-657 (Policy 2009-657); and
  • Telecom Regulatory Policy CRTC 2017-104 (Policy 2017-104).

The CRTC’s Policy 2009-657 informs stakeholders how the Commission applies section 27(2) of the Act to Internet traffic management practices (ITMPs). ITMPs are technical and economic means employed by Canadian ISPs to ensure an optimal use of their networks. Under this Policy, technical ITMPs include slowing or prioritizing a user’s traffic, or identify heavy users to limit the bandwidth, while economic ITMPs include limiting a user’s monthly bandwidth capacity or varying the pricing of services based on the time of day. In 2010, the CRTC extended Policy 2009-657 to mobile wireless data services.

To protect consumers, the Commission directs all ISPs to provide their customers with information on the ITMPs they employ. When responding to a complaint, the Policy directs an ISP to describe the ITMP, along with its need, purpose and effect, and disclose whether the practice results in discrimination or preference. The Commission will consider that an ITMP resulting in discrimination or preference conforms to section 27(2) of the Act if the ISP demonstrate that:

  1. The ISP designed the ITMP only to address the need and achieve the purpose and effect in question;
  2. The ITMP results in discrimination or preference as little as reasonably possible;
  3. The ISP harms end-users, other ISPs or any other person as little as reasonably possible; and
  4. In the case of a technical ITMP, network investment or economic approaches would not suffice to reasonably address the need and achieve the purpose and effect in question.

Policy 2009-657 also states that an ISP violates section 36 of the Act not only if it outright blocks access to content, but also if the ISP noticeably slows time-sensitive content, such as audio or video traffic.

The CRTC extended its net-neutrality framework with Policy 2017-104, which focuses on differential pricing practices. Under the Policy, differential pricing occurs when an ISP offer similar products or services at different prices, such as when an ISP discounts data originating from a particular website or application from a customer’s monthly data plan (i.e. a practice known as “zerorating”). The Commission will consider the following criteria to determine whether a discriminatory pricing practice or offering results in an undue or reasonable preference or disadvantage:

  1. Whether the offering treats data without regard to carried content;
  2. Whether the offering is exclusive to a category of end-users or content providers;
  3. How the offering has an impact on Internet openness and innovation; and
  4. Whether there is financial compensation involved between a content provider and an ISP or third party (affiliated or not).

On 23 May 2018, Parliament unanimously called on the Government of Canada, in its upcoming review of the Act,  “to explore opportunities to further enshrine in legislation the principles of neutrality in the provision and carriage of all telecommunications services.”

On 28 June 2018, the Government requested the expert panel conducting the review to examine whether current legislation is well-positioned to protect net neutrality in the future. The panel is expected to table its final report in January 2020.

Author: Francis Lord, Library of Parliament