Small internet service providers are challenging a ruling that gave Bell Canada Inc. the green light to selectively slow down internet speeds for some of their customers.

Canada's internet regulator, the Canada Radio-television and Telecommunications Commission, didn't fully understand the technology involved and made errors in the November 2008 judgment, said an application filed with the commission Thursday by Canadian Association of Internet Providers (CAIP), along with the Consumers' Association of Canada and a number of other groups.

The groups listed on the application are: The Consumers’ Association of Canada.

Canada Without Poverty.

Canadian Association of Internet Providers.

Acanac Inc.

Accelerated Connections Inc.

Cybersurf Corp.

Eagle.ca.

Execulink Telecom Inc.

Managed Network Systems Inc.

Skyway West Business Internet Services,

Start Communications, TekSavvy Solutions Inc.

Vianet Internet Solutions.

Yak Communications Inc.

The application asks the commission to review its decision.

Bell's "throttling" targets internet traffic generated by peer-to-peer (P2P) file sharing applications used by its own customers and by customers of the smaller ISPs. Bell is required to rent network access to smaller ISPs at regulated rates because the networks were built decades ago at taxpayer expense.

Bell said throttling is necessary to prevent network congestion.

In November 2008, the Canada Radio-television and Telecommunications Commission ruled that Bell's throttling is not discriminatory, as the practice is also applied to Bell's own internet customers.

The decision came in response to a complaint filed in April 2008 by CAIP, which represents about 50 companies. The ruling did not address the larger issue of whether throttling should be allowed or whether ISPs should avoid favouring some users or some applications over others, an issue referred to as net neutrality.

In response to the new application, Bell said in a statement Thursday that it has only just received the submission and is reviewing it. The company added that the CRTC made "the right decision" in November, and noted that the commission already has another proceeding underway to examine more fully issues around network management. That proceeding, announced by the commission on the day it released the original ruling, includes a hearing on July 6.

Decision hurts consumers, say small ISPs

The groups involved in the new CRTC application allege the November decision was flawed and interferes with the companies' ability to distinguish themselves from Bell and therefore compete effectively.

"They're being forced to becoming mini Bells and removing choice," said Rocky Gaudrault, CEO of TekSavvy Solutions Inc., one of the companies listed on the new application. "Consumers no longer have an option."

That concern is the reason the Consumers' Association of Canada, which wasn't involved in the April 2008 application, is involved in this one, Gaudrault added.

John Lawford, a lawyer representing the Consumers' Association of Canada and Canada Without Poverty on the application, said the groups believe that if ISPs are allowed to control content sent over the internet, the price of internet service will rise. In addition, the groups have privacy concerns about deep-packet inspection, the technique used by Bell to identify peer-to-peer file sharing so it can be slowed down compared to other applications.

The fact that the CRTC is holding public proceedings to gather more information about internet traffic management practices shows that it didn't have all the facts when it made its earlier decision, the application argues.

"If they did not have sufficient facts in front of them … they shouldn't have rendered the decision," said Tom Copeland, chairman of CAIP.

Ruling could sway outcome of public hearings

The fact that the CRTC made that decision will also influence and narrow the scope of the public proceedings, the applicants argue.

"A lot of us are pretty convinced that the outcome of this new public proceeding has already been decided. It's going to be based on the CAIP decision."

That ruling has since been used by other internet service providers to support their own throttling, Gaudrault said.

"It's almost become an accepted practice."

Meanwhile, he added, Bell has revealed that it is installing hardware solutions such as switches to deal with its network capacity crunch.

"So there indeed were and are alternate means to dealing with capacity other than throttling," he said.

That shows the CRTC erred in deciding that throttling was necessary, he argued.

"At the end of the day, it's about investment in infrastructure."