(L to R) Commissioners Candice Molnar, Len Katz, Konrad von Finckenstein (chair), Suzanne Lamarre and Timothy Denton heard from speakers representing small internet service providers and public interest groups Thursday. ((Emily Chung/CBC)) Should internet service providers be allowed to selectively slow down certain applications when the internet is congested? If they do, how much should they be required to tell their customers?

Those are two of the questions that Canada's internet regulator must answer in the coming months.

The Canadian Radio-Television and Telecommunications Commission held hearings from July 6 to 14 on internet traffic management in an effort to determine whether it should set guidelines specifying how ISPs are allowed to manage internet traffic and congestion and if so, what those guidelines should be.

During the process, the CRTC heard from parties that included:

Internet service providers, ranging from large companies such as Rogers and Bell, to small ones such as those represented by the Canadian Association of Internet Providers (CAIP).

Companies that make internet traffic management tools including Sandvine and Juniper Networks.

Consumer and public advocacy groups such as the Public Interest Advocacy Centre.

Companies and Canadian artists such as filmmakers that rely on the internet to deliver their services and creations, such as video rental company Zip.ca, and the Canadian Film & Television Production Association.

Various experts called by other parties.

Those parties were to have until the last week of July to send their final comments to the CRTC and the commission has said it will announce its decisions by the end of November.

The federal Liberal party and the federal NDP both publicly supported the principle of net neutrality in June.

The commission began the hearings on the assumption that internet congestion is a problem. While some parties questioned this, there was a general consensus that internet use is increasing, and bandwidth-hungry applications such as video are gaining popularity. Many of those who testified said that when congestion occurs, applications that are most affected are those that are time-sensitive such as:

Video and VoIP (voice calls over the internet), which will become noticeably choppy.

Online gaming, where delays make it more difficult for people playing with one another to interact and experience the same things at the same time.

Here are some of the main questions discussed during the hearings that the CRTC must now consider:

What internet traffic management practices are acceptable and should any be considered as completely unacceptable? How might innovation be affected by guidelines?

Consumer and public interest groups as well as businesses and artists who rely on the internet took the position that practices used by ISPs to deal with congestion were acceptable so long as they did not discriminate against or favour particular protocols or applications, as doing so could stifle innovation. That meant throttling specifically peer-to-peer applications was not acceptable. However, temporarily throttling heavy users, regardless of what applications they are using, during times of congestion, was acceptable to them.

ISPs, both large and small, were reluctant to rule out any network management practices, saying that they need to have access to all options in order to manage their networks, especially since the internet and technology are constantly changing. They said network management tools represent innovation that could be stifled by new guidelines.

They added that critics of traffic management practices have offered no evidence that any harm has come from those practices, although at least one commissioner noted that information would likely be available only to the ISPs themselves.

Most larger ISPs argued that there is fierce competition in the marketplace, so if any practices are unacceptable to consumers, they can choose another ISP.

Rogers executives, including Mike Lee, left, and Ken Engelhart spoke before the CRTC Monday. They argued that throttling uploads is better for their customers than other proposed methods of traffic management. ((Emily Chung/CBC))

Smaller ISPs that buy network access wholesale from larger ISPs in order to sell to their customers argued that there isn't yet enough competition. That's because wholesalers such as Bell often apply the same traffic management practices to their wholesale customers (and hence, those ISPs customers) as they do to their retail customers, they said.

Consumer and public interest groups suggested that competition would help, but isn't enough right now.

What's required to manage internet congestion? Can the problem be solved by measures that don't target certain applications or protocols over others, such as usage-based pricing and network expansion?

Network traffic and management researchers Anthony Coates of Montreal's McGill University and University of Minnesota's Andrew Odlyzko both testified on behalf of consumer groups that internet traffic has grown more slowly than predicted, and therefore increasing the capacity of networks should be enough to accommodate the growth.

Some ISPs such as Telus Communications Company said so far measures such as network expansion and usage-based billing have been sufficient to deal with congestion on their networks. But Michael Hennessy, senior vice-president of regulatory and government affairs for Telus, said the company will only make investments as long as there is a business case to support them.

"We are troubled by the statements of some parties that assume that all we need to do to keep up with traffic is to just keep investing with no guarantee of a return," he told the CRTC.

Vidéotron has relied so far on network expansion and surcharges for heavy users.

But both Telus and Vidéotron said they may need to turn to other means in the future.

Scott Stevens, vice-president of technology for Juniper Networks, says the internet was not originally designed for applications such as streaming video. (Emily Chung/CBC

ISPs that throttle peer-to-peer file transfers all argued that network expansion and economic measures were not enough.

"Traffic management is critical to providing internet service that is fast, reliable and affordable," said Ken Stein, senior vice-president of corporate and regulatory affairs for Shaw Communications Inc.

CRTC commissioners asked why usage-based billing wouldn't be an effective solution, since that is the standard for wireless use. ISPs responded that:

It would boost internet prices and make people unhappy, especially for times of day when people want to use the internet most.

It would require a lot of education, as the public doesn't understand what applications consume more bandwidth than others.

It would affect more customers than are currently being affected by other traffic management methods.

Should ISPs disclose their practices and, if so, in what form?

Most ISPs said they were reluctant to disclose details of their traffic management practices to customers because:

Customers aren't really interested in the details.

The details would confuse them.

The information is "competitively sensitive."

However, Bell Canada suggested it was acceptable to ask ISPs to disclose more general information about traffic management practices such as:

The types of applications affected.

The times of day when they are affected.

Any privacy implications.

At one point while questioning Shaw executives, CRTC commissioner Suzanne Lamarre asked how competition alone could regulate ISPs' practices, as they suggest, if they don't provide customers with information about internet traffic management that could let the customers choose between competitors.

Shaw and other ISPs maintained that most customers choose based on factors such as advertised price and speed, not internet traffic management practices.

Jean-François Mezei said throttling peer-to-peel file transfers will make users take a less efficient path in an effort to avoid detection, worsening congestion. ((Emily Chung/CBC))

Meanwhile, consumer advocates argued that providing more information to consumers is better. Jean François Mezei, who runs the consulting company Vaxination Informatique, suggested that if ISPs were forced to advertise their throttled speeds, those speeds would go up and congestion would be reduced.

How do people use peer-to-peer file transfers? Should they be selectively throttled to reduce congestion?

Public advocacy groups and businesses that rely on the internet said P2P file transfer is an efficient way to distribute all kinds of files, and it still has a lot of untapped potential. Zip.ca said it is considering using P2P methods for distributing movie rentals. Members of the film industry told the CRTC that P2P is a cheap and easy way to distribute independent films that would have trouble getting on commercial sites such as iTunes. It also supports a business model in which a film is distributed for free and the filmmaker earns money by selling related merchandise.

ISPs said they pick peer-to-peer file transfers to slow down over other applications because:

The file transfers are not time-sensitive – the downloaded files are used at some later point in time, unlike streaming video, which is watched as it is transmitted.

The protocol is designed to "hog" bandwidth, leaving less for other applications.

Few people use P2P transfers, so few are affected.

A small minority of users is responsible for a large percentage of traffic, and when P2P is targeted, there is a noticeable decrease in congestion.

The ISPs also noted that they don't stop the transfers from occurring – they just slow them down.

While Bell throttles uploads and downloads, a number of ISPs, including Shaw, Rogers and Cogeco, throttle only uploads. Shaw executives said most users only upload files to get download privileges and aren't really choosing to upload – something CRTC commissioner Suzanne Lamarre said she disagreed with.

Gregg Vanderheiden and Jutta Treviranus say P2P file transfers are an important way to get films with closed captions to people with hearing disabilities. ((Emily Chung/CBC))

Rogers said most downloaders are in other countries, so throttling has little effect on their customers. But, Lamarre said they provided only anecdotal evidence of this.

Meanwhile, filmmakers argued that throttling puts P2P transfers at a competitive disadvantage compared to commercial file transfers such as downloading from iTunes, which isn't slowed.

Does the use of internet technologies for the purpose of internet traffic management raise privacy concerns?

Public and consumer advocates expressed concerns about deep packet inspection, which is used to identify different types of traffic, such as P2P file transfers, and treat it differently.

They suggested the technology can be used to glean information about a user's behaviour such as:

What application, website or other service was used.

How long it was used.

What search terms were typed in.

The information could be used for things such as targeted advertising and law enforcement surveillance, they said.

ISPs said there are no privacy concerns as no personal information is collected, the information is kept for short periods of time (30 days in the case of Cogeco), it is only used for network management, and under Canadian privacy laws, companies would have to get consent to use the information for any other purpose.

Mark Coates, a McGill University network management researcher who spoke on behalf of the Union des Consommateurs, suggested that shallow packet inspection, which relies on statistics, is a less invasive way of classifying information that is effective 95 per cent of the time in tests.

However, Rogers executives said they are already using the technique when DPI isn't possible and it is less accurate than Coates suggests.

What type of guidelines should be put in place? Should exceptions to the guidelines be pre-approved or should they be reviewed after the fact when a complaint is filed?

Consumer, business and arts groups all supported a similar test for acceptable internet traffic management practices, asking:

Is there evidence of a serious and pressing problem that must be addressed?

Is the solution narrowly targeted at the problem and the least intrusive option? Does it provide benefits that outweigh any harm it may cause?

They alleged the test does not discriminate against different technologies and they suggested that exceptions should be pre-approved, as a complaints-based process is slow and cumbersome. Those harmed by a practice may not have the resources to file the complaint and the harm may be irreparable by the time the process is complete, they said.

By and large, ISPs argued against such guidelines, saying technological change could make them irrelevant.

Bell also argued that the test, which is based on a similar test used to evaluate government intervention, is not appropriate in the realm of competitive business.

Bell and Telus suggested their own guidelines are based on the premise that solutions should be "reasonable" rather than "least intrusive." They argued that would make the test less subjective and remove the need for the CRTC to make judgments about the "perfect" solution in an area where it lacks expertise.

Bell suggested that "reasonable efforts" should be made to limit the negative impacts of traffic management practices on users, services, protocols or applications. Telus suggested that the solution could be applied to any circumstance that enhances security, efficiency, and or the availability of the network for the users but agreed it should be narrowly tailored.

They said the current complaints-based process works well and ensures that judgments are based on facts about the impacts of traffic management practices rather than speculation.

Is the application of certain internet traffic management practices to wholesale services appropriate?

Many smaller ISPs buy network access wholesale from larger ISPs such as Bell. In fact, the CRTC's probe into internet traffic management arose from a complaint last spring from CAIP on behalf of those smaller ISPs that Bell was throttling those ISPs' customers. The CRTC launched the probe after ruling in November 2008 that Bell could legally throttle the smaller ISPs, its wholesale customers, as it also throttles its own retail customers.

Christian Tacit and Tom Copeland of the Canadian Association of Internet Providers blamed congestion partly on a lack of competition. ((Emily Chung/CBC))

Bell alleges that the network is completely shared between its retail customers and the customers of its wholesale customers, so it must manage the network for everyone.

However, MTS Allstream, which sells wholesale network access in Manitoba, claims it is able to distinguish between its Manitoba wholesale and retail traffic. The company buys wholesale network access from Bell and other large ISPs outside Manitoba.

It and many other ISPs that buy network access wholesale said their providers should not be allowed to traffic shape on their behalf, as they want to be able to manage their own networks.

Should there be concerns about services such as VoIP (voice phone services delivered over internet protocol) and IPTV (television delivered over internet protocol) that don't reside on the public internet?

Technically, such private services were outside the scope of the hearing, but there was some discussion about them because they run on the same cables as the public internet.

For both IPTV and VoIP paid services, quality is important and a little congestion could lead to noticeable choppiness.

While the services share a "highway" with internet traffic, they are kept separate.

Len Katz, the CRTC's vice-chair of telecommunications, expressed concerns that such services could encroach on bandwidth used by the public internet.

Telus and Bell admitted this was technically possible, but unlikely as the internet market is competitive.

When asked what would happen if Telus had a sudden boost in its IPTV business, Telus executives admitted that under that circumstance, the company would have to limit sales of its wholesale internet service. But, the company insisted that "if push comes to shove" its public internet service would get priority over IPTV because it is currently more profitable, and it might lose internet customers to competitors if its service started to degrade.

Bell also said that due to competition it would not be interested in decreasing internet speeds.