Canadian content battles networks on net neutrality

Exploding demand for Internet bandwidth has forced a showdown between network providers and the content providers who argue that Net neutrality should be preserved and all Internet traffic should be treated equally.

While the U.S. Congress continues to debate the issue of Net neutrality, comments by the CEO of one Canadian network provider have raised the spectre of potential content fees north of the border.

Last October, Robert Depatie, president and CEO of Videotron, said in a telecom conference he would like content providers like Google and Vonage to pay for their expanding use of band- width on Videotron’s network.

Content providers believe allowing network providers to charge additional fees to content providers could create a multi-tiered Internet where traffic from content providers who pay network providers a premium receives better treatment.

Breaking Net neutrality and treating some traffic differently than other traffic is merely a way to implement a tax or “adversely influence the choices consumers have before them,” says Joe Parent, vice-president of marketing and business development for Vonage Canada.

“The people who are for Net neutrality believe that the network providers will, somehow, give priority to certain people who pay them more money,” says Brian Sharwood, an analyst with telecom consultancy Seaboard Group in Toronto.

“Therefore, they’ll try to extract money from the likes of Google and Yahoo! and YouTube and extract money from them to give them higher priority. Therefore, it creates an uneven Internet – that is really the main concern.”

Parent says Net neutrality is important because it’s also a consumer advocacy issue.
“If companies like Vonage don’t get involved and speak out, then what will happen is that will allow those people with the most to gain by violating principles of Net neutrality to be allowed to determine what rules that play into the market,” Parent says.

Network providers see things differently though.

They argue they have to foot the bill for the expensive network upgrades required to support increasingly bandwidth-hungry applications and would like to offset that expense by charging additional fees.

“I think what we’ll see is, depending on the type of client and the relative importance of the application to their business, there may be some ISPs who will be applying preference to certain types of data,” says Tom Copeland, chair of the Canadian association of Internet providers and
president of

“It will happen on a case-by-case basis. I think given the uproar we’ve seen in the past over certain providers giving preference to their own applications while degrading the performance of competitive applications, I don’t think we’ll see that come back.”

Copeland says that ISPs constantly having to buy more bandwidth for data-rich applications is unfair as a business model.

“Why is it we’re always buying more bandwidth for them [content providers] to make more profit?”
In two or three years, when all this bandwidth starts to be consumed, we’re going to have to look at a different model that more appropriately puts the burden of cost on those consuming or distributing.”

Parent disagrees that services like VoIP are causing bottlenecks in bandwidth consumption.

“What we’ve got is a confluence of things, where the technology is emerging to the point where there are more and more high-bandwidth applications and ISPs are in a position where they have to seriously look at the service they’re providing and how they’re going to meet this increased demand. At the end of the day, Vonage is just a convenient lightning rod for that,” he says.

“We’re not using even a fraction of the bandwidth that things like online gaming, music or video or other entertainment downloads are using, yet they’re not as easy to go after as targets such as Vonage is.”

Copeland remains unconvinced that new applications aren’t legitimate targets as heavy bandwidth users.

“While the cost per megabit is relatively stable, it’s the fact we have to keep adding that capacity and if things like video-on-demand and VoIP continue to expand the need for bandwidth, I can see in the not-too-distant future many ISPs will be looking at costs in the neighborhood of 30 to 50 per cent increases year over year.”

Net neutrality laws aren’t likely to be coming anytime soon.

Copeland doesn’t see any real movement to act on the federal government’s part.

“I can’t see lobbying for new laws – we can’t even get the Minister of Industry to look at the anti-spam taskforce. I think Net neutrality isn’t on anyone’s horizon right now.”
Sharwood believes net neutrality has a lot more to do with economic realities than government regulation.

“In terms of the relationship between the ISPs and advocates of Net neutrality, you have to remember who’s more scared of whom.

Do you think Rogers is more scared of Google than Google is of Rogers? I think Rogers is more scared of Google. The big content providers have a lot of market sway. It works both ways.”

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