Local access nets must stay neutral

Net Neutrality, a hot topic south of the border, but, until now, mostly dormant in Canada, has raised its ugly head recently. The president of Quebec-based cable giant Videotron, Robert Depatie, recently brought up the idea of a transmission tariff that could be imposed on Internet content providers for the right to transmit content to ISP subscribers.

Depatie’s argument is that since there’s competition in the access arena there should be no harm in charging a tariff to content providers. If the content providers don’t like it, they can reach switch network access providers.

There is some merit in Depatie’s reasoning. Content providers, such as Google, already pay Internet access costs based on traffic volume. If, say Google, doesn’t buy enough access, its service will be poor, subscribers won’t be able to access its services efficiently and Google’s business will suffer. Those costs, however, get paid to Internet providers — not local access providers. Content providers don’t pay for the bandwidth they use between an Internet point-of-presence (POP) and a subscriber. So while content providers are paying a premium for timely Internet backbone performance, they aren’t paying anything if they hog bandwidth on local access networks.

The problem with moving to a less regulated model for local network access is that there isn’t significant competition in the Canadian local network access market. Content providers in most parts of Canada would have, at most, two options when trying to reach ISP subscribers — the local telco or the local cable company. That’s hardly a truly competitive situation.

Another thorny issue is that in some cases the local network access companies, like Bell Canada and Rogers, offer their own services over their networks. In an unregulated market they could give priority to their own traffic, charge competing services a hefty premium for similar priority, then undercut their competitors’ pricing.

Until the local network access market becomes more competitive, loosening the regulations to allow content providers to be charged an additional fee is a perilous proposition.

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