Vonage says Shaw breaching net neutrality

A shift from broader bandwidth to higher quality of service for voice over the Internet is being watched closely by the Canadian telecom industry, with most analysts expressing concern that the move may jeopardize advances in technology.

Calgary-based Shaw Communications Inc. recommends its high-speed Internet users pay an additional $10 monthly fee to ensure voice packets travel first-class on its network, giving priority to VoIP software ahead of other Web-enabled applications.

Vonage Canada has asked for a full investigation by the Canadian Radio-Television and Telecommunications Commission (CRTC), calling the fee a VoIP tax and accusing the telco of limiting net neutrality.

Shaw says the fee will pay for network multimedia management technology — traffic shaping tools such as PacketCable 2.0, DOCSIS and Ellacoya’s IP Service Control — that will ensure quality of service for common VoIP software such as Skype, Vonage and MSN Messenger.

Asking for a QoS enhancement fee is one way of changing the model from offering faster and faster speeds, says Brian Sharwood, a principal analyst at SeaBoard Group Inc. in Toronto. “I’m not sure there’s anything particularly inherently wrong with that,” he says.

Sharwood says market forces in Western Canada allow Shaw to operate off a different model for quality of service on its Internet network. Toronto-based Rogers Communications Inc., for example, has gone the other way, he says.

“Rogers feels it’s important that Vonage works on its Internet connections at an acceptable quality level. But the market dynamics are different: Rogers has 50 per cent of the high-speed market and want to win more, whereas Shaw has about 80 per cent of the market out West.”

Sharwood stresses the Internet should not be prioritized for the owner of the pipe and says Shaw’s QoS fee does present some questions. “The customer is buying something that’s quite ethereal. There’s no visibility and there’s no way the end-user can measure QoS.”

Shaw’s concerns about voice quality are quite valid, but a lot depends on how the company implements the services associated with the $10 fee, says George Goodall, a research analyst with London, Ont.-based Info-Tech Research Group Inc.

Goodall says Shaw is justified in levelling the QoS fee. “These are genuine concerns around prioritization for voice packets, and it makes a lot of sense because they’re looking at differentiating network traffic. On a commercial level, these issues are top of mind and businesses pay extra in hardware and service to ensure voice quality,” he says.

But Goodall cautions: “We haven’t yet seen what this fee involves in terms of the technology and service levels.”

Shaw perceives that too many entities, such as Vonage, Skype and other peer-to-peer programs, are getting a free ride on its network, says Lawrence Surtees, vice-president and principal analyst, communications research at IDC Canada Ltd. And Shaw is now saying it needs to have people pay for what they’re doing, he adds.

“But the high-speed Internet user is already paying for access to that service,” says Surtees, who agrees Shaw’s enhancement fee is a tax. “We learn as kids that if you don’t ask, you don’t get. Well, phone companies seem to have learned that if you don’t take, you don’t get,” he says.

Surtees says he’s seen a lot of this type of behaviour in the history of Canadian telecom. “Whenever there’s some disruptive change, [the telcos] dig in their heels and use their clout, or their tolls, in these kinds of ways.

“They’ll develop something draconian and there’ll be a regulatory or legal issue and the companies will be told what they’re doing is unreasonable, but in the meantime they’ve pocketed all this money.”

Having transport-related charges in an Internet world is counterproductive, says Roberta Fox, a senior partner with Mount Albert, Ont.-based Fox Group. “It could be detrimental to VoIP technologies and it’s not good for competition,” she says.

According to Vonage, Shaw is looking for a way to regain some of the costs incurred to make sure its network is built to handle the reality of an evolving Internet.

“Shaw needs to explain [its QoS enhancement fee] better because we think they’re violating the trust they’ve built up in their customer base, and the public in general,” says Joe Parent, vice-president of marketing for Mississauga, Ont.-based Vonage Canada.

Shaw’s challenge is to minimize traffic contention and one way of ensuring quality is subscribing to a different tier of service, says Peter Bissonnette, president of Shaw Communications.

PacketCable 2.0 and IP Multimedia Service, for example, give higher quality of service to VoIP users than to somebody who just wants to browse the Internet. “It’s similar to the difference between T1 and OC192. There are different levels of service for different types of applications,” he says. “So if somebody wanted that greater assurance, we’re able to provide it with DOCSIS (Data Over Cable Service Interface Specification) and some RF tailoring, as well as PacketCable 2.0 in the future.”

Bissonnette says Shaw can also manage Internet traffic with technology from Ellacoya Networks, Inc. “We can only manage the network as far as we control the network. Peer-to-peer can consume the whole pipe if you let it, but Ellacoya allows us to manage BitTorrent-type traffic. There’s a host of things we can do and they all cost money.”

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