In a Network World article by Dave Webb,
Bell Canada’s chief of regulatory affairs Mirko Bibic attempts to
justify the throttling of the last-mile connection to independent ISPs.
As is typical, Bell Canada is abusing peoples confusion between issues around the last mile natural monopoly and Net Neutrality.
I increasingly believe that if people continue to confuse these two
related but separate issues, Bell Canada and other incumbent phone and
cable companies will win this critical debate.
I strongly agree with Network Neutrality. I am, however, one of
those who believe that market forces within a competitive marketplace
will be better able to ensure this neutrality than government
regulation of TCP/IP based services. In order for this to be possible
we need to have a competitive marketplace where those of us that
recognize the need to hire ISPs that provide us services based on the End-to-end design principle are able to do so. We will then continue to educate other people about this need as well.
There are times when congestion exists on the Internet (sometimes
legitimate, and sometimes not), and customers should be able to hire an
ISP that best matches their own beliefs in how to handle this
congestion. While I believe that the government should mandate
disclosure of routing policies by ISPs, I believe that regulating “Net
Neutrality” directly may backfire.
This is an entirely different question than the fact that existing
regulation of the “last mile” monopoly must be enforced and
strengthened. There will always be a “last mile” monopoly for
telecommunications for the same reason there is for roads: it makes no
more sense for every telecommunications provider to run separate wires
into our homes than for every retailer to run separate roads to our
homes.
Solving the Net Neutrality ISP issues through competition requires
that a competitive marketplace exist, and that requires that those
managing that “last mile” are not able to leverage that monopoly to wipe out competition.
Bell Canada as a company operates in many different markets, and
offers a number of different services. In each of these markets they
are regulated (or not) in different ways. With Bell ExpressVu they are
a cable company, regulated as a “broadcast undertaking” just like
StarChoice, and very similar to Rogers when acting as a cable company.
They are also a wireless cell carrier, and a ILEC (Incumbent Local
Exchange Carrier) offering a variety of telecommunications services.
They own Telesat Canada, and an interest in CTVglobemedia.
Bell Canada also offers Internet Service Provider (ISP), including
through the Sympatico brand. In this case they are using the same “last
mile” infrastructure as any other competing ISP, allowing customers to
connect point-to-point to their routers. After that point it is an
“Internet” service where they offer transit (connections between their
Internet routers and those of other ISPs locally and beyond) and other
competing Internet-related services (email storage/delivery, Website
hosting, DNS, etc).
In most of these marketplaces they operate as a regular private
sector company, regulated just like any other competitor in that same
marketplace.
There is one of their services where they are different and that is
in the provision of physical wiring to our homes. This is a service
where Bell was given privileged “right of way” access by various levels
of government to place cabling (copper, fiber, etc) below and above
public and private land. Bell could never offer this service without
government intervention, and the superior property right is the public
and private property that the cables run below and above — not the
cabling.
Bell was given a number of requirements in exchange for this
privileged government intervention. Historically the most often
discussed was rural access, where Bell was mandated to offer phone
services to rural locations — even at what might otherwise have been a
loss, except for the fact that they were given practically guaranteed
profits in other markets by the government, as well as massive
government subsidies over the years. More recently the condition
discusses more often is competitive access to the facilities which the
public sector made possible (through right of way and subsidies) to
allow services built upon this last mile to be provided by a
competitive private sector.
I will state what seems to be the core of the confusion: when it
comes to this last mile wiring below and above our property, the
service that Bell Canada manages can no more be considered privately
“owned” by Bell than Canada Post can be considered private. While the
ideal would have been if this specific service had been separated by
Bell Canada and operated as a proper crown corporation, we can’t go
back in time and fix this problem.
We do have a number of ways to move forward from here. Some suggest
that adequate enforcement of competitive access is sufficient. While I
might have been convinced in the past, the claims by Bell Canada that
their throttling of competitive access circuits is somehow related to
P2P Internet traffic suggests that this alone is not going to work.
The type of management that Bell is trying to justify is not
legitimately considered Internet traffic at all. In fact they may be
violating both the terms of the regulated service as well as federal
privacy legislation to inspect the packets within these point-to-point
communications to the level to even detect if they contain TCP/IP
packets. There is also no legitimacy to their being congestion on these
circuits, unless it is temporary due to damage within the network. The
speed of the connection between the customer and the ISP (and Bell is
*NOT* an ISP in this transaction) is part of the regulation.
Given Bell can’t be trusted to live up to their end of the bargain
with governments, it may be time to take back these services from Bell
and allow the remaining company to operate the way Bell seems to want
to operate. The louder Bell tries to justify their questionably legal
activity, the more we need to push to take from the table the option of
bell violating their end of the bargain and getting away with it.
We can give Bell a simple choice.
One option would be for this last mile infrastructure to be spun off
into a separate company that would then become a crown corporation.
Bell can even be given a contract to manage the services of this
company for a 10 year period, after which it would be open to
competition or to employees of this new crown corporation. With a
separate corporate structure, Bell Canada would clearly no longer be
able to allege that they “own” this infrastructure, or claim they can
manage it any way they see fit.
Another option would be to allow Bell to retain ownership of this
infrastructure, as long as they paid a rental fee at a fair price for
the right of way, as well as returning any government subsidies —
including interest over the last 50 years. We would be fair and only
backdate this for 50 years, even though they have received privileges
for far longer. It would be clarified that the Crown Corporation would
still be created, and while historical right-of-way would be
grandfathered, it would be this new Crown Corporation that would own
any new last-mile infrastructure.
Given these options I believe Bell will choose the first, given I
doubt even Bell with their guaranteed profits over the years could
afford to pay back the various handouts from the public purse they have
received. At that point we would have a competitive marketplace between
competing phone and Internet access companies able to operate on equal
footing, each able to build out their own networks using the (mandatory
disclosed) policies of their choice. Customers can then read the public
reports of these management choices, and hire the phone and Internet
access company of their choosing.
Note: As part of the other work I do I look for electronic versions
of older government documents (Bills and summaries, statutes, etc).
While the 1987 version of the Bell Canada Act
is online, earlier versions are not. It would be interesting to have
adequate online references for the history of Canadian
telecommunications, given how quickly people forget and then believe
the “we own it, and we can do what we want with it” rhetoric from the
phone and cable companies.
P.S. I participated in IT360 last week, and will BLOG about that
later in the week. It just seems like questions around throttling and
Net Neutrality are extremely hot at the moment (See ITWorldCanada’s Net Neutrality Resource Centre).
Update: Mirko Bibic did an audio interview for CBC’s Spark, with an edited version appearing on the April 16′th show.
This article was referenced by SlashDot, and people wanting to read additional commentary can read there as well.
CRTC is publishing the various letters on this issue, including the “reply” from Bell, etc.