More Bell Canada misinformation and misdirection in attempt to justify questionably lawful throttling

(First published on IT World Canada blog)

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.