Chris Seidl to the Standing Committee on Access to Information, Privacy and Ethics

Ottawa, Ontario
February 6, 2018

Chris Seidl, Executive Director, Telecommunications
Canadian Radio-television and Telecommunications Commission

Check against delivery

Good morning, Mr. Chairman and honourable committee members.

My name is Chris Seidl and I am the Executive Director of Telecommunications at the Canadian Radio-television and Telecommunications Commission (CRTC). With me today is my colleague Stephen Millington, Senior General Counsel and Executive Director of the CRTC’s Legal sector. Thank you for giving us the opportunity to appear before you to speak about net neutrality.

As you may be aware, the CRTC is an independent administrative tribunal responsible for regulating the activities of telecommunications service providers further to the Telecommunications Act. As such, the CRTC is required to make every decision with the goal of ensuring the fulfillment of the policy objectives set out in the Act.

Net neutrality is the concept that all traffic on the Internet should be given equal treatment by Internet providers, with little to no manipulation, interference, prioritization, discrimination or preference given. This concept is enshrined in the Telecommunications Act through section 27(2), which prohibits unjust discrimination or undue preference, as well as section 36, which prohibits telecommunications companies from influencing the content they transmit unless they have received express authorization to do so from the CRTC.

These sections of theAct provide the CRTC with the tools and the flexibility to establish and enforce a net neutrality framework that is entirely appropriate and reasonable for Canada. Interestingly, these are not new provisions. They date back to the Canadian Railway Act of 1906 when the concept of common carriage ensured that railway companies would carry all goods without discrimination.

It turns out that the same principles are effective whether we are referring to cargo transported on railway cars or data carried over telecommunications networks. It is important to keep in mind that net neutrality is focused on carriage rather than content.

We mention this because the broadly worded statutory provisions have stood the test of time and have allowed the CRTC the flexibility required to address more modern concerns. They have been able to adapt to modern technology and needs, including net neutrality.

Net neutrality in Canada

The CRTC was one of the first regulators in the world to implement an approach to uphold net neutrality. We have taken several decisions that demonstrate our approach. Let me share with you three key ones.

The first, in 2009, created a framework against which Internet traffic management practices may be evaluated for compliance with the Telecommunications Act. Honourable members, the CRTC clearly stated that when congestion occurs, an Internet service provider’s (ISP’s) first response should always be to invest in more network capacity.

However, we recognized that expanding and upgrading a network is not always the most practical solution. Internet service providers will, when necessary, adopt economic or technical measures to better manage the flow of traffic on their networks. They could, for example, charge extra fees to customers whose Internet usage exceeds a predefined limit or slow traffic on their networks to manage an unusual network congestion situation.

It may be of interest to the Committee to note that although the CRTC permits ISPs to use technical measures to manage Internet traffic, we recognize that these measures may allow ISPs to view and collect consumers’ personal information and data. In the interest of protecting Canadians’ privacy, we have therefore put measures in place to limit ISPs’ use of that personal information or data for traffic-management purposes only. They may not use or disclose such information for any other purposes.

We have required ISPs to be transparent about their use of Internet traffic management practices. Customers must be told how the practice will affect their service, including the specific impact on speeds. Should a consumer believe that their ISP is not being transparent, they may ask the CRTC to intervene. Our most recent statistics show that the CRTC received 19 complaints relating to Internet traffic management practices last year.

We have been proactive in ensuring transparency and follow up on each of the complaints that we receive. We firmly believe that our approach is effective. For instance, when we receive complaints alleging practices or approaches that are of significant concern, we hold public consultations and deal with them in a definitive way.

Let me explain. A few years ago, it came to our attention that certain companies were offering mobile wireless services that exempted their own mobile television services from their customers’ standard monthly data allowance. Content from other websites or apps, on the other hand, counted against the customers’ monthly data allowance.

The CRTC issued a decision in 2015 in which we directed these providers to stop giving their own mobile television services an unfair advantage in the marketplace. We also required the companies in question to amend their practices. The CRTC stated that while it is supportive of the development of new means by which Canadians can access both Canadian-made and foreign audiovisual content, mobile service providers cannot do so in a discriminatory manner. This decision was the second step we took to uphold the principle of net neutrality by ensuring that audiovisual content is made available to Canadians in a fair and open manner.

The third and most recent step we took was in regard to differential pricing. This is a practice by which providers offer the same or similar products and services to consumers at different rates. Differential pricing can occur when an Internet service provider exempts a particular application from a user’s monthly mobile data plan, or when an application provider enters into an agreement with a service provider to exempt or discount the rate paid for data associated with that application.

In April 2017, we declared that ISPs should treat all data that flows across their networks equally. By enacting differential pricing practices, service providers are, in effect, influencing consumers’ choices of which data to consume. The result being that these practices restrict access to content over the Internet—something that the CRTC found was contrary to the Telecommunications Act. Our framework supports a fair marketplace in which ISPs compete on price, quality of service, data allowance and innovative service offerings.

Net neutrality in other regions of the world

Net neutrality is an issue in other regions of the world, and has been brought to the forefront of public conversation as a result of the U.S. Federal Communications Commission’s decision last December.

The members of this Committee may be wondering what impact this decision will have on the CRTC’s policies, Canadian ISPs or Canadians. The Federal Communications Commission’s vote will not affect the way in which Internet traffic is treated in Canada. The CRTC has set out its approach to net neutrality, consistent with its powers and duties under the Telecommunications Act, and we will continue to enforce it within Canada.

By the same token, the CRTC has no jurisdiction over the way in which Internet traffic is managed outside our country. We therefore cannot comment or speculate on the effects of such a practice, nor the ways in which data will be treated by service providers in other jurisdictions.

Conclusion

Mr. Chairman, we hope that this overview helps you understand the concrete steps taken by the CRTC to address the issue of net neutrality in Canada. The decisions taken by the CRTC, based on the powers currently in the Act, combine to create an effective approach to net neutrality, and ensure that Canadians always have access to the free movement of ideas.

Before concluding our remarks, we want to advise you that we may not be able to answer all the questions that you would like to ask us today. For instance, you may have read that a coalition called FairPlay recently submitted an application asking the CRTC to establish a regime that would enable ISPs to block access to websites that host pirated content. Mr. Chairman, we trust you will understand that we cannot comment on that application or any other that is currently before the CRTC.

We would be happy to answer any questions you may have about our approach to net neutrality.

Thank you.

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