ARCHIVED -  Transcript of Proceeding

TRANSCRIPT OF PROCEEDINGS BEFORE

THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

SUBJECT:

Review of the Internet traffic management practices of Internet service providers

HELD AT:

Conference Centre

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

July 8, 2009

Transcripts

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and staff attending the public hearings, and the Table of

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However, the aforementioned publication is the recorded

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Canadian Radio-television and

Telecommunications Commission

Transcript

Review of the Internet traffic management practices of Internet service providers

BEFORE:

Konrad von Finckenstein   Chairperson

Len Katz   Commissioner

Suzanne Lamarre   Commissioner

Candice Molnar   Commissioner

Timothy Denton   Commissioner

ALSO PRESENT:

Sylvie Bouffard   Secretary

Regan Morris   Legal Counsel /

Chris Seidl   Hearing Managers

Stephan Meyer

HELD AT:

Conference Centre

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

July 8, 2009

- iv -

TABLE OF CONTENTS

   PAGE / PARA

Independent Film and Television Alliance / Canadian Film & Television Production Association   348 / 2040

Council of Canadians with Disabilities / ARCH Disability Law Centre   398 / 2282

Alliance of Canadian Cinema, Television and Radio Artists   435 / 2476

MTS Allstream   456 / 2586

Gatineau, Quebec

--- Upon resuming on Wednesday July 8, 2009 at 0902

2034 THE CHAIRPERSON: Good morning. Bonjour.

2035 Madame la Secrétaire, commençons.

2036 LA SECRÉTAIRE: Merci, Monsieur le Président.

2037 We will begin day three with Items 11 and 12 on our Agenda.

2038 I would now invite the next participants, Independent Film and Television Alliance and the Canadian Film & Television Production Association to make their presentation as a panel.

2039 Please introduce yourselves and then begin your presentation.

PRESENTATION

2040 MR. BARRACK: Thank you. Good morning, Mr. Chair, Mr. Vice Chair, Commissioners and CRTC staff.

2041 My name is John Barrack and I am the CFTPA's National Executive Vice President and Counsel.

2042 We are pleased to be here today to share the perspective of independent producers from both Canada and abroad regarding the importance of having a regulatory policy in place that ensures that the Internet remains an open access platform to content providers, application developers and end users, while also providing ISPs with flexibility to adopt reasonable traffic management practices.

2043 The CFTPA and the Independent Film & Television Alliance, known as IFTA or IFTA, requested to jointly appear before you this morning because we share a common message and common concerns. While each of us will be speaking on behalf of our respective organizations and members, we have combined and streamlined our presentation into one so as to avoid duplication and conserve time.

2044 Allow me to introduce our panel.

2045 To my immediate right is my friend and colleague Susan Cleary, IFTA's Vice President and General Counsel. Los Angeles-based IFTA is the trade association representing more than 140 independent production and distribution companies worldwide, including seven members headquartered here in Canada.

2046 IFTA members collectively produce more than 400 independent films and countless hours of television programming each year and, I should note, the majority of Oscar winning movies over the last few years.

2047 IFTA has played an active role in the policy and political debates in the United States and indeed worldwide regarding the traffic management practices of ISPs and their impact on independent producers.

2048 Also with us are two Canadian independent producers who have been pioneers in using the Internet as a primary means of distributing Canadian content to Canadians and to audiences around the world.

2049 To my far right is Dan Hawes, President and founder of Sudbury Ontario based March Entertainment, an award winning producer of branded Digital content. March Entertainment first came to national prominence with its hit animated series "Chilly Beach" and has since carved out a reputation for creating compelling digital experiences for a number of platforms, including TV, film, the Internet and wireless.

2050 To Dan's left is Brad Fox. In addition to working with Toronto-based Strata Films, Brad is the Co-founder and Executive Producer of Rocket Ace Moving Pictures, or RAMP, a company that has been at the forefront of this country's earliest forays into Internet content creation.

2051 In addition to Dead End Days, Canada's first dramatic video podcast, RAMP has produced several of the country's most popular domestic Internet video series. RAMP's later production, Serialized, recently became the first independent Internet exclusive series to be nominated for a Canadian comedy award.

2052 We also have two CFTPA staff members with us today.

2053 To my immediate left is our Associate Counsel Reynolds Mastin. I would mention that Reynolds is primarily responsible for the drafting in this proceeding.

2054 To Reynolds left is Mario Mota, our Vice President of Broadcasting, Policy and Regulatory Affairs. I would also like to point out Adrienne McBride who is a second-year law student at the University of Ottawa who has been integral in our presentation today.

2055 We would like to begin by underscoring how important we consider this proceeding to be. When the Commission rendered its decision in CAIP versus Bell last November it was under no obligation to do anything more. You could easily have adopted a wait-and-see approach, addressing ISP traffic management issues on a case-by-case basis; but you didn't.

2056 By deciding to hold a policy proceeding that takes a holistic view of traffic management practices of ISPs, the Commission recognized that this is an issue that affects all Canadians and is indeed worldwide in its scope.

2057 As stated earlier, the CFTPA and IFTA share a common message and common concerns. The common message is that independent producers have a vital role as content creators, innovators and creative entrepreneurs in the digital and online environments.

2058 In order for independent producers to equally participate in this emerging marketplace, they need direct unfettered access to audiences through the Internet, whether via wireline or wireless.

2059 The major common concern is that ISP traffic management practices may create unreasonable and insurmountable barriers to online access. Such barriers would imperil innovation, experimentation and the development of new business models for the distribution of independently produced content, including commercial content financed and developed specifically for the Internet space where we have come to all called New Media content.

2060 If allowed to take root, such practices may choke off the only distribution method that currently allows independent producers to directly reach their audience without having to go through gatekeepers or aggregators, whether those gatekeepers are a Hollywood studio, an ISP, a Canadian broadcaster or, worse, a combination of these within a vertically integrated company.

2061 Another concern is the traffic management practices of vertically integrated ISPs that own and/or are affiliated with production units or Internet portals may not be able to resist the temptation to give preference to their own or affiliated content, leaving independent controlled content in the slow lane. Effectively, Commissioners, our fear is the creation of a two-tier Internet.

2062 I turn the floor now to Susan Cleary, who will provide you with IFTA's perspective on network management traffic and the need for transparent neutral practices.

2063 Sue...?

2064 MS CLEARY: Thank you, John.

2065 Good morning, Commissioners, and thank you for inviting IFTA to participate in this proceeding.

2066 As I'm sure you are aware, the debate over what ISPs should be allowed to do under the guise of Internet traffic management has been raging for a few years now in the United States. Media reports of the so-called net neutrality debate in the U.S. may characterize it as a battle between large ISP, telecom and cable companies like AT&T and Comcast squaring off against influential application providers and online companies such as Google and Amazon, with the consumer rights advocates and technologists also providing diverse perspectives on the issue.

2067 IFTA is framing the issue in a way that puts the focus on independent content creators and their ability to produce and distribute diverse content to consumers in all formats and via all distribution methods, including the vast potential of the online marketplace. This is even more important today, as independent producers who finance and distribute content must secure revenue opportunities via the Internet in order to replace revenues that have been lost in television, theatrical and DVD distribution as a result of industry consolidation.

2068 Revenues from downloading or streaming digital content may soon become the primary and, in many cases, the only way for independent producers to finance, produce and distribute content. That is why it's critical that the rules of the road are clear and that the Commission provides the framework and oversight necessary to ensure unfettered access to online distribution by independent producers and more diverse options for the public.

2069 In the U.S. broadcast and cable television is consolidated in the hands of very few gatekeepers. In the case of a vertically integrated Hollywood studio, each has production units that license content directly to the company's distribution networks or affiliates, and the major broadband providers are limited in number and are now directly invested in destination websites. An example would be Time Warner-AOL which owns or has the ability to control broadcast cable Internet distribution outlets, forming a noose around the neck of content distribution.

2070 This high degree of consolidation in the traditional distribution platforms came about because of a successful drive by the U.S. TV networks in the 1980s and 1990s to do away with the Financial Interest and Syndication Rules -- what we call the Fin-Syn Rules -- which place limits on the amount of network-owned television content that could be aired in primetime.

2071 As we noted in our written submission to this Commission, in 1995 50 percent of all network primetime programming was independently produced. Seminal television programming such as M.A.S.H. and All in the Family was produced independently and flourished under the Fin-Syn Rules.

2072 But by 2003 only 18 percent of the programming in primetime was independently produced and that was as a result of elimination of the Fin-Syn Rules. These figures demonstrate that vertically integrated media conglomerates have dramatically shrunk the available shelf space for independently produced product to make room for their own content on the broadcasting cable platforms that they own and operate.

2073 This leaves independent producers rightly concerned that the ISP gatekeepers will grant the same preferential treatment and carriage to ISP owned and/or affiliated content and squeeze out independent producers from the last open and democratic distribution platform under the guise of network management.

2074 The word "congestion" has become the catchall justification by ISPs for some questionable traffic management practices, practices that threaten the ability of independent producers to build their businesses by distributing their content online to the public. We believe that any network management practices should be targeted at actual congestion, the kind we battle every day in Los Angeles on the freeways, and that there should be a clear criteria for what constitutes congestion.

2075 In my review of section 27(2) And 36 of Canada's Telecommunications Act, those seem to apply a reasonableness standard to traffic management practices. IFTA firmly believes that reasonable network management does not include targeting specific legal applications, including peer-to-peer applications which are being used to monetize and legitimately distribute independent content.

2076 Given that such applications may provide the only real alternative to assessing non-ISP owned and/or affiliated content, we would respectfully suggest that application-based traffic throttling by ISPs should attract a higher degree of scrutiny by the Commission as likely to be in contravention of section 27(2).

2077 With respect to section 36 of the Act, we consider that the type of package forging that Comcast was found to be engaging in amounted to controlling the content or influencing the purpose of telecommunications. We asked the Commission to prohibit this type of discriminatory treatment of legal content and legal applications.

2078 However section 27(2) and 36 are ultimately interpreted and applied, it is critical that there be active regulatory oversight by the Commission of the traffic management practices of ISPs.

2079 The current business climate and outlook dictates that IFTA and its members take a robust position now in the net neutrality debate before future distribution opportunities are irreparably damaged.

2080 We therefore respectfully urge the Commission to provide the framework, regulation and oversight of transparent and reasonable network management practices that are necessary to ensure that the Internet remains an open access platform for independent content producers and a source of diverse and compelling content for the public.

2081 Brad...?

2082 MR. FOX: Thank you, Susan.

2083 If we want to see today's generation provided with their own M.A.S.H. or All in the Family, which may take a very different form, like a five-minute webisode such as Serialized viewed on a wireless device, then we can't kill the goose before it's allowed to lay the golden egg. That's exactly the risk that we run if we take an after-the-fact regulatory approach to the traffic throttling practices of ISPs.

2084 Therefore, the CFTPA proposes that the Commission impose, pursuant to its powers under section 24 of the Telecommunications Act, a condition of service on ISPs that would prohibit them from engaging in traffic management practices that discriminate on the basis of application or protocol.

2085 Our proposed condition of service is very narrowly tailored. It leaves far more out then it puts in. We have not requested that the Commission either prescribe or proscribe any other traffic management practice by ISPs. We also believe it would provide a clear, straightforward, bright line rule for ISPs and all stakeholders, while at the same time promoting competition in the provision of telecommunications services and furthering a number of the policy objectives set out in the Act.

2086 However, should the CRTC decide that a complaint-based regulatory approach to this issue is more appropriate at this time, then we would encourage the Commission to clearly indicate that traffic management practices that throttle specific applications or protocols would likely be considered discriminatory under section 27(2) of the Act and would require justification by the ISP concerned.

2087 We are also of the view that such practices engage section 36 and should not be approved by the Commission.

2088 Practically speaking, we are very concerned about throttling practices that are being portrayed as being in the consumer's interest, when in fact they limit consumer choice. I can't think this can be more importantly clear: Throttling practices remove public choice and potentially promote self-dealing and that's absolutely not in the public interest.

2089 Dan...?

2090 MR. HAWES: Thank you, Brad.

2091 In the CFTPA's written submissions we outlined certain approaches that we regard as the preferred means for ISPs to manage the traffic that flows through their networks. Of these approaches we believe that increasing capacity is by far the most efficient and effective means of ensuring that broadband supply meets broadband demand.

2092 We note that in the U.S. the FCC has embarked on an unprecedented information gathering exercise that will determine how the $7 billion that Congress recently allocated for the national broadband buildout will be spent. This is leaving many Canadians with a bad case of broadband envy and speaks to both the CFTPA's and the CRTC's urgent calls for the development of a comprehensive national digital media strategy. One of the pillars of any such strategy must be to reclaim Canada's place as a legitimate leader in broadband speed, access and affordability.

2093 We would note that even since this hearing began two days ago, a number of other options have been proposed to increase network capacity and introduce more efficient methods for managing ISP networks. Those options include increasing last mile capacity, mandating upstream peering by all ISPs and aggressively deploying content delivery networks.

2094 While not commenting directly on these alternative approaches, the sheer breadth of them would suggest the application and protocol-based throttling is not the only potential solution to congestion.

2095 Let us be clear, any neutral traffic management practices that are adopted should be implemented in combination with building a strong, robust infrastructure capable of meeting the ever-increasing consumer demands on ISP networks.

2096 Reynolds...?

2097 MR. MASTIN: Thank you, Dan.

2098 The CFTPA is strongly of the view that over and above the issue of which traffic management practices are permissible under the Act, any traffic management practices undertaken by ISPs must be disclosed in a transparent manner that ensures that customers and other affected parties are kept fully informed of the nature and the impact of the practices adopted.

2099 We therefore recommend that the Commission should impose notification requirements with respect to the provision of both wholesale and retail Internet access services. With such notification specifying and explaining the type of traffic management practice adopted, its potential impact on the quality of service provided, the rationale for its adoption, and the timing of any such adoption.

2100 The CFTPA would also urge the Commission to consider requiring, or at the very least encouraging, additional notification measures so as to enable consumers to develop a greater understanding of the quality of the broadband service being offered to them and greater control over the management of their use of broadband.

2101 We support, for example, Score Media's proposal of having ISPs disclose the proportion of the physical access link that is dedicated to Internet access. This would provide customers with some means of tracking whether certain content is being accorded fast lane priority by an ISP through its distribution on a portion of the access link not used by the public Internet.

2102 We also believe that to the greatest extent possible there should be symmetrical regulation of wireline and wireless services. The Commission should, at the very least, reconsider whether it should continue to exempt wireless service providers from being subject to section 27(2) of the Act.

2103 With the release of last month's New Media Policy, we were pleased that the Commission has proposed to amend the New Media Exemption Order by having the definition of New Media Broadcasting Undertaking encompass broadcasting services delivered using point-to-point technology and received by way of mobile devices.

2104 We were also pleased to see the inclusion of an undue preference, unjust discrimination clause that would apply to New Media broadcasting undertakings.

2105 With these amendments we believe the Commission will have taken an important step in building a regulatory framework that fosters nondiscriminatory treatment of broadcasting traffic in both the wireline and wireless space.

2106 As the Commission is also aware, the CFTPA took the position in the New Media proceeding that ISPs are broadcasting undertakings when they deliver programming and are therefore subject to the Broadcasting Act. The CFTPA remains strongly of this view, but recognizes that this is a question that will soon be addressed by the Federal Court of Appeal.

2107 One of the reasons we have participated in this proceeding is to ensure that our members' interest in maintaining an open access Internet is protected, regardless of how this issue is ultimately resolved by the court.

2108 John...?

2109 MR. BARRACK: Thank you. Thank you, Reynolds.

2110 Both of our associations fully recognize the delicate balancing act that the Commission is confronted with in this proceeding.

2111 On the one hand, imposing needlessly inflexible regulatory prescriptions on ISPs may significantly hamper their ability to manage their networks efficiently and effectively leading to additional costs for all stakeholders, most especially Canadians.

2112 On the other hand, allowing ISPs to engage in practices that discriminate against certain applications and protocols will have the effect of dampening innovation in the development of new applications and forms of content delivery, while at the same time reducing the diversity of content, including Canadian independently produced content, available to Canadians and global audiences.

2113 Clearly, we all must be mindful of the law of unintended consequences when discussing what the rules of the road should be when it comes to traffic management practices in regards of ISPs.

2114 But it is equally clear to us that some rules are required. We would caution the Commission to be sceptical of the claim that net neutrality is a solution in search of a problem or that it is a make-work project for regulatory lawyers.

2115 While lawyers should not dictate the future evolution of the Internet, nor should this be the exclusive purview of the network engineers of ISPs.

2116 Since we all have a stake in the outcome, we all need a seat at the table. We hope that we have come to this table with a unique perspective and constructive approaches to what is a highly complex issue and we thank you for giving us the opportunity to be heard today.

2117 We look forward to answering any questions that you may have.

2118 THE CHAIRPERSON: Thank you for your presentation. And thank you for doing a joint presentation, thereby avoiding unnecessary duplication.

2119 You always learn something.

2120 Mr. Hawes, you are located in Sudbury, Ontario? Not exactly known as a centre of television production.

2121 MR. HAWES: We have an animation studio with 100 seats in Sudbury and we have an office in downtown Toronto as well.

2122 THE CHAIRPERSON: But most of your production is in Sudbury?

2123 MR. HAWES: All of our production is in Sudbury.

2124 THE CHAIRPERSON: Okay.

2125 Now, I have a problem with your submission because, as you quite honestly say on page 4, you are worried about undue preference, that the integration, the vertical integration of the industry, will allow them to prefer their own over others.

2126 As you well know, the Telecommunications Act has a section specifically outlawing undue preference. We have in the CAIP decision for instance, one of the reasons why we let Bell do this was because there was no preference, they were throttling their own the same way as the accessors were reselling.

2127 What leads you to believe that -- I mean on what basis could we, as regulator, make the assumption that you are making that there will be breaches of the law, the telecommunications integrated the companies will give undue preference to their own?

2128 I mean it's very rare that you use a business strategy which is in outright contravention of the law and will get you in trouble with regulators. It is not, in my experience, a good business strategy.

2129 MR. BARRACK: From your mouth to God's ears, Mr. Chairman. I think certainly that is our sincere hope, but we are concerned -- and I am going to turn to both Reynolds and to Dan actually to address this question. So do you want to start, Reynolds, and then Dan, practically to give you some examples.

2130 MR. MASTIN: Mr. Chairman, we would begin perhaps by pointing out that our concern is, as of today, July 8, 2009, are we pointing to specific practices that certain ISPs might be engaging in where they are preferring the distribution of their own content by degrading the content of other competing providers?

2131 We are not doing that today but what we are concerned about is not only the potential for that to happen but that if that becomes in any way an established practice and given the exigencies that are involved in actually filing a complaint under 27(2), particularly if, for example, you are an independent producer, and getting that complaint resolved, that a great deal of time could elapse in the meantime, and for a number of our members, particularly emerging producers, this could have a very, very damaging impact in terms of giving them the ability to get their product to market with the speed at which they need to do so.

2132 Which is one of the reasons why we were suggesting that given the potential for reparable harm for certain kinds of content providers that are not the large Rogers of this world, that a simple right line rule imposed via a condition of service would provide that protection for those of us who are perhaps not as deep-pocketed as others in adjudicating complaints of that nature that would fall under section 27(2).

2133 THE CHAIRPERSON: But how would that change anything? Because I mean it's the law right now, so we make it a condition of licence. It is still the same thing. I mean it is there, if there is a breach, obviously you have to produce the evidence and there will be a due process, which takes time. I don't quite understand how by us making it a condition of licence rather than it being a provision of the law it will in any way lead to greater obedience of the law, which is what you are suggesting.

2134 MR. MASTIN: I think one critical difference is that it's the difference between may and must. The difference between enunciating a set of guidelines by the Commission that would say that there may be certain kinds of behaviours or a certain constellation of circumstances that might lead the Commission to conclude that there might be an undue preference or unjust discrimination in a certain case versus having a condition of service which is very clear, which says thou shalt not do X, Y or Z. And we believe that to some degree at least this would provide more of deterrence to those who might be inclined to engage in that behaviour.

2135 And separate and apart from that, I would just add that it is not just a concern with respect to what an ISP might do for its own pro-competitive purposes, it is also the notion of discrimination as between content providers and application providers and users as well.

2136 THE CHAIRPERSON: Which takes me to the second point, application. You want us to bend any application-specific Internet traffic management. Why? I mean if it is applied across the board to all applications, regardless whether they are applications used by independents, by the ISP, by the affiliates, et cetera, where is the injustice? Where is the evil that you are trying to fight?

2137 I mean take P2P, if a network says P2P damages, can't prove it, et cetera, therefore we will not carry any P2P or we will slow down all P2P, where is the discrimination, where is the injustice that you are afraid of?

2138 MR. MASTIN: Just to give a very concrete example, and we will give a truly neutral example by using two independent producers in this example.

2139 If you take an independent producer, a documentary producer that puts together a 30-minute documentary on the swine flu virus, for example, and using a Handycam and puts that together using the limited budget that he or she might have, and because of bandwidth cost decides that the most efficient and effective mechanism of distributing that film is through peer-to-peer, also because there is a certain audience that they know they will be able to engage very quickly using peer-to-peer, so you have that scenario.

2140 Then you have, say, another independent producer who has produced a very high budget two-hour drama film, maybe in standard definition, maybe in high definition, that is able to do a deal with iTunes.

2141 Under the current -- for those ISPs that are currently engaging in throttling, what would happen in the concrete case is the iTunes two-hour high budget film is going to essentially get priority carriage to its customers, whereas that documentary producer's film is going to find itself subject to throttling, even if the documentary film has much lower bandwidth demands because it is a shorter film, it is not in high definition than that two-hour drama film.

2142 So in that very particular case, that documentary producer is suffering very real harm as a result of the decision by the ISP to throttle that particular application.

2143 THE CHAIRPERSON: And in that particular instance, you say that the delivery over P2P would use less bandwidth than the delivery from iTunes?

2144 MR. MASTIN: Well -- sorry, we've got Dan who wants to --

2145 MR. BARRACK: Sorry, if you could answer the very narrow, specific question and then I would like to turn to Sue --

2146 MR. FOX: Absolutely. There are many situations where a video that you would get over iTunes would be significantly greater over all bandwidth than a similar video over BitTorrent.

2147 THE CHAIRPERSON: So, all of the evidence that we have heard here that P2P is sort of the bandwidth gouger with 5 percent using 65 percent of the available bandwidth, et cetera, is incorrect?

2148 MR. FOX: Not at all, Mr. Commissioner. I would just state that BitTorrent is extremely popular and the nature by which it handles traffic is slightly different than a direct download.

2149 THE CHAIRPERSON: Okay.

2150 MR. BARRACK: Maybe if I might, Mr. Chairman, I think Ms Cleary has a sort of clarifying point that would be helpful.

2151 MS CLEARY: I am only licensed to practise law in California and in the District of Columbia and I am not a Canadian attorney, so I would not be able to interpret your laws and I don't pretend to do so.

2152 What I can tell you about is the specific Comcast case, an example. Here as an ISP, a very large gatekeeper. They decided on their own to go ahead and throttle all BitTorrent, not concerned with whether BitTorrent was being used legally or illegally. They did not do a deep packet inspection of the content, so they did not know what was legal, what was pirated. So they decided on their own accord to go ahead and throttle. And then, of course, they lied about it. And then, of course, they paid people to go sit in public hearings and contravented the democratic process, and our FCC became enraged at the practices.

2153 So if you want an example of an ISP going out and deciding what they were going to do with the Internet and their control of the Internet, that is a good example.

2154 The FCC, of course, came with the adopted decision on August 1st, 2008 and they squarely said that Comcast had engaged in discriminatory and arbitrary practice and they unduly squelched the dynamic benefit of an open and accessible Internet and it did not constitute reasonable network management.

2155 Our reasonableness standards are the same from our Internet policy and they applied that. They did not fine Comcast. They ordered them to disclose their practices and then provide a plan. They gave them six months to provide a plan.

2156 THE CHAIRPERSON: I am familiar with the Comcast decision but as an attorney you appreciate that decisions have to be interpreted in light of the specific facts. Surely, you are not suggesting that all Canadian ISPs will behave like Comcast did?

2157 MS CLEARY: Well, in that case they did and then we got a lot -- But in preparing for this hearing I did put together a chart that compared Canada, the Bell case with Comcast, and if the Commissioners think that is useful, I have copies for you.

2158 THE CHAIRPERSON: Why don't you submit it later on, okay?

2159 Tim?

2160 MR. BARRACK: I think if I might, not to overly protract the answer to this question, but I think Dan has some practical insights into how this affects content creators. Would you like to speak to that, Dan?

2161 MR. HAWES: Yes. Just to give you a little bit of background, I was the Digital Switching Product Manager for ISDN and ADSL at Nortel, subsequently started one of the first digital Internet providers in 1995, and we have been doing content in applications on the Internet. It has been our lifeblood.

2162 The network, I can tell you, has degenerated over the last 14 years. Where we had a world-class infrastructure, it is now poor. Now, that may talk more to the national digital strategy but I can tell you that we have our content syndicated on at least a couple of dozen platforms and partners around the world and various partners around Canada and we can give explicit examples of how our content gets secondary coverage to certain providers who have their own proprietary content or proprietary content relationships.

2163 I won't go into any specific vendors but, you know, from our experience there is not just selective, there's actually predatory applications happening.

2164 For example --

2165 THE CHAIRPERSON: Hang on. If you have specific evidence, why don't you use the provisions of the law? Why don't you make a complaint under section 27(2) and say, here there is undue preference, there is predatory conduct, rather than here in a policy hearing?

2166 MR. HAWES: Well, because I don't have time to take on -- you know, we are just trying to survive. We spend our time trying to innovate and create jobs and we rely on the CFTPA to be our voice in helping us resolve those issues. But certainly from a producer's perspective, we don't feel like we are getting a fair shake.

2167 THE CHAIRPERSON: Okay.

2168 Tim, you have some questions?

2169 COMMISSIONER DENTON: Good morning, ladies and gentlemen. At a certain stage of the hearing, briefs start to take on a certain resemblance one to the other and for the purposes of discussing your brief, there are many areas of commonality with what has already been presented and some areas of difference.

2170 One of the areas of difference is the potential use of section 24 of the Act as a condition to be imposed by the Commission.

2171 In view of the fact that you are small, that you don't have time to fight large ISPs and telcos, what is the advantage you perceive of using section 24 as a basis of preventing practices you disapprove of or don't like?

2172 MR. MASTIN: I think, Commissioner Denton, that it relates to what we were saying earlier, which is that under an ex post approach essentially all of the actors are provided with guidelines which may have a certain degree of specificity or may not, whereas with a condition of service there is a clear rule which says that a carrier must not engage in a certain activity, and generally those conditions of service are very clear as to what is permissible and what is not.

2173 Does that mean that there still isn't room for interpretation as to what any condition of service might be laid down or does that obviate the need as well for a process that would have to be undertaken?

2174 No. Unquestionably, that would be the case but we would feel more comfortable, particularly given the importance of the issue to our members, to go beyond merely providing certain illustrative guidelines as to what may or may not be offside section 27 and to have a clear bright line simple rule that ISPs are not to throttle on the basis of application or protocol.

2175 COMMISSIONER DENTON: Thank you. I notice in paragraph 113 of your original submission, page 22, you come to a point of view of how we are to measure -- how we are to determine whether a procedure is discriminatory or unjustly discriminatory insofar as does the traffic management practice further a pressing and substantial objective, is the traffic management practice narrowly tailored, et cetera, is the traffic management practice the least restrictive means.

2176 There seems to be some consensus emerging that this is a practical and -- or this is the appropriate way. How did you arrive at this determination because many others seem to have come to the same process of reasoning?

2177 MR. MASTIN: Well, in part it was because many others came to the same process of reasoning, and upon review of the various submissions in looking for a test, first of all, that is a well established test, including in the United States, as we were discussing last night actually over dinner, and it provides, we believe, the necessary standard by which we think ISP traffic management practices should be held, while at the same time ensuring that there is a measure of flexibility.

2178 We also say in our submission -- and I probably can't find the exact paragraph for you -- at bottom the purpose of going through this three-stage analysis is simply to determine whether the practice at issue is reasonable and in the public interest, and that is really what it is intended to get at, and it provides the conceptual lens through which to undertake that analysis and to reach that conclusion one way or the other.

2179 COMMISSIONER DENTON: Is it your view that discrimination on the basis of a protocol would essentially shift the power relationship between producers and carriers in a way that is unacceptable to you? Is that the basis of your objection to discrimination on the basis of protocol?

2180 MR. BARRACK: Yes. Would you like a specific example or a concrete example? Would that be helpful?

2181 COMMISSIONER DENTON: You have got airtime.

2182 MR. BARRACK: Thank you.

2183 MR. FOX: Thanks. I was just going to say a really great example of that and also why any application-specific filtering is problematic.

2184 On very short notice I had the opportunity to run a live Web telethon for the Sick Kids Foundation this November, which was called the Couchathon, in which we got a number of Canadian comedians to perform live, locked in a room for as long as people kept donating money, and it was very compelling after about 36 hours.

--- Laughter

2185 MR. FOX: But because of the last-minute nature I had to rely on Bell Internet service to provide the stream to the servers that ultimately distributed this content.

2186 Because that content had to be encrypted on the way up and because of the length of it, it was interpreted as being BitTorrent traffic even though it was nothing of the kind and was throttled to a point where we actually couldn't continue broadcasting the show. Every 45 minutes to an hour we would actually have to reset the entire program, basically asking our viewers, some of which had been following us for 24 hours, to come back and watch again.

2187 So basically it was directly impeding my ability to perform a show because I was being -- it was being interpreted as a singular protocol where it wasn't. Had that same filter been applied across the network, my particular stream wouldn't have been prejudiced to the detriment of the show itself and the ability of Canadians and the world to see it and interact with it.

2188 COMMISSIONER DENTON: So do you see that congestion is the basic problem that carriers are trying to deal with and is your complaint that they are not dealing with it in a sufficiently intelligent manner through the measures so far adopted?

2189 MR. BARRACK: I think one of our primary concerns is doing a drilldown analysis as to what is actual congestion versus what is perhaps trumped up congestion to certain ends and then I think looking at where the congestion is occurring, at what stage in the network is that occurring and taking the appropriate steps necessary to sort of free up the pipes, if I might.

2190 Do you want to add to that?

2191 MR. MASTIN: I think the only thing we would add is, as we outlined in our submissions, we fully recognize that when an ISP is building out its network it is economically rational for it to build it out to the absolute maximum capacity of the service packages that have been offered to its subscribers. We do recognize that.

2192 But, of course, the moment that you underprovision you run the risk that you are going to have at some point congestion on your network and the question is, at what point, frankly, does the rubber hit the road in that regard and where perhaps additional provisioning is required in order to reduce the congestion problems that the ISPs are experiencing.

2193 What we are essentially saying in our submission is in a certain way we are agnostic as to the traffic management practices that ISPs are engaging in. We recognize they need flexibility, except with respect to this one particular practice because of the damage that it inflicts on application providers, content providers and users of those applications and downloaders of that content.

2194 COMMISSIONER DENTON: Thank you.

2195 Now, I noticed that at one stage of your presentation you were concerned with a kind of arms' race between those who would spoof certain kinds of traffic or those -- you know, between carriers and those who wish to engage in practices that most people would think are obnoxious. Now, you also said that there needs to be clear publication of the standards whereby carriers would carry traffic.

2196 Do you have a concern that if carriers establish clear standards of how they will carry traffic that this will allow for the propagation of certain kinds of obnoxious practices by those who are ready to use the public rules to get around them?

2197 MR. BARRACK: I think transparency is always positive. I think that what you then do is you initialize a debate and it may well be that you enter into any number of conversations, whether it be under 27(2) or elsewhere under the Act, if necessary, if, in fact, those published practices are obnoxious.

2198 The greater mischief that we are concerned about and what you are hearing about here is what goes on in an unpublished sense. So I think that we are not suggesting that publishing is the solution but it certainly gives everybody an opportunity to know what the rules of the game are and then to engage on that basis.

2199 MR. MASTIN: And I would just add to that, Commissioner, that the foundation to have a competitive market, and, in fact, all free market theory is premised on this, is on having an informed consumer. And so to the greatest degree that we can ensure that consumers have an understanding of the service package or packages that are offered to them and how they can avail themselves of the use of broadband that is contained within that package, the better.

2200 Might there be circumstances where, for certain kinds of information, it might be desirable to have, for example, a standalone network where applications developers would have to sort of sign in and sign anti-disclosure agreements so that they wouldn't be revealing certain critical points about how an ISP manages its network? That might be something that should be considered.

2201 But as a general principle, particularly when it comes down to how that traffic is being managed in terms of its impact on the consumer, we do believe that the maximum amount of disclosure is desirable and furthers competitive purposes.

2202 COMMISSIONER DENTON: One of the things that many parties have presented in common is the problem of the disparity of resources between those who want to put stuff on the Net and the carriers who transport it and that a complaints-driven process is maybe necessary but that it engages powers of unequal weight.

2203 What value do you see in the establishment of a committee to look at common and acceptable practices, engaging both the industry and the potential applications providers?

2204 MR. BARRACK: I think we would support that. Certainly, to your point, you heard what Mr. Hawes was saying when he was answering the Chair's question, that precisely because he has limited resources and is in the nascent business of trying to populate the Internet with Canadian content, this is not his -- his time and energy is not best spent in that fight.

2205 But a larger discussion forum -- what we say in our submission is that all players need a seat at that table. We think that having that dialogue, having that discussion is extremely useful. Would we go further to suggest something like an ombud could be appropriate here? Yes, potentially it could.

2206 I think that anything that allows for -- back up. There are several models of self-regulation in our industry, self-regulation in our sector. Are there lessons to be learned there? Absolutely. Do those lessons need to be modified to take into consideration the broader diverse stakeholders here? Yes. Would we support that? Yes.

2207 COMMISSIONER DENTON: Okay, thank you. Well, normally what we do is we have the CISC, the CRTC Committee on Interconnection, and we allow people to argue it out until they come to some sort of consensus if they can.

2208 And finally, I just can't resist pointing out, in paragraph 97, that old habits die hard, that there is a mention of a condition of licence and to my knowledge we haven't yet subjected you guys to licensing.

2209 MR. BARRACK: No, but if you want to license us, we wouldn't necessarily -- but we can talk about that in a separate conversation.

2210 COMMISSIONER DENTON: In a different conversation.

--- Laughter

2211 COMMISSIONER DENTON: Thank you, Mr. Chairman, those are my questions.

2212 THE CHAIRPERSON: Len?

2213 COMMISSIONER KATZ: Good morning. I just have one question.

2214 On page 6 of your submission this morning you talk about the risk of independent producers being squeezed out by ISP gatekeepers and/or affiliated content relationships and I am just wondering whether you feel that independent business transactions between ISPs and non-aligned, non-affiliated producers, how that would not be any different than this.

2215 I mean, like Bell Canada making a deal with someone in Hollywood to provide preference for their programming as well; would you see that as being contrary to business practice in a competitive marketplace?

2216 MS CLEARY: Absolutely. What we're seeing in the U.S., the traditional distribution formats we've been squeezed out of. We've showed the stats.

2217 We're actually updating for an FCC proceeding upcoming, we're updating our numbers and it's looking like the methodology is the same as the study we had did in 2005 for a media ownership proceeding and we're even down further on -- I think we're going to be at like 15, 16 percent of prime time, less on cable.

2218 And we're seeing that the aggregators, we've been meeting a lot, we've gone up to Silicon Valley to meet with the big players, the big aggregators, and our members -- we just had a board meeting two weeks ago and we went around the room and we surveyed 27 independent producers who have produced 60 percent of the Academy Award winning movies, movies like "Crash", "Million Dollar Baby",

"No Country for Old Men" and we asked them whether or not they could get the aggregators interested in taking on their product, independent product, and unless you have a huge catalogue even people -- producers like Roger Corman who have 800 films in their catalogue, cannot get any of the aggregators interested.

2219 Hulu only has one of our member product on, Lionsgate is a member, and we just -- we can't get them interested in dealing with one-off films the way we license and finance and we can't even get them interested in medium sized catalogues.

2220 They want the low-lying fruit, they want the studio catalogues and we're always put in the back of the bus and they won't even license -- they won't license our content.

2221 COMMISSIONER KATZ: But your issue then is a much broader and bigger issue than just the issue of ISP owned and are affiliated content providers, it's a much broader issue that deals with how independents are or are not treated, not only in Canada but I guess in the U.S. as well?

2222 MS CLEARY: Correct, and world wide.

2223 COMMISSIONER KATZ: Okay.

2224 MR. BARRACK: But what we are saying in this context is that here you have before you a medium that allows for content to be disseminated in a truly democratic fashion, and what we're concerned about are practices that in any way, intentionally or otherwise, limit that democracy.

2225 COMMISSIONER KATZ: If I just take that one step further to the wireless environment, obviously you're saying there's a quid pro quo and it applies across the technologies?

2226 MR. BARRACK: Yeah. We see there's a continuum between wired and wireless, we do not see a distinction.

2227 I mean, you take your -- whether it's -- you know, you want to surf the web on your BlackBerry, you want to surf the web on your desk top, you want to surf with any mechanism, it doesn't matter, you get your e-mail wireless, you get your e-mail wired. There is a continuum here. They're just after devices. There is no distinction in our view.

2228 COMMISSIONER KATZ: And you're saying there's no distinction, yet there is capacity issues, there is all sorts of technological reasons why historically wireless has got much more flexible I guess environment.

2229 MR. FOX: If you would. I mean, another practical example for me as a content producer with "Serialized", we were extremely surprised to find out the large proportion of our audience for that show which were watching it on wireless devices just because that's how they chose.

2230 We never produced it for wireless devices, we never packaged it for wireless devices, I never provisioned it for wireless devices, I didn't host it for the wireless space, but a significant proportion of our audience watched it while commuting on trains on cell phones, on iPods, on PSPs.

2231 So, to that extent, as a content producer, there was no difference to me. I put it on the Internet, it was the audience who told me how they would prefer to consume it and they made that choice.

2232 COMMISSIONER KATZ: Those are my questions.

2233 Thank you.

2234 THE CHAIRPERSON: Suzanne?

2235 CONSEILLÈRE LAMARRE : Merci, Monsieur le Président.

2236 Well, Commissioner Katz just gave me the lead for my question because I want to touch on this comment that you made at the top of page 12 where you say you:

"...also believe that to the greatest degree possible there should be symmetrical regulation of wire line and wireless services." (As read)

2237 COMMISSIONER LAMARRE: And I want to understand exactly what you mean by greatest degree possible and symmetrical regulation.

2238 But before we get there, I have to tell you where I'm coming from. Having spent the better part of the last 20 years doing spectrum management, I have difficulty with the answer you just gave to Commissioner Katz because the last mile in wireless access to the Internet is spectrum.

2239 Now, spectrum is part of an infrastructure and do I understand the position of both the parties here at the table and many other parties is that in order to manage traffic better building on the infrastructure is a good way to go.

2240 And I understand that perfectly, but mind you, it's much easier to unroll cable than it is to unroll spectrum. If spectrum was an easily accessible commodity governments wouldn't be able to auction it for billions of dollars.

2241 So, when you talk about greatest degree possible, don't you think we should be taking into consideration that that part of the infrastructure has a capacity limitation that you don't get when you're talking about wire line?

2242 MR. MASTIN: That is a very important distinction to make, and because you mentioned that the wireless auction, the upcoming one, we just want to mention that we are also broadly supportive of Telus' suggestion that the revenues from that auction should be directed to implementing a national broadband strategy in this country.

2243 And also, speaking of Telus and capacity issues, I believe that Mr. Hennessy announced two or three weeks ago that Telus will be spending several billion dollars in the roll-out of 4G networks over the next couple of years.

2244 We were hoping that some of those capacity issues amongst the major wireless carriers will become attenuated over time.

2245 But there's no question that there are capacity constraints there that are unique to the use of wireless spectrum, which is why we've been very careful in our submission to say, for the reasons that we've been discussing this morning, we do not believe that application and protocol or discriminatory throttling is appropriate.

2246 We do need to leave the maximum degree of flexibility to ISPs and to wireless carriers to enable them to best manage the increasing data demands which we know are increasing exponentially, especially on the wireless side in the years to come.

2247 COMMISSIONER LAMARRE: Because no matter how much revenues from those auctions you may link or you may use to develop then a wire infrastructure, you're not going to change the laws of physics.

2248 I mean, the spectrum is going to stay what it is, and though technology may help wireless operators as devices are more effective and use it more effectively, the limitation is not the same as on the wire line.

2249 You do recognize that?

2250 MR. MASTIN: Well, we --

2251 MR. HAWES: No, but -- if I could just add. There's also an inherent conflict of interest with certain carriers.

2252 Let's say I wanted to watch the broadcast of a certain baseball team in Canada. Ironically the streaming of that video over the web to a cell phone or a computer is vastly superior to the experience that you would experience with other forms of content.

2253 So, by creating and maintaining scarcity it actually gives certain people content advantages over other people.

2254 So, yes, there is an issue of scarcity, there are issues of capacity that need to be dealt with, but that's the best way to deal with it because that scarcity can be used to disadvantage the independent producers.

2255 COMMISSIONER LAMARRE: Okay. On a totally different topic. On page 7 of your submission, middle of the second paragraph, you state right there -- well, actually IFTA states that they:

"...firmly believe that reasonable network management does not include targeting specific applications including peer-to-peer applications which are being used..." (As read)

2256 And that's where I want to put the emphasis:

"...which are being used to monetize and legitimately distribute independent content." (As read)

2257 So, is it CFTA's and IFTA's position that peer-to-peer is an application that allows creators and independent producers to generate revenues from their work?

2258 MS CLEARY: Absolutely. We've been working in our country to develop an awareness that piracy does not -- P2P does not equal piracy, it's being used for pirated purposes, but it's also a very efficient and one of the most efficient ways to distribute product on the web.

2259 And we're meeting with companies now that are able to monetize P2P distribution and it's a direct to the consumer, you don't have to go through an aggregator to use these protocols. So, it may be our future.

2260 COMMISSIONER LAMARRE: Mr. Barrack, do you want to add to that?

2261 MR. BARRACK: We would concur, and I would give a -- turn to Brad for a very specific example.

2262 MR. FOX: I've just got a couple of other applications. One, a lot of times, especially in this hearing, when people refer to P2P they refer to BitTorrent and some people make a distinction, well, lots of technologies use P2P, World of Warcraft, the most financially successful video game probably of all time uses P2P technology.

2263 However, in terms of BitTorrent, I've monetarized BitTorrent. I have distributed shows on BitTorrent that I was able to merchandise, not to any great extent, I don't think the model there is developed and I certainly wouldn't advocate it industrially, but I have done it and I have case examples of making dollars in an account from a BitTorrent distribution.

2264 The other point, just along those lines, that I'd provide for reference is, when people talk about BitTorrent as a bogeyman. For, you know, the starting point of this conference, BitTorrent really only has two things going for it, it has P2P characteristics which makes it difficult to traffic manage and it's extremely popular.

2265 Any technology that's invented from this point forward will likely have P2P tendencies that will make it difficult to manage in traffic.

2266 COMMISSIONER LAMARRE: Point taken.

2267 MR. FOX: And (b), the popularity, that's just an arm's race that will change. There's always the bogeyman out there. There was 10 years ago, there will be 10 years from now.

2268 COMMISSIONER LAMARRE: Thank you. That was all.

2269 Merci, Monsieur le Président.

2270 THE CHAIRPERSON: Okay. Thank you very much.

2271 Those are our questions. You had said you had a list that you wanted to furnish with us, so please do that through the secretary.

2272 We'll take a five-minute break.

2273 Thank you.

2274 MR. MASTIN: Thank you very much.

2275 MS CLEARY: Thank you, Commissioners.

2276 MR. FOX: Thank you.

--- Upon recessing at 0959

--- Upon resuming at 1009

2277 LA SECRÉTAIRE : À l'ordre, s'il vous plaît.

2278 LE PRÉSIDENT : Bon, commençons.

2279 THE SECRETARY: I would now invite the Council of Canadians with Disabilities and ARCH Disability Law Centre to make its presentation.

2280 Appearing for the Council of Canadians with Disabilities and ARCH Disability Law Centre is Phyllis Gordon.

2281 Please introduce your colleagues, after which you will have 15 minutes for your presentation.

PRESENTATION

2282 MS GORDON: Good morning, Mr. Chairman and Commissioners.

2283 The Council of Canadians with Disabilities and ARCH Disability Law Centre would like to thank you for the opportunity to address the issues raised in this proceeding.

2284 With me today are Dr. Gregg Vanderheiden and Jutta Treviranus. Together they span the world of accessible technology.

2285 Dr. Vanderheiden is a Professor and Director of the Trace Research and Development Centre at the University of Wisconsin, Madison. He works regularly with both people with disabilities and industry.

2286 Some of his most famous designs include the original accessibility features for Microsoft Windows and Macintosh as well as cross-disability access features in the U.S. Postal Service automated postal stations and Amtrak's ticketing machines.

2287 He is the co-Chair of the WCCC Guidelines on web content accessibility and has served on the FCC's Technological Advisory Council.

2288 Jutta Treviranus is a Director of the Adaptive Technology Research Centre at the University of Toronto. She is the Chair of the WCCC Guidelines on authoring tool accessibility, Canadian head of delegation to several international standards organization working groups on accessibility and leads many international research networks that create building blocks for accessible software applications such as the Firefox browser.

2289 Before inviting Dr. Vanderheiden to speak, I'd like to make submissions regarding two issues raised by the Commission, the establishment of guidelines and the framework for section 36, and one not raised by the Commission, the interpretative framework for section 27.

2290 With respect to the guidelines, the Commission is proposing to establish guidelines that will maximize freedom of Canadians to use the Internet, necessarily including Canadians with disabilities, while permitting ISPs to manage their networks consistently with privacy and other legislative constraints.

2291 CCD/ARCH welcome this initiative if, and only if the guidelines specifically address accessibility. Accessibility is required both by statute and jurisprudence, and must be treated at least at the same level as privacy.

2292 The inclusion of accessibility in the guidelines is in the public interest and will direct ISPs to attend to their obligation to provide internet telecommunications services in a non-discriminatory fashion; essential, in light of the historical failure of industry to respond to disability in the absence of Commission direction.

2293 With respect to section 36, in the context of granting approval for an ITMP, we propose a three-step approach which uses the Minimal Impairment Test, but only after determining that the ITMP is lawful.

2294 Step 1 is the consideration of whether the ITMP is caught by section 36. This isn't the theoretical concern for people with disabilities. If an ITMP results in the delay or degradation of real-time communication, the meaning and purpose of the transmission may well have been influenced and the content controlled.

2295 Step 2 is a determination of whether the ITMP is contrary to law. It is at this point that we diverge from the Oakes Test advocates. We agree that there is a formal similarity of the courts' task where Oakes is used and your task. The courts are determining whether to uphold a law that violates the Charter. You are determining whether to approve an industry practice that contravenes section 36.

2296 However, there is a substantive difference between the two tasks. While the court has the power to uphold a law that is otherwise invalid, you do not have the power to approve an ITMP that is contrary to law; that is, a legal requirement, whether statutory or judicial, cannot be tossed into the mix of Oakes Test considerations for balancing, and should be determined in advance.

2297 At this step we suggest that an audit-like checklist of potential circumstances when ITMPs might be in contravention of the law needs to be applied to the ITMP.

2298 For example, the Commission would vet for compliance with privacy statutes. Likewise, you would vet for accessibility impact, as inaccessible telecommunications services may well contravene section 27(2).

2299 If the ITMP results in inaccessible internet services, the next question is whether it amounts to unjust discrimination and is contrary to law. To determine whether the discrimination is unjust, a polycentric balancing of the policy objectives must be made.

2300 As well, an assessment must be made as to whether there is an accommodation or reasonable equivalent alternative.

2301 Step 3 then comes into play if the ITMP is found to not amount to unjust discrimination, is neutral with respect to accessibility, or is a positive intervention. At this point the balancing of section 7 objectives occurs, and we agree that the Minimal Impairment Test can be usefully applied.

2302 ARCH and CCD submit that this is not the time to refashion the interpretation of section 27, and section 27(2) in particular. If the Minimal Impairment Test, or Oakes Test, is used to interpret not only section 36, but also 27, you will undo decades of clear and effective section 27 jurisprudence with respect to discrimination, and will merge two separate cornerstones of the Telecommunications Act. This shouldn't be undertaken lightly.

2303 Pursuant to section 27(2), the Commission has the legal obligation to ensure that internet telecommunications services do not discriminate against people with disabilities. We submit that, just as you have correctly applied human rights principles in the past, you must leave the door open for their application with regard to internet traffic management practices in the future.

2304 Finally, with the expansion of the internet, the realm of telecommunications has expanded into every arena of social, public and economic life, and the future isn't charted. During this period of transition we urge the Commission to be vigilant and adopt a cautious approach to granting approvals under section 36, or reinterpreting or using section 27 until the ramifications of doing so are better understood.

2305 Thank you. I would like to now ask Dr. Vanderheiden to talk.

2306 DR. VANDERHEIDEN: Mr. Chairman, Commissioners, the internet has really represented a watershed for people with disabilities and those who are older. Individuals who are blind have access to more types of information than ever before, and they have the potential for equal access.

2307 Individuals who could not manipulate print materials because of physical disability can easily operate computers, with little or no movement. We now have the ability to do it just with brain power.

2308 Individuals who are deaf have access to more captioned materials, and thanks to crowdsourcing, they can find captions and add them to movies that were not otherwise captioned.

2309 Those who rely primarily on sign language for communication can use the internet to communicate in sign language with others, as well as to call up sign language interpretation to allow them to access movies.

2310 People with cognitive disabilities can use alternate applications that are simpler, giving them access to many services for the first time because they were not able to handle the complexities of the mass market commercial applications and programs.

2311 Now, some of this benefit comes directly from the nature of the internet and its services. Much of it, however, depends on non-standard applications, formats and services that ISPs are generally unaware of and not expecting.

2312 Unfortunately, some of these services and applications may look like, or be taken for other non-traditional applications or services that the ISPs are concerned about, for example, P2P.

2313 Even when they don't look like programs that the ISPs are concerned about, these accessibility-related applications may be degraded simply because they are not recognized applications, or they are not on a whitelist. Don't know what it is; can't be important.

2314 In addition, even whitelisting programs, if it were possible to list all of the different accessibility programs, may pose problems. It can expose information about users or their disabilities, which can be used to either target them -- those with diminished capacity, for example -- or discriminate against them in health care, employment, or other ways.

2315 What we are looking for is a level playing field. It is important that people with disabilities are provided with a level playing field, where they can use their special applications and services, alongside of or instead of mainstream products, without having to declare themselves or their programs as special, and without being blocked or having degraded performance.

2316 This would be true whether they access the internet at home, at work, where they visit, at school, in a public place or a library. This traffic may show up at any location, it is not something where they can say: I will look for it from this particular house.

2317 This does not mean that traffic management practices cannot be used, it just means that traffic management practices need to be chosen carefully, used only where there in fact is traffic congestion that cannot be solved by reasonable provisioning, and that it be non-discriminatory.

2318 Let me highlight briefly some key issues around this area that are essential, and thus should be considered in any guidelines that you develop.

2319 First, individuals with disabilities need to be able to use any device and any software to access the web. Many individuals cannot physically operate the mainstream products, either the products are just too complex for them, or the mainstream products assume and require that the person be able to see or hear in order to use the product.

2320 ISPs that require customers to use a particular program, or that have preferred QoS or bandwidth for a particular web or telephone program, do not allow users with disabilities to choose software that will fit their abilities, software that they can actually use.

2321 Even when an ISP's preferred programs are designed to be accessible, that does not guarantee that everyone will be able to use them. Individuals' needs can be very unique, and different programs are often accessible to different users. So users must be able to be free to use any combination of programs that meet their needs, so that they are, in fact, able to operate this.

2322 One suggestion was that any special or assisted programs be registered or whitelisted. Unfortunately, there are so many different types of programs and individual adaptations to meet specific users' needs that this would be impractical, or impossible.

2323 Also, it often is not a special program, but a mainstream program from a competitor that is the one that will work best for an individual.

2324 Would that mean that the chief competitor's products would be whitelisted for all users and get the same preferential treatment? This would defeat the Preferred Marketing Agreements for many of the ISPs and their partners, and there are examples in parallel markets.

2325 Another problem is that whitelisting particular products or users can have the effect of tagging them. This can lead to targeted or discriminating behaviours.

2326 For example, if it is known that people are using a program that is designed for those with diminished capacity, it exposes those users to being targeted by people who love to market to individuals with diminished capacity.

2327 Registering special programs or people also allows them to be identified as having disabilities in ways that can be used to discriminate against them for employment, insurance, and for other purposes.

2328 Secondly, users need to be able to draw their information from any source. The movies offered by the ISP or the Preferred Marketing Partners may not have captions or descriptions, whereas movies from an alternate source may.

2329 Individuals who need captions or descriptions should be able to watch the movies from other sources with the same fluidity and reliability as they can from the mainstream users.

2330 In the previous testimony we heard that there are already examples of some programs that seem to flow much better than others. Why is this? Are these going to be the captioned versions or the non-captioned versions, et cetera.

2331 With respect to format, users may need to secure information in a different format, or may need additional information in another format to augment the primary content.

2332 For example, when watching a movie or making a phone call which is using an expected format, they may need text or captions or description which is in a non-standard or unexpected format.

2333 They may also require Medidata or other supplemental information along with the content in order to be able to match the content -- the movie -- with the supplemental information, the captions.

2334 Where this information exists, it should not be blocked, nor should the supplemental resources -- captioning, description, sign language, interpretation, et cetera -- be blocked or impeded, or the bandwidth or fluidity compromised because it is in a format that is different than the ISP is expecting, prefers or sees traditionally.

2335 For example, if the movie was recognized as a format qualifying for quality of service, but an audio text stream from another source, and in an unexpected format, was not recognized as deserving QoS, then the movie would arrive on time and flow smoothly, but the audio or text stream, which would be the audio description of the captions, would not, resulting in text or audio that is delayed, causing either the supplemental audio to play right over the top of people who are talking, or the captions wouldn't match the picture.

2336 Server-based control interfaces is another non-standard format where quality of service is critical, and it would not necessarily be in any format that would be recognized as a standard QoS qualified format.

2337 Now, in general, people with disabilities do not require significantly higher bandwidth than others, when you compare the bandwidth of the accessibility of information against the bandwidth needed to download, say, movies, or to stream HDTV or movies.

2338 However, the bandwidth needed may be greater in some specific areas, for example, phone calls. With a phone call, the upstream bandwidth needed to pass audio would be much less than the upstream you would need if you were using sign language. And you must have a pretty good flow of video in both directions in order to do sign language.

2339 So if you were making a phone call, the bandwidth required would be higher for sign language than you would need for audio. However, both of those bandwidths are nothing compared to an HD movie. It is within a particular activity, like a phone call, that it would be higher, but, in general, it would not.

2340 As internet bandwidths naturally increase, this should not be a problem, unless metering is done by content type. But if we are just talking about overall, it is not going to be anything significant.

2341 QoS can be a problem, though, if the ISP assumes that only the audio on a call needs to flow smoothly, or assumes that the video is not important, because you are just looking at somebody and it is not as fluid as the audio is, and suddenly you can't use it for sign language.

2342 In closing, the internet is a tremendous and critical asset for people with disabilities, and it is only going to get more so in the future.

2343 Traffic management can be done in ways that will not have a disproportionate impact on people with disabilities, but some practices can significantly and disproportionately impact people with disabilities.

2344 The disclosure of traffic management is critical, no matter what is allowed. It must be known what is being done and when. It is the only way to troubleshoot problems when they occur.

2345 This is much more important for disabilities than otherwise, due to the diversity of form and formats that are used.

2346 In fact, we have an example of interference with accessibility features in Toronto that cannot be clarified because traffic management information is not disclosed.

2347 If you would like, one-page summaries of traffic management techniques that are best and worst can be provided, and we could also provide one-page guidelines for disclosure, as well.

2348 Thank you. My colleagues and I would be happy to respond to your questions.

2349 THE CHAIRPERSON: Thank you for your presentation.

2350 Let's go back to your opening points on sections 27 and 36. You say that we should make sure that something is lawful before even applying the Oakes Test.

2351 That's a funny way of expressing it. I presume what you are really worried about is a regulatory conduct offence by us authorizing something under section 36. It, therefore, can be deemed to be legal, even if it violates some other provision of law.

2352 Is that what you are really worried about?

2353 MS GORDON: I am really worried about it, because in listening to the discussions over the last few days, it was being proposed that a Minimal Impairment Test deal with everything, that all of the different kinds of considerations, when you are looking at an ITMP under 36, would be put into the balance.

2354 We say that you can't balance some things that are, in and of themselves, contrary to law.

2355 THE CHAIRPERSON: That is sort of self-understood. Why would we balance something that is illegal?

2356 I don't understand your starting point, unless --

2357 MS GORDON: With respect, sir, yesterday you said that we would put privacy in there. So privacy would be one of the considerations that we would be balancing.

2358 That was said, I think, to the Open Internet Coalition.

2359 If privacy is protected by statute, then the rights under the statute can't be diminished in a balancing. So what we are basically saying is, you have to make sure that everything that you are looking at doesn't otherwise create a problem.

2360 I think that this issue is happening because the ITMPs call into question -- traffic management practices can be considered both under section 36 and under section 27. That is not always the case. Section 27(2) is where we usually go for discriminatory issues. Certainly for people with accessibility questions we would use 27.

2361 But if you are reviewing a traffic management practice, we say that you can't approve one if it results in discrimination. And if you don't think that's a legal problem, then I am content, but the way the conversation was developing yesterday, it felt to us that the balancing under 36, with the Minimal Impairment Test, could potentially result in a result that would be discriminatory for people with disabilities, which we say needs to be considered upfront.

2362 THE CHAIRPERSON: It's your choice of language. When you say "legal", it sounds like it's black and white. As you know, a lot of these issues are qualitative, and the provisions of statutes include "reasonable" or "not undue preference", et cetera.

2363 MS GORDON: Yes.

2364 THE CHAIRPERSON: So it requires you to do a balancing for that purpose already.

2365 MS GORDON: I agree.

2366 THE CHAIRPERSON: Let's say privacy, for instance; you have to do the balancing: Is this an invasion of privacy or not?

2367 Secondly, you go to the ISP --

2368 So that is what you are basically saying, balance it according to the specifics --

2369 MS GORDON: Whatever the legal context is, you must balance it there first.

2370 THE CHAIRPERSON: The other thing is, you seem to -- like the folks before you, you seem to automatically assume that when information exists, it will be misused by the ISPs.

2371 For instance, when we talk about accessible programs, especially those that you have to call up as a disabled person, et cetera, you therefore become identified, and therefore you could be subject to marketing for people who want to market disabled people.

2372 But they would have to get that information, first of all, and the only person who would have it is the ISP, and the ISP, by law, cannot share information.

2373 Why do we always go on the assumption that the information will be abused or will be used in an improper way, rather than being used purely for the reason it was garnered, which is in order to ensure traffic management and ensure the integrity of the network?

2374 DR. VANDERHEIDEN: Thank you for the question. It is really an excellent question.

2375 There are several things. First of all, in the United States at least -- and, again, I am not as familiar with Canadian law -- you are allowed to vertically share any information about your consumers with anybody else that is part of your corporation. That means that the ISP that is owned by a bank can share it with the bank, which is owned by an insurance company, so it can share it with the insurance company.

2376 All of that information, once it is inside --

2377 THE CHAIRPERSON: That doesn't apply in this country, so that's --

2378 DR. VANDERHEIDEN: Okay. I am just saying that you have those kinds of issues.

2379 The second thing is that, having information like that available, if it is to be used by all of the different parts of traffic management, that means that information will be distributed to all of those locations, which means that everybody throughout the company, including people who are not bonded or anything -- it's not like it's all locked up in a safe like credit cards.

2380 Thirdly, as we know, credit cards routinely are broken into, these registries, and they are distributed. You can then swap out and get a new credit card, but once you are identified and you go into a personnel database as having this characteristic, that's it. You can track this for life and you can't ever get rid of it.

2381 So giving up the information about your disability or your vulnerability, and stuff like this, things that naturally --

2382 THE CHAIRPERSON: But your very own example, you do it right now with credit cards. That doesn't mean that we stop issuing credit cards. That doesn't say that credit card users are not allowed to ask for that kind of review, or for that information. Surely, they, for credit card purposes, can use it.

2383 I don't quite understand, what is the difference between a credit card company and an ISP? The credit card company will use it for its own purposes; the ISP will use it for its own purposes.

2384 DR. VANDERHEIDEN: Credit card companies are not allowed, under any circumstances, to say that they want to know what your disability is, what your competency -- if you are vulnerable, et cetera, before they issue you a credit card.

2385 So the information about a person with a disability is not something that a credit card company has.

2386 THE CHAIRPERSON: No, but you can ask the credit card company to communicate with you by whatever means you specify, whether it's mail, whether it's e-mail, whether by telephone, et cetera. Right?

2387 That you can do, and you do, as a credit card user. That is information from which they can extrapolate information about you.

2388 DR. VANDERHEIDEN: No, because when I ask them to communicate with me by e-mail, they have no idea what format or what software, et cetera, I am using. They are using information formats which --

2389 THE CHAIRPERSON: No, you are a technologically savvy person who likes to use e-mail, as opposed to -- if you have ticked "Telephone only", they realize: Hey, this person feels uncomfortable with technology and wants to have person-to-person contact.

2390 DR. VANDERHEIDEN: Actually, they don't know that. There are an awful lot of people who use e-mail all the time that only want to be contacted by phone, because they don't want to give their e-mail address to that particular source.

2391 THE CHAIRPERSON: The point is that when you sign up for the credit card, you have the choice of choosing which way you want to be communicated with. You do that, or you don't, as you feel, but when you do it, the credit card company will use it for its own purposes.

2392 I don't see the difference between that and what an ISP does, in terms of you choosing to communicate with them.

2393 DR. VANDERHEIDEN: There is information harvesting that is done, as you said, from different sources of information. The question is, if the way that a particular individual gets to be treated differently requires them to just use the internet to disclose information about accessibility-related issues, this is the question that --

2394 THE CHAIRPERSON: Yes, but your real worry is the misuse of that information; that it's not guarded properly and will be used in an inappropriate forum.

2395 DR. VANDERHEIDEN: Yes.

2396 THE CHAIRPERSON: Okay.

2397 MS TREVIRANUS: Can I respond to that question a little bit further?

2398 THE CHAIRPERSON: Yes.

2399 MS TREVIRANUS: The issue is, does the provision of accessible services by the ISP require that the individual identify themselves as having a disability. That is the concern.

2400 The statement was made in relation to whitelisting, the proposal that accessibility issues could be dealt with by having accessible services whitelisted.

2401 The concern here is that no credit card company can ask you: Do you need accessible services? That type of practice doesn't happen elsewhere.

2402 The issue of the ISP simply requiring that information for the provision of services -- we have examples such as Rogers redirecting to their particular search engine with their particular advertising. So that implies that the ISP is doing more than simply providing a pipeline, they're also providing advertising and particular preferred applications.

2403 That particular advertising could be directed, they could harvest the information about the fact that this individual has a disability, has diminished capacity, and could direct the advertising specific to those particular needs.

2404 It's not that --

2405 THE PRESIDENT: But you are now making accusations. You may say Rogers is using information for one purpose and paid for one purpose, for another purpose, for advertising purposes of which you--

2406 MS. TREVIRANUS: No. Those were two different statements. So, the one statement I've made was an actual statement of fact that Rogers has re-directed users to a particular search engine with advertising.

2407 THE PRESIDENT: Yes.

2408 MS. TREVIRANUS: That's one statement. My other statement is our concern is since those are the types of things that are happening with ISPs, that's simply to show that Rogers is doing more than simply providing a pipeline. They are also engaging advertising. It is a common practice for ISPs to engage in advertising.

2409 We are not saying that they're presently using that information. There is no white list at the moment. So, there isn't at the moment a way for Rogers or other ISPs to identify that somebody has a disability.

2410 THE PRESIDENT: Okay. Let's get away from Rogers and my point is if we restrict the use of that information for the purpose of network integrity and nothing else, wouldn't then your problem be solved?

2411 MR. VANDERHEIDEN: The problem would be solved if the information never -- if the information was secured in our work and if you know how the networks -- and you would have to distribute that information out through the network to make it work and so, as a result, there would be no way to secure the information.

2412 THE PRESIDENT: Okay. Len, do you have some questions?

2413 COMMISSIONER KATZ: Thank you, Mr. Chairman, and good morning.

2414 Maybe it's before said of the Chairman, but as you can tell from the panel, there has been a number of us here that were on the Accessibility hearing as well, so we have an awful lot of knowledge and experience on people with disabilities.

2415 I do want to follow up on the latest discussion that you had with the Chairman though and that is self-identification and, in fact, you say on page 6 of your opening summary this morning on a level playing field that one of your concerns is having access without having to declare they are themselves or their programs as special, without being blocked or having degraded performance.

2416 And it raises the question throughout both your submission of February and this one as to how to go about dealing with people disabilities in a fair and equal manner without sort of making everybody have access to everything in order to accomplish that.

2417 And so, I guess I'll raise the question with you in the context of some of the things that the Commission has done in the past with regard to self-identification, and we talked about this in the past as well, about the long distance discounts and people with disabilities, in some cases, historically have had longer calls because of the need to have relay services and as a result of that, the Commission had ordered many years ago the phone companies to reduce their long distance rate by 50 per cent roughly in order to accommodate those people.

2418 It took self-identification to do that, I would imagine, because those companies had to know what to do with those customers that were using it.

2419 And yet, you are saying here you don't want to have some form of declaration and the question is: How do you go about doing this and in reading your submission and again this morning, you talk about white listing and all the alternatives and every single one you lay out you then say: "and it doesn't work, and it doesn't work, and it doesn't work".

2420 So, my question to you is: what will work?

2421 MS. GORDON: Let me just start with this one.

2422 MR. VANDERHEIDEN: Sure, go ahead.

2423 MS. GORDON: Thank you. It's a hard question and my understanding, not from the technical point of view, but my understanding of the internet is that this is a new world and it's a world that if the barriers are removed, consistently with submissions from many other parties who are wanting an open internet, that people with disabilities won't need to declare any longer.

2424 Where it is essential for telephone service that made sense, but my understanding from the experts is if it's done right, you won't need to declare because the barriers, I mean similar barriers that we have heard about from other people that if blocking doesn't occur and throttling doesn't occur on application specific programs that are useful to people disabilities, then the issue isn't there because you can access that application from wherever you are.

2425 I am going to let Gregg pick it up.

2426 MR. VANDERHEIDEN: Three parts. The first one is that many of the things you're talking about are people who are applying for special benefits and, yes, they then have to identify themselves. Clearly, if you want a disability discount you have to identify yourself as having a disability and so, this is a different category.

2427 This is where you are not asking for anything, it would be like saying that if you want a discount you have to apply for disability, that's one thing.

2428 But this is saying if you want to get in at the regular price, you have to identify yourself as having a disability.

2429 In other words, we're talking about, do they have to identify themselves to just get standard treatment, not special treatment. If the -- as we're talking about, we have neutrality. Then, in fact, there is no need to do this M.U.D. special things.

2430 We are still talking about problems that are created by doing something and that we are then -- they are saying while we are going to create the problem, then we are going to say that people disabled can solve it by doing all of these extra special things. And so, that's the difference between the situation talking about now and before.

2431 The key point though that you are interested in is, gee! every time you talk about, you know, something you would say that this is a problem, that's a problem; do you have any suggestions for what we can do?

2432 And so, yes, traffic management is critical. It is really important. And in fact, it is important for disability. It's important that when you have sign language going on, that you not have it big download speed, breaking it up just like you can't have break-up of telephone call.

2433 So, there are two kinds of network management that are the most problem, are source or destination throttling, that is you let stuff from one movie source through, but another movie source, you know, it doesn't get the same treatment. That's, you know, one of the most.

2434 Or if you're sending stuff. You let people send stuff in one place, but another place isn't because the first place is your partner and you want to make sure that you give first preference to your ISP partner and so you give them better -- so, you throttle by source or destination.

2435 The other one is application, and this is where you throttle, if it's not the application that you provide or it's not from a preferred vendor of yours. And the problem here is that people with disabilities may have to use your competitors product because it's accessible and yours isn't, or yours is accessible to one person, but not for this type of disability.

2436 And so, the two really tough ones are source and application.

2437 Format and protocol. Format and protocol, you can't have quality of service without doing some preferential for some types of content.

2438 We know that if you are on a phone call, for example, and somebody else is downloading a huge file, the download can be stretched out, but the phone call can't. You can't all..... lo..... you can't just stretch it out because you're trying to slow it down.

2439 So, we have to do it by type, but when you have things like saying that it's a whole category like peer to peer and now you don't know what the type of communication is, you're just saying, well, you know, I don't like that kind of traffic. And so, you are making judgments.

2440 It may be that the peer to peer is being used to serve the captions. It may be that the peer to peer is being used for communicating. I mean, there is lots of different kinds of things and we can give some specific examples.

2441 As a matter of fact, I'll hand it of since there is interest in peer to peer. We can talk about examples of peer to peer being used for accessibility and having interference.

2442 The bandwidth throttling obviously is something that is a way of if you just have an instance of congestion, you have to -- someone has got to be throttled. If you don't throttle anything, everything will be throttled. I mean, there is a congestion. There is a throttling going on. The question is: do we affect it?

2443 And so, yes, that's probably going to have to be done. So, the question then is: how? And so, throttling can be done. The question is: what are the criteria being used? And if we first make sure that reasonable provisioning is being done and then we try to make sure that it is not being done in a discriminatory fashion, but it's being done in terms of QLS.

2444 Volume over time.

2445 COMMISSIONER KATZ: Let me -- let me jump to the point I was going to make. I think you are going to get there anyways, but I'll try and look forward a bit.

2446 You say on page 7 with regard to white listing, that this would be impractical or impossible. Yet, we have heard the notion of white listing earlier in this hearing as well.

2447 Do you have data and information to support the fact that some of these solutions perhaps are not necessarily practicable? I mean, you are saying it, but on what basis are you saying it?

2448 MR. VANDERHEIDEN: When you're talking about the applications -- I am trying to figure out how to say this concisely -- there are so many different types of adaptations and combinations that are being used by people with different disabilities, and this is constantly changing over time, that having the ISPs keep track of even the major types of applications that might be used is -- it would be almost impossible trying to keep track of all the different variations for all the different types and combinations of disabilities. It's just not something that's going to happen.

2449 So, what you are going to end up with is their "white list" is not going to have things that are being used by people who have disabilities.

2450 COMMISSIONER KATZ: And has that been publicly stated in the U.S. and by ISPs or by carriers, to your knowledge, or are you just saying this based on your understanding of the complexity of technology and computerization?

2451 MR. VANDERHEIDEN: The latter coupled with the behaviour in the past, and this is a -- there is a long history along these lines.

2452 For example, you would think that if you had telephones for sale and that they worked with assisted technologies, with, say, TTYs, that you can go into a store and purchase them.

2453 In fact, you can go into a store and try to purchase a phone that will work with the TTYs, they say it doesn't exist. You will say: that one there does, and they will tell you: no, it doesn't. They will call their company, the company will confirm that that phone won't work with the TTY and in fact that is one of the phones that is designed specifically to work with TTYs.

2454 Getting disability information into the retail infrastructure is very important and that is the result of an actual study that we had done.

2455 COMMISSIONER KATZ: Okay. Thank you. You talk in your February 23rd submission with regard to the issues and concerns you have with bit caps and bandwidth usage and that's sort of an analogy to what I have said earlier with regard to the long distance discounts and the history as well.

2456 If the Commission was to look at finding ways of adapting to people with disabilities higher use or needs of bandwidth needs, do you know how much that would amount to? I mean, the long distance market, as I say, was 50 per cent discount.

2457 Is there some sort of analogy, some sort of research or data that has been provided by studies in the U.S. or elsewhere that would basically say that the use as to levels of people disabilities for the same applications would be X per cent higher?

2458 MR. VANDERHEIDEN: Yes, and one of the things we can do is to give you a short couple page brief on that.

2459 COMMISSIONER KATZ: Could you, please, when you file your submission? That would be great.

2460 MR. VANDERHEIDEN: Yes. Because it turns out it's not that much and it will -- the percentage will go steadily down and here is the reason why.

2461 The amount you need for disability access is, you know, if you have like a four gigabit, it's way below that and so, if you're talking about as the natural process goes up, for example, the bandwidth will use forever more and more complex high definition, television 3D definition, et cetera, it's going to go up.

2462 But the cost to have captions doesn't, okay, because that's going to be sort of flat. And so, what you are going to see over time is that as long as you have the caps high, and by high I don't mean sky high, you know, moderate, you can set a cap here and you'll get rid of all of your bad actors and your four or five per cent that you keep talking about and the disability is all going to be below that.

2463 So, those are kinds of things that can be looked at and we can give you some more data.

2464 COMMISSIONER KATZ: If you have some studies and all that, that would be very useful as well.

2465 MR. VANDERHEIDEN: Jutta?

2466 MS. TREVIRANUS: I just wanted to add that one of the amazing things that the internet provides for people with disabilities is the option in fact not to have to have a special segregated additional cost on top of things that we have.

2467 The provision of the internet is the opportunity to have multiple modes of communication at the same time, without requiring additional special provisions.

2468 And so, I just wanted to reiterate what Gregg had said, that we don't in fact -- if we are able to use the internet without the practices that cause barriers, then there is the potential to not have to spend the additional cost, the sustainability issues, the administrative costs, the work and time that it takes for someone with a disability to request and identify themselves, all of that can be -- we can get rid of that and we have the opportunity to communicate, to learn to educate, et cetera, et cetera, without those special provisions.

2469 COMMISSIONER KATZ: Got it. Thank you. Those are my questions, Mr. Chairman.

2470 THE PRESIDENT: Okay. Thank you very much. As my colleague mentioned, we had a hearing on Accessibility and you will see our decision shortly, which hopefully will answer some of your concerns. But I appreciate your coming and pointing to us how especially difficult it's for disabled persons.

2471 Okay. Let's take a five-minute break and then we'll deal with ACTRA.

--- Upon recessing at 1051

--- Upon resuming at 1101

2472 THE SECRETARY: Order, please. À l'ordre, s'il vous plaît.

2473 LE PRÉSIDENT : Commençons.

2474 THE SECRETARY: I would now invite the Alliance of Canadian Cinema, Television and Radio Artists, or ACTRA, to make its presentation.

2475 Appearing for ACTRA is Ferne Downey. Please introduce your colleagues and you will then have 15 minutes for your presentation.

PRESENTATION

2476 MS DOWNEY: Thank you, Mr. Chair, Vice-Chair, Commissioners and CRTC staff.

2477 My name is Ferne Downey. I am a professional actor and the newly elected National President of the Alliance of Canadian Cinema, Television and Radio Artists. It is a great honour for me to appear before you this morning.

2478 Supporting me are ACTRA's National Executive Director Stephen Waddell and Joanne Deer, Director of Public Policy and Communications.

2479 We are here today as the voice of ACTRA's 21,000 members, who live and work in every corner of Canada. Our members are English-speaking artists whose performances cross all delivery platforms: film, television, sound recordings, radio and digital media.

2480 Our presentation here today is supported by the 17,000 professional musicians in Canada who are members of the AF of M and also the 3 million workers represented by the Canadian Labour Congress.

2481 Mr. Chairman, Commissioners, ACTRA has appeared before you in this room many times before. On first blush, our interest in traffic-shaping might not be so apparent as our obvious stake in issues such as TV licence renewals or regulating broadcasting in new media.

2482 We are not here to give you technological analysis or detailed solutions. We are not going to talk about the details of deep packet inspection.

2483 Rather, we want to speak to you about an important objective you outlined in calling these hearings: "to maximize the freedom of Canadians to create applications and use the Internet."

2484 Tomorrow and the next day you will no doubt hear arguments from big telecoms with transparent economic interests in maintaining maximum control over Internet traffic.

2485 I am here as a Canadian artist to urge the CRTC not to hand the keys to the Internet over to the handful of major corporations who control broadband access in Canada.

2486 Instead, we urge you to use this opportunity to enshrine the principle of net neutrality.

2487 Your decisions on the issue of Internet traffic management directly impact our members and their ability to work. They also impact our democracy, our shared culture and our ability to have free and unfettered access to the most powerful tool for communication, information and entertainment we have ever known.

2488 Like conventional television, the Internet is another platform for viewing and distributing the content that ACTRA members help create.

2489 That is why Canadian performers like me are worried. More and more Canadians are turning to their computers and mobile devices to watch our work. Roughly 70 percent of Internet traffic is generated by people watching audiovisual material. And because our work usually comes in big fat video files, it is the most likely target for being throttled by ISPs concerned about traffic.

2490 Some of the programs my colleagues work on, such as "Têtes à claques" -- you will recall that the star of that series, Bruce Dinsmore, appeared on ACTRA's behalf during the new media hearings -- and "Sanctuary" were produced specifically for Internet distribution.

2491 "Sanctuary" is shot in British Columbia and stars Canadian TV people such as Amanda Tapping and Robin Dunne. "Sanctuary" started as an 8-episode series released through the Internet in early 2007 and sold directly to viewers. The show was such a huge success, the SciFi Channel picked up the series for distribution on traditional television.

2492 We also look to hit shows such as "Degrassi," "Corner Gas," "Flashpoint" and "Little Mosque on the Prairie" to see content produced primarily for conventional broadcast spread over the Internet.

2493 Content-rich websites are helping to build audiences and to enrich the experience of Canadians who are already fans. The availability of these programs on the Internet helps these shows compete and to find a global audience.

2494 We also see more and more Canadians turning to sites like CTV.ca and GlobalTV.ca to catch up on missed episodes of their favourite drama series.

2495 If Canadian programming is to continue to find an audience on conventional television and in new media it is essential that this content be able to be distributed over the Internet without interference, shaping or throttling. Canadians won't watch "Corner Gas" on CTV.ca if Rogers is making the connection so slow as to be unbearable.

2496 We saw the Commission's new media hearings as a battle for the future of Canadian broadcasting. These hearings are also critical. The review of broadcasting in new media concerned the availability of Canadian broadcasting content. And today, we are discussing the rules allowing Canadians to access that broadcasting content.

2497 We cannot allow narrow corporate interests to have unlimited control of this distribution tool. They must not be allowed to determine what content is transmitted, how it is transmitted and by whom it is transmitted.

2498 We note that the Telecommunications Act recognizes the role of policy in facilitating the:

"...orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions."

2499 We believe content transmitted through the Internet should be treated equally. This includes content which falls under the definition of "program" and "broadcast" and content which is outside that definition.

2500 ACTRA has two specific concerns with respect to Internet traffic management:

2501 (1) The risk of ISPs giving undue preference to further their own economic interests; and

2502 (2) The potential of ISPs to abuse their power as gatekeepers and control the type of traffic being distributed.

2503 Performers are greatly concerned about the potential for ISPs to slow down Internet traffic, both applications and content, that competes with their own services. This concern is magnified by the small number of large corporations who control broadband networks in Canada.

2504 The magic and power of the Internet is its ability to provide open access. Creators have direct routes to consumers and consumers have endless choices. This freedom is threatened if ISPs are able to give preference to their own content or services. They can fast-track their own and put all others in the slow lane.

2505 In the diversity of voices proceedings, ACTRA noted that distribution undertakings are the gatekeepers controlling which programming services have access to Canadian audiences and under what terms. In that process, ACTRA pointed out that vertical media integration is a threat to diversity since the distribution undertaking will ordinarily provide privileged access and more favourable terms to programming undertakings which it owns.

2506 These same principles hold with respect to ISPs that own broadcasters or other content providers. ACTRA is concerned that giving ISPs broad latitude to determine how they manage traffic raises the possibility that they will discriminate in favour of the content which their affiliated companies have made available.

2507 For example, Bell Canada continues to have an equity position in CTVglobemedia and, through it, an interest in conventional and specialty broadcasters as well as newspapers. Rogers also has a far reach as an ISP and broadcaster.

2508 The Commission must ensure that when Bell Canada, Rogers Communications and others are providing services as an ISP and dealing with issues of network congestion, they can't give preferential treatment to content providers in which they have either an equity interest or other affiliation.

2509 They must also be prohibited from discriminating against smaller Internet service providers which purchase wholesale services.

2510 MR. WADDELL: When you consider that the size of one video podcast is equivalent to thousands of emails, you understand why audiovisual material is particularly vulnerable to traffic throttling. It is rather tempting for ISPs to slow down this bandwidth hog to clear the lanes for text-based data.

2511 Because video files are so large, people are turning to peer-to-peer applications to transfer it. These applications, such as BitTorrent, allow you to transfer huge amounts of data at low cost. As a result, legitimate copyright holders are also increasingly turning to this technology to distribute broadcasting content.

2512 BitTorrent is not just a way for kids to swap illegal bootlegs. It is now the standard for delivering large files over the Internet, having signed deals with legitimate distributors like 20th Century Fox, Comedy Central, Lionsgate, Paramount, Warner Brothers, numerous record labels and videogame producers.

2513 It is turning the traditional business model on its head. Even the CBC used BitTorrent to distribute Canada's "Next Great Prime Minister." Peer-to-peer applications are especially appealing to small independent audiovisual content producers. It gives them direct access to a worldwide audience at a minimal cost.

2514 The problem is ISPs often target traffic being distributed by peer-to-peer technology, blaming it for cluttering their pipes. In fact, the whole point of peer-to-peer distribution is to alleviate traffic congestion and ease the burden put on bandwidth from moving large video files.

2515 Let's be clear here: ACTRA is not endorsing illegal file-sharing, far from it. We need fair copyright laws that ensure that creators have control and are compensated for their work. And there need to be complaint-based mechanisms for rights holders who feel that their work is being shared without compensation. However, it is not the job of ISPs to determine the legality of material being transmitted through their networks.

2516 To be clear, illegal file-sharing hurts creators. Prejudicial treatment such as targeting and throttling peer-to-peer traffic also hurts creators of Canadian audiovisual content and consumers. It impedes creators' access to cheap, efficient distribution and limits Canadians' freedom to access legal content.

2517 We contend that traffic-shaping and throttling are generally incompatible with the Telecommunications Act.

2518 In our view, ISPs must invest in the necessary infrastructure and upgrade their network capabilities to ensure that they can handle the growing volume of activity, including all of the newest applications.

2519 Internet traffic is only going to increase. It is the ISPs' business to make the investments necessary to adapt to the expanding technology and requirements.

2520 As a short-term exception, the Commission may determine that it is necessary to give ISPs the power to manage traffic in order to avoid serious problems. We know ISPs are already using traffic management practices. The Commission must make it clear that this is not a long-term solution and regulate the practice only under the guidance of the following principles:

2521 (1) the onus should be on ISPs to prove they need to manage traffic in order to manage the integrity of the system;

2522 (2) ISPs must fully disclose what types of traffic management practices they are using and when;

2523 (3) there should be no discrimination as between wholesale and retail clients;

2524 (4) there should be no discrimination as between end users;

2525 (5) there should be no differential treatment between different applications or content;

2526 (6) and finally, the only exception to these principles would be the ability for ISPs to give preferential access to any emergency service authorized by public authorities.

2527 These principles will ensure that the power held by ISPs to control the flow of content through the Internet is not abused. And again, we urge that any traffic management be temporary. It is not the solution.

2528 Since we are greatly concerned about the throttling of large audiovisual files over the Internet, I would like to add a word about the Commission's authority over broadcasting over the Internet.

2529 As you heard ACTRA assert a few months back, we believe that since the Internet is just another platform for delivering broadcasting content, the CRTC is obligated to assert its jurisdiction over it.

2530 We are disappointed that the Commission chose to maintain the exemption orders for broadcasting in new media. However, we believe that monitoring the amount of broadcasting content being delivered by new media is an important step forward and we also support your decision to ask the Federal Court about the CRTC's jurisdiction over ISP and wireless service providers. ACTRA looks forward to participating in the process.

2531 MS DOWNEY: In conclusion, ACTRA asserts that traffic-throttling and traffic-shaping are incompatible with the Telecommunications Act.

2532 Discriminatory traffic-throttling diminishes the range of distribution options for Canadian performers and degrades the quality of the Internet as a content distribution platform.

2533 With illegal downloading increasing, Canadian artists must have unfettered access to the Internet to ensure we are on an equal footing to legally distribute and promote our work.

2534 We urge the CRTC to enshrine the principle of net neutrality and keep the Internet free from corporate interference by big service providers. The Commission must make it clear that traffic management practices should be a short-term solution to be used transparently under regulated controls.

2535 All Internet users must be treated equally, regardless of what content they are sending or receiving or whether the ISP is a big or small player. Equal access to the Internet is fundamental to the future not only of our broadcasting and telecommunication systems but our very health as a democratic country.

2536 I thank you for your attention today.

2537 THE CHAIRPERSON: Well, thank you for your presentation. I must say I am struck a little bit by what seems to me a very utopian approach that you take.

--- Laughter

2538 THE CHAIRPERSON: You say:

"We contend that traffic-shaping and throttling are generally incompatible with the Telecommunications Act. ISPs must invest in the necessary infrastructure and upgrade their network capacities to ensure they can handle the growing volume of activity, including all of the newest applications."

2539 Well, first of all, I would imagine they do that because it is in their commercial interest. If there are people who want to use the Internet, it will increase.

2540 But the fact is there is more usage than there are pipes. It is the same with the traffic system or anything else, and therefore, you have to regulate and you have to make decisions. You have to discriminate, obviously on a fair basis, you know, and in the end things that are time-sensitive will get priority over things that are not time-sensitive.

2541 So how can you come here to me and say there should be no throttling and no shaping and if there is an exception it can only be temporary? I mean that is not the world we live in.

2542 MR. WADDELL: That is the world we hope we lived in, Mr. Chair, and I think our point is similar to the point that the CFTPA has been raising and others, that there shouldn't be discriminatory practices, the preference of one type of content over another.

2543 THE CHAIRPERSON: I will come to that. Your basic outset is they should invest, they should build so that there is total capacity?

2544 MR. WADDELL: That is correct, yes. We believe that the ISPs who are making significant profits should be reinvesting in the system and upgrading the system.

2545 THE CHAIRPERSON: Do you have any evidence that they are not doing it, that they are not investing as much as they can as fast as they can? Surely, if I am a businessman, this is a growing business, there is a huge demand, et cetera, why would I not invest in order to accommodate these people and garner the income? I mean presumably they are doing the best with their capacity, but again, the growth is exponential and way beyond what anybody expected.

2546 MR. WADDELL: Yes. We accept that, Mr. Chair, and we hope that the ISPs will continue to build their capacity to ensure that the traffic will not have to be throttled or managed.

2547 THE CHAIRPERSON: Okay. We are not there. We clearly have more demand than capacity.

2548 Now, you say you don't want to see any discrimination and any self-dealing, et cetera. You are making some very strong hints that Bell owns part of CTVglobemedia, Rogers has its own broadcaster, et cetera. As you know, there is a specific provision in the Telecommunications Act, section 27(2), against discrimination and self-preference.

2549 Again, is this a suspicion or do you have any evidence that there is actual preferential treatment taking place?

2550 MR. WADDELL: Mr. Chairman, we have no evidence that there is actual discrimination taking place but there is always a concern and so we express that concern to you.

2551 THE CHAIRPERSON: Yes. But I mean, I don't quite understand. It's like we all have a concern against people behaving illegally and breaking the law. We have laws to prevent it but they will still do it, et cetera.

2552 So I mean, what more do you expect from us? We have set up a system, we have legislation, we enforce the legislation. If somebody is acting in a discriminatory or preferential way, we have the means to step in and we will. So here you raise this issue, this concern. What is the follow-up action that you expect us to take?

2553 MR. WADDELL: We don't expect anything specific, Mr. Chairman, just that the CRTC will continue to do the good job that it has been doing in regulating the ISPs.

2554 THE CHAIRPERSON: Okay. Now, like everybody else, you essentially suggest some sort of in cases where there is a necessity for traffic-shaping, and you posit it would be only a temporary one, but apart from that, it is basically the same test everybody suggests, you know, it has to be for the integrity of the system, it has to be limited, it should not discriminate, et cetera.

2555 But you also say there should be no differential treatment between different applications or content. Content, I understand. There is no problem. Obviously we have section 36 which allows us to authorize it and we ask people what should be the framework we should use to apply that, because clearly that is a very intrusive tool and hopefully it will never be used or it will be used for true emergency situations or whatever.

2556 But why do you say that there should be no differential treatment between applications? If there is an application that is particularly consumptive of capacity, et cetera, and it does interfere with time-sensitive applications, if there is traffic-shaping and you slow them all down regardless of who they are, where they come from, who owns them, what the content is, but you use that type of capacity, and Bell or Rogers, whoever, says, sorry, in order for our time-sensitive applications not to suffer, we are going to slow you all down by 10 percent or something, what is the objectionable part against that?

2557 MR. WADDELL: The objectionable part -- and we raise it in our submission and in our speaking notes -- is that there may be discrimination against peer-to-peer applications and the point we raise is, yes, there is quite a considerable amount of peer-to-peer file-sharing going on that is illegal, which we obviously oppose as rights holders, but on the other hand, there are legal peer-to-peer applications and there shouldn't be discrimination against a peer-to-peer application simply because it is a peer-to-peer application.

2558 THE CHAIRPERSON: Presumably it is not in the interest of the network to traffic shape unless they have to. I mean they would love all their users to have maximum use because that is a nice sales feature for them to attract customers, et cetera. When they do it, it is out of necessity because there is more contention than there is room.

2559 So they choose the bandwidth hogs, let's call them, and if they, without discrimination, slow them all down, just because you happen to be in the business of delivering content that comes in fat video files, you get caught like everybody else who is a bandwidth hog, I don't see why per se you can say that can't be done.

2560 Take peer-to-peer, whether it is legal or illegal, whether it is a small company or a large company, whoever uses it, if they are all -- because they are using too much, slow down the peer-to-peer, I don't see why, by definition, you say that can't be done.

2561 Obviously, we would have to examine it very carefully to make sure that there is no discrimination or differential effect or disguised discrimination, all of this, et cetera.

2562 But I am not quite sure why from the outset you can say you can't have any differentiation based on application.

2563 MR. WADDELL: We're hardened by your words and the point we're making is that there shouldn't be any preferential or discriminatory practices.

2564 THE CHAIRPERSON: Okay. So, that is obviously --

2565 MR. WADDELL: That's our main point. Thank you.

2566 THE CHAIRPERSON: In terms of your industry particularly and peer-to-peer, which seems to be -- is the Canadian industry, the Canadian players, your industry, are they heavier users on peer-to-peer than others?

2567 So is, in effect, what you're saying, if you're doing this discrimination against peer-to-peer, even if you do it even handedly without discrimination, not favouring anybody, the actual fact will be disproportionate because a large number of Canadian producers, Canadian distributors use P2P and, therefore, while it's perfectly neutrally applied, the effect will be it hits the Canadian film industry harder than anybody else?

2568 MR. WADDELL: The Canadian film television industry and recorded media, audio/visual industry uses peer-to-peer quite extensively and, you know, that's the product, the product is audio/visual content.

2569 So, if there is any form of differential treatment against peer-to-peer applications it will affect the Canadian film, recorded media, audio/visual recorded media industry harder than potentially other industries that don't use...

2570 THE CHAIRPERSON: So, it has an asymmetrical effect. Even if it is uniformly applied, the effect will be asymmetrical, you're saying.

2571 MR. WADDELL: Well, since the audio/visual industry uses it so extensively, that's correct.

2572 THE CHAIRPERSON: Audio/visual industry, or the Canadian audio/visual industry?

2573 MR. WADDELL: Sorry, Canadian audio/visual industry. I can only speak -- well, I can't -- I can speak to some extent about the U.S., but I'm here to speak about the Canadian industry, sir.

2574 THE CHAIRPERSON: Okay. Thank you.

2575 Those are my questions.

2576 Len, do you have any?

2577 Any one of my colleagues?

2578 I guess your presentation speaks for itself. Thank you very much. It was very clear, very straightforward what you're saying, so we don't have to --

2579 MR. WADDELL: Thank you, Mr. Chairman and Commissioners.

2580 LE PRÉSIDENT : Madame la Secrétaire, est-ce que MTS est ici? Est-ce qu'on peut continuer avec eux?

2581 LA SECRÉTAIRE : Oui, pas de problème.

2582 I would now invite MTS Allstream to come to the presentation table.

--- Pause

2583 THE CHAIRPERSON: Okay.

2584 THE SECRETARY: Appearing for MTS Allstream is Teresa Griffin-Muir.

2585 Please introduce your colleagues and you then have 15 minutes for your presentation.

PRESENTATION

2586 MS GRIFFIN-MUIR: Thank you.

2587 Good morning, Mr. Chairman, Commissioners.

2588 My name is Teresa Griffin-Muir. I am the Vice-President, Regulatory Affairs for MTS Allstream.

2589 With me on the panel today is, to my right, Kelvin Shepherd, MTS Allstream's President, Consumer Market Division. On my left is Paul Frizado, the company's Chief Information Technology Officer.

2590 MTS Allstream believes the Commission should set aside the more extreme positions that have been taken by some parties to this proceeding in favour of a reasoned and principled view of network management.

2591 To that end, I will start today's presentation by setting out three overarching principles that we believe are applicable here.

2592 Paul will then review our functional categorization of traffic and give our views of some of the more specific network management practices and technologies that have been suggested to deal with congestion issues, and Kelvin will outline our approach to assessing the legitimacy of traffic management measures under the Telecommunications Act and address the issues of notification and consent of end customers.

2593 Let me begin with the three principles.

2594 The first principle, which may sound obvious but which we believe is absolutely core to this proceeding, is that competition in the market should be promoted because it has a direct impact on the need for regulation of traffic management measures.

2595 Put another way, the more retail competition there is in the market, the less regulation is needed to enforce net neutrality.

2596 In the United Kingdom where there is vibrant retail communication competition for high-speed broadband, customers have a genuine choice of providers.

2597 We believe this retail competition is a direct result of the wholesale access framework in the U.K. which gives competitors access to wholesale access services on the same cost-effective terms and conditions as the incumbent's retail operations.

2598 Because of this framework each ISP can decide how best to manage its own high-speed broadband service and customers can choose the provider who's traffic management practices are acceptable to them.

2599 The second principle, which follows from the first, is that no traffic management measures other than normal network planning and engineering practices affecting the network as a whole should ever be imposed by a dominant carrier on a wholesale access customer.

2600 Wholesale access customers should be able to control and manage traffic, including Internet traffic, to their own retail customers free of interference or control by a dominant carrier, subject only to the limits imposed by the Commission.

2601 Based on this principle, any traffic management measures discussed in this proceeding beyond ordinary management of whole network should apply only in the retail context.

2602 Our third principle is that the Commission should take a pragmatic, case-by-case approach to assessing whether a particular traffic management measure is justified.

2603 As Paul will explain, we don't believe it serves anyone to either endorse or demonize any particular technology.

2604 The question is, what you do with that technology and, more practically, whether that use breaches sections 27 and 36 of the Act.

2605 We have developed certain criteria to guide the Commission's approach when these provisions come into play. Kelvin will talk about this in a little more detail.

2606 The net neutrality debate is vitally connected to many other proceedings that have been held, or are underway, so it is important to consider how they all affect each other and the regulatory environment.

2607 A number of proceedings in the last few years have dealt with wholesale ADSL and ethernet services that are crucial to the provision of high-speed broadband.

2608 Following the Essential Services proceeding, applications have been made by several parties to argue for more efficient and effective wholesale access to these services.

2609 Unbundling ADSL access and transport or revising the structure of the aggregated ADSL tariffs, ensuring that competitors can provide the same speeds as the dominant providers and providing cost-effective access to wholesale facilities are all fundamental to a robust wholesale access regime that will provide competition in the market.

2610 And all of these proceedings are relevant to the principle that competitors using wholesale access services should be able to manage their traffic in whatever way they think best.

2611 MR. FIZADO: The Commission has asked a number of questions about how ISPs should deal with congestion in networks. Regardless of whether one takes the attitude that traffic growth will outstrip forecasts or adopts a more measured approach that sees traffic as plateauing over the next several years, the best approach to network management does not change in our view.

2612 The first and most fundamental technical measure that ISPs can use to manage traffic is standard network planning and engineering practices.

2613 This means, simply put, that each provider must ensure they have sufficient network capacity to meet existing and expected traffic volumes.

2614 At MTS Allstream we routinely measure and monitor our band width utilization levels to flag any capacity upgrade requirements and identify pending congestion problems in our network.

2615 We do this not just for Internet traffic, but to manage all the traffic on our network, including voice, wireless and non-Internet data like frame relay and MPLS.

2616 To date our network planning and engineering practices have been sufficient to limit network congestion and ensure an acceptable level of service to end users.

2617 In our submission in this proceeding MTS Allstream divided traffic management measures into four functional categories.

2618 The first three are: true network planning and engineering, including dealing with threats to the security and integrity of the network; compliance with laws of general application. like criminal or copyright law; or measures that are agnostic in their treatment of content, application or protocol, like usage caps, overage fees and peak period billing.

2619 But there is a fourth category, it is here that we have a debate about when and whether supplemental traffic management measures are necessary in the retail context.

2620 The fourth category deals with traffic prioritization, degradation and blocking of what we call CAP, content application protocol.

2621 CAP-based measures can include, for example, measures based on the latency of a given application or blocking, or expediting certain kinds of content based on its source or destination.

2622 Throttling of peer-to-peer applications. for example, is a CAP-based measure.

2623 CAP-based measures rely on technologies like deep packet and inspection. In our view, the debate around use of this particular technology has become a little over heated.

2624 Let's be clear, there is nothing magical about DPI per se, nor is there anything particularly invidious about it. DPI allows traffic associated with specific applications to be identified, but it is just one tool that can be used as part of a larger network management strategy.

2625 This is recognized by Bell and Rogers who note that it is not just DPI, but the combination of approaches they employ, including capacity provisioning and other technical and economic measures that allow them to effectively address network congestion issues.

2626 We should also recognize that technology continues to develop from all sides, including efforts to improve the efficiency of peer-to-peer file transfers and new traffic management technologies to address congestion.

2627 Accordingly, we believe it would be a mistake to attempt to regulate any particular technology. Rather, to the extent regulation is required, it should be focused on outcomes.

2628 At the wholesale access level, as Teresa has already made clear, we do not believe that dominant carriers should be allowed to impose their own traffic management measures on their customers -- on their competitors.

2629 The argument that Bell has made to the effect that it cannot separate its own retail from wholesale access traffic is a red herring. Bell has a diagram in its submission showing the architecture of its gateway access service network and the location of its DPI equipment.

2630 This diagram shows that traffic shaping is occurring at a point where Bell can identify whether the traffic is being originated by one of its own retail Internet customers or by the end customer of a competitor using Bell's gas service.

2631 This issue is being explicitly addressed in another proceeding underway right now.

2632 For the purpose of this proceeding, however, our view is straight forward. Dominant carriers can and should be required to manage their own retail Internet traffic separately from that of their wholesale access customers.

2633 MR. SHEPHERD: The real question is how any particular traffic management practice or technology is being used.

2634 How should the Commission determine when a particular measure is legitimate or not? What is the impact of a given traffic management practice on retail customers and when should they be given either notice or the opportunity to consent?

2635 The legitimacy of a measure will depend on its compliance with the Act. In particular, the Commission must look at whether the measure is unjustly discriminatory or unduly preferential under section 27(2).

2636 In respect of section 36 of the Act, which calls for the Commission's approval before carriers can control the content, or influence the meaning or purpose of telecommunications, the Commission has to look at, first, whether its approval is necessary; and, second, whether to grant that approval.

2637 MTS Allstream has set out suggested criteria in its submissions to guide the Commission's approach to these issues. I won't go through them in detail here, but they are appended to this oral presentation for your reference. Many of them deal with an assessment of the proportionality and appropriateness of the measure in light of what it's trying to achieve.

2638 Our criteria also includes looking at the degree to which the measure reflects customer control over his or her user experience, including whether it might be offered as an optional service feature.

2639 Most importantly, the criteria require the Commission to take into account the degree of competition in the market for the affected retail Internet services, content, or applications.

2640 We also believe these criteria should apply to wireless carriers. In fact, they may be even more important in the wireless context, given the nature of wireless technology.

2641 As Paul has noted, we don't believe it makes any sense to target anyone particular technology. But we do believe that the Commission should establish that whenever a dominant carrier's wholesale access offering dictates the quality, features, pricing, or other characteristics of a competitor's retail service, this should be considered as unjustly discriminatory because it violates the principle that competitors should have the same flexibility to serve their customers as the wholesale provider.

2642 Aside from this principle, we think the Commission should adopt a case-by-case approach where questions are raised about an ISP's compliance with the Act with respect to retail traffic management measures.

2643 Not every situation where traffic is prioritized on its source or destination will be problematic. In some cases, such as anti-spam measures, there is a general consensus that filtering is desirable. In other cases, for example exclusive sponsored content arrangements, the reasonableness of such measures might be judged by assessing whether such arrangements are offered on equal terms by the ISP to all content or application providers, the competitiveness of the market for that application and the general competitiveness of the market for Internet access.

2644 Similarly, where customers themselves request the blocking or prioritization of certain types of applications, we don't see this as contravening the Act. These kinds of requests can be made available in the form of an optional feature of Internet access service. This allows end customers more control over their service without causing harm to third party content or application providers.

2645 We do believe that timely disclosure of traffic management measures should be made to retail customers in the case of measures that fall under our categories 3 and 4.

2646 Customer notification can be carried out in a variety of ways: through billing inserts, on websites or in Terms of Use agreements. We also believe that end customers should be given the opportunity to provide their informed consent to any traffic management practices that could affect the collection, use or disclosure of their personal information.

2647 The solution to net neutrality is unlikely to lie in the application or regulation of specific traffic management technologies. Rather, the solution is a marketplace where there is enough retail competition to give end users a genuine choice of services and service providers.

2648 This is why we continue to come back to the importance of a wholesale access framework that allows competitive providers to create differentiated retail service offerings, including Internet services. We believe that a healthy competitive environment would mitigate many of the concerns around net neutrality and bring significant benefits to Canadian consumers.

2649 Thank you.

2650 We'd be pleased to take any questions you may have.

2651 THE CHAIRPERSON: Thank you.

2652 Explain to me your fundamental contention that any traffic shaping should only apply in the retail context? I don't quite understand that.

2653 If you don't apply it in the wholesale context, won't you get congestion because some of your -- the people to whom you sell the wholesale are serving customers which cause an undue demand and, therefore, there will be congestion in the network?

2654 How can you do it only at the retail level? I just don't -- sorry, I haven't wrapped my head around it, so explain to me how you see this working.

2655 MR. FIZADO: Let me just answer the first question. The traffic itself from a wholesale access, because that is the service that's sold, is actually segregated and provided to the competitor and that's part of that gas service.

2656 So, there is a segregation because that traffic does flow to the competitor --

2657 THE CHAIRPERSON: That is limited. That is limited. Whatever you're providing, let's say you're Bell and you're providing it to some independent ISP, so gas, that is restricted to a certain capacity, that purchase of the gas cannot exceed that; is that what you're saying?

2658 MR. FIZADO: No, the gas service itself will have a speed.

2659 THE CHAIRPERSON: Yes.

2660 MR. FIZADO: And it is actually decoupled from the network, it doesn't actually touch the Internet and it's handed over to the competitor or the purchaser of that wholesale access service.

2661 And that service shouldn't be, you know, throttled as the retail service because that service itself can be used for more than just Internet and it is used for more than just Internet.

2662 THE CHAIRPERSON: I see. So, basically at the moment it gets sold, in my example Bell, Bell sells it to some independent ISP, it's out of Bell's network, so it doesn't affect it anyone, is what you're saying?

2663 MR. FIZADO: Correct. So, wholesale access is the access, it's not Internet service.

2664 THE CHAIRPERSON: And this is technologically capable, as you say here in your submission:

"It's doable. Bell's diagram shows that they have a DPI at all the key points and, therefore, they can identify..." (As read)

2665 THE CHAIRPERSON: And that's also economically feasible to do right now?

2666 MR. FIZADO: Correct. Actually this gas service has been offered for many years, prior to DPI actually showing up, so the capability of segregating it has always been there.

2667 Bell has chosen to now flow them all through DPI equipment, for whatever choice they made, but it's not required.

2668 THE CHAIRPERSON: Are there economic considerations that drives this choice of Bell?

2669 MR. FIZADO: I couldn't say specifically why Bell would do that.

2670 MS GRIFFIN-MUIR: But we actually have the same service as Bell --

2671 THE CHAIRPERSON: Of course, right.

2672 MS GRIFFIN-MUIR: -- in Manitoba. So, we don't -- our service -- the structure of our tariff and our services in -- while we don't have DPI anyway, but Bell, it looks identical to our network and what the ISP does is actually buy a certain amount of capacity.

2673 THE CHAIRPERSON: Right.

2674 MS GRIFFIN-MUIR: So, once they've bought that capacity, they're not buying Internet access in the same way that the retail customer is buying Internet access.

2675 THE CHAIRPERSON: And you then say, whoever purchases -- so that's why your logical corollary is it should only be at the retail level. The ISP purchases that access and let's them decide how they serve their customers and if they have congestion problems they deal with it, they obviously should be dealing with it on a neutral and non-discriminatory way, but it's really their problem, it's no longer Bell's problem?

2676 MS GRIFFIN-MUIR: That's correct, yes.

2677 If you look at it, let's say, the way you would look at long distance, when that first became open to competition and CallNet introduced, which everybody knows, their flat-rate calling, they were leasing the capacity from Bell, but it was the capacity for them to provide their end customer a service, and because there was an overflow of capacity, CallNet had to lease more capacity.

2678 Bell didn't actually have to throttle their network, it was CallNet's problems.

2679 THE CHAIRPERSON: Okay. Thank you.

2680 Suzanne, do you have some questions?

2681 COMMISSIONER LAMARRE: Thank you, Mr. Chair.

2682 I will come back to that issue, also, but first I want to talk about retail. I would like a little bit of clarification with your categories, and I am glad that you appended a copy of the table, because I can put back what was in my briefing book.

2683 If we talk about Category 1 -- actually, all of the categories -- you are using a qualification. Some of them you call non-transparent versus transparent.

2684 I am assuming that what you mean here is that, when it is non-transparent, those are techniques that you do not divulge or discuss with your customers. It's something that you deal with in-house, and you feel that the customers or the end users do not have to know about that.

2685 MR. SHEPHERD: Yes. For example, Category 2, which we have described as non-transparent, clearly, if we were required through a legitimate law enforcement order to provide information, to be effective, that would have to be non-transparent and not disclosed to the individual it is affecting.

2686 That is an example of a non-transparent measure.

2687 COMMISSIONER LAMARRE: Okay. I just wanted to make sure that I got the distinction right.

2688 Now, within Category 1, you are talking about true network provision and engineering practices.

2689 Are you referring to infrastructure deployment, or the upgrading of -- be it hardware or software of that infrastructure?

2690 Is that the only thing you are referring to?

2691 MR. FRIZADO: Yes, in the oral presentation -- it's really about managing capacity and expanding the network to deal with that increased capacity, as well as the forecasted capacity.

2692 COMMISSIONER LAMARRE: Okay, but it's through the deployment of infrastructure.

2693 MR. FRIZADO: Correct.

2694 MR. SHEPHERD: The one exception to that is that there are some types of what might be called filtering, or intervention, such as, for example, antivirus, or measures taken to prevent denial of service attacks.

2695 We view those as legitimate Category 1 security measures, but they clearly do affect particular types of traffic or particular streams of traffic. We think, given that they are implemented to really protect the integrity of the network, they really fall as a Category 1 function.

2696 COMMISSIONER LAMARRE: Using those techniques to provide for the security of your network, doesn't that raise the issue that you may be, in fact, infringing on the privacy of your users by doing that in a certain way, shape or form?

2697 MR. SHEPHERD: We don't believe so, as long as they are clearly focused and limited to that purpose.

2698 For example, a threat that most networks have to protect themselves against is a denial of service attack. This could be a mass attack on a particular network switch or router that is launched, in some cases, by thousands of end users whose computers have been taken over by viruses.

2699 There are techniques to deal with those denial of service attacks. They generally include, specifically, filtering, restricting, or otherwise affecting the traffic coming from those source IP addresses.

2700 In and of itself, to protect against a legitimate security threat like that, we think that is a Category 1 function and is not the type of traffic management function that should be subject to some of the requirements that we would think, say, a Category 4 cap-based measure would be applied to.

2701 COMMISSIONER LAMARRE: But how do you make that distinction?

2702 MR. SHEPHERD: I think we make the distinction by, first of all, the purpose for which it is being applied, so it is being provided to protect integrity or security versus simply to address a capacity issue.

2703 That would be one way that you would distinguish between them.

2704 COMMISSIONER LAMARRE: Okay. In your reply -- and I will refer directly to your reply -- in paragraph 4 you address the fact that, while parties have insisted that Category 1 -- what you define as Category 1 techniques -- network deployment should be the preferred technique to manage internet traffic.

2705 And you are of the opinion that it is not the only type of measure, and it's difficult not to agree.

2706 That being said, would you otherwise agree or disagree that before resorting to other types of management techniques, it should be demonstrated that those Category 1 techniques have been applied with due diligence before you get to techniques that actually do manage traffic otherwise?

2707 MR. SHEPHERD: I would say, not in every situation.

2708 For example, the Category 3 measures that we have talked about -- for example, limiting the speed or bandwidth of individual customer services -- is typically a way that different service levels are offered for different prices in the marketplace.

2709 Clearly, those measures tend to be more related to how an ISP might develop a service, might cost and price it in the market, and might offer it to differentiate itself in terms of its retail offerings.

2710 I think, largely speaking, we think that Category 3 measures are legitimate measures that can be applied, and are being used today. The most obvious one that I could offer is that many ISPs offer different levels of bandwidth speeds. You have a light speed offering, you have a medium speed, and maybe an ultra speed offering. Those are typically implemented through measures that would fall into Category 3.

2711 To the extent that you have defined your services around that, then you clearly need to, as a first step, take Category 1 measures to provide the required capacity to support those services and service levels that you have offered in the marketplace.

2712 I think, generally speaking, we would say that you would start with Category 1. Where some Category 4 measures do come into play, though, is that they have the opportunity to increase the efficiency, the effectiveness and the quality of service being provided to customers. So Category 4 measures could be implemented, I think, quite legitimately to improve the utilization and the effectiveness of the network, as well as to actually ensure that acceptable levels of performance are provided to end users.

2713 I don't think the answer is always to apply Category 1 techniques, because I think that Category 4 techniques could actually play a part in ensuring that the service levels and offerings work more effectively for end users.

2714 COMMISSIONER LAMARRE: But going back to the first part of your answer, I think it's a fair answer that Category 1, combined with, let's say, retail pricing, marketing techniques -- they definitely go together. That is how you will manage to deploy your network in an orderly and financially responsible fashion.

2715 But if you do that, do you really need, then, to go to the prioritization of either the application or the type of traffic?

2716 MR. SHEPHERD: I think there are situations where it certainly not only makes economic sense to do that, but it may actually be required to ensure that reasonable performance and quality of service are offered.

2717 For example, it is not always possible to anticipate traffic surges on a network. A practical example, which I just had an e-mail about today, was the Michael Jackson funeral yesterday.

2718 COMMISSIONER LAMARRE: I was going to ask about that.

2719 MR. SHEPHERD: That caused a significant increase in traffic on our internet backbone.

2720 COMMISSIONER LAMARRE: Did it crash?

2721 MR. SHEPHERD: No, it did not crash, thanks to Mr. Frizado's engineers. I think they have me covered.

2722 However, if you get an event like that, which may exceed what you would have reasonably forecasted or engineered the network for, clearly, traffic management does play a role in helping you manage those types of events.

2723 Now, if that traffic was going to happen every Tuesday at two o'clock, then you would have to apply Category 1 techniques, I think, to address the long-term issue.

2724 Clearly, we know that in all types of networks -- in voice networks, for example, if you have mass calling events, it is quite common to apply network controls to manage those and prevent the network from crashing.

2725 I think, in an IP network, certain types of traffic management are probably quite expected and required to deal with those types of events.

2726 So I think there are situations where Category 4 measures make sense, and can be applied for legitimate network management reasons, and actually help to supplement Category 1 measures.

2727 COMMISSIONER LAMARRE: Okay. On a different subject, I must admit that I am struggling with a concept that you put forward, and maybe it is because I am not clear about the semantics, so maybe you can set me straight.

2728 When talking about determining whether or not a technique that is being used may be infringing on section 27(2) of the Act, and in trying to come to the conclusion of whether or not the discrimination is just or not, in your submission and also in your reply you mention that the consent from the user is an element that could help the Commission determine whether or not the measure is just.

2729 I have a problem mixing the two. To me, consenting is one thing. Being an informed consumer is one thing, but whether or not the consumer has been informed, and has even consented to an unreasonable or an unjust measure, that won't make it just.

2730 I don't understand why you are mixing the two.

2731 MS GRIFFIN-MUIR: I guess it's on the flip of that. Once you are transparent, once the customer has knowledge of what is happening and still decides to purchase your service, as opposed to another ISP service that doesn't do that, arguably, it is not unreasonable or unjust.

2732 COMMISSIONER LAMARRE: Okay, point taken. But that would work if the state of competition was such that it was easy to switch providers at the flick of a switch, if you will pardon the expression.

2733 If one day MTS Allstream sends me a notification about a technique that I feel is unreasonable, and I can just, with a phone call, terminate the contract that I had signed previously for three years and I am only six months into it, and go to another provider, it is --

2734 MS GRIFFIN-MUIR: I take your point, if you are saying that you are under a contract, and, frankly, if there is not enough retail competition, it makes a big difference. That's why we advocate for a more robust wholesale regime, because those choices are there.

2735 Definitely, the degree of retail competition, whether you are under a contract or not -- if you are not under a contract, which is pretty typical actually, you can change, and that would be a factor to be considered.

2736 You are correct, you could agree with me because you feel you have no choice. MTS Allstream is giving you your internet service, and now we are telling you that we are going to do A, B, C, and you have no choice. Obviously, that is a different analysis than if you do have a choice.

2737 COMMISSIONER LAMARRE: My concern is that, by doing so, by actually considering the consent that you may get about a specific measure from the customer, it may be introducing a subjective factor into a test where we would try to be as objective as we can.

2738 If you get consent from half of your customers and you don't get consent from the other half, what does that tell us?

2739 MS GRIFFIN-MUIR: Right. You would have to consider those things.

2740 I guess the way we would have looked at it was really in the context of what we might be doing to content or -- the discrimination question, in particular.

2741 We looked at the application of CAP, or those kinds of measures, which, to a retail customer, would be generally acceptable, if they are transparent, and if the customer knows, and if there is sufficient competition.

2742 Having a lot of choice for retail customers eliminates the need to examine each and every measure that particular ISPs take.

2743 But, definitely, if someone brought forward a complaint and you were looking at whether or not it was appropriate, consent would only be one factor. Obviously the degree of choice would be another factor.

2744 COMMISSIONER LAMARRE: Do you think, within that test, also, and considering the consent, that there should be some issues over which an ISP should not even be allowed to ask whether a customer would consent?

2745 I am basically thinking about privacy issues.

2746 Can you actually give consent to private information being disclosed in an inappropriate manner, and then be able to argue that the consent was actually a free consent?

2747 MS GRIFFIN-MUIR: Certainly there is legislation around privacy, and we would obviously have to be compliant with that legislation.

2748 I am not sure -- if I asked the customer, "Can I use some of your information as part of my marketing database," and they consented, that is explicit consent. I don't see a problem with that.

2749 I just can't picture your example, actually.

2750 COMMISSIONER LAMARRE: Okay. You are making a good distinction here that reassures me. You are talking about explicit consent to the situation where you would actually share information.

2751 On a different topic, you referred to -- and we are going back, maybe, a little bit to the wholesale issue here.

2752 You used the expression "dominant supplier" to talk about Bell or Rogers, or whoever, in your submission. From my point of view, dominant is relative to something else.

2753 If I looked at Manitoba, for example, my reaction would be to say that MTS is the dominant player there.

2754 When you are actually talking about putting in place a set of rules that may be different for wholesale than for retail, am I to assume that when you are on the dominant side of the coin you would agree to act accordingly with respect to the rules that you are promoting today?

2755 MS GRIFFIN-MUIR: Oh, absolutely.

2756 MR. SHEPHERD: Maybe I will add, Teresa, in spite of some chagrin occasionally, in terms of the conflict you have between the retail business and the wholesale business, yes, that's our view, that the wholesale service that is offered should not be subject to traffic management measures beyond the Category 1 measures, and I guess, to some extent, potentially, Category 2, if, as the wholesale provider, you were required to implement those.

2757 Typically, Category 2 measures are required of the retail provider, but there could be situations as a wholesale provider in which you would have to implement Category 2.

2758 But we think, really, yes, with a wholesale offering, which typically includes commitments of bandwidth and capacity, that the wholesale provider should meet those and not implement additional traffic measurement that interferes with that.

2759 COMMISSIONER LAMARRE: If I may go back to the discussion you had earlier with the Chairman about the distinction you wish to make between rules for wholesale and retail, if I understand properly your answers, what you are saying is, the wholesale part of the system is actually the equivalent of a priority lane on the highway of the provider.

2760 MR. SHEPHERD: I wouldn't call it a priority lane, because priority implies that there is some kind of prioritization being given.

2761 COMMISSIONER LAMARRE: Okay, a reserved lane.

2762 MR. SHEPHERD: It is a virtual private network, essentially. It is allocated specifically to that provider and receives the level of performance that has been promised.

2763 COMMISSIONER LAMARRE: You also state in paragraph 80 of your reply that Category 2, 3 or 4 techniques have no place in wholesale.

2764 I have difficulty with that statement as far as Category 2 is concerned, specifically. If a wholesale provider is being asked by law, by a court, to actually apply such measures to one of its wholesale clients, wouldn't you agree that they would have to do so?

2765 MR. SHEPHERD: I think, as I qualified in my earlier answer, there could be situations in which Category 2 could apply to a wholesale provider.

2766 I think, generally speaking, those measures, first, are taken to the retail provider, since they have the customer information -- the end customer information that is required, but there could be situations, as you suggest, for example, that would require the wholesale provider to act in compliance with a lawful request.

2767 COMMISSIONER LAMARRE: Finally, on wireless -- and I don't know if you were in the room this morning when I raised this question with another party.

2768 You are making, even in your submission and your presentation, the point that whatever rules are applied should be applied to both wireless and wire.

2769 But when we talk about infrastructure deployment, wouldn't you agree that there are additional difficulties with wireless access to the internet?

2770 MR. SHEPHERD: I think the reason we say that the rules should be applied in a consistent manner is that we believe, as I have said, that there is a place for Category 4 measures, which seem to be the most contentious ones.

2771 In fact, because of, as you said, the -- I would call it the more limited resource on the access piece, and the fact that it is shared in a different way in a wireless network among traffic and users, there may be a requirement for greater use of Category 4-type measures in a wireless network, to ensure adequate performance.

2772 COMMISSIONER LAMARRE: Okay. Those are my questions. Thank you.

2773 THE CHAIRPERSON: Thank you.

2774 Len...

2775 COMMISSIONER KATZ: Thank you, Mr. Chairman.

2776 Good afternoon. I have a couple of questions.

2777 Let me start by picking up on Commissioner Lamarre's comments, and your response, on the issue of a dominant carrier.

2778 I am going to take the reverse side of this thing and argue that, in the Province of Ontario, there is no dominant carrier. Bell and Rogers both have services out there, and there is no dominant player.

2779 Are you suggesting, as part of your principle, that there doesn't need to be any traffic management controls put in place?

2780 MS GRIFFIN-MUIR: "Dominant" comes in the context of wholesale, and what you are talking about is the retail market.

2781 COMMISSIONER KATZ: No, both markets, the retail and the wholesale market.

2782 There is TPIA and there is DSL.

2783 MS GRIFFIN-MUIR: Okay. What you are saying is, they are both available, and they both want to sell them on a non-discriminatory basis, and once the competitor purchases the service, the capacity they purchased will not be subject to traffic management.

2784 Yes, I think it would still apply.

2785 COMMISSIONER KATZ: Therefore, the word "dominant" in here is not appropriate in --

2786 MS GRIFFIN-MUIR: It's a question of interpretation. I don't necessarily agree with your interpretation, especially if I take it into the business market, where, really, TPIA is not useful anyway.

2787 COMMISSIONER KATZ: But you are saying, in a hypothetical situation where there is no dominant player.

2788 MS. GRIFFIN-MUIR: Well, there is really -- I think it's a hypothetical situation where there is actually competing wholesale. We would say, no, it's still up to the wholesale -- the customer buying the wholesale service to decide whether or not they manage that traffic and how they manage that traffic. It's not up to the carrier they're purchasing from.

2789 The reason for that would be if you want to have choice in the retail market and not have to overly regulate what types of category form measures you can put in place, you need to give the customer choice. So, the more choice the customer has, the less need there would be for regulation of traffic management measures in retail.

2790 COMMISSIONER KATZ: I don't disagree with what you are saying.

2791 MS. GRIFFIN-MUIR: Okay.

2792 COMMISSIONER KATZ: But I'm just presenting numbers with the word "dominant" in here and I think if the word was out, your arguments would be the same.

2793 MS. GRIFFIN-MUIR: Would be the same, yes.

2794 COMMISSIONER KATZ: And I want to know whether that's true or not or whether you purposely picked the word "dominant" in there to draw a distinction?

2795 MS. GRIFFIN-MUIR: No. We would say it's true.

2796 COMMISSIONER KATZ: Okay. On that same page, on page 2, you use the U.K. as a model or as an example: "Anyway, the vibrant retail competitive market where customers have genuine choice of providers".

2797 Can you tell us whether there are traffic management practices that are instituted by British Telecom since they are the dominant and only player for facility there? And if they do have them, are they on a retail and wholesale basis or not?

2798 MS. GRIFFIN-MUIR: They're on a retail basis. There is issues from the retail perspective, not in terms of having a proceeding like this or having -- I think what initiated this proceeding was actually the CAPE application where we were actually talking wholesale.

2799 There are differences of opinion as to whether or not there should be retail measures and some of the retail service providers.

2800 COMMISSIONER KATZ: But all the competition in the U.K., is the resale level. They're all alternate providers buying facilities from B.T.?

2801 MS. GRIFFIN-MUIR: From, yes, that's right, yes.

2802 COMMISSIONER KATZ: Does B.T. engage in traffic management practices at the wholesale level for their customers?

2803 MS. GRIFFIN-MUIR: No, no, no.

2804 COMMISSIONER KATZ: Okay. You mentioned, and I think it was Mr. Shepherd, you said in a conversation earlier and I just wrote down the last of a group of words: "receives level of performance that has been promised" and it was in context of quality of service, I guess.

2805 And I guess I asked the question at the wholesale level, the GAS tariff, and then I don't remember it. Is there a costing element in the cost for GAS services that have the component dealing with providing a guaranteed level of service?

2806 MR. SHEPHERD: I believe the costing element -- first of all, it's an access service and so, I mean by definition that means that it's a connection to an end-customer that's aggregated and then brought out on some kind of common aggregation point.

2807 So, the characteristics of that are a commitment to a certain amount of bandwidth to each customer and then, an aggregation of that. So, there is implicit in the service level definition, if you want to call it that, a capacity commitment that the wholesale customer is paying for.

2808 COMMISSIONER KATZ: So, when you use the term "has been promised", there is an obligation in the tariff to meet that?

2809 MR. SHEPHERD: Our view is that there is a commitment or a promise if you want to call it that that's made in the service description for the service to deliver a certain amount of capacity and throughput.

2810 You know, back to the question of could the wholesale or could the competitor still experience congestion if, for example, they didn't buy enough capacity, wholesale capacity, or their customers all used too much capacity simultaneously? Absolutely, but then that would be an issue with the competitor service, not the wholesale provider.

2811 But to the extent where the wholesale provider then taps in and restricts or applies traffic management over and above to restrict the realization of capacity, that's where the issue arises.

2812 COMMISSIONER KATZ: I mean, I draw the distinction from the perspective of enterprise services where they are managing network and there is guaranteed levels of service and they pay for it as well.

2813 And the question that I am trying to get around here is: at the retail level, there is no guarantee quality of service to my understanding. It's and up to or a level of speed that is commentary with the marketing that clout there as well.

2814 When you get to the wholesale level, the question is: is there something different that's committed to by the carrier, dominant or otherwise, or not?

2815 MR. SHEPHERD: Yes. My understanding is that the wholesale service, because of the nature of it and how it's structured, has a commitment to a certain amount of capacity throughput.

2816 COMMISSIONER KATZ: Okay. And that we have found in the tariffs or whatever, of the agreements?

2817 MR. SHEPHERD: Paul, do you want to comment?

2818 MR. FRIZADO: I believe so and I think what -- the distinction here, and I want to make sure it's clear, is the wholesale access service is not an internet service.

2819 COMMISSIONER KATZ: I understand that. But I am just falling back on the comment about the word "promise" and to me promise is one thing, cost element and recovery is what makes that promise concrete. So, maybe you can file something as part of the final submission as to where you get that notion that there was a guarantee commitment at the end of the day?

2820 MS. GRIFFIN-MUIR: Okay. I just want to be clear though. Is your question whether or not you would factor in the capacity, the demand?

2821 COMMISSIONER KATZ: But what I want to know is whether in fact at the wholesale level, there is a commitment for a guarantee throughput and level of service as part of the tariff and the costs that are being charged by ILEX in general to ISPs?

2822 MS. GRIFFIN-MUIR: Okay. So, you understand GAS is a best effort, like it's reversible service. So, in that context, what's the commitment?

2823 COMMISSIONER KATZ: That's not reversible. Their minimum commitment is their guarantee of any sort at all and what is it?

2824 MS. GRIFFIN-MUIR: Okay, sure.

2825 COMMISSIONER KATZ: Okay. Last question and it goes on to page 8 of your comments this morning and you mentioned that as part of your case-by-case analysis, there might be situations where exclusive sponsor content arrangements might be reasonable.

2826 And I guess the word "exclusive" strikes me as odd because exclusive means at the exclusion of others and if it's content that's going over the internet and someone is entering into an exclusive arrangement, then it's no longer making the internet as open to other as if it's exclusive to one party.

2827 And I'm just trying to understand what you meant by that and maybe as to what you meant, I don't know.

2828 MR. SHEPHERD: So, this is a bit of a hypothetical to begin with, and let me make it clear. We don't have any current arrangements of this or even have any plans to enter into such arrangements. But, there is obviously, and let's take a topic that's of, I think, interest out there and that's over the top video services and increasingly you have content providers that are entering into arrangements to distribute content over the internet directly to end-users.

2829 Some of those content providers conceivably might be interested in having, for example, a higher level of service by paying for, say, quality of service measures to be applied to their traffic, through certain parts of the network.

2830 That would perhaps be an example of an exclusive sponsored arrangement that a content provider and a carrier might enter into, that's certainly --

2831 COMMISSIONER KATZ: But whether it's a higher level of service on the one hand or they are throttling on the other, the key is the same thing. It's a two tared system.

2832 MR. SHEPHERD: Well, I think there is some difference if you throttle everybody else at the expense of somebody versus you simply make available a higher level of service through applying some quality of service measures.

2833 But to your point, Mr. Commissioner, these arrangements are more problematic and as I've said, we don't -- We believe you would have to look carefully at those, if it's exclusive clearly there is potentially a discriminatory element that could be seen or may in fact exist.

2834 So, that would be certainly one thing to look at and that's why we are suggesting that you would have to assess whether the arrangement is being offered generally to all application providers or whether it's made available to them, whether they all want to take it or not is another issue, but whether it's made available, whether the competitiveness in the market, whether other content or application providers have entered into similar arrangements with other providers and the general competitiveness in the market for internet access.

2835 So, to the extent that end-customers have the choice and can choose different service providers based upon the level of performance or types of services they want to achieve.

2836 So, certainly, you know, this is an emerging area. I don't think it's generally something that has been implemented in the market, but it certainly is, as you see more and more, very high bandwidths and tens of applications being offered, the people offering those applications have interest, I think, in working with carriers to ensure that their applications are delivered and, in some cases, that might require a level of performance and capacity more than what is generally available.

2837 COMMISSIONER KATZ: Thank you. Those are my questions.

2838 THE PRESIDENT: Candice?

2839 COMMISSIONER MOLNAR: Thank you. Let me say I always look forward to MTS's perspectives because they are a strange blend of incumbent and wholesalers, so --

2840 I would like to begin by just having your perspective on the objective that we have for this proceeding and actually not the objectives so much as the definition where we have defined internet traffic to exclude traffic that is not part of the managed network or, you know, in a wild garden sort of application, such as IPTV or managed IP applications.

2841 Do you agree with that definition and I ask the question because if you've listened to the proceeding, we have had people before us who suggest that all traffic carried on the broadband network should be the subject of this proceeding?

2842 MR. SHEPHERD: I would say we would agree with your definition that if you think about network, a network or networks, generally there are many different types of traffic that can be carried on a single infrastructure.

2843 The fact that we virtualize that infrastructure to, for example, carry an internet service and through the same equipment we may be carrying an IPTV service or a voice service or some other type of offering, I don't think we would agree that all of the traffic carried on that single broadband infrastructure should be the subject of this discussion. It's specifically to I guess what you call public internet services.

2844 COMMISSIONER MOLNAR: Okay. Thank you. I will move back to the issue of the GAS. You've defined it as a virtual private network service. My understanding of GAS is it incorporates the access, it aggregates it in large regions, I expect in Manitoba it's the province, but you have aggregation across the province through your single GAS tariff. Correct?

2845 MS. GRIFFIN-MUIR: That's correct, yes.

2846 COMMISSIONER MOLNAR: So, there is a couple things I need to understand when you say it's a virtual private network because it is also using shared network components of the -- what is not the private managed network, but the public internet. No?

2847 Okay, but let me say this from -- as MTS. As MTS the carrier in Manitoba, the facilities you are using to provide GAS, your ADSL access, the component of that is not part of any part of your management private network. It is the facilities that area available for public internet access use. Correct?

2848 MR. FRIZADO: No. It's actually used for other purposes besides internet. It's a high speed access that can be used through virtual private networks and is used for that.

2849 MR. SHEPHERD: I think perhaps let me try to weigh in here because I think perhaps how we would describe it is in fact in the overall infrastructure called the "Broadband infrastructure" is in fact a managed network.

2850 Internet service is one of the applications or services that is delivered on that managed network. So, it's not that we are delivering wholesale service on the internet network, in fact we are delivering internet as a service over a managed network, another service we may be delivering would be some type of business VPN service and a third one would be wholesale access services.

2851 So, I think you have to look at the underlying broadband infrastructure as in fact the carrier network that is being managed and internet service is really a service or application that's carried on that network. It's not -- I don't think you can think of internet service as the internet network per se.

2852 In the access component, in particular where it's shared with many other services, internet is really a service riding on a managed broadband network. That broadband network is going to be managed and have traffic management and other types of management applied in order to manage their service.

2853 Generally, what happens is a certain amount of capacity is virtualized and set aside for internet and that particular capacity is largely left unmanaged because it's a best effort service. It is being offered to the end-user.

2854 I don't know whether that helps the Commission, but I am trying to draw this --

2855 COMMISSIONER MOLNAR: I don't want to take up too much time here because I think we are going to have another opportunity in a few months to deal with this in great detail as well.

2856 But, you know, I had understood that the network, and you say, you virtualize the capacity on your IP network and you will have assigned certain capacity that's virtually dedicated to IPTV.

2857 As an example, a certain amount of capacity on your access network is dedicated to IPTV, separate and apart from what might be available as an ADSL access service to a competitor who would be looking at it. It is separate and apart.

2858 You have a managed network, you have a network that would be defined to be your broadband access available for internet services. So, is that correct or not?

--- Pause

2859 COMMISSIONER MOLNAR: I am going to let this go and let me move on to another question.

2860 I would like for you folks to answer this question. I will do more on the GAS.

2861 MS. GRIFFIN-MUIR: Yes, sorry. I just want to make sure I understand the question.

2862 What you are suggesting is when we sell GAS, it's separate, like on a different network from IPTV, like it's all the same network.

2863 COMMISSIONER MOLNAR: Oh! I fully understand it's the same network, but it is, as I -- what would be available on an ADSL access if you were as the wholesaler in Manitoba would not be the full 35 megs you have available on that ADSL access. It's potentially the five megs that you are offering as an internet access service, under your GAS ADSL access there.

2864 MR. SHEPHERD: Yes, the wholesale access has a service definition associated with it in it. It offers --

2865 COMMISSIONER MOLNAR: It excludes all the broadband you've held back for purposes of --

2866 MR. SHEPHERD: Well, it has basically a bandwidth that's assigned to it. It may not be the full bandwidth of the particular loop that's available, yes.

2867 COMMISSIONER MOLNAR: Right. Right. It also -- I just want to be sure because you've said it's a virtual private network, but in fact, it is sharing common network elements across with other internet based uses. Yes?

2868 MR. SHEPHERD: Yes. A good example of that is a DSLAM, which is a point, elements of that particular piece of equipment obviously are shared between different services.

2869 COMMISSIONER MOLNAR: Right. Can you tell me if there is no traffic management on the GAS service on the wholesale GAS service? Can you, as the now wholesale customer -- can you provide full assurance or guarantees that the use of that GAS service by your retail customers would not impact in any element of the network?

2870 You know, you just talked about the DSLAM, for example, and can you guarantee that you would have no impact, that the traffic of your retail customers would have no impact on the speed or congestion of the underlying network?

2871 Can you guarantee that if all category 2 and category 3 network management was pulled off of that service?

2872 MR. SHEPHERD: Paul can elaborate here, but I'll give you my layman understanding.

2873 COMMISSIONER MOLNAR: A "yes" or "no" would be real easy for me.

2874 MR. SHEPHERD: The answer would be, yes, the design is such that the wholesale traffic would be unaffected by what happened on the retail part of the service.

2875 COMMISSIONER MOLNAR: The retail traffic would be unaffected by the wholesale use of the service?

2876 MR. SHEPHERD: And vice versa. In other words, if the gas service, say, it experiences congestion because there is too much capacity being driven through the GAS service. That would not impact the carriers retail service which may be carried on the same -- same equipment.

2877 And that's because basically at those points of aggregation or sharing, the traffic is essentially assigned or allocated and engineered so that those two services are essentially guaranteed certain levels of performance and do not impact each other.

2878 So, it is, to be fair, it requires that the equipment that you are using provide for that capability, but generally speaking, it does.

2879 MR. FRIZADO: I think to place your thinking is further upstream from the DSLAM where it actually hits into the internet, is where most of the congestion is happening, where multiple DSLAMs are being aggregated together and feeding into the internet.

2880 And the wholesale access service is already, you know, extracted and pushed towards the wholesale access customer. And it's really that internet access piece or the internet service from the retail that is one that's causing the congestion.

2881 COMMISSIONER MOLNAR: Okay. I think that the important answer is "yes" if all traffic management was removed from GAS as a wholesale customer of that product, you can guarantee the incumbent that their traffic will not be impacted by your use, and guarantee it.

2882 I'm going to ask the incumbents that and will, just to correct that.

2883 MS. GRIFFIN-MUIR: But we are the incumbent, like that's what I am just a bit confused.

2884 COMMISSIONER MOLNAR: Well, but I am asking you as the wholesaler here.

2885 MS. GRIFFIN-MUIR: Right, but it would be the same issue would apply when we provide that service too.

2886 MR. SHEPHERD: Our architecture is --

2887 MS. GRIFFIN-MUIR: It's the same.

2888 MR. SHEPHERD: -- is that way today.

2889 MS. GRIFFIN-MUIR: So, we can answer and saying as the incumbent.

2890 COMMISSIONER MOLNAR: That's great. I appreciate it. I'm just telling you I'm going to ask other parties.

2891 I just have one more question. We have generally focused on internet services that appear to be well not stated, appear to be more driven to the consumer markets and you have a focus on business and I wondered if there was anything particular as it regards the issues being considered in this proceeding that you think are of particular note, concern or otherwise, for the business market?

2892 MS. GRIFFIN-MUIR: Well, I guess the degree of availability of access and the manner in which it's made available, so it's the same principles would apply and that's really what we are talking about here between wholesale and retail. So, we would use GAS for small business customers.

2893 COMMISSIONER MOLNAR: Right. And so -- I am not talking about just the wholesale issue here, I am talking about, for example, the impacts of different traffic management techniques or anything and how that might impact --

2894 MS GRIFFIN-MUIR: Business customers?

2895 COMMISSIONER MOLNAR: Yes. Is there anything particular that has been perhaps missed here as it would regard a business customer versus a retail user? We have had a lot of discussion about big fat video files and HD movies and so on, which aren't of particular application to the business market. Is there anything particular in the business market that needs to be considered?

2896 MR. SHEPHERD: No, I don't think so. I think -- I mean, our view would be, first of all, it depends what part of the business market you are talking about. For small business, they look very much like a consumer and would, I think, have similar concerns or applications they might be using.

2897 If you talk about a very large and sophisticated enterprise, typically they are not using the Internet for the types of mission-critical applications that, you know -- if they had something that required, for example, huge peak bandwidths and large peer-to-peer file transfers, they are not going to necessarily reply on public Internet to deliver that, they will have their own managed capacity to do it.

2898 So think there are some differences in sophistication and capability that come into play. At the lower end of the market, I would think small business Internet customers look very much like a consumer/customer in terms of the applications and types of things they are looking for.

2899 COMMISSIONER MOLNAR: Okay. And I guess, just to be fair, I had something in my mind and I didn't share it but I do know small business rely on Internet applications, for example, to run debit cards in rural and remote locations and they run lottery terminals and different applications.

2900 We have spoken here, for example, about VoIP being possibly a service to be white-listed and I wondered if there were other issues related to the business market that should be considered.

2901 MR. SHEPHERD: I think those are examples of things that -- you know, probably our position is to apply a Category 4 kind of measure to something like a Voice over IP service, for example.

2902 I am not sure it is something we would consider as necessarily a legitimate Category 4 traffic management application, unless, of course, it was intended to be applied to ensure that it actually was delivered. But seeing as Internet service is generally best-efforts, I would think if somebody is relying on Voice over IP and requires an absolute guarantee of service, then generally public Internet service isn't necessarily going to deliver that.

2903 But to the extent that those are applications that a Category 4 measure might be applied to, I don't think we would view that as necessarily a legitimate use of a Category 4 traffic management technique.

2904 MR. FRIZADO: Just to add to that, you know, as you mentioned, for lottery terminals as well as smaller outlets, wholesale access is a key component and that is why we are pretty adamant that no traffic measure should be applied. Because it is being used for a different purpose, that shouldn't be affected.

2905 COMMISSIONER MOLNAR: Thank you, those are my questions.

2906 THE CHAIRPERSON: Thank you, Candice.

2907 Tim, can you clean up?

2908 COMMISSIONER DENTON: So if I understand your propositions, it is on the retail service provider to engage in traffic management practices; is that correct?

2909 MR. SHEPHERD: That is our view, yes.

2910 COMMISSIONER DENTON: Yes. So therefore the product or service differentiation should occur at the retail service level. Therefore, how is the -- okay. I got that one.

2911 Second point. Mr. Ménard yesterday was talking about the need for congestion signalling between the wholesaler and the retailer so that the retail could carry out its duties to engage in appropriate levels of congestion management. Do you have any comment to make on that particular point?

2912 MR. FRIZADO: If I heard correctly, it was to implement further congestion-type controls that would signal within the network to indicate that congestion was going on, to slow it down, and I think that was an indication of something that they wanted to do in the future versus what is happening today with TCP, that that naturally will happen if networks are congested.

2913 COMMISSIONER DENTON: You are saying that TCP will naturally cause -- but what are you going to do when so many of the protocols are UDP and don't have congestion control?

2914 MR. FRIZADO: We are going to have a congested network.

2915 COMMISSIONER DENTON: Okay.

2916 MR. FRIZADO: Overall, it is all about congestion.

2917 COMMISSIONER DENTON: Absolutely. Okay. So then supposing from your point of view the CRTC had a burst of enlightenment and adopted all of your policies, holus bolus, how --

2918 THE CHAIRPERSON: We are always enlightened.

2919 COMMISSIONER DENTON: We are always enlightened, I am reminded by the Chairman.

--- Laughter

2920 COMMISSIONER DENTON: -- how then is your quadripartite, four-part set of -- what shall we call them -- classifications of traffic management, how is that to be implemented, and particularly, given they are guarded, should it be case-by-case or should it there be some kind of policy established and how is that to be worked out?

2921 MS GRIFFIN-MUIR: If the Commission were to accept our proposal that there is a distinction between wholesale access and retail --

2922 COMMISSIONER DENTON: You would die of happiness, I know.

2923 MS GRIFFIN-MUIR: Hopefully, I will not die.

--- Laughter

2924 MS GRIFFIN-MUIR: Then what you are asking is, how are the other categories going to be affected --

2925 COMMISSIONER DENTON: Yes.

2926 MS GRIFFIN-MUIR: -- in the retail market?

2927 So you are accepting the fact that there should be no additional measures beyond what is necessary in Category 1 to manage the network, generally speaking, and to the extent there is any need for Category 2, because they have legal considerations.

2928 We would say for Category 3 and 4, if there is sufficient competition in the retail, these measures could be adopted, and to a certain extent some of them already are today in the Category 3 in terms of pricing where you buy a certain bandwidth or -- they exist.

2929 And Category 4 to the extent that there is a reaction to some of the measures from retail customers or if we take Mr. Katz's example where we implement an exclusive arrangement with the content provider and it is deemed to be discriminatory, so you would have to look at the facts around that, whether we would only do that premium service for one content provider or whether we would make it available to similarly situated content providers and decide whether or not it should be acceptable.

2930 We don't think though that the Commission should say you can or cannot use certain types of technology like DPI. We don't think they should if we are talking strictly retail unless they are being used in a discriminatory way, unless we are selecting certain applications and not applying them uniformly to all applications.

2931 COMMISSIONER DENTON: Let me try to make clear where I am coming from. The constant complaint of smaller players is that they don't have time, money or whatever to engage in regulatory dispute settlement on a case-by-case basis and I am trying to find out what your opinion would be about various measures that might be taken, the balance between case-by-case and establishing a policy in advance.

2932 So what I am trying to ask you is: Do you see us establishing rules under section 36 and then giving it over to CISC or do you see case-by-case? How do you see the balance or have you thought this one through?

2933 MS GRIFFIN-MUIR: We would have looked at it case by case. Actually I do definitely understand the position of certain parties, including ourselves, because dispute resolution ex post is very difficult. There could be general principles. I don't know that CISC actually accelerates any kind of process from a service provider's perspective. But you would be talking about really content providers now?

2934 COMMISSIONER DENTON: I am just trying to figure out whether you have thought through --

2935 MS GRIFFIN-MUIR: Right.

2936 COMMISSIONER DENTON: You have thought through a great deal about this.

2937 MS GRIFFIN-MUIR: M'hmm.

2938 COMMISSIONER DENTON: I am wondering whether you have thought through issues of how to implement your ideas.

2939 MS GRIFFIN-MUIR: Right.

2940 COMMISSIONER DENTON: And if you would like to comment on that in final argument, we would be most entertained to read it.

2941 MS GRIFFIN-MUIR: Well, I guess other -- we attached the criteria that we think you should consider when you are determining whether or not something is discriminatory. Beyond that I would have to comment --

2942 THE CHAIRPERSON: Maybe you want to reflect on that and put that in your further submissions.

2943 MS GRIFFIN-MUIR: M'hmm.

2944 COMMISSIONER DENTON: Exactly. Thank you.

2945 THE CHAIRPERSON: Okay, thank you very much. Thank you for your intervention.

2946 I think that is it for today, Madam Secretary?

2947 THE SECRETARY: Yes, it is. We will reconvene tomorrow morning at 9:00 a.m.

2948 THE CHAIRPERSON: Thank you.

--- Whereupon the hearing adjourned at 1246, to resume on Thursday, July 9, 2009 at 0900

REPORTERS

____________________ ____________________

Johanne Morin                     Jean Desaulniers

____________________ ____________________

Sue Villeneuve                    Beverley Dillabough

____________________ ____________________

Monique Mahoney              Madeleine Matte

Date modified:

2009-07-08