Myth-busting the Internet: The truth about throttling, congestion and usage-based billing

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New report offers scathing critique of Canadian telecoms industry

by Michael Lithgow
A new report is challenging assertions made by Canada’s large telecom companies in recent public battles over Internet billing and governance. Casting An Open Net: A Leading-Edge Approach to Canada’s Digital Future, offers an at times scathing critique of telecom positions on Internet congestion, BiTorrent use, billing strategies and throttling and backs its criticisms with excellent research and analysis.

The report, published by OpenMedia.ca (a Canadian non-profit group on whose Board I serve), also takes a look at what is happening internationally in Japan, Sweden, UK, United States, Australia and Chile demonstrating a variety of strategies in other jurisdictions that protect Internet openness without stifling innovation and economic growth.

It is a readable, well researched and welcome contribution to the important public conversation about Internet governance and regulation. What follows are some of the highlights.

The cultural and political implications of connectivity are enormous. Large telecommunications companies worldwide are pushing for changes that would allow them to structure fees and speeds in such a way that new tiers of access could deny all but the wealthiest to the kinds of speeds and services we take for granted today. This is the battle for net neutrality, arguably one of the most important this generation will face.

Never before have so many Canadians had so much to say about a telecommunications policy. More than 11,000 submissions were made to the CRTC from the public during Internet traffic management hearings last year. According to cited research, approximately two-thirds of all Canadians support net neutrality, and the figure jumps to 86% among those who use the Internet at home. According to the report, Canadians are most concerned about industry accountability, the negative impact of limited market choices, and privacy.

One of the loudest cries by the industry in support of their anti-net neutrality practices is “congestion”. The industry claims that congestion problems justify (i) extra charges on users, and (ii) slowing down some kinds of traffic based on kinds of use (called ‘throttling’, ‘traffic management’ or ‘traffic shaping’). The industry has been targeting peer-to-peer (P2P) usage, often called Bitorrent downloading, which they say clogs the Internet and uses a disproportionate amount of capacity.

Throttling ignores the fact that large P2P data use occurs in only 5% of users.

 

Now, to be clear, the report explains that when we talk about the “telecommunications industry” in Canada, we are talking about the five biggest telecom providers nationwide: Videotron, Rogers Cable, Shaw Cable and Cogeco who dominate the Canadian ISP market. Many or even most of the smaller ISPs do not use the same techniques or advocate for the same regulations. What the report reveals is that industry claims about congestion and P2P usage are without basis in the face of empirical studies.
Traffic shaping or throttling aimed at P2P traffic ignores the fact that large P2P data use occurs in only 5% of users meaning that 95% of P2P usage falls within average ranges. More troublesome, throttling singles out one kind of Internet use for special treatment and penalty. Why should the ISPs get to decide how the public should use the Internet?

The industry says that because P2P traffic is not “time sensitive” (meaning usage involving real-time communication) it can be throttled without diminishing enjoyment of use. But this is an argument that ignores what is actually happening on the Internet.

It turns out that P2P usage is a remarkably efficient way to distribute data capacity throughout a network in real-time, and that there is growing use of P2P in all kinds of innovative distribution projects. Throttling also ignores the fact that P2P usage is mostly in off-peak hours. When congestion is at its worst, P2P usage is at its lowest. The report claims that it isn’t torrents causing congestion, but rather inadequate infrastructure and the failure of industry to upgrade network capacities.

“It isn’t torrents causing congestion, but rather inadequate infrastructure and the failure of industry to upgrade network capacities.” 

 

Furthermore, P2P traffic as a percentage of overall use is in decline. The industry claims that 36% of Internet traffic is P2P – a figure that misleadingly includes upstream data flows, which is not where congestion problems are occurring. P2P download traffic only accounts for a modest 18% of all Internet use. And this percentage is steadily growing smaller as more and more television and film services migrate online.

And there’s more:

(1) The large ISPs claim that the Internet in Canada is experiencing unmanageable growth – bandwidth constraints demand throttling, predatory pricing, etc. Not true – growth in usage rates is in fact slowing, a trend being experienced worldwide.

(2) The large ISPs say that they can’t build their way out of this problem – it’s too expensive. Not true. According to the report, modest upgrades would more than accommodate the kinds of usage growth rates being experienced in Canada. As the report says: Functioning markets do not squash demand, they increase supply. Experts indicate that modest and normal infrastructural upkeep and reinvestment would do the trick.

(3) The large ISPs claim that congestion periods last for hours. Not true. Real-time monitoring of Internet use indicates that congestion usually lasts for a few minutes. Throttling or increasing fees for 10 hour stretches is unrelated to the problems of congestion.

At stake for the large ISPs is their usage-based billing plan (UBB), a plan that the industry argues makes consumers pay for what they use, that penalizes band-hogs, and is fair. The report makes it clear that these arguments ring false.

“Actual costs for 1GB of data flow are about 8 cents, but ISPs have been charging up to $10/GB for excess use.” 

 

For example, the exhorbitant fees ISPs charge for extra data use have nothing to do with actual costs: the ISPs are gouging consumers. Actual costs for 1GB of data flow are about 8 cents, but ISPs have been charging up to $10/GB for excess use. And UBB policies implemented to date do not target the small percentage of high-use customers (not that this is necessarily fair, either), but rather are discouraging regular users from using the Internet at a time when Canadians are increasingly migrating their cultural interests online through streaming video services (like Netflix). UBB is discouraging ordinary Canadians from using the Internet to participate in culture, to access video and television programming, to watch films.

The summaries of regulatory approaches to the internet in other countries are fascinating, and I am going to leave these for you to read for yourself. Suffice it to say (along with the few words below) that there are options other than letting the large incumbent industry players run roughshod over the principle of net neutrality in order to fill their pockets.

The US is probably the weakest model due largely to the steady erosion of regulatory power of the Federal Communications Commission. Wireless Interent services have all but been abandoned by regulators in the net neutrality fight allowing ISPs in the US to throttle and choke wireless services to their wallet’s content. And the Republican controlled House has been pushing the FCC to back off entirely from any kind of regulation protecting net neutrality claiming that such provisions threaten innovation, investment and jobs.

But Japan, Sweden, Chile, even the UK all have flourishing ISP markets that are regulated in such a way to protect not only consumers from gouging but to a large extent the principle of openness and accessibility.

The report is well worth the read for anyone interested in the future of Internet policy in Canada and in maintaining net neutrality as the organizing regulatory principle. Others have had to fight for net neutrality around the world, and so must Canadians. This report is an excellent primer on the politics, technical arguments and cultural implications for an open Internet policy and what it might look like in a Canadian context.

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