Takedown of U.S. net neutrality laws might embolden Canadian telecoms to follow suit

The Federal Communications Commission (FCC)’s decision to roll back net neutrality laws won’t impact Canadians in the short-term, but they might feel the pinch down the road, says the CEO of the Canadian Internet Registration Authority (CIRA).

“It’s certainly possible that end-users will start to feel the impact of decisions down south in the medium or long-term future,” Byron Holland told IT World Canada just before the FCC vote Thursday, where a five-member panel voted three votes to two to remove rules put in place by former-president Barack Obama in 2015. “That’s going to happen on a couple of fronts.”

Canada’s larger telecom companies, such as BCE Inc. subsidiary, Bell and Rogers Communication, might feel empowered to follow in their southern counterpart’s footsteps and ultimately block, slow down, or otherwise impede their competitors, said Holland.

“That’s where it gets interesting in a Canadian context, where many of the providers of pipes and plumbing to the internet are also the content providers,” he said. “You might start to see differentiating business offerings for the end-user.”

Holland pointed to cable packages as an example, where popular channels like HBO and TSN are split into separate bundles, and said that kind of business model could be applied to the internet.

Canadians might end up paying more for the same thing, he added, if service providers conduct preferential pricing for the content it owns, or put their competitors in the broadband slow lane. Startups and innovators would also be negatively impacted.

“That is the kind of thing we begin to worry about as soon as you free people from the fundamental tenant that built the internet, one of which was certainly net neutrality,” said Holland.

Others, however, disagree, suggesting the rollback of net neutrality in the U.S is a positive for both consumers and innovators.

“This will increase competition and provide good incentives for Internet Service Providers to offer the best products to their customers, not those necessarily planned and coordinated by the FCC,” Yaël Ossowski, deputy director of the Consumer Choice Center told ITWC. “What happened yesterday was that the Internet returned to its original regulatory status enjoyed under the Clinton Administration, during which consumers got exponentially better and faster services that never existed before. That fostered so much innovation, and I think that’s what we’ll see now as well.”

Canada could use more competition in the broadband and mobile markets, added Ossowski.

“The [Canadian Radio-television and Telecommunications Commission] has made this more difficult by mandating certain price and profit levels, and it’s only served to reduce the incentives for new ISPs to enter the highly regulated market,” he said.

But Holland says the rise of Facebook could have been derailed if the owners of MySpace, which at the time was News Corp., decided to use preferential business models or preferential performance to bring Facebook’s growth to a halt.

“When the end user had a choice, regardless of what any of us think about Facebook, the fact of the matter is, the end-user community resoundingly chose the Facebook offering over the MySpace offering.”

Holland said Bell’s widely reported attempts to create a not-for-profit corporation that would maintain a blacklist of websites distributing pirated content is an early example of telecoms dabbling with preferential business models.

“It’s not directly related to net neutrality, but it does speak to trying to use the technology as a blunt instrument to further the business interests of private sector actors and to do it in a way that doesn’t have any judicial oversight,” he said.

In a statement this morning, Stuart Carlaw, chief research officer at ABI Research said the rollback of net neutrality regulations will allow the communications industry to function in a “more natural market condition.

“If anything, this legislative move will likely provide the much-needed boost to timelines for more meaningful technological deployments that will enable companies to transform digitally and allow consumers to benefit from technology-driven improvements in service from multiple industry segments based on best of breed communications,” said Carlaw.