p2pnet news view P2P | Freedom:- “In accordance with the Commission staff letter of 19 June 2008 and Bell Canada’s (or the Company’s) letter of 9 July 2008, the Company is hereby filing its Answer to the CAIP (Canadian Association of Internet Providers)  Application dated 3 April 2008.”

That’s Bell Canada’s Mirko Mr 5% Bibic to Canadian Radio-Television and Telecommunications Commission secretary general Robert A. Morin.

Bell admits it’s, “also in receipt” of 25 comments from such as Google and Per Vices, the company which also provided a way for people to get around Bell’s bandwidth throttling “traffic management” actions. The complete list is in the document below.

Dear Mr Morin, it says >>>

Subject: Application requesting certain orders directing Bell Canada to cease and desist from “throttling” its wholesale ADSL Access Services

In accordance with the Commission staff letter of 19 June 2008 and Bell Canada’s (or the Company’s) letter of 9 July 2008, the Company is hereby filing its Answer to the CAIP Application dated 3 April 2008.

Sent in yesterday, it’s a day late —- Bell asked for, and was granted, an extension —- and considerably more than the dollar short.

With a little luck, we’ll be able to give you CAIP’s response on Monday or Tuesday.

But here it is in full, including an interesting dissertation on deep packet inspection (DPI).

I believed it was important to have this document available as soon as possible and I apologise in advance for any mistakes I made in converting by hand it to html, for any other mistakes which may be down to me, and for the fact I’ve left footnote numbers in. [Please note, Figure 10 (the number of congested links per month for the period of March 2007 to May 2008 for each location in the network ) is missing in our copy. But figure 11 expresses the same data as a numerical percentage rather than absolute numbers. Figure 13 is also missing.]

Click here  for the full document (as I received it), including footnotes, and in the meanwhile >>>

BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION IN THE MATTER OF AN APPLICATION BY CANADIAN ASSOCIATION OF INTERNET PROVIDERS PURSUANT TO PART VII OF THE CRTC TELECOMMUNICATIONS RULES OF PROCEDURE AND SECTIONS 7, 24, 25, 27, 32, 36 AND 62 OF THE TELECOMMUNICATIONS ACT REQUESTING CERTAIN ORDERS DIRECTING BELL CANADA TO CEASE AND DESIST FROM “THROTTLING” ITS WHOLESALE ADSL ACCESS SERVICES

ANSWER BELL CANADA
11 JULY 2008

1.0 Executive summary

ES1 In accordance with the Commission staff letter of 19 June 2008, the following constitutes the Answer of Bell Canada (or the Company) to the CAIP Application dated 3 April 2008.

ES2 Bell Canada’s GAS customers are an important and valuable segment of Bell Canada’s wholesale business and the Company endeavours to supply them with the best possible network so they can provide internet services to their customers. In order to do so, the Company must, like any responsible network owner, manage its network. During the course of this proceeding, a number of misrepresentations and unsubstantiated allegations have arisen (which, it is important to note, do not necessarily reflect the opinions of the majority of Bell’s GAS customers). The Commission’s assessment must be based on facts, not unsubstantiated allegations or conjecture. The Company’s Answer is based on facts, data pulled from extensive studies on the growth of Internet demand, network capacity and congestion, as well as the Company’s more than a decade of experience in managing an Internet network and over a century’s experience in managing a telecommunications network.

Congestion

ES3 Internet traffic has grown exponentially and is expected to continue. For example, Cisco predicts that from 2007?2012 Internet traffic will grow six fold worldwide. Such growth does, and will continue to, put strain on network capacity. The Company has provided the number of congested links per month for the period of March 2007 to May 2008 for each location in its network (i.e., central office DSLAM, Aggregation network, BAS and Backbone network) as a numerical percentage. The total percentage of all four types of congested network links during a given month in the period in question has varied between 2.6% and 5.2%. While these numbers may seem low to the average lay person, they are significant to network traffic engineers such that it is important to consider the number of congested links in the proper context.

ES4 Since end-users’ high-speed traffic travels across multiple links in the Company’s network, if a single link along the way is congested, an end-user will experience negative impacts of congestion such as a slow connection or inability to connect. Once congestion has been observed, this means that latency has already been occurring in the network thereby producing negative impacts on customers. This phenomenon is analogous to a road system. When some of the major arterial roads are congested (analogous to Backbone links), cars travelling from the suburbs to downtown are impacted by traffic regardless of the state of congestion on the roads in the suburbs (similar to DSLAM and Aggregation links). Just like a single traffic roadblock can hinder drivers going to multiple destinations that pass through the road that is blocked, a very small amount of congested links can seriously affect a large number of high-speed end-users’ traffic. When traffic levels increase, the potential for drivers to be impacted by more than one roadblock also increases. The impact of that congestion is clearly perceptible to the end-user, though to varying degrees. The effects are even more obvious in the case of time sensitive applications such as voice communications, where the content can become severely degraded to the point of being unrecognizable.

ES5 Depending on the type of link, the potential number of impacted customers will vary. The Company had projected that the number of customers that could be affected by congested links could reach as high as 790,000 by the end of the first quarter of 2009 were Bell Canada to fail to apply its network management solution.

The Company’s Solution

ES6 In order to address network congestion, Bell Canada has essentially adopted a three-pronged approach to managing capacity on its network:

i)Investing in capacity through managed capital spending

a.Since 2001, the Company has invested over $3 billion in capital investments on its high-speed Internet service. The Company plans to spend close to half a billion dollars in 2008 to expand and upgrade the infrastructure of its DSL network.

b.In 2004, the Company started building its next generation DSL network using Fibre to the Node technology (FTTN) and Optical Ethernet (OE) in its aggregation network. When relief is required to address congested links on the ADSL ATM network, the Company is required to invest in legacy technology to support the ATM network. While ATM is both expensive and limited in its capacity when compared to OE, nonetheless, the Company continues to make those investments on behalf of its customers. The Company is increasingly investing in its Ethernet aggregation network as well as its FTTN network, but it will take time until it is expanded and available to the majority of Internet end-users. During this proceeding parties have continuously oversimplified the work required to address network congestion. In paragraphs 98 to 101, the Company notes several inconsistencies and faulty assumptions in an article1 presented by CISP to support its claims. In the article, Mr. David Burnstein, a DSL industry analyst, ignored some very important costs. Contrary to his assertions, simply upgrading DSLAM ports to GigE is not all that is required. This may explain how the author formulated the incorrect conclusion that Bell Canada’s congestion is minimal and easily solved.

ii)Moving toward usage-based pricing and new business models in a manner that benefits end-users and that takes into account the realities of the highly competitive marketplace

a.The Company initiated the transition to usage-based billing in December 2006 when it ceased offering its ‘unlimited traffic’ plan to any new subscribers. However, the transition to usage-based pricing cannot be the sole solution to network congestion, nor is it an instant “fix” for three principal reasons:

i.Transitioning from “unlimited traffic” pricing to “usage based” pricing will take time; from a purely contractual basis, all customers would have to be adequately notified of such a significant change; from a systems viewpoint, the Company would have to design, build, implement and seamlessly transfer customers from unlimited billing to billing that indicates usage based prices.

ii.Carriers will need to carefully experiment with different pricing plans in the marketplace in order to maintain customer satisfaction and thus, maintain its customer base. This will involve a high degree of trial and error which necessitates market trials rather than mass migrations of its entire customer base.

iii.And for other competitive reasons that have been submitted in confidence to the Commission at paragraph 106 of the Company’s main submission.

b.Even once the transition to usage-based pricing is achieved, usage pricing alone will not suffice in reducing network congestion. For example, as consumption continues to increase, necessitating further network investments, network management actions will be required as pricing plans are adjusted to respond to these new demands on the network. There will also likely remain a need to manage “bursts” of traffic which usually, but not always, occur during “peak” periods.

iii)Managing bandwidth

a.For the above reasons and those set out in detail in this submission, “managing bandwidth” must remain an essential component of Bell Canada’s Internet traffic management solution. The solution includes the following:

i.terminating or managing the service of users who consistently breach the Company’s Acceptable Use Policy; and

ii.better balancing Internet traffic on its network during peak periods by using DPI to redistribute P2P file sharing traffic to off-peak periods. The Company does not block any form of P2P file sharing applications nor does it shape non P2P file sharing applications.

ES7 The Company has not arbitrarily chosen to shape P2P file sharing applications. There are two reasons why P2P file sharing applications are subject to traffic management measures. First, P2P file sharing is not a time-sensitive application. As noted below, the Company does not traffic shape time sensitive P2P applications such as Skype and Joost. Second, P2P causes unique problems for network providers. The attraction of the P2P protocol from a content and application provider perspective (i.e., the distributive nature of the service which reduces costly storage and centralized upload capacity) is the very same attribute that creates significant problems for the network provider. Due to the nature of its architecture there are three ways that P2P file sharing applications use a disproportionate amount of bandwidth compared to other types of traffic:

i)P2P file sharing traffic is designed to open several sessions in an effort to transfer data as fast as possible, thus overwhelming other forms of traffic.

ii)Because of the possibility of queuing file requests, P2P file sharing can sustain a continuous maximum network traffic load, 24 hours a day, 7 days a week and 365 days a year, as long as there are queued requests.

iii)Some P2P file sharing applications look for the fastest node available, and thus any increase in capacity to one network node will attract increased P2P file sharing upload requests from other P2P file sharing applications resident on other networks. As described by Rogers’ Chief Strategist at the latest Telecom Summit, Rogers’ tests have indicated that an increase of capacity at a node could be eaten up by P2P file sharing applications within 24 hours. Indeed, the Company’s own testing shows that in some cases the increase in capacity could be eaten up in as little as 30 minutes.

ES8 As P2P file sharing applications are designed to use all of the bandwidth that is available, additional capacity cannot, on its own, resolve this issue. Network management is currently the only realistic response and has been applied, on an objective and rational basis, to both the Company’s retail and wholesale GAS services. Because P2P file sharing applications are non time-sensitive, these can be “slowed down” during peak hours of traffic without interrupting service. Additionally, the bandwidth that is freed up allows real-time applications to make use of this bandwidth. The Company does not shape other types of traffic, including that of non P2P file sharing applications. P2P file sharing applications are the only signatures for which traffic shaping policies apply – these applications are easily distinguished by the DPI from other applications such as Skype or Joost. Accordingly, Skype and Joost traffic are not being shaped.

Legal issues raised in CAIP’s Application

Network management activities permitted by tariffs

ES9 The GAS Tariff contains the terms and conditions pertaining to the GAS service. Contrary to CAIP’s allegations, the Company has not acted outside of the bounds of the Company’s Tariffs. Rather, the Company’s traffic management measures are performed in a manner that is consistent with its tariffs, its contractual obligations and the Commission’s determinations in this regard. The Commission has long recognized that the Company’s Terms of Service, found in General Tariff – 6716, Part 1, Item 10 (Terms of Service) and applicable to the Company’s GAS service:

“…allow them to suspend or terminate service where a customer uses or permits others to use services so as to prevent fair and proportionate use by others.”2

The Commission has accordingly stated that it is not necessary to include explicit “network congestion” provisions in specific telephone company tariffs as such provisions are already accounted for by virtue of their respective Terms of Service.3

No unjust discrimination

ES10 The Company notes CAIP’s allegation that the Company’s traffic management measures are contrary to section 27 and in particular, subsections 27(2), (3) and 4 of the Telecommunications Act (the Act). Allegations similar to those of CAIP in the present proceeding were made by Cybersurf Corp. in a proceeding against the cable companies. Cybersurf, a reseller of Shaw’s High-Speed Internet Service (HSIS) asked the Commission to intervene on the basis that Shaw was conferring an undue preference onto itself by making Quality of Service Enhancement service (QSE) available to its own retail customers without reselling it to Cybersurf. The Commission denied Cybersurf’s petition in that case:

The Commission finds that based on the evidence provided in this proceeding, no traffic is given priority over other traffic, and in particular, there is no evidence that Shaw’s QSE gives its traffic preference over Cybersurf’s or any other competitor’s traffic on the HSIS network. The Commission therefore cannot find that Shaw is conferring onto itself an undue preference by offering its HSIS customers the QSE while not offering the same to Cybersurf for resale to its end-customers.4 [Emphasis added]

ES11 The Commission also addressed nearly identical issues to those in the present instance in rendering its determinations in Telecom Decision CRTC 2006-77:5

248. The Commission considers it appropriate that each cable carrier be provided the ability to manage the potential negative outcome of high-consuming bandwidth end-users in a manner that does not degrade the Q of S to all end-users, whether it is the cable carrier’s end-user or the competitor’s end-user. The Commission considers, however, that regardless of the approach adopted by the cable carriers to address this problem, such an approach must provide equivalent treatment with respect to excessive usage to both its own retail Internet access service end-users and TPIA end-users.

…

249. With respect to the different treatment by cable carrier of end-users for excessive usage, the Commission considers that, subject to the requirement for equivalent treatment specified above, each cable carrier is permitted to implement its own approach. [Emphasis added]

ES12 GAS service is not offered over a separate and distinct network. The GAS service offered to wholesale ISPs and the retail Sympatico Internet service offered by the Company share and have always shared the same access network and therefore will experience the same benefits and the same problems. As the Company is applying the same treatment to traffic of its own retail Internet access service end-users and GAS end-users, the Commission cannot find that the Company is conferring unto itself a preference, let alone an undue preference.

ES13 The Company further notes that the implementation of the Company’s traffic management solution has not resulted in a substantial lessening of competition.

i)The high speed Internet access market is highly competitive.

ii)The Company’s number of total GAS end-users has continued to grow each month before and after traffic shaping was implemented.

ES14 Finally, there is no ulterior motive attached to the Company’s management of network congestion; it was not launched in order to i) launch usage-based billing, ii) facilitate the launching of an IPTV service or iii) give an undue preference to the newly launched Bell Video store nor for any other purpose unrelated to the management of network congestion.

ES15 Despite the many claims by CAIP and other parties, the evidence clearly demonstrates that there is no ulterior motive or any basis for a claim of unjust discrimination. The Companies note the particular irony in Google accusing Bell Canada of playing the ‘gatekeeper role’ by traffic shaping P2P6 and thereby impeding competition. If there is, indeed, any gatekeeping activity on the Internet, which is questionable, the gatekeeping is being performed by the Internet search engines, which are typically the users’ ‘window’ to the near-infinite content available worldwide. And Google is widely acknowledged as being the dominant Internet search engine. In any event, it would be counter productive to impose regulatory rules to prevent traffic management techniques that are designed to improve the overall end user Internet access experience and to ensure that congestion does not harm innovation in the future.

Notification of network changes is not an issue

ES16 The Company submits that the Commission’s notification of network change requirements (the Notification Requirements) do not apply to the current situation for two reasons. First, the Notification Requirements do not apply to GAS service (as it is not a bottleneck service); second, traffic management is not a notifiable change because it does not require ISPs to make adjustments in their network.

Bell respects the privacy of its customers

ES17 The Company’s use of DPI technology as part of its traffic management practices is such that the actual contents of the communication exchange are not examined. Rather, only the protocol headers are examined and the DPI equipment does not retain the information reviewed in the packet headers.

ES18 While the Company has explained in detail, in section 10.4 of its submission, what its DPI devices are capable of doing; it is helpful to summarize what they do not do. By design, the DPI devices deployed in Bell Canada’s network do not:

- use any personal identification information of an individual user;

- store or log any personally identifiable information;

- have specific knowledge of a user’s real identity;

- have knowledge of a user’s content;

- have knowledge of a user’s URL browsing history;

- have knowledge of a user’s Internet search activity;

- have knowledge of a user’s email topics or content;

- store content accessed by a user;

- cache any content, including user-specific content, whatsoever;

- capture and playback any communications exchange; or

- install or require any specific software on user machines.

Bell is not in violation of section 36 of the Act

ES19 Bell’s DPI traffic shaping activity does not “control the content or influence the meaning or purpose of telecommunications” for two key reasons. First, slowing the delivery of content does not amount to “controlling” it. Second, Bell is not involved in any way with the editorial control of content being transmitted through P2P file sharing applications nor is it creating or preventing access to such content. The shaping technique is content and content provider agnostic. Bell cannot influence the meaning or purpose of the telecommunications because Bell has no knowledge of the content itself.

Unwarranted policymaking and/or regulatory measures could hurt innovation, impede competition and decrease the efficiency of Canadian telecommunications

ES20 The Company urges the Commission to exercise caution as it assesses the unsubstantiated allegations that have been made in support of requests for new and unneeded policies with regards to this tariff dispute. As remarked by the Commissioner of Competition at this year’s Telecom Summit:

The reason for intervention should not be so vague as “finding an appropriate balance.” Balance of what? Why cannot that balance be created ultimately by market forces? Often the pursuit of “balance” is little more than the protection of the status quo. Those who enjoy a market advantage will say that we have struck the right balance. They do not want more regulation, but neither do they want deregulation to open the market to new competitors. Is protecting the status quo the best way to increase innovation and prosperity? If you believe that, then state it, and let the debate begin. […]regulation should always be viewed, not as a first step, but as a last resort. [Emphasis added]

ES21 Several parties have claimed that traffic management will hinder innovation. The Commission should see these claims for what they really are: the use of policy rhetoric devoid of substance in order to promote vested business interests. Indeed, the opposite of these claims is clearly the case; necessity is the mother of invention. Without any regard to network capacity, P2P file sharing application designers could develop applications designed to use all of the bandwidth that is available. It is no coincidence that P4P is emerging as a possible solution with regards to P2P file sharing at a time when ISPs around the world are starting to implement traffic shaping measures. Indeed, P4P is still very much a nascent framework that has yet to be deployed for widespread use or as a viable solution for the Company’s use. The Company is confident, however, that competition and market forces will encourage, as it has already done, the development of new, better and fairer P2P file sharing applications.

ES22 Until that time, the Company has endeavoured to limit its traffic shaping to what it sees as a reasonable measure in order to address network congestion. It has implemented this solution prior to the network’s succumbing to “rampant congestion” as it seems that some parties would prefer that the Company do. It has opted, in an objective and rational manner, to direct its network management solution solely to P2P file sharing traffic and not other forms of traffic. Finally, it has opted to engage traffic shaping only during peak traffic hours and not 24 hours a day.

ES23 As a final note of caution, the Company notes that the Commission has asked the Company in the interrogatory stage a number of questions related to the state of congestion in its network. Further, in its Interim Answer and in this submission, the Company provided very detailed explanations of its Internet traffic management solution, a large amount of which Bell Canada has chosen to place on the public record. Its decision to offer these detailed explanations (mostly on the public record) is in response to the large interest in the media and the blogosphere, and to correct the miscomprehension about how Bell Canada is actually managing its network and the impact that it is having on its Internet end-users (retail and GAS customers). GAS customers generally, including the Applicants, have used and continue to use unsubstantiated allegations regarding the facts to then jump to inappropriate conclusions. The Company understands the Commission’s need to examine the detail of this congestion in order to satisfy itself that there is no unjust discrimination or anti-competitive motive underlying the Company’s actions. Outside of that one concern, the Company submits it is not for the regulator to second guess the Company’s engineering decisions. As the Commission has stated: “a carrier should be free to implement the standards and specifications of its choice within its network. To require otherwise could be costly and inefficient to some carriers, while possibly decreasing opportunities for product differentiation.”7 The Company has established that there can be no validity to any claims of unjust discrimination or anti-competitive conduct. The Company therefore submits that there is absolutely no need for Commission intervention in this case.

Conclusion

ES24 For all of the reasons above, the Company asks that the Commission deny the relief requested at paragraph 116 of CAIP’s Application.

2.0 Introduction

1.Bell Canada (Bell or the Company) is in receipt of an Application (the Application), dated 3 April 2008, made by the Canadian Association of Internet Providers (CAIP) pursuant to sections 7, 24, 25, 27, 32, 36 and 62 of the Telecommunications Act (the Act) and Part VII of the CRTC Telecommunications Rules of Procedure (the Rules) requesting that the Commission issue certain orders directing Bell Canada to cease and desist from “throttling” wholesale ADSL services and in particular, the wholesale service known as Gateway Access Service (GAS).

2.The Company is also in receipt of comments by:

Acanac Inc. (Acanac), 3 July 2008

Advancing Democracy & Media Sanity in Canada (ADMS), 3 June 2008

British Columbia Civil Liberties Association (BCCLA), 12 June 2008

Canadian Advanced Technology Alliance (CATA), 3 July 2008

Canadian Association of Voice Over IP Providers (CAVP), 12 June 2008

Canadian Internet Policy and Public Interest Clinic (CIPPIC), 21 May 2008 and 3 July 2008 (on behalf of the Campaign for Democratic Media (CDM))

Cisco Systems, Inc. (Cisco), 12 June 2008

Coalition of Internet Service Providers Inc. (CISP), 3 July 2008

Daniel Matan, 24 June 2008

Distributel Communications Limited, 3 July 2008

Google Inc. (Google), 3 July 2008

Information Technology Association of Canada (ITAC), 30 June 2008

Interactive Advertising Bureau of Canada, 3 July 2008

Kaboose Inc, 9 June 2008

Per Vices Corporation (Per Vices), 2 July 2008

Primus Telecommunications Canada Inc. (Primus), 15 April 2008 and 3 July 2008

Public Interest Advocacy Centre (PIAC), 3 July 2008

Rogers Communications Inc. (Rogers), 3 July 2008

Skype Communications s.a.r.l. (Skype), 11 June 2008

TCPub Média Inc. (TCPub), 9 June 2008

TELUS Communications Company (TELUS), 3 July 2008

Union des Consommateurs (UdC), 24 April 2008 and 12 June 2008

University of Western Ontario, 11 June 2008

Vaxination Informatique (Vaxination), 4 April 2008 and 3 July 2008

Wireless Nomad (Nomad), 22 April 2008

3.The Company hereby submits its answer in accordance with the procedures established by the Commission in its letter dated 19 June 2008. Pursuant to section 39 of the Act certain information in this response is being filed in confidence with the Commission. Absent a ruling from the Commission requiring disclosure, release of some of the information would be in contravention of Article 11 of Bell Canada’s Regulated General Terms of Service and Article 9 of Bell Canada’s Unregulated Terms of Service because it would disclose confidential information related to certain of Bell Canada’s competitors. Furthermore, release of the information would be in contravention of confidentiality requirements of applicable CSG agreements. In addition, release on the public record of certain information provided in this response would allow existing and potential competitors to formulate more effective business plans and marketing strategies, thereby prejudicing Bell Canada’s competitive position and causing specific direct harm to Bell Canada. An abridged version is provided for the public record.

4.Failure by the Company to address herein any issue or matter raised in any of the identified comments or those filed by other parties should not be construed as agreement to the extent that such agreement would be inconsistent with the interests of the Company.

3.0 Background

5.As part of its Application, CAIP also made a request for interim relief on an expedited basis requesting that the Commission issue an order directing Bell Canada to immediately cease and desist from traffic shaping GAS. Bell Canada filed an answer on 15 April 2008 (the “Company’s Interim Relief Answer” or the “Interim Answer”) solely addressing CAIP’s request for interim relief and factual discrepancies contained therein. CAIP filed its Reply to the Interim Answer (the Interim Reply) on 24 April 2008. The Commission denied the interim relief requested by CAIP on 14 May 2008 in Telecom Decision CRTC 2008-39, Canadian Association of Internet Providers’ request for interim relief regarding Bell Canada’s practice of “throttling” its wholesale ADSL access services. The Commission issued a process letter and interrogatories to CAIP and Bell Canada on 15 May 2008 with regards to the Application. On 29 May 2008, CAIP and Bell Canada filed their responses to the Commission’s interrogatories.

6.Certain parties, such as Google, PIAC and UdC, have also attempted to broaden the scope of this proceeding into a general “net neutrality” hearing. The Company agrees with Primus and TELUS that such issues are beyond the scope of this wholesale tariff dispute. However, while this dispute relates to wholesale GAS service, the Company will also discuss, in order to favour public debate, its Sympatico retail services due to the close relationship between the two and the fact that the Company’s network management practices are applied throughout the Company’s DSL network, including to its own retail services.

7.It must be noted that the Company, as a Canadian Carrier, is in control of its own network and is free to implement the standards and specifications of its choice within its network, as has been recognized in the past on several occasions by the Commission.8 Nevertheless, Bell Canada, in both the Interim Answer and in its 29 May 2008 interrogatory responses, provided very detailed explanations of its Internet traffic management solution in order to favour public debate and address a large amount of confusion and miscomprehension about how Bell Canada is actually managing its network and the impact that it is having on its Internet end-users (retail and GAS customers). Bell Canada’s GAS customers are an important and valuable segment of Bell Canada’s Wholesale business and the Company endeavours to supply them with the best possible network so they can provide Internet services to their customers. In order to do so, the Company must, like any responsible network owner, manage its network. Some GAS customers, including the Applicants (which, it is important to note, do not necessarily reflect the opinions of the majority of Bell’s GAS customers), have made and continue to make unsubstantiated allegations, and misinterpret the facts, to then jump to inappropriate conclusions. In assessing CAIP’s GAS tariff complaint, the Commission’s assessment must be based on facts, not unsubstantiated allegations or conjecture. Below the Company will set out the relevant facts to enable the Commission to reach a fully informed decision.

8.In paragraph 25 of its Application, CAIP claimed that that there was simply no congestion problem associated with the Bell Canada network, and thus traffic shaping is not required. As stated in its Interim Answer and interrogatory responses, Bell Canada rejects this allegation entirely. In this submission, the Company once again, and in even greater detail, describes the nature of the congestion issues and the steps it has taken to manage its network. In particular, the Company will provide details on the implementation of Deep Packet Inspection (DPI) technology and traffic shaping as part of its network management solution. The Company will also address third parties’ statements and correct several misconceptions regarding DPI. In order to address CAIP’s and other parties’ allegations, the Company has organized its answer as follows.

9.First, the Company will provide a description of GAS and how it is provisioned over the Company’s network. In describing GAS, the Company will address certain fallacies that have been promulgated through CAIP’s allegations.

10.In order for readers to fully understand the issues, the Company will follow with a description of the technologies involved including: a description of how traffic is routed on the Internet, how devices and applications on the Internet handle congestion followed by a description of peer-to-peer (P2P) technology.

11.Next, the Company will describe the growth in Internet demand, both globally and for Bell Canada, as well as the resulting increase in network congestion and how the Company is managing this increase in demand, including a description of the Company’s use of DPI for traffic shaping.

12.The Company will then address the legal issues that were raised in CAIP’s Application, and specifically submit that: 1) network management activities are permitted by tariff, 2) there is no unjust discrimination, 3) there was no breach of the Company’s notification of network change obligations, 4) the Company is compliant with its privacy obligations and 5) the Company does not control the content or influence the meaning or purpose of communications.

13.Finally, the Company explains why the Commission must avoid unwarranted policy making or regulatory measures which could hurt innovation, impede competition and decrease the efficiency of Canadian telecommunications. The Company will end with a cautionary note to the Commission.

14.The Company further notes that PIAC has submitted an application for costs. The Company notes that the cost claim is premature and cannot be addressed under section 44 of the Telecommunications Rules of Procedure until the record has closed. Further, PIAC has not filed any of the supporting documentation necessary for the determination of a costs claim. Should a cost claim be properly made under the Telecommunications Rules of Procedure at a future date, the Company reserves the right to make submissions with respect to PIAC’s eligibility, the quantum claimed and proper costs respondents.

4.0 A Description of GAS and the Company’s network

15.At the outset, Bell Canada must correct three specific assumptions about its GAS service that emerge from the numerous allegations made by various parties including CAIP: 1) the notion that GAS services are offered over a separate and distinct network than the Company’s retail Internet access service; 2) the notion that a specific amount of bandwidth must be available to GAS customers when tariff rates are paid; and 3) the notion that there are simply no viable alternatives for GAS customers.

4.1 GAS services are not offered over a separate and distinct network

16.The Company’s GAS Tariff9 provides a broadband access service based on asynchronous digital subscriber line (ADSL) technology and enables a service provider to establish a high speed data access path between its end-user’s premises and a Company serving wire centre. GAS uses available bandwidth above the voice-band on the same local loop as the end-user’s Company or CLEC provided residential or business individual line. It includes logical paths to provide network connectivity between GAS Access arrangements and an ADSL Aggregated High Speed Service Provider Interface (AHSSPI) by aggregating traffic associated with each GAS Access served from groups of wire centres to a broadband access server (BAS) and subsequently aggregating such traffic from all Company provided BAS to the ADSL AHSSPI. Essentially, it also includes the backbone to transit traffic from the central office where the end-user is located to the central office with the ISP’s AHSSPI (typically nearest the ISP’s point-of-presence).

17.At least one party10 to this proceeding believed that Sympatico retail Internet and GAS services are offered over separate and distinct networks or at least are isolated from one another. This is not the case. The GAS service offered to wholesale ISPs and the retail Sympatico Internet access service offered by Bell Canada share and have always shared the same access network and therefore will experience the same benefits and the same problems. As discussed in the Interim Answer, wholesale traffic from all of the ISPs who use GAS and Bell Canada’s retail Internet traffic traverse the same central office facilities, the same access network and part of the same backbone network. Figure 1 illustrates how GAS and Bell Sympatico retail traffic transit through the same path/equipment from the DSLAM up to the BAS (and the associated DPI), the point in the network where retail and wholesale traffic is aggregated. The GAS and retail traffic also transits through some of the same backbone network links since the wholesale traffic must be sent to the wholesale equipment/facilities before going to the Internet. It is in fact impossible to distinguish traffic from a retail Sympatico end-user from the traffic of a GAS end-user until the two services reach the BAS.

Figure 1

18.The Company offers another wholesale high speed Internet service to ISPs called High Speed Access (HSA). The Company’s HSA Tariff11 is based on the same ADSL technology as for the GAS service. It enables a service provider to establish a high speed data access path between its end-user’s premises and a Company serving wire centre, and it uses available bandwidth above the voice-band on the same local loop as the end-user’s Company or CLEC provided residential or business individual line. However, the similarities with GAS service end there. The primary distinction is that while HSA traffic transits through the same access network as GAS, HSA accesses are not aggregated via a BAS. The HSA service includes a dedicated Permanent Virtual Circuit (PVC) between the end-user’s premises and the AHSSPI located in the Company’s wire centre. This dedicated channel can be used by the ISP to deliver features that require a permanent IP address, such as monitoring. The HSA traffic does not pass through the DPI devices and is therefore not subject to Bell’s traffic shaping.

No specific amount of bandwidth must be available when tariff rates are paid

19.According to CAIP and Vaxination: i) “The purpose of GAS is to create a pipe or pathway that runs from the premises of each end-user customer through Bell’s central offices (COs) and then on to a physical interface point in Bell’s local network where competitors must interconnect in order to gain access to their customer’s traffic”12, and ii) “A service provider pays a GAS/HSA for each individual ADSL line. The service provider should have full and unqualified access to the bandwidth of each ADSL line the service provider pays for. A service provider also buys sufficient capacity in the “Aggregated High-Speed Service Provider Interface” (AHSSPI) to support the link between itself and the Bell ADSL cloud. Bell is therefore already compensated on the number of customers as well as the total bandwidth generated by those customers.”13

20.Based on these premises, parties throughout their submissions compare the theoretical speed of the GAS service with the reduced speed applicable to a single type of application (i.e., P2P file sharing applications) during peak periods when traffic shaping takes place. These parties then draw the ridiculous conclusion that Bell “cripples the ADSL by approximately 90%”14 or “Since Bell throttles downstream speeds to 30 KB/s (or 240 kbps)15, this represents only 4.8% of the Basic – Residence downstream speed of 5 Mbps referenced in Bell’s GAS tariff.”16

21.The incorrect premises lead to invalid calculations and comparisons, which only serves to confuse the relevant issues. At the outset, because of the nature of DSL services, it is impossible for the Company to promise a specific bandwidth to high-speed service end-users (retail or wholesale GAS). Therefore, these services are marketed with an “up to” speed (such as 5 Mbps in the case of GAS). This is a fact that all ISPs are aware of, including CAIP:

“… this service can be affected by the quality of the copper loop facilities that link each customer premise to a Bell host or remote switch. For example, it may not be possible to achieve GAS speeds of 5 Mbps downstream/800 Kbps upstream in the case of an end-user customer that is served by a copper loop facility that has excessive bridge taps or which is approaching the range of the ADSL equipment located at Bell’s host or remote switches.” 17

22.Furthermore, the traffic shaping that Bell applies is limited to P2P file sharing applications during peak periods, and does not impact the speed for other applications such as web browsing or video streaming such that simultaneous use of other non P2P file sharing applications is not affected. An end-user using multiple applications during peak periods should only see shaping of its speed associated with P2P file sharing applications but not other applications. Bell Canada has performed repeated tests during shaping periods and established that wholesale and retail end-users were able to achieve their full bandwidth tier with non P2P file sharing applications. Therefore, it is inappropriate for CAIP to perpetuate the myth that end-users no longer have access to their full speed or bandwidth.

23.CAIP and other parties make similar arguments regarding the AHSSPI. For instance, CAIP states that “competitors are now paying for AHSSPIs that they either no longer need or which are sized too large because Bell is deliberately reducing the volumes of traffic that it delivers to competitors at the AHSSPI.”18

24.In one of its interrogatory responses19, CAIP describes the factors used by its members to determine the capacity requirements in order to select the appropriate AHSSPI size. These factors include historic usage and growth rate in the customer base. No doubt these factors play an important role for planning purposes, but CAIP itself admits that “the AHSSPI must be sized to peak period utilization by customers, not average utilization”20. It is useful to note that Bell’s 400 Mbps and 1000 Mbps (1 GigE) AHSSPIs are offered at the same monthly rate of $1,850 and its 100 Mbps AHSSPI is offered at $775 per month. Thus, it is generally more economical to subscribe to a 1 GigE AHSSPI than it would be for multiple 100 Mbps AHSSPIs. GAS customers have taken advantage of this situation as evidenced by the fact that many ISPs already subscribe to multiple GigE AHSSPIs. Competitors will likely continue to select an AHSSPI based on the lower tariff rates for GigE links and use the peak utilization as an additional factor in their decision process irrespective of fluctuations in traffic.

25.In any event, contrary to CAIP’s allegations, Bell did not observe any significant drop in peak traffic utilization on the AHSSPIs. For comparison purposes, Figure 2 below illustrates the peak downstream traffic at individual AHSSPIs when Bell compared i) the traffic from 4 March 2008 prior to the implementation of wholesale traffic shaping with ii) the traffic from 3 June 2008 after the implementation of traffic shaping. For example, the analysis shows in the case of one significant GAS customer, #, that the traffic kept growing even after traffic shaping and an additional GigE link had to be added.

26.In addition, CAIP notes21 that its “members typically plan for additional capacity when peak AHSSPI utilisation rates hover between 50 and 60 percent of the total capacity of the AHSSPI”. The table shows that even after shaping the utilization level surpasses the level where additional capacity should be planned for. Therefore, one can see that at this level of utilization, the GAS customer is fully utilizing its AHSSPIs. The utilization levels for each GigE AHSSPI greatly surpass those that CAIP notes are typically used to determine when to add capacity.

Figure 2

27.This GAS customer is definitely not paying for excess capacity.

There are alternatives for GAS customers

28.CAIP brings up a further point of contention when it denies22 that there are viable alternatives to GAS for competitors which, if taken advantage of by independent ISPs, would completely avoid the network management initiative to which GAS is subject. CAIP claims it does not view co-locating in COs and installing their own DSLAMs as a feasible option mainly because of the high utilization of remotes to provide ADSL capable lines in Ontario and Québec. CAIP states that it is its “understanding” that between 40% and 80% of lines are served by remotes and this would prevent them from offering high speed services. The Company provided the number of lines connected to its DSLAMs in confidence to the Commission in an interrogatory response23 in another proceeding and can state that the numbers provided here by CAIP are grossly exaggerated. Notwithstanding this exaggeration, it is incorrect for CAIP to assume that the presence of a remote automatically prevents a competitor from leasing unbundled loops. In locations where Sympatico retail high-speed end-users are served from remote DSLAMs, competitors can still request unbundled loops for DSL and in many cases the Company is able to provision such a loop.24

29.While CAIP agrees that HSA could be a “partial” alternative to GAS for business customers, it denies that third party Internet access (TPIA) service could be an alternative because of service coverage and technical problems. While making this allegation, CAIP merely refers the reader to a previous filing25 where the so-called coverage and technical problems are barely described. The three problems CAIP finds with TPIA are: i) the limited coverage of cable network in business areas, ii) the inability of TPIA service to provide dedicated channels in order to offer static IP addresses, and iii) the fact TPIA is not offered in an unbundled fashion. If CAIP believes there are issues with TPIA, then it should deal with these in a separate application as TPIA is not relevant to the Company’s network management practices. Nevertheless, with respect to the coverage issue, at the end of 2005, cable BDUs passed 97%26 of households and of those passed, 89% had broadband capability. Bell Canada also estimated that in Ontario and Québec, 95% of the SMB customers were in the footprint of a cable operator27. Therefore, coverage is not a serious issue at the very least for residential and SMB markets where most GAS services are prevalent. In terms of dedicated channels in order to provide static IP addresses, this is not a feature provided with GAS service either. Rather, this feature is offered with the HSA service. As mentioned above, CAIP is in agreement that

HSA is an alternative to business end-users. Finally, with respect to unbundling, Bell points out that GAS, even though multiple items are listed in the Company’s GAS tariff, GAS service is also only offered in a bundled fashion.

30.In conclusion, the Company submits that there are a number of viable alternatives to GAS service, and CAIP has not provided credible arguments to the contrary. In fact, due to these alternatives, the Commission has classified GAS service as a non-essential service.28

5.0 Technology description

31.Many misconceptions surrounding the Company’s network management practices seem to result from a misunderstanding of the underlying technology. In order for readers to fully understand the issues, the Company will provide a description of the following: how traffic is routed on the Internet, how devices and applications on the Internet handle congestion, and how P2P works.

How is traffic routed on the Internet

32.Internet applications, such as email and web browsers, are used to access and communicate between parties (servers or other end-users/machines) over the Internet. These Internet applications use well defined protocols to communicate between parties. In order to get data (i.e., content) to another party on the Internet, the application will first format the data and header information (e.g. the recipient’s email address in the case of an email application) will be added. The original data (i.e. content) with its application header will be sent to the network driver which will also encapsulate this data and add yet another header. One of these encapsulation types is known as the Transmission Control Protocol/Internet Protocol suite (TCP/IP). The TCP header (which contains information such as port number and sequence number) is added and finally, the IP header will be added, which includes information such as source and destination IP addresses. This is depicted below in Figure 3.

Figure 3

33.The TCP protocol is designed to ensure delivery of the data unless the communication path between the two end-points has completely failed. When congestion is important, the TCP protocol still attempts to deliver or receive packets. However, after waiting for a certain period of time for information, the applications may time out and stop responding. TCP is also responsible for congestion detection and avoidance and thus will try to use as much bandwidth as the communication path can offer, without dropping packets. The IP protocol defines a set of identifiers or header information, such as IP addresses, that would allow the network to appropriately route the data traffic (packets) to the intended recipients. Network equipment deployed in an ISP network, typically called a router, examines IP protocol header information, primarily the destination IP address, of each data packet and makes the necessary routing decision to forward the data packet towards the receiver. These routers are also designed to efficiently route the traffic, handling failures by re-routing around parts of the network that have experienced communication failures.

34.As indicated in Figure 3, in addition to the TCP and IP protocols, each Internet application supports its own application specific protocols. For example, email applications will conform to specific protocols that control how email should be delivered and received. Web browsers and web servers will conform to specific protocols that describe how web pages will be accessed and how to communicate with the webserver. P2P file sharing protocols (such as BitTorrent) will specify how file transfers should be initiated, carried out and terminated. These application specific protocols are described via a set of protocol headers that are typically transferred at the initial setup phase of the communication between the two end-points. To use the postal analogy, these protocol headers are the digital equivalents to the address label, content declaration (when the application port is properly represented) and postage on a package handled by the postal system.

35.To exchange content, the sender application will typically first exchange a set of “setup” messages with the receiver before the actual data or content will be exchanged. In the case of P2P file sharing, a set of messages is also exchanged before the data or content is shared.

5.2 How do devices and applications on the Internet handle congestion?

36.Essentially, congestion occurs when a link or device along a network path receives more traffic than it can transport to its destination. Internet routers deal with congestion by simply removing or dropping excess packets that cannot be delivered. In addition to lost packets, congestion may lead to latency (packet transmission delivery delays) or jitter (varying delays in packet transmissions). Lost or delayed packets, therefore, are an indication of congestion in a network. Whereas it is easy to understand the importance of minimizing packet loss and latency, jitter is often forgotten or misunderstood. John Bartlett of Netforecast Inc. provides a clear and helpful explanation:

To define jitter we need to back up and understand latency. Latency is the time it takes a packet to traverse the network from source to destination. Latency is half of the ‘ping’ time, or half of the round-trip delay. Jitter is the variation in latency. For example, suppose that the average latency from source to destination is 100 milliseconds (ms). If a specific packet, packet A, traverses the network in exactly 100 ms it arrives just as expected and has a jitter of 0. If packet B traverses the network and is delayed slightly, arriving 130 ms after it left, it is 30 ms later than expected, and has a jitter of 30 ms.

When we send real-time traffic across the network we are trying to encode and then decode a real-time event such as sound or a visual image. The sound and the visual image change constantly, so we have to continually take samples, encode them, send them across the network, decode them and reproduce the sound and stuff on the far end. The receiving end is expecting a continuous stream of data and needs that data to arrive at regular intervals so it can properly recreate the original audio or video. If a packet is late, the time slot in which that data was needed has gone by and the arriving packet is of no use.

Because we know that IP networks are asynchronous and can cause delays in the packets, we implement a jitter buffer on the receiving end. Let’s consider a 40 ms jitter buffer. The jitter buffer predicts the expected time of arrival for each packet, but then delays the playing of those packets by 40 ms. So the real-time event at the far end is being recreated 40 ms later than it could otherwise have been recreated. The value of this is that if a packet arrives less than 40ms late it can be pushed ahead in the jitter buffer so that it is available for its play window even though it arrived late. This is like your colleague telling you the train leaves a half hour earlier than it really does because he knows you often arrive late. The train really leaves a half hour later (the jitter buffer) than the expected schedule.

So a 40 ms jitter buffer will take care of network jitter up to 40ms. If packets are later than that, then again their play window has gone by and they are discarded by the jitter buffer. So why don’t we just make the jitter buffer arbitrarily long to allow for any amount of jitter in the network? Remember that delay. As we delay the recreation of the voice or video image, we reduce the ability for participants to easily interact. When there is a delay on the connection we find ourselves stepping on each other’s speech. This effect is disconcerting. It can make you wonder if the other party is listening, and it can make a back and forth discussion very difficult. So we limit the size of the jitter buffer. This means we need to ensure that the network can keep packets within the jitter specification that the jitter buffer can handle.29

37.Therefore, different web applications have, by necessity, different Quality of Service (QoS) requirements. As mentioned above, latency or jitter can make Voice over Internet Protocol (VoIP) conversations disconcerting and difficult. However, that same latency or jitter will have less effect on file transfers, especially when the transfers are over TCP, since TCP will retransmit lost packets and control latency issues.

38.To illustrate, various web applications or types of traffic can essentially be classified into 3 main categories: Real-Time, Time-Sensitive and Non Time-Sensitive. Real-time applications such as VoIP, live video conferencing and interactive/online gaming must be delivered with minimal latency, jitter or loss for a good user experience. For Time-Sensitive applications, such as HTTP video streaming (e.g., YouTube), streaming audio, web browsing or time-sensitive P2P applications like Joost, minimal packet loss or minimal jitter will not overly impact the end-user experience, however, the end-user is expecting a timely and consistent response. Many applications in this category have some form of buffering; for example, an application may buffer 10 seconds before starting a video, and thus can afford up to 10 seconds of lost data without the end-user noticing. Finally, Non Time-Sensitive applications such as P2P file sharing or large file server downloads are unlikely to be affected by moderate packet loss, jitter or latency since these applications normally have inherent mechanisms that address reorganization of delayed packets and retransmission of lost packets.

39.TCP has congestion control algorithms that make sure packets are sent as fast as possible. All applications that utilize TCP for data transmission incorporate the use of a congestion detection and avoidance algorithm known as TCP Windowing. The goal of TCP is to maximize throughput. Each individual TCP session will try to use as much bandwidth as the communication path can offer without dropping packets. When TCP detects congestion it will scale back the transmission rate. Since each individual TCP session behaves and uses the same scale-back algorithm, each session will get a fair share of the bandwidth. This seems fair for applications that behave the same way on the network. But what happens when applications behave differently, such as P2P?

5.3 What is P2P and how does it work?

40.The term P2P is generally used to describe a communication architecture that has multiple communication nodes, with each node functioning as a “peer” node, in which it can act as both a client and a server. Unlike more traditional client-server architectures, where clients connect directly to a specific server (for example, web browsers are clients that communicate to a specific HTTP server), a network based on P2P architecture is self-scaling; that is, the more nodes that join the network, the more resources there are and resiliency is improved. More and more applications are transitioning away from client-server architectures to that of P2P. For example, some Internet applications are based on a P2P network architecture, such as Skype (a VoIP service) or Joost (an online video streaming service). As each user joins Skype or Joost, they essentially bring along more storage, more bandwidth and more resiliency. As such, by making use of P2P architectures many application service providers can avoid centralized server and network infrastructure investments.30

41.P2P networking does not have the notion of separate client and server nodes (computers), but only equal peer nodes that can make all nodes act simultaneously as both “clients” and “servers”. Nodes can connect to other nodes to receive data and simultaneously serve data to other nodes. When a P2P application attempts to download data, it will create numerous connections to other nodes in order to download pieces of the data from multiple end nodes, reassembling the data upon successful receipt of all the pieces. In addition, once a piece of data is downloaded, P2P applications typically begin to share that piece with other nodes. The emergence of P2P applications on the Internet has created a dramatic change in network traffic behaviour, moving from a predictable interactive “query-response” traffic behaviour to an “always on, multi-query multi-response” traffic behaviour utilizing as much network capacity as possible.

42.One of the principal applications for P2P is file sharing, because each node in the network that wants a file can download and store the content (or pieces of the content) and act as a server for the other nodes in the network. As noted above, P2P applications used for voice and streaming tend to be more real-time than P2P file sharing applications. Users of Skype, for example, engage in real-time voice calls or chatting. In addition, P2P voice communication uses very little bandwidth compared to P2P file sharing applications. P2P file sharing is typically used to download or upload large files (and often many files simultaneously) and tends to be non real-time. End-users typically select files to download, and let these download in the background and often overnight or many days until the file is complete. It is typical to see a large percentage of network bandwidth consumed by file sharing applications. Because P2P file sharing applications are non time-sensitive, these can be “slowed down” during peak hours of Internet use without interrupting the user’s Internet service.

43.In contrast, typical interactive applications, such as web browsing, send and receive a certain amount of data every so often, but most of the time the computer is waiting for user interaction. The unattended P2P file sharing applications, on the other hand, are designed to use as much bandwidth as possible and continuously strive to auto-correct for best performance.

44.There are three ways that P2P file sharing applications use a disproportionate amount of bandwidth compared to other non P2P file sharing applications. First, as stated by Rogers’ Chief Strategist, Mike Lee, P2P is “actually designed to overwhelm other traffic.”31 A P2P application, rather than opening up only one stream or session, will open up 40 to 100 TCP sessions in an effort to transfer data as fast as possible using multiple sources and can therefore grab dozens to 100s times more bandwidth than a traditional single-stream application such as email or Internet banking applications (see Figure 4 below). By initiating more and more P2P applications on powerful computers, the user will continue to expand the number of active streams eventually consuming all available bandwidth. To further compound the bandwidth demand, some users will employ multiple computers on the same Internet connection.

Figure 4

45.Second, once all the available bandwidth is being consumed, TCP, through its windowing technique mentioned above will use a queuing technique for additional requests until more bandwidth becomes available. In addition, P2P applications typically have slots for the total number of downloads. Once the total number of slots is consumed, the P2P application will use a queuing technique for additional file downloads until additional slots become available. The P2P application queuing of multiple requests combined with TCP windowing and the inherent application persistence of P2P enable it to sustain a continuous maximum network traffic load, 24 hours a day, 7 days a week and 365 days a year, as long as there are queued requests.

46.Finally, it is not enough to simply manage the traffic of the network’s users. Some P2P file sharing applications constantly look for the fastest node available, and thus any increase in capacity to one network node will attract increased P2P file sharing upload requests from other P2P file sharing applications resident on other networks.32 As described by Rogers’ Chief Strategist at the latest Telecom Summit, Rogers’ tests have indicated that an increase of capacity at a node could be eaten up by P2P file sharing applications within 24 hours. Indeed, the Company’s own testing shows that in some cases the increase in capacity could be eaten up in as little as 30 minutes.

47.Thus, P2P file sharing applications not only generate considerably more traffic volume in the long run because it runs for a lengthy amount of time, it also uses up the major share of the available bandwidth at any given point in time because it uses so many concurrent TCP sessions and some are designed to constantly look for nodes with the most capacity. Therefore, hundreds of TCP sessions generated by a single user, or users from other networks, will negatively impact the experience of many others. This is compounded by the fact that P2P file sharing users tend to initiate multiple large file downloads and simply leave the application downloading and/or uploading pieces of content. As the content is unaffected by slowdowns, a slowing down of certain of these bandwidth hungry applications (i.e., P2P file sharing applications) has the least impact compared to other types of traffic on the web.

48.There seems to be a belief among certain parties that this movement away from a centralized client-server network architecture infrastructure means that all P2P applications are operated at zero cost. For example, Google states that P2P applications “enable content distributors to massively reduce costs”.33 This belief tends to be coupled with the idea that ISP network management destroys innovation. However, these views are misguided. P2P file sharing does not diminish costs, rather it offloads the hosting and server costs from a content provider to the ISP’s network. In other words, P2P file sharing creates a negative externality for facilities based ISPs. One could argue that content providers need to be motivated to develop a more efficient method of distribution that takes into account network operator concerns. Network management does not harm innovation; to the contrary, it is a market stabilizer that encourages innovation of new, more efficient applications.

49.Indeed, additional capacity cannot, on its own, resolve this issue. As stated by Mike Lee, “file sharing programs are designed to constantly look for more optimal sources for their shared files, sending out constant requests to find a better connection or more sources for files. They will also keep downloading bits of files from wherever they can, all the while accommodating requests from other file sharing users. If the P2P software senses there is more space on a network, it will flood that space with these requests.”34 The need for bandwidth management is therefore clear. As mentioned by Cisco in its 12 June 2008 comments: “Even if more bandwidth could be added overnight, peer-to-peer (”P2P”) applications are currently designed to use all of the bandwidth that is available. Thus, network management is the only realistic response to the current challenge presented by P2P and other bandwidth-intensive applications.”

6.0 Growth in internet demand

50.Internet demand has grown exponentially both globally and for Bell Canada. The Company will describe the global growth of Internet demand and network congestion. The Company will also provide a description of its Internet demand growth and experienced network congestion.

Global Internet Demand

51.Cisco predicts that total global IP traffic will increase by a factor of six from 2007-2012.35 Figure 5 shows that globally between 2007 and 2012: (i) web, email, file transfer traffic will increase 334%; (ii) P2P traffic will increase 285%; and (iii) Internet video to PC traffic will increase 680%.

Figure 5

52.The Minnesota Internet Traffic Studies (MINTS) also examines Internet growth trends and finds Internet traffic volumes consistent with the Cisco white papers.36 MINTS finds that there was a regular doubling of Internet traffic in the early 1990s, but with a period of ten times growth in 1995-1996 due to an increase in graphics-rich web traffic replacing text-oriented material.37 Around 1997, while growth rates declined, they were still doubling every year and may now be at the point where Internet traffic is growing at fifty percent a year.38 However, MINTS states that four to six times annual growth is still possible since there are potential sources that can drive this growth such as data transfer and video transmission.

53.A recent report by Bret Swanson and George Gilder (Swanson and Gilder) for the Discovery Institute titled Estimating the Exaflood: The Impact of Video and Rich Media on the Internet – A “zettabyte” by 2015?39, discusses a number of sources that will drive significant increases in demand. One of the key drivers identified by Swanson and Gilder is video. For example, by mid-2007 YouTube was streaming 600 petabytes (PB)40 per year, but with the introduction of High-Definition (Hi-Def) videos, a Hi-Def YouTube would stream 12 exabytes (EB) per year or close to the total traffic on the U.S. Internet in 2007. Similarly there is amateur video. Currently, amateurs account for 10 EB of video a year, which can be shared between family and friends, but as more content becomes HD, this would grow to 100 EB per year or 10 times current U.S. Internet traffic.

54.On a more professional basis there is motion picture distribution and Internet TV. Companies such as Amazon, Netflix, Blockbuster and Apple all provide movie downloads, and again with HD, Netflix alone would currently ship 5.8 EB of DVDs each year. For Internet TV, NBC streamed 50 million of its shows on-line in October 2007, and in 2007 Hulu was founded by NBC Universal and News Corp., which now consists of a large selection of videos from more than 50 content providers, including FOX, NBC Universal, MGM, Sony Pictures Television, Warner Bros.41

55.However, video is not strictly confined to entertainment. There also exists video conferencing. By mid-2007, MSN Video Messenger was generating 4 PB per month, but with Cisco’s new HD Telepresence system, just 75 one-hour conferences would generate as much traffic as the entire internet in 1990.

56.In March 2008, comScore found that the number of online videos viewed in the U.S. increased 13 percent to 11.5 billion.42 There were also 138.5 million unique viewers with each viewer watching an average of 82.8 videos.43 comScore also found that: (i) 73.7 percent of the total U.S. Internet audience viewed online video; (ii) the average online video duration was 2.8 minutes; and (iii) the average online video viewer watched 235 minutes of video.44

57.As shown by Cisco in Figure 6 below, YouTube traffic alone generated more traffic in 2008 than the entire U.S. backbone in 2000.45

Figure 6

58.Another key driver identified by Swanson and Gilder is imaging and data gathering transmitters. For example with imaging, in 2006 there were 400 million camera phones sold, and in 2009 it will increase to 700 million with each photo generating files of around 3 MB, and similarly with the introduction of Apple’s iPhone, video rich content can be easily obtained for mobile devices. From a business perspective there is Radio Frequency Identification. While the total impact is not known, in 2000 there were about 100 million devices connected to the Internet, but by 2010 that number is expected to be 14 billion. This exponential increase will be facilitated by Internet Protocol version 6 (”IPv6″) which will allow for 3.4 x 1038th unique addresses, allowing for even more devices to be connected to the Internet.46

59.The final key driver identified by Swanson and Gilder is the move away from Local Area Networks to “cloud” computing. Network computing and web services or “cloud” computing presents a true virtual computing environment, allowing use of web service interfaces to requisition machines for use, load them with custom applications, manage networks’ access permissions, and run as many or few systems as required. Cloud computing is currently being used. Since cloud computing delivers software and services over the Web and through a browser, it is no longer necessary to install servers and client software.47 For example, Amazon Web Services offers a web-scale computing platform which allows developers and businesses to scale computing infrastructure up and down depending on immediate requirements.48 Currently, over 330,000 developers, start-ups and established companies are using Amazon Web Services. Other cloud computing providers include IBM Blue Cloud49, GoGrid,50 3tera,51 and Microsoft Live Mesh.52

60.There is also the storage and transmission of digital information. IDC estimates that the total digital information created, captured, or replicated in 2006 was 161 EB, but that by 2010 it could be 988 EB, and if Internet content companies continue to offer remote or online back-up services, then by 2015 there could be a total of 50 EB of remote back-up in the U.S. alone.53 For example, the New York Times uses Amazon Web Services to digitally archive issues of the New York Times starting with Volume 1, Number 1 September 18, 1851 and currently ending at December 30, 1922.54 Thus, subscribers now have access to these archived issues of the New York Times which are stored and accessed over the Internet.

61.Similar to other ISPs, Bell Canada is experiencing growth in utilization of the network by existing customers. In 2002, the average Bell Canada retail Internet customer used # Gigabytes (GB) of bandwidth per month. By 2008 this number has grown tenfold to # GB per month. As Figure 7 below demonstrates (in Gigabits per second), the overall impact on the network has been a huge growth in demand.55 Although some of this demand is partly a result of subscriber growth, the number of retail Internet subscribers for Bell Canada over the last year has largely remained flat and thus these growth figures can only be partially attributed to subscriber growth.

Figure 7

7.0 Increased network congestion

7.1 Congestion: A Global Issue

62.As noted above, most applications that run over the Internet use protocols with inherent congestion detection and control mechanisms that are able to automatically adapt the delivery speed of packets when congestion is detected. However, these mechanisms are effective only to the extent that traffic sent across the network does not exceed the capacity that each of the network elements are capable of processing at any given moment. When capacity is exceeded, packets are delayed before being delivered to their destination (also called latency) or dropped, in which case the user or application may decide to retransmit the packets. Therefore, latency and dropped packets are considered symptoms of congestion in a network. In the broadest of terms, network congestion simply implies that user demand is greater than network capacity. The impact of congestion on Internet end-users will vary from slower traffic to not being able to receive content from the Internet at all.

63.The nature of the growth of Internet traffic is that as network capacity expands, new user applications invariably also grow to utilize that capacity. As a result, Internet service providers have begun to manage network data flow through the use of various network management tools in order to mitigate network congestion due to increased traffic by consumers, particularly during peak periods. The issue of increasing network congestion is not one that is faced solely by Bell Canada. It is an issue that is faced by network providers around the world: as a Comcast executive was recently quoted as saying, “You can never build your way out of this problem.” 56

64.The reason behind network congestion is the dramatic increase in demand relative to capacity. Nemertes Research (Nemertes) conducted an in-depth analysis of Internet and IP infrastructure (capacity) as well as current and projected traffic (demand) in order to determine if there will ever be a point where demand exceeds capacity.57 The Nemertes Study examines demand independent of capacity in order to control for the situation where capacity may be limiting demand.58 The Nemertes approach was to focus on the absolute busy hour characteristics of a user group rather than trying to determine a comprehensive user demand profile over time.59 Figure 8 below shows the results of the Nemertes model of user demand for the U.S. By 2012 demand would reach 200,000 PB which is the same as an individual user consuming or generating 26 GB per day.60 While the results of the Nemertes model yield geometric growth in demand, it should be noted that the model also states that in 2006, an individual user consumed or generated about 350 MB per day which is equivalent to downloading an hour of Internet video or multiple hours of working, emailing, uploading, downloading and watching video.61 It is noteworthy that 350 MB per day translates into approximately 10.5 GB per month.

Figure 8

65.Swanson and Gilder agree with the approach taken by Nemertes:62

Any long-range forecast in the dynamic world of technology exposes itself to charges of “speculation.” Yet Nemertes’ approach is conceptually appealing for the very reason that most observers, unable to grasp the power of exponential change, have consistently underestimated the mid- to long-range pace of advance in the world of computation and communication. Professor Odlyzko believes Nemertes’ projections of traffic (or what it calls “demand”) are very aggressive but not beyond plausibility. We agree.

66.On the supply side, from 2007 forward, Nemertes projects that connectivity capacity will increase at a faster rate than core capacity as network providers extend higher speed interfaces toward the edge of the network, and that global broadband access capacity will grow at a linear rate over time.63 This result assumes that global fibre to the home will be increasing over time, and that wireless devices will increasingly replace fixed access technologies.64 However, as technologies in wireless devices improve and data transmission rates to basic devices increases, it is possible that global access capacity could increase more than projected.65

67.Then by comparing demand against supply, Nemertes finds that if innovation continues to drive demand, that absolute demand will approach the limits of capacity by 2012.66 In practice, this means that the rate of retransmission goes up, and net throughput goes down.67 As a result, in order to avoid this problem and close the gap between desired capacity and available capacity, by 2010 the additional investment in just North America would amount to $43 billion. This additional amount is equivalent to nearly 60% of the existing projected network investment of $72 billion by 2010.68

68.The relationship between supply and demand is also noted by Jason Kowal in a report titled The Never-Ending Rush Hour: Internet Traffic Growth Requires Continual Investment in Capacity and Innovation in Network Management:69

Although Internet capacity is upgraded to meet new traffic requirements, the increase in capacity and capabilities also stimulates new traffic growth as well. As described above, aggregate increases in available network capacity supply can also create demand in the network by making new types of content delivery possible. This occurs because there is less contention for resources on end-to-end connection. As a result, Internet traffic growth typically moves in relation to the growth of capacity. However the relationship does typically move in lock-step: in some years traffic grows faster than new capacity is deployed. According to TeleGeography, in 2006 the growth in average traffic level (75%) outpaced the growth of capacity (47%) on the world’s international Internet backbones for the third consecutive year. Significantly, this data only captures the early stages of surging video traffic, which is putting new strains on conventional capacity upgrade processes. [footnote omitted]

69.As Nemertes notes, the implication of this capacity crunch is not that the Internet will stop working, but rather the degradation of Internet performance will constrain users’ ability to consume more.70 If network providers do not take steps to mitigate the congestion issue, users will experience erratic performance (i.e., an increase in latency and dropped packets). Thus, Nemertes believes that congested infrastructure will slow down the pace of both technical and business innovation such that the next Google, YouTube, or Amazon might not arise due to the inability to fulfill that demand.71

7.2 Congestion in Bell Canada’s Network

70.It is well accepted that the Internet consists of multiple interconnected networks and that applications that run over the Internet can experience congestion in locations that may be external to Bell Canada’s network. This submission, therefore, only addresses congestion in Bell Canada’s network as it pertains to the delivery of high-speed Internet services (retail and wholesale GAS). Bell Canada measures latency and dropped packets (referred to as “cells” in the case of an ATM network) as well as the level of utilization of links in the network. Although both measurements are important, it is the level of utilization of links that Bell Canada uses as the primary criteria to determine where the congestion is occurring. Such an approach is more efficient since utilization level measurements are more consistently and readily available than latency measurements. The approach is also reliable given the observed close relationship between the measured utilization levels and the latency (the higher the utilization in a link, the higher the latency).

71.A common industry practice in network management is to develop thresholds at which the utilization level in a link has a very high probability of producing negative impacts on end-users. Therefore, it is not feasible to ever utilize a link continuously to its full capacity. The actual thresholds used by Bell Canada were developed by analyzing the plotted latency data for each type of link in its network. Using this method, Bell Canada was able to determine the specific level of utilization of a link at which the number of congestion events (latency and dropped packets) increases dramatically and the events become longer in duration. Link utilization measurements are taken every 15 minutes, however these figures hide the instantaneous traffic peaks that can be higher than actual measured utilization. This is highlighted by the fact that latency and dropped packets occur well below 100% link utilization. Bell Canada has developed thresholds for each type of link using the same methodology:

DS-3: 61%;

OC-3: 84%; and

OC-12 and OC-48: 90%.

72.The fact the thresholds for DS-3 links are lower than they are for OC-48 links is explained in part due to the lower processing capacity of the DS-3 equipment and the longer periods of time traffic is able to remain in queues waiting to be processed, increasing the potential for higher latency.72

73.The Company is able to actively monitor congested links in order to take appropriate action to resolve the problem. For a link to be considered congested today, the threshold must have been exceeded at least once on 5 or more different days of a 14 consecutive day period. Bell Canada believes that this approach to measuring and identifying congestion in its network is consistent with the methodology used by many other service providers throughout North America and the UK.

74.The Company has broken down its network into four categories, namely DSLAM, Aggregation Network, BAS and Backbone Network. The location of those parts of the network, and the links associated with those parts, can be seen in Figure 9.

Figure 9

75.Figure 10 below illustrates the number of congested links per month for the period of March 2007 to May 2008 for each location in the network (i.e., central office DSLAM, Aggregation network, BAS and Backbone network). Figure 11 expresses this same information as a numerical percentage rather than absolute numbers.

Figure 10 (missing)\

Figure 11

76.As can be observed from Figure 10 and Figure 11, even though congestion is occurring in all the link types of the network, congestion is most severe on DSLAM links.

77.While these numbers may seem low to the average lay person, they are significant to network traffic engineers such that it is important to consider the number of congested links in the proper context.

78.Since end-users’ high-speed traffic travels across multiple links in the Company’s network, if a single link along the way is congested, as noted above, an end-user will experience negative impacts of congestion from slower traffic to not being able to receive content from the Internet at all. Once congestion has been observed, this means that latency has already been occurring in the network thereby producing negative impacts on customers. The actual negative impacts of congestion can be experienced by 100% of Internet end-users making use of the network on congested links, though to varying degrees depending on what the end-user is doing. Even Internet end-users making use of the network on links that are affected by latency but not yet considered congested may still be impacted by a slower connection; however, it is difficult to clearly identify this condition.

79.This phenomenon is analogous to a road system. When some of the major arterial roads are congested (analogous to Backbone links), cars travelling from the suburbs to downtown are impacted by traffic regardless of the state of congestion on the roads in the suburbs (similar to DSLAM and Aggregation links). Just like a single traffic roadblock can hinder drivers going to multiple destinations that pass through the road that is blocked, a very small amount of congested links can seriously affect a large number of high-speed end-users’ traffic. When traffic levels increase, the potential for drivers to be impacted by more than one roadblock also increases. The impact of that congestion is clearly perceptible to the end-user, though to varying degrees. The effects are even more obvious in the case of time sensitive applications such as voice communications, where the content can become severely degraded to the point of being unrecognizable.

80.One needs to be cautious about simply looking at absolute number of congested links over time. For example, non P2P traffic that is not being managed as part of the Company’s traffic management solution has been able to use up and flow more freely using the bandwidth previously occupied by P2P file sharing traffic during peak periods. Similarly, other non P2P types of traffic such as video streaming are growing at a faster pace than in prior years. Furthermore, one must consider the impacts of seasonal fluctuations in traffic patterns generally. Finally, the number of congested links over the period in Figures 10 and 11, the table above is also affected by the rate of deployment of the Company’s traffic management solution.

81.Depending on the type of link, the potential number of impacted customers will vary. As an example, a congested OC-3 link can impact as many as # customers whereas for an OC-48, this number increases to # customers. The Company had projected that the number of customers that could be affected by congested links could reach as high as 790,000 by the end of the first quarter of 2009 were Bell Canada to fail to apply its network management solution. As will be discussed in section 8.1 of this submission, Bell Canada has invested heavily in expanding capacity of its DSL network to address congestion issues. Even with these investments, given the year over year growth trends, Bell Canada estimates that congestion would increase to a point where the projected investment would not be sufficient to support the growth, hence the need for additional measures.

82.Figure 12 shows a significantly increasing number of dropped cells on the ATM network over a very recent period compared to previous years even though total average capacity was at all times above the total average usage in the network.

Figure 12

83.A sharp increase in cell loss directly translates to high packet loss in the network. Overflowing traffic on a link is first queued (delayed) until it can be delivered. If the delay of delivery is too long or the quantity of traffic surpasses the queuing capacity, then cells (packets in the case of an IP network) are dropped. Therefore, an indication of dropped cells means that latency is likely at its highest level.

84.One party, TCPub73, commented that the increase in cell loss “sudden ascent began at about the same time when Bell Canada began implementing traffic shaping…” and implied that the Company’s equipment might be causing the cell loss. This statement shows that TCPub misunderstands many aspects such as the seasonal traffic fluctuations, the timing of the DPI implementation, and the meaning of the chart. Firstly, each year Bell Canada experiences growth in traffic in the fall that starts around the month of August. This is reflected in Figure 12, when the sharp increase in cell loss event began to occur. Secondly, the DPI devices were first implemented starting in October 2007 and were not significantly deployed in the network until the end of November 2007, so the sharp increase in cell loss could not be due to the DPI equipment. Thirdly, the cell loss activity that was recorded in the chart was solely due to congestion on links in the ATM network. Any cell loss caused by other issues such as equipment failure is not included in the chart. In any event, the DPI devices limit the throughput (downloads and uploads) but cannot cause cell loss. Cell losses are due to congestion. Finally, the chart shows that at its peak in February 2008, there were 4500 cell loss “events”. As indicated in the chart, a cell event is “recorded if any ATM port in the network experiences discards due to congestion in a 24 hour period”. This means that, if evenly distributed during the month, a rough calculation would translate into more than 150 congested ports in a single day. A port can support thousands of customers and an event can represent thousands of lost cells on that port. Therefore, contrary to TCPub’s belief, the cell loss events in Figure 12 are significant.

85.The compounded effects of delay and dropped cells negatively affect Internet end-users to varying degrees. The effects are clearly worse in the case of time sensitive applications where the content such as a voice communication can become severely deteriorated to the point of being unrecognizable. It is quite possible that a high number of end-users attribute a slow connection to Bell’s traffic shaping when in fact the situation might be caused by network congestion.

86. Therefore, any suggestion that the Company does not have congestion on its network is clearly unwarranted.

8.0 How Bell is managing increased growth

87.Bell Canada has essentially adopted a three-pronged approach to managing capacity on its network: i) investing in capacity through managed capital spending, ii) moving toward usage-based pricing and new business models in a manner that benefits end-users and that takes into account the realities of the highly competitive marketplace, and iii) managing bandwidth. “Managing bandwidth” as part of Bell Canada’s Internet traffic management solution includes the following:

- terminating or managing the service of users who consistently breach the Company’s Acceptable Use Policy; and

- better balancing Internet traffic on its network during peak periods by using DPI to redistribute P2P file sharing traffic to off-peak periods.

8.1 Building Capacity

88.Augmenting capacity in the network has been and continues to be the first approach the Company uses to manage congestion. Indeed, since 2001, the Company has invested over $3 billion in capital investments on its high-speed Internet service. In fact, in 2007 alone, the Company spent over # in CAPEX on its high-speed internet service and $110M of that CAPEX was additional unplanned capital spending solely to relieve congestion on its network. The Company plans to spend close to half a billion dollars in 2008 to expand and upgrade the infrastructure of its DSL network. Figure 13 sets out the Internet related network investments made by the Company (and that the Company continues to make this year) for the years 2001 to 2008:

Figure 13 (missing)

89.This significant amount of capital expenditure is reflected in the growth in network capacity as illustrated by Figure 14 below.74

Figure 14

90.Although capacity is shown in Figure 14 to be at all times above the total traffic demand or growth in Figure 7, these figures can be misleading since they are simply averages of traffic measured at specific moments in time and are not able to reflect the peak traffic usage every day. Once congestion has been observed, this means that latency has already been occurring in the network thereby producing negative impacts on customers. As described in section 7.2, this phenomenon is analogous to a road system. When some of the major arterial roads are congested (analogous to Backbone links), cars travelling from the suburbs through downtown are impacted by traffic regardless of the state of congestion on the roads in the suburbs (similar to DSLAM and Aggregation links). The Company has also observed that, while a fairly high number of links are not overly utilized, the number of very highly utilized DSLAM links has been significantly growing over the years.

91.To address congestion, Bell Canada monitors the utilization of links and, at specific utilization thresholds, network provisioning groups are automatically notified to initiate the necessary projects to augment network capacity on a specific link. The utilization thresholds used to trigger the network relief are designed to be lower than the thresholds where the link is considered congested. The network relief threshold needs to be low enough to provide sufficient time for the additional capacity to be operational and available before the link becomes congested. Ideally, the network relief threshold would always be low enough so that congestion is avoided altogether on the links. Bell Canada uses the following network relief thresholds:

92.As explained previously, DS-3 and OC-3 links are typically used to feed DSLAMs and OC-3 links can also be used as small Aggregation links. In the case of OC-12 links, these can be used in the Aggregation network or in the Backbone network whereas OC-48 links are typically used in the Backbone network.

93.CAIP indicated in CAIP(CRTC)15May 08-5 that its members typically plan for additional capacity when AHSSPI utilisation rates hover between 50 and 60 percent. Based on this, it can be seen that the thresholds used by Bell Canada to trigger new projects to augment capacity are more than reasonable.

94.Bell Canada also performs rerouting of traffic on less congested links. However, this mechanism to manage congestion is limited since too much rerouting increases the delay in delivery of traffic and therefore latency is not improved.

95.Up until this point in the submission, one might conclude that Bell Canada has a single DSL network. That is not the case. Initially, Bell Canada constructed an ADSL network that uses ATM as the technology underpinning its backbone network. In 2004, Bell Canada started building its next generation DSL network using Fibre to the Node technology (FTTN) and Optical Ethernet (OE) in its aggregation network. Bell Canada is heavily investing in its Ethernet aggregation network as well as FTTN, but the vast majority ( #) of its retail and wholesale GAS customers currently reside on the ADSL ATM network. When relief is required to address congested links on the ADSL ATM network, Bell Canada is required to invest in legacy technology to support the ATM network. While ATM is both expensive and limited in its capacity when compared to OE, nonetheless, as noted above, Bell Canada continues to make those investments on behalf of its customers. Bell Canada is increasingly investing in its Ethernet aggregation network as well as its FTTN network but it will take time until it is expanded and available to the majority of Internet end-users. Therefore, transferring customers from the ADSL ATM network to the Ethernet aggregation network and the FTTN network to relieve network pressure was not possible for the majority of locations where congestion was occurring.

96.Acanac argues that congestion in Bell’s network could not be that widespread and at least not in the areas in which Acanac provides services75. Acanac arrives at this conclusion based on the following:

Approximately one year ago, Acanac requested that it be completely migrated off of Bell’s ATM network (which existed at the time between certain Bell central office DSLAMs and the BAS) and upgraded to a so-called GigE “AGAS” interface… Acanac therefore finds it difficult to believe that there are many if any end-user premises on Bell’s networks, at least in the areas in which Acanac provides services, who are on the ATM network where Bell now apparently claims to have congestion.76

97.It is clear, based on Acanac’s statement, that it misunderstands what Bell Canada’s AGAS service provides. The AGAS service provides an IP-based connection between the AHSSPI and the BAS. Contrary to Acanac’s belief, subscribing to AGAS does not change the portion of the network between the BAS and the end-users. If end-users are presently connected to the ATM network, and the majority are as indicated above, the ATM portion does not change simply when a GAS customer subscribes to the AGAS service.

98.CISP’s statements acknowledge the need for Bell Canada to proceed with equipment upgrades to address congestion in its network77. When presenting its claims, CISP provided the copy of an article that was posted on the web by a DSL industry analyst78. The Company reviewed the article and noted several inconsistencies and faulty assumptions which may explain how the author formulated the incorrect conclusion that Bell Canada’s congestion is minimal and easily solved.

99.The Company first takes issue with the author’s assumption that because percentages of congested links are low that these must be ‘unnoticeable to the user, but is a sign trouble might be coming’. The Company has explained that once congestion has been measured, latency and dropped packets are already occurring and that impacts are felt by end-users. The Company established these facts through internal testing and some customer surveys.

100.To ascertain that congestion is unnoticeable to end-users, the author would have to correlate individual events of latency and dropped packets occurring at a specific moment in time with any end-user perceived effects. The Company notes that while there is considerable on-going academic research on the topic, there are no established levels on what constitutes acceptable levels of delayed or lost packets. What does matter is the end-user’s perception even more so than absolute congestion numbers. The Company’s paragraph 86 illustrates that the author has only guessed that end-users would not notice congestion.

101.The Company rejects the suggestion that congestion would disappear if only the Company would spend $4-12M to upgrade 5% of its DSLAM with GigE uplinks. This is a gross oversimplification of the work required to address congestion. At the outset, the Company estimates that the costs in the article would barely cover the hardware and basic installation of a GigE link in DSLAM but would not cover the necessary network costs such as the Ethernet switching ports or the significant human resources it would take to transfer end-users already in service to new equipment. Most significantly, the author completely ignores the fact that Ethernet technology is not available in every central office and that some DSLAMs cannot be upgraded to GigE. In many cases the cost of Ethernet switching equipment and transport costs would have to be added to the GigE port costs. Where older DSLAMs cannot be converted, the cost of a GigE uplink provided by the author is completely irrelevant.

8.2 Usage-based billing

102.As noted above, Nemertes argues that North America will require an additional $43 billion in capacity investment by 2010. While continued investments in network capacity must remain at the core of a carrier’s network management solution, this type of incremental investment will not be sustainable without changes to existing revenue models and the introduction of new business models. Part of the issue is that current revenue models were not designed to handle the dramatic increase in demand due to online video. As noted by Cisco, Figure 15 shows that video provides a little over 1% of $0.01 per MB while mobile text messaging provides $20 per MB.79 This implies that consumers have been paying for services and not MB, and thus, consumers’ willingness to pay for a service currently has no correlation with the amount of bandwidth that a service consumes.

Figure 15

103.Bell Canada faces a similar situation. Figure 16 shows the Company’s average revenue per customer (ARPU) per month between 2003 and 2007. From 2003 to 2007, ARPU while the average usage per user (in GB) increased 267%. As Figure 16 shows, ARPU does not reflect bandwidth usage, and as a result, the revenue model will need to change in order to support the additional investment in capacity required to handle the explosive increase in demand.

Figure 16

104.Furthermore, the economic and market realities of the high-speed Internet access market clearly show that a pure capital spend solution is not viable. The nature of the growth of Internet traffic is such that as network capacity expands new user applications invariably also grow to utilize that capacity. As a result, in addition to expanding capacity, Bell Canada uses pricing-based mechanisms to manage network traffic such as bandwidth caps and usage-based pricing. This type of differential pricing is beneficial to both consumers and carriers because it matches prices to use, which provides the appropriate incentives for optimal network use and expansion.

105.The Company initiated the transition to usage-based billing in December 2006 when it ceased offering its ‘unlimited traffic’ plan to any new subscribers. However, the transition to usage-based pricing cannot be the sole solution to network congestion, nor is it an instant “fix” for three principle reasons, the third of which is submitted in confidence as it reflects the Company’s potential marketing and pricing strategy. First, transitioning from “unlimited traffic” pricing to “usage based” pricing will take time; from a purely contractual basis, all customers would have to be adequately notified of such a significant change; from a systems viewpoint, each company would have to design, build, implement and seamlessly transfer customers from unlimited bills to bills that indicate usage based prices. Second, carriers will need to carefully experiment with different pricing plans in the marketplace in order to maintain customer satisfaction and thus, maintain its customer base. This will involve a high degree of trial and error which necessitates market trials rather than mass migrations.

107.Even once the transition to usage-based pricing is achieved, usage pricing will not itself suffice in reducing network congestion. As explained above, Internet demand growth over the last few years greatly surpassed industry projections. It has become increasingly difficult to project with any reasonable accuracy future demand such that adjustments to corporate strategies to deal with future growth will always be required. That is why the Company has adopted a multi-pronged approach to managing demand on its network, as described earlier in section 8.0. Even if technology is eventually developed in order to allow for flexible pricing, there will likely remain a need to manage “bursts” of traffic which usually, but not always, occur during “peak” periods.

8.3 Bandwidth management

108.Bell Canada is currently using DPI technology as part of its Internet traffic management solution. As explained in Bell Canada(CRTC)15May08-7 CAIP Part VII, the DPI equipment was originally intended to introduce customer usage data collection functionality for Bell Canada’s usage billing. It was subsequently determined that DPI should also be used for traffic shaping during peak periods as an additional measure to address congestion.

109.Prior to implementing traffic shaping during peak periods, high usage resulted in many links being identified as congested for very short periods of time, triggering network capacity projects. However, outside the peak period, the same links were not congested and performing satisfactorily. Thus, expanding capacity throughout the network to relieve congestion situations experienced only during peak periods would not be an efficient use of limited capital dollars.

110.The introduction of traffic shaping was a necessary measure to manage investments in the network to address the congestion at peak periods. Since traffic shaping has been introduced, Bell Canada has managed to reduce the number of links being identified as congested for very short periods of time. The Company has observed that non P2P traffic has significantly increased since it deployed traffic shaping during peak periods. This increase is likely a result of two main events: 1) non P2P traffic is now able to use up and flow more freely using the bandwidth previously occupied by P2P traffic, and 2) other non P2P types of traffic such as video streaming are growing at a faster pace than in prior years. The end-result is a better customer experience when using time-sensitive non P2P file sharing applications during peak Internet usage periods. Because the implementation of traffic shaping in Bell Canada’s network is very recent, the analysis of traffic trends for the purposes of drawing full conclusions on the impacts of the implementation is difficult especially considering seasonal traffic fluctuations, the increasing number of DPI devices in the network during deployment and the growth of traffic. A full year of data would be needed to better understand the benefits to non P2P file sharing traffic that are directly associated with the implementation of traffic shaping. Nevertheless, the decreasing number of cell loss events seen in Figure 12 is a direct indicator that packet loss and latency in the network are declining.

Deployment of bandwidth management on Bell Canada’s retail traffic

111.Bell’s initial sampling of traffic usage using DPI revealed that a small number of users were generating a disproportionate percentage of the total traffic on the network, and that a substantial amount of that traffic was P2P. The initial sampling results prompted Bell Canada to investigate using DPI for purposes of traffic shaping. After a period of technical trials, Bell Canada began the deployment of its current Internet traffic shaping solution to its Sympatico retail customer base on 28 October 2007 during peak periods of Internet usage that typically occur in the early evenings and end in the early mornings (i.e., 4:30 p.m. to 2:00 a.m.).

Bandwidth management applied to wholesale traffic

112.After additional software upgrades and trials, Bell Canada began the second phase and applied its current bandwidth management practice to its wholesale GAS customer base on 14 March 2008 to ensure that all traffic on the shared network was treated the same. As of 10 April 2008, the Company had applied its current bandwidth management practice to wholesale to the same extent as retail. As of July, the Company has reached substantial deployment of aggregation sites in its network ( # BAS or # of the total BAS) which handle the vast majority of wholesale and retail traffic. The total number of BAS expected to be enabled with DPI technology is #. Once this number is reached, DPI will have been enabled for all the DSL end-user traffic that traverses BAS.

How Bell is actually using DPI: the shaping of P2P file sharing traffic for the benefit of other traffic and the majority of users

113.Bell’s Internet traffic shaping is intended as a mechanism to allow for a better allocation of bandwidth for all users that share a common network and is aimed at delivering a more positive and better experience on the network for all users during peak Internet usage periods. Bell Canada has restricted the application of its Internet traffic shaping solution to only P2P file sharing applications, including BitTorrent, which uses a well understood application protocol that is distinct from other types of Internet traffic such as VoIP. The Company’s traffic shaping is being applied in the same manner to all identified P2P file sharing traffic on its DSL Point to Point Protocol over Ethernet (PPPoE) network, including both retail and wholesale GAS traffic.

114.Before the introduction of DPI, network equipment or routers only looked at the destination IP addresses to determine where to send data, and in order to preserve network integrity (such as protecting the network against viruses). DPI looks at the protocol headers (IP, TCP, application), commonly referred to as “signatures”, which are used to properly identify the application of the traffic, e.g., DPI is being used to properly identify P2P traffic regardless of how the application declares itself. With the use of DPI, it is now possible to properly identify P2P file sharing applications from other applications such as VoIP. Once the P2P file sharing traffic is properly identified, the DPI equipment implements a selective traffic shaping function on the identified P2P traffic.

115.The DPI shaping rules deployed by Bell Canada is limited to identified P2P file sharing applications. Therefore, when it comes to using DPI for shaping P2P file sharing traffic, it is important to have the appropriate signatures for the P2P file sharing applications configured into the DPI device. For example, many refer to Skype (a VoIP service) and Joost (an online video streaming service) as forms of P2P because they use certain communication mechanisms similar to P2P file sharing, i.e., the applications make a connection from one user to another user. However, Skype and Joost protocols are different than those of P2P file sharing applications. P2P file sharing applications and BitTorrent are the only signatures for which traffic shaping policies apply – these applications are easily distinguished by the DPI from other applications, like Skype or Joost. Accordingly, Skype and Joost traffic are not traffic shaped. Furthermore and contrary to CIPPIC’s assertion80, the Company does not shape the traffic of Babelgum, Miro or Reeltime. Although these applications are based on a P2P distribution model, they run completely different signatures from P2P file sharing applications and in fact mostly utilise HTTP protocol for their communications. As for Vuze, also mentioned by CIPPIC, this application uses the BitTorrent protocol and therefore shaping is applied.

116.VoIP voice communications are not aimed by the current shaping rules as there is an obvious differentiation of VoIP in the signature on the DPI. As for VPN and streaming, there are specific signature sets for these applications as well that the DPI can recognize. In addition, there are some streaming services that use HTTP that are obviously captured under the HTTP signature since these streaming services are video protocol encapsulated on top of HTTP. VPN traffic, on the other hand, is typically encrypted. Therefore, the VPN signatures in the DPI are created leveraging the standard protocol ports and basic signatures based on the specification of the VPN vendor. As long as the customer’s VPN port is correctly setup and there are no alterations to the VPN client, VPN traffic will not be shaped. In the Company’s experience, issues arise because the VPN client is incorrectly setup or not setup to the specifications of the VPN vendor.

117.It is important to remember that all the applications in use are competing for the same bandwidth. End-users sometimes launch more applications than their bandwidth tier is capable of handling and this could self-impose a degradation of some of the applications. For example, if a large file is already downloading or uploading and the customer attempts a VoIP call, depending on the high-speed service the customer is using, it is possible that the voice communication could appear degraded. This situation is beyond Bell’s control. As mentioned previously, end-users using other non P2P file sharing applications simultaneously with P2P file sharing applications still have access to the full bandwidth of their service for these non P2P file sharing applications during peak periods (subject to the line) as only the end-user’s P2P file sharing applications are traffic shaped. The aggregate total traffic from all applications simultaneously used can make use the remaining available bandwidth on the facility to that end-user.

118.When it comes to traffic shaping of P2P file sharing applications, a number of parties have criticized Bell’s approach because they claim it does not address congestion in a focussed manner81. These parties have in turn proposed applying traffic shaping on a per-GAS service provider basis82, on a per-user basis83 or only at times or where congestion exists84. As previously noted, the Company, as a Canadian Carrier, is in control of its own network and is free to implement the standards and specifications of its choice within its network, as has been recognized in the past on several occasions by the Commission.85 The Company is constantly and proactively monitoring the industry for solutions or products that would enable it to continue to improve its network management practices. Nevertheless, the Company submits that while it may explore a more granular application of bandwidth management in the future, the management tools that would be economically and technologically suitable for a telephone company using DSL network equipment to perform network management at the level of granularity and in the dynamic fashion suggested by these parties are not presently available in the market. The Company’s present network management practices continue to be the best practical alternative to address congestion in its network for both retail and wholesale high-speed Internet end-users.

9.0 Allegations of problems caused by Bell’s use of DPI for bandwidth management

9.1 Reported problems and the Company’s investigations

119.In paragraph 22 of its Interim Answer and in Bell Canada(CRTC)15May08-6 CAIP Part VII, the Company responded to several allegations on various websites and in online forums, as well as allegations in CAIP’s Application (see in particular paragraph 103), that the Company’s Internet traffic management solution is affecting more than P2P applications, such as VoIP and Virtual Private Network (VPN) traffic, as well as online streaming traffic such as YouTube and Internet radio. Even though the Company continues to investigate reported problems with GAS customers and end-users, the vast majority of these problems are not related to the deployment of DPI technology.

120.In a particular case, a very large number of users of P2P file sharing were at once impacted when in January of 2008, Microsoft advised customers to download a very important patch to fix a security problem in all of its Windows operating systems. When users downloaded the patch, the default settings for half-open connections when browsing the Internet was set to a low number of 10. Since P2P file sharing applications work on the basis of opening multiple sessions, many end-users were severely impacted without understanding why. Several customers contacted Bell Canada and were convinced that traffic management was causing the problem. Eventually, the source of the problem was discovered and a patch was made available on the web to address the problem. This is simply one example of many where the use of DPI for traffic shaping was incorrectly blamed as the cause of problems.

121.In other cases, the Company received end-user complaints from regions where DPI was not yet deployed. These problems were investigated and eventually attributed (although inconclusively) to mis-configurations and other network issues.

122.Other allegations include wholesale ISPs claiming that subsets of end-users were complaining of negative impacts on their applications due to Bell’s P2P traffic shaping. The same shaping rules and signatures are applied on each of Bell’s DPI’s. Since the same rules and signatures are applied, logic would dictate that all users would encounter the same problem, and not just a few. Upon investigation, the Company established that most of these cases were related to issues with the end-user’s DSL line and not DPI.

123.The Company continues to encourage its wholesale ISP customers to bring to the Company’s attention any problems and remains committed to working towards resolving them.

9.2 CAIP’s “evidence” does not support its allegations

124.In interrogatory CAIP(CRTC)15May08-2, with respect to CAIP’s allegation that “practically all forms of file sharing service and audio or video streaming service, such as Internet radio and YouTube have been affected”, the Commission asked CAIP to “provide all evidence in support of CAIP’s claim that such applications have been affected.” (Emphasis added).

125.Very surprisingly, in response to the interrogatory, CAIP has relied solely on anecdotal evidence without any reference to hard evidence. Indeed, CAIP was content with merely referring to comments that were filed by various end-users and posted on the Commission’s website along with some statements made in its Application and Interim Reply comments. It was perhaps understandable that CAIP had limited time to prepare its case when it first filed its Application. However, since then CAIP had ample time to gather and prepare its evidence. Instead, CAIP elected to rely on incomplete information almost devoid of facts or probative value. Every day, ISPs such as Bell Canada receive many calls from their end-users reporting problems. This fact is no different with or without the implementation of traffic shaping. As is clear from section 9.1, the fact that an end-user believes that “traffic shaping” is the cause of any and every service issue does not make it so. Problems are often related to elements beyond the Company’s control, such as the configuration of the end-user’s devices or applications.

126. For the purposes of preparing their case or responding to the Commission’s interrogatories, there are many tests that CAIP members could have conducted with their end-users to derive fact-based test results. A serious test program would include placing test equipment at the end-user’s premises. This type of testing is readily available on the market from a number of sources.86 CAIP would have had to describe the test program and provide details such as the sample size, the test conditions and the measured parameters. CAIP did not provide any of these details to support its claims. It appears that most if not all of the tests performed by CAIP members were performed using software-based tools that were never designed to test the network for the effects of traffic shaping as opposed to using professional testing equipment that would produce more reliable results and information on the network’s condition. The Company submits that CAIP’s so-called “evidence” is without probative value and should be treated as such.

127.In its interrogatory response87, CAIP attempts to provide “evidence” that DPI is impacting VoIP, VPN, encrypted data and other applications.

128.In many recent troubleshooting activities, it was found that VoIP and VPN complaints about packet loss and latency were due to other network issues (e.g., network routing issues, link failures and bad telephone line synch stats). Some of the troubleshooting efforts were found from locations where the DPI’s had not been physically implemented yet during Bell’s rollout schedule.

129.As “evidence” of impacts to VPN connections and encrypted data, CAIP refers to 23 comments from individuals that were posted on the Commission’s website. At the outset, the Company notes that such comments could have been posted by anyone including end-users that are not even served by the Company’s network. An analysis of some of the comments on the Commission website quickly illustrates that some commentators are even cableco customers. Since no validation is performed by the Commission, these are simply comments taken out of context whose probative value is suspect and cannot be relied upon.

130.CAIP also quotes Wireless Nomad, another intervener in this proceeding that “Bell Canada, in our experience, classifies many forms of encrypted communications (including SSH sessions) as potentially “peer-to-peer”…”88. Wireless Nomad itself does not base its statements on facts and uses the term “potentially”. CAIP goes on to state that reports in online user groups corroborate CAIP’s findings. As for the impacts of DPI on other applications, CAIP again refers to the comments that were filed on the Commission’s website. Clearly, comments taken out of context cannot be considered “evidence” to prove CAIP’s allegations.

131.In another interrogatory response89 CAIP presents the effects of traffic shaping through a number of screen captures. Notwithstanding that screen captures can be created in a lab under simulated conditions, the Company reiterates that such examples that are taken from websites and provided without the proper context are not that useful and do not constitute probative evidence. That being said, the screen captures that CAIP refers to show that end-users are using P2P file sharing applications and that P2P file sharing traffic is dropping. This is not a fact that the Company denies. On the contrary, the Company has outlined this very fact in each of its submissions in this proceeding. Therefore, the screenshots add nothing more except to support Bell Canada’s statements that traffic shaping is limited to P2P file sharing applications during peak periods and does not impact the speed for other applications such as web browsing or video streaming.

10. Legal issues raised in CAIP’s application

10.1 Network Management Activities Permitted by Tariffs

132.CAIP has alleged that the application of the Company’s traffic management practices to its GAS customers is contrary to ss. 24 and 25(1) of the Act, more specifically, that doing so is akin to the Company unilaterally altering its GAS Tariff without Commission approval. The GAS Tariff contains the terms and conditions pertaining to the GAS service. Contrary to CAIP’s allegations, the Company has not acted outside of the bounds of the Company’s Tariffs.

133.All Company tariffs, including the GAS Tariff, are subject to terms and conditions outlined in other applicable tariffs, including General Tariff – 6716, Part 1, Item 10 (Terms of Service). Section 8.3 of the Company’s General Terms of Service states that:

Customers are prohibited from using Bell Canada’s services or permitting them to be used so as to prevent a fair and proportionate use by others. For this purpose, Bell Canada may limit use of its services as necessary.

134.The Commission has long recognized that the Company’s Terms of Service contain provisions that:

” …allow them to suspend or terminate service where a customer uses or permits others to use services so as to prevent fair and proportionate use by others.”90

135.The Commission has accordingly stated that it is not necessary to include explicit “network congestion” provisions in specific telephone company tariffs as such provisions are already accounted for by virtue of their respective Terms of Service.91 In this particular situation, the Commission was addressing proposed tariffs filed by various telephone companies regarding the use of automatic dialing-announcing devices (ADADs) and the proposed provision for the telephone company to refuse ADAD attachment where network congestion could result. The Commission confirmed that such provisions were unnecessary.

136.The Commission reiterated this position when it extended to cable carriers the right to suspend or terminate the service of an ISP’s end-user who makes disproportionate use of the service.92

137.The applicability of the Company’s tariffs, including its General Tariff, is clearly stated in the Company’s Master Communications Agreement for Tariffed (MCAT) Services that each ISP purchasing GAS must execute. The MCAT provides for the termination or suspension of service in accordance with the Company’s tariffs. Agreements with the Company’s wholesale GAS customers also typically include an appendix containing Internet Use Policies (the Policies) which clearly provide that the customer agrees to comply with the Policies and to also ensure that its end-users comply with the Policies. Specifically, the Policies affirm that the service may not be used “in a manner which is contrary to law or would serve to restrict or inhibit any other user from using or enjoying the service or the Internet.” The Policies further state that engaging in such a prohibited practice may result in the termination or suspension of the offender’s account and/or access to the Company’s services or may result in additional actions that the Company deems appropriate with respect to any of the Policies described.

138.For example, the agreement with the same GAS Customer referred to above in section 4.2 executed in # includes the following provisions:

Master Communications Agreement – Tariffed

The Services, … shall only be provided in compliance with and subject to all applicable tariffs, including General Tariff – 6716, Part I, Items 10 (Terms of Service) … The Tariffs will prevail over any provision of the main body of this Agreement or the Service Schedules.

Bell DSL Tariff Approval Letter – Schedule Z

We wish to advise that the CRTC has approved Tariff Notice 6767D … GAS and HSA Services must now be provided in accordance with applicable tariffs approved by the CRTC, including General tariff – 6716, Part 1, Items 10 – Terms of Service…

Service Confirmation Form – Part III

By signing where indicated below, Customer agrees to the terms of the Internet Use Policy attached as Appendix 2.

Appendix 2 – Internet Use Policies

1. Rules While using the Service, you may not … or otherwise use the Service in a manner which is contrary to law or would serve to restrict or inhibit any other user from using or enjoying the Service or the Internet;

139.Therefore, notwithstanding the Commission’s affirmation of the Company’s right to ensure a fair and proportionate use of its services by others resulting from the fact that the Company’s various tariffs are subject to the Company’s Terms of Service, the Company’s Agreements and Policies applicable to GAS customers also actually contain such explicit provisions.

140.The Commission has also made certain findings regarding what actions by customers may prevent others from making “fair of proportionate use” of the service. For example, the making of a very large volume of calls in a short timeframe was found to be taking up lines that were not available for other customers, thereby preventing them from making fair and proportionate use of such lines and resulting in a justified disconnection of service under Aliant Telecom’s Terms of Service.93

141.In Telecom Order CRTC 2000-789, in interpreting the phrase “fair and proportionate use”, the Commission considered the purpose for which the service was intended and the terms on which it was offered. In so doing, it took the preliminary view that the attachment by an end-user of a server at its premises would not be “fair and proportionate use” of the cable carrier’s access services.

142.In another recent example, the Commission acknowledged in the context of the implementation of enhanced community notification service the need for ILECs to manage their networks by imposing operational measures such as allowing only a fixed number of callers through the PSTN and limiting the length of outgoing voice messages in order to mitigate network congestion by network intensive applications.94

143.Nevertheless, the Company has not fully exercised its discretion to “suspend or terminate” service of those GAS customers whose end-users prevent a fair and proportionate use by others. Instead, the Company has made use of other technical options available which are less interventionist in nature, such as its Internet traffic management solution. Network management simply limits use of the GAS service as necessary to comply with the Company’s General Tariff and, specifically, the fair and proportionate use by all its customers.

144.In short, and contrary to CAIP’s allegations, the Company’s traffic management measures are not being performed in a manner that is inconsistent with its tariffs and contractual obligations. Rather, the Company’s traffic management measures are performed in a manner that is consistent with its tariffs, its contractual obligations and the Commission’s determinations in this regard.

10.2. No Unjust Discrimination

145.The Company notes CAIP’s allegation that the Company’s traffic management measures are contrary to section 27 and in particular, subsections 27(2), (3) and 4 of the Act.95 Section 27 of the Act provides as follows:

Unjust discrimination
(2) No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.

Questions of fact
(3) The Commission may determine in any case, as a question of fact, whether a Canadian carrier has complied with section 25, this section or section 29, or with any decision made under section 24, 25, 29, 34 or 40.

Burden of proof
(4) The burden of establishing before the Commission that any discrimination is not unjust or that any preference or disadvantage is not undue or unreasonable is on the Canadian carrier that discriminates, gives the preference or subjects the person to the disadvantage.

146.CAIP makes several allegations in its Application which are simply untrue:

stitute a purely commercial, anti-competitive move that is directly related to the usage billing changes that it has implemented for its retail Internet access service. (para 76)

147.The Company will further address CAIP’s allegations of unjust discrimination as follows. First, no preference is being conferred by the Company’s traffic management measures. Second, the implementation of the Company’s traffic management solution has not resulted in a substantial lessening of competition. Finally, there is no ulterior motive attached to the Company’s management of network congestion.

No preference is being given

148.In applying its traffic management measures, the Company is not discriminating against its GAS customers nor is it giving itself an undue preference. As the Company is already applying traffic shaping to its retail customers, there is no discrimination or undue preference incurred by the application of this shaping.

149.The Commission has considered an issue analogous to the current situation in Order CRTC 2000-789, Terms and rates approved for large cable carriers’ higher speed access service (Order 2000-789). Certain cable companies had proposed at the time to apply a volume usage cap and a rate for usage above specified levels on ISPs purchasing wholesale capacity from them. The Commission stated at paragraph 26 of Order 2000-789 that:

The Commission considers that to the extent a cable carrier chooses to include volume usage rate restrictions in its tariff, the carrier should apply these same volume usage rates to its own retail Internet service offering. It is the Commission’s preliminary view that it would be contrary to section 27(2) of the Act if a cable carrier’s access tariff includes volume usage rate restrictions that differ from the basis on which the carrier offers its own Internet service. [Emphasis added]

150.Allegations similar to those of CAIP in the present proceeding were made by Cybersurf Corp. in a Part VII application for access to the Quality of Service Enhancement Service (QSE) of Shaw Cablesystems G.P. (Shaw) and PacketCable functionality of Rogers Communications Inc., Shaw, and Vidéotron ltée. Cybersurf, a reseller of Shaw’s High-Speed Internet Service (HSIS) asked the Commission to intervene on the basis that Shaw was conferring an undue preference onto itself by making QSE available to its own retail customers without reselling it to Cybersurf. The Commission denied Cybersurf’s petition in this case:

The Commission finds that based on the evidence provided in this proceeding, no traffic is given priority over other traffic, and in particular, there is no evidence that Shaw’s QSE gives its traffic preference over Cybersurf’s or any other competitor’s traffic on the HSIS network. The Commission therefore cannot find that Shaw is conferring onto itself an undue preference by offering its HSIS customers the QSE while not offering the same to Cybersurf for resale to its end-customers.96

151.For the same reasons, the Commission cannot find that Bell Canada is conferring unto itself a preference, let alone an undue preference.

152.Indeed, the Commission addressed nearly identical issues in rendering its determinations in Telecom Decision CRTC 2006-77 Cogeco, Rogers, Shaw and Videotron – Third-party Internet access service rates (Decision 2006-77), the follow-up to Telecom Decision CRTC 2004-28, IMCAIP against certain incumbent cable and telephone carriers – Provision of higher-speed access and retail Internet services including Lite service (Decision 2004-28). Paragraph 235 of Decision 2006-77 marks the start of a section called “Treatment of end-users for excessive usage.” Like CAIP in the present instance, Xit Telecom Inc. (Xittel) submitted that a cable carrier should not be put in a position in which it had effective control over how each end-user of a TPIA customer used the Internet. The cablecos, on the other hand, stated that Xittel was ignoring the primary and essential function of restriction on Internet use: the maintenance of the integrity of the cable carriers’ networks. In making its determination, the Commission stated:

248. The Commission considers it appropriate that each cable carrier be provided the ability to manage the potential negative outcome of high-consuming bandwidth end-users in a manner that does not degrade the Q of S to all end-users, whether it is the cable carrier’s end-user or the competitor’s end-user. The Commission considers, however, that regardless of the approach adopted by the cable carriers to address this problem, such an approach must provide equivalent treatment with respect to excessive usage to both its own retail Internet access service end-users and TPIA end-users. The Commission further considers it appropriate that each cable carrier in this proceeding include a statement in its TPIA tariff to reflect this equivalent treatment. Accordingly, the Commission directs Cogeco, RCI, and Shaw to include a statement of equivalent treatment of both retail Internet access service end-users and TPIA end-users in their TPIA tariff pages.

249. With respect to the different treatment by cable carrier of end-users for excessive usage, the Commission considers that, subject to the requirement for equivalent treatment specified above, each cable carrier is permitted to implement its own approach. With respect to RCI’s request to remove the volume usage charge from its TPIA tariff, the Commission considers that it is appropriate to do so. The Commission further considers that all cable carriers should be required to describe their treatment of end-users that are identified as excessive users. Accordingly, the Commission directs each cable carrier to include in its TPIA tariff pages a description of its treatment of end-users that have been identified as excessive users. Also, the Commission directs that if and when a cable carrier introduces changes to its retail quota charges or related excessive usage criteria, it should issue at the same time revised TPIA tariff pages that match these changes. [Emphasis added]

153.As ITAC noted, the Commission should examine this application to see “…if the applicants are asking for a form of reverse discrimination whereby they or their customers would wind up being treated more favourably than other customers in ways that could have significant perverse consequences”97 The Company is exercising the very same traffic management measures that CAIP is challenging to its own retail customers. This is consistent with the Commission’s previous determinations, as seen above in Decision 2006-77. What CAIP is asking for would amount to a preferential treatment of wholesale customers.

The Company’s implementation of traffic management measures has not resulted in a substantial lessening of competition

154.One component of the examination of undueness or unjustness is the consideration of whether there might be a substantial lessening of competition. As illustrated in a recent paper by Alexander J. Adeyinka III; “in order for differential treatment of customers, such as QoS pricing, usage-based pricing, bandwidth caps or access tiering, to violate section 27(2) of the Act, it must have a potential to substantially lessen competition in the markets affected by differential [treatment].”98

155.The Cybersurf Part VII application discussed above is of a good example of the Commission’s requirement to examine both the content and the application providers’ market as well as the Internet market when making a determination pursuant to section 27(2) of the Act. There was no evidence that Shaw’s service favoured its own VoIP service. The Commission therefore could not find that Shaw was conferring onto itself an undue preference.99

156.Adeyinka summarizes several other CRTC decisions where the Commission has held that “where a customer has access to competitive alternatives, service denial or differentiation does not constitute unjust discrimination.”100 These include:

(i) Telecom Decision CRTC 2006-33, Part VII application by Superior Wireless Inc. against TBayTel alleging unjust discrimination (Decision 2006-33) in which the CRTC concluded that while TBayTel did discriminate against Superior’s customers, the discrimination was not unjust, noting, in paragraphs 29 and 30 of its decision, that:

In assessing whether the actions of TBayTel amount to unjust discrimination, the Commission also considers that the degree of competition in the wireless market is a significant consideration. In Application by Microcell regarding alleged contraventions of section 27(2) of the Telecommunications Act by Rogers Wireless and Bell Mobility, Telecom Decision CRTC 2003-26, 28 April 2003, the Commission considered that the wireless market was characterized by rivalrous behaviour and was robustly competitive. The Commission considers that this assessment continues to be valid with respect to the current state of competition in the wireless market. In this regard, the Commission notes that in its Report to the Governor in Council: Status of Competition in Canadian Telecommunications Markets, October 2005, the Commission reported that the wireless market continued to display strong growth and to be competitive.

The Commission considers that the robustly competitive nature of the wireless market suggests that the Commission should exercise restraint with respect to the application of its powers under subsection 27(2) of the Act.

(ii) Telecom Decision CRTC 2004-66, Application by Shaw Cablesystems G.P. against TELUS Communications Inc. concerning high speed Internet promotions (Decision 2004-66) in which Shaw alleged that that TELUS was conferring an undue preference on itself and an undue disadvantage on other ISPs by promoting its higher speed internet at large discounts amounting to, in Shaw’s estimations, below cost pricing for extended periods of time. The Commission denied Shaw’s application and stated in paragraph 33 of Decision 2005-66 that given the extent of competition in the provision of higher-speed Internet access services, the targeting of discounted pricing by TELUS to new customers would not result in unjust discrimination and would not provide TELUS with an undue preference.

(iii) Telecom Decision CRTC 2003-26, Application by Microcell regarding alleged contraventions of section 27(2) of the Telecommunications Act by Rogers Wireless and Bell Mobility (Decision 2003-26), in which Microcell claimed that Roger and Bell were in violation of section 27(2) because they offered discounted pricing to Microcell’s customers in order to induce them to switch from Microcell even though these discounts were not offered to other customers. The Commission concluded that while the conduct might be discriminatory, it could not be “unjust” discrimination given “the robustly competitive circumstances of the wireless market.”

157.Indeed, the Commission has already found the Internet access market to be competitive, and has reconfirmed this finding on numerous occasions such as in Telecom Decision CRTC 2002-37, Independent Members of the Canadian Association of Internet Providers – Digital Subscriber Line Internet services by Bell Canada and Bell Nexxia, and in Telecom Decision CRTC 2006?49, The Quebec Coalition of Internet Service Providers – Part VII application regarding Internet services.

158.The Commission further stated in its latest Monitoring Report that “the average annual growth rate for both retail segments combined was 12.1% over the 2002 to 2006 period, making the retail Internet access and transport service market one of the fastest growing segments in the telecommunications industry.”101 [Emphasis added]

159.Furthermore, the Commission has recently determined in the Essential Facilities decision that the retail Internet access market is sufficiently competitive so that it classified GAS service as a non-essential service. Contrary to the predictions of CAIP in its initial application, it is clear that the Company’s network management practices have not lead to a substantial lessening of competition in the Internet access market. Indeed, the evidence demonstrates the opposite. As seen in Figure 17, the Company’s number of total GAS end-users has continued to grow each month before and after traffic shaping was implemented and the same is true for the GAS customer referred to above:

Figure 17

There is no ulterior motive attached to the Company’s management of network congestion

160.Having failed to prove that there has been discrimination or preference, let alone unjust discrimination or undue preference, several unsubstantiated theories have been developed in an attempt to support CAIP’s section 27 allegations. According to these theories, the Company initiated traffic shaping to: i) launch usage-based billing, ii) facilitate the launching of an IPTV service and iii) give an undue preference to the newly launched Bell Video Store.

161.With regards to usage-based billing, allegations that the Company’s traffic management measures are purely commercial when the Company imposes these same measures on its own retail customers are, to put it mildly, baffling. Contrary to CAIP’s allegations, the Company had launched usage-based billing well over a year prior to the deployment of DPI. All new customers are ineligible for the unlimited plan.

162.As previously stated in section 8.2, in addition to expanding capacity, the Company uses pricing-based mechanisms to manage network traffic such as bandwidth caps and usage-based pricing. This type of differential pricing is beneficial to both consumers and carriers because it matches prices to use, which provides the appropriate incentives for optimal network use and expansion. However, the transition to usage-based pricing cannot be the sole solution to network congestion, nor is it an instant “fix”, as discussed in section 8.2. Both usage-based billing and traffic shaping are instead part of a multi-pronged approach that has been adopted by the Company in order to manage capacity on its network. The Commission therefore cannot conclude that traffic shaping is meant to favour usage-based billing.

163.Furthermore, CAIP states102 that Bell commenced shaping at the same time that Bell launched a marketing campaign intended to promote its retail Internet access service. CAIP quotes Bell’s campaign as offering “super fast speeds of up to 16 Mbps” and “a direct, uncongested gateway to the Internet over a brand new fibre optic network”. In the same paragraph, CAIP goes on to state that “Bell’s throttling of competitor traffic also comes at a time when it is poised to introduce IPTV on a commercial basis”. CAIP submits that this information is proof there is no congestion in Bell’s network. Bell Canada has clearly refuted CAIP’s allegation that there is no congestion. Furthermore, Bell Canada has not commercially launched IPTV on a mass-market basis. Therefore no conclusions can be drawn on the current state of congestion in the network based on an event that has not yet occurred.

164.With respect to the recent launching by the Company of the Bell Video Store, it should be noted that the launching of Bell Video Store is unrelated in any way to the Company’s network management practices. The Company further notes that any allegations of an ulterior motive connected with the launching of this store assumes that the Company has significant market power in the online content distribution market. It does not. Indeed, Apple’s iTunes is the clear market leader with 91% of the TV video download market and 42% of the movie download market.103 Even if the P2P file sharing market were in competition with the video download market, it is highly doubtful that the bandwidth management during peak periods of P2P file sharing applications will lead to the attainment of significant market power in the online content distribution market for the Company. The Company further notes that the Bell Video store is accessible to any Internet end-user on the web,104 not just Bell Sympatico customers. The content, when it is downloaded by end-users, is not treated by the Company any differently than any other non P2P file sharing traffic such as traffic from the Apple iTunes’ video store. Thus, there cannot be a determination of discrimination on these grounds, let alone unjust discrimination.

165.Finally, CIPPIC105 also refers to CAIP’s paragraph mentioning one of the Company’s marketing campaigns and asked Bell to describe how customers of its 16 Mbps service are affected by traffic shaping and to provide an explanation if traffic shaping is not used. It is obvious by CIPPIC’s questions that there is an impression that some customers might be treated differently when it comes to traffic shaping. That is simply not the case. Bell Canada’s customers for the 16 Mbps retail service, Sympatico Total Internet Max, are no exception. This service is subject to the same traffic shaping rules during peak congestion periods as for all the other high-speed Internet end-users with traffic transiting through the BAS where DPI has been enabled already.

10.3 Notification of network changes is not an issue

166.The Company notes that in paragraph 16 of its Application, CAIP asserts that the Company has failed to provide its customers with notice of a network change in accordance with Telecom Letter Decision 94-11, Notification of Network Changes, Terminal-to-Network Interface Disclosure Requirements and Procedures for the Negotiation and Filing of Service Arrangements (Letter Decision 94-11) and paragraphs 42 to 45 of Telecom Decision CRTC 97?8, Local Competition (Decision 97-8). As noted previously, the Company acknowledges the frustration of some of the Applicants’ members and has apologized to its GAS customers. The Company submits, however, that the Commission’s notification of network change requirements (the Notification Requirements) do not apply to the current situation for two reasons. First, the Notification Requirements do not apply to GAS service (as it is not a bottleneck service); second, traffic management is not a notifiable change because it does not require ISPs to make adjustments in their network. These reasons are further described below.

Nonetheless, in the interest of improved customer relations, the Company has created a new proposal for disclosure of such activities as set out in Bell Canada(CRTC)15May08- 9 CAIP Part VII.

GAS is not a Bottleneck Service

167.The Commission stated in Letter Decision 94-11 that:

In the Commission’s view, Stentor’s definition of the changes requiring notification (changes involving network interconnection interfaces) is both restrictive and vague. The Commission considers that all changes that affect a competitor’s use or potential use of bottleneck functions should require notification, and that such changes would include technical changes to interconnection interfaces, as well as changes to local network functions (including new functions) that could be used to provide competitive services. In the Commission’s view, such notification is required to ensure that the Stentor companies do not confer upon themselves an undue preference contrary to the Telecommunications Act. However, the Commission notes that notification should only apply with respect to bottleneck services and facilities, and not to the telephone companies’ competitive services. (Emphasis added)

168.”Bottleneck” is a term that is rarely used anymore. At the time that Letter Decision 94-11 was drafted, “bottleneck” was used interchangeably with the word “essential”. For example, Telecom Decision 94-19, Review of Regulatory Framework (Decision 94-19) uses both terms throughout the decision:

In the opinion of the Commission, regulation should focus primarily on services supplied on a monopoly (or near-monopoly) basis or in markets that are not yet workably competitive. This includes access to bottleneck or other Utility services by competitors. Where markets are sufficiently competitive, market forces are generally preferable for governing the behaviour of telecommunications service providers.

[…]

The Commission agrees with all parties that, under the new regulatory framework, there remains a need to monitor the quality of essential Utility services and bottleneck facilities.

[…]

The Director submitted that, in order for convergence to occur, the Commission must ensure that competitors are not denied access to bottleneck or essential facilities and that the terms and conditions associated with such access are open and non-discriminatory, whether those facilities are controlled by telephone companies, cable companies or others under the Commission’s jurisdiction.

[…]

The Commission will also consider the nature of barriers to entry affecting the market, such as the presence of essential bottleneck facilities that competitors cannot duplicate and whether there are regulations or policies in place that prevent or limit entry, such as restrictions on foreign ownership, regulatory or licensing approvals or approvals for rights of way. [Emphasis added]

169.In a report issued by the Commission shortly after it issued Letter Decision 94-11 and Decision 94-19, the Commission clearly defined “bottleneck” as:

A bottleneck is a local telephone network service, function or facility currently subject to some degree of monopoly control, that competitors cannot economically duplicate, but require access to in order to compete. The degree to which network elements exhibit bottleneck characteristics will soon be examined in the Commission’s process on local competition.106 [Emphasis added]

170.The process that the Commission referred to in the report ultimately led to Decision 97-8 in which the “degree to which network elements exhibit bottleneck characteristics” was expressed in terms of essentiality. Indeed, the Decision 97-8 definition of “essential” is virtually identical to the above definition of “Bottleneck”:

The Commission concludes that to be essential, a facility, function, or service must meet all three of the following criteria: (1) it is monopoly controlled; (2) a CLEC requires it as an input to provide services; and (3) a CLEC cannot duplicate it economically or technically.107 [Emphasis added]

171.Since Decision 97-8, references to “bottleneck” almost invariably refer to pre?Decision 97-8 proceedings108 or expressly state that “bottleneck” is to be interpreted as “essential”:

For the imputation test for a bundled service including one or more tariffed service elements and services that are the subject of PN 97-21, the Commission concludes that essential services (for the purposes of this Decision includes those referred to as “bottleneck” services in Decision 94?19)the Commission concludes that essential services (for the purposes of this Decision includes those referred to as “bottleneck” services in Decision 94?19) used in the provision of the bundled service are to be costed at tariffed rates.109 [Emphasis added]

172.The Commission recently revised the definition of “essential” in Telecom Decision CRTC 2008-17, Revised regulatory framework for wholesale services and definition of essential service (Decision 2008-17):

The Commission determines that to be essential, a facility, function, or service must satisfy all of the following conditions:

(i) The facility is required as an input by competitors to provide telecommunications services in a relevant downstream market;

(ii) The facility is controlled by a firm that possesses upstream market power such that withdrawing mandated access to the facility would likely result in a substantial lessening or prevention of competition in the relevant downstream market; and

(iii) It is not practical or feasible for competitors to duplicate the functionality of the facility.110

173.In applying its revised definition of an essential service, the Commission classified wholesale services into six categories: essential, conditional essential, conditional mandated non-essential, public good, interconnection and non-essential subject to phase-out. The Company’s GAS service was deemed to fall into the “conditional mandated non-essential” category.

174.As such, GAS service is not an “essential/bottleneck” service and thus the rules set out in Letter Decision 94-11 do not apply to changes made to this service.

Traffic Shaping is not a notifiable change

175.Despite the fact that GAS is a “non-essential” service and therefore not a “bottleneck” service requiring notification of network changes as per Letter Decision 94-11, the Company notes that even if GAS was an essential service, the network notification requirements would not be applicable to network management practices such as traffic shaping.

176.The notification requirements that have been set out in Letter Decision 94-11 and expanded to all LECs in Decision 97-8 were set out solely for the purpose of proper interconnection between owners of competing networks:

42. Changes made in a network can affect terminals and interconnected networks. It was for this reason that the Commission in Notification of Network Changes, Terminal-to-Network Interface Disclosure Requirements and Procedures for the Negotiation and Filing of Service Arrangements, Telecom Letter Decision CRTC 94-11, 4 November 1994 (Letter Decision 94-11), established rules for telephone company notification of network changes with regard to interexchange networks and terminal equipment. Most parties that addressed this issue agreed that, with the advent of local competition, these rules should be extended to all LECs, insofar as local network interconnection arrangements are concerned.

43. The current procedures for providing disclosure of ILEC network changes that affect terminal equipment are intended to provide assurance that terminal equipment manufacturers will be aware of terminal interconnection specifications and not be disadvantaged in the terminal supply market as compared to other suppliers, some of whom may be affiliated with ILECs. The Commission is of the view that this existing requirement for notification of changes affecting terminal equipment by ILECs should continue since ILECs will remain in a dominant position. However, the Commission considers that it is not necessary to impose the terminal equipment notification obligation on CLECs who, in light of their non-dominant status, have minimal potential advantage in failing to notify.

44. Regarding changes to network-to-network interfaces, however, the Commission considers that notification by all LECs is clearly required, as such changes can affect interconnecting carriers. Failure to provide notification of proposed network changes could lead to disruptions in the networks, which would affect network users. In the Commission’s view, the public interest requires that, in an environment of multiple interconnected networks, a very tight discipline be imposed on all carriers to ensure that no change is made without all interconnecting carriers having the opportunity to examine the proposed change, conduct tests and take action as required before the change comes into effect. The Commission agrees with parties that rules and procedures contained in Letter Decision 94-11 should be extended to CLECs for these purposes.

45. Accordingly, all LECs will be required to provide advance notification of any network modification that may affect the operation of the networks of other carriers to which they are interconnected, pursuant to the rules and procedures contained in Letter Decision 94-11. Further, any LEC proposing changes must be prepared to conduct technical tests of the proposed changes with all of the carriers to which it is interconnected. [Emphasis added]

177.Traffic shaping does not entail a change to network-to-network interfaces. The changes that have been implemented do not in any way affect how another carrier interconnects with the Company and once traffic is handed off to an ISP who uses GAS, they are free to treat it as they see fit. As expressed by the Commission in Telecom Order 98-40:

12. The Commission is of the view that a carrier should be free to implement the standards and specifications of its choice within its network. To require otherwise could be costly and inefficient to some carriers, while possibly decreasing opportunities for product differentiation.

13. However, the standards implemented at the network interface must be compatible with the selected common interface standards. Carriers must be able to accept all legitimate messages conforming with the selected common interface standard(s) and complete the calls. [Emphasis added]

178.As capacity management and network maintenance fall within “standards and specifications within [the Company's] network”, the Company had no obligation to notify other carriers pursuant to Letter Decision 94-11 or Decision 97-8.111 The Company’s relationship and notification requirements towards its customers of “conditional mandated non-essential” services is instead governed by the relevant tariffs.

10.4. Bell respects the privacy of its customers

179.CAIP alleges that the Company’s use of DPI as part of its traffic management solution during peak Internet usage periods violates individual privacy rights because of the alleged collection and use of certain information by Bell during the course of DPI traffic shaping. Specifically, the information that CAIP is concerned that Bell is collecting and using is “the type of data being transferred, the ISP upon whose network the data is being transferred, an end-user’s intention to acquire certain types of Internet content and the IP address and, hence, the identity of the end-user customer who is sending/receiving the data.” 112 CAIP also alleges that the Company is collecting and using personal information of end-users without their prior consent thereby violating their privacy contrary to the Personal Information Protection and Electronic Documents Act (PIPEDA)113.

180.In addition, even though the Commission denied CIPPIC’s request for additional interrogatories, CIPPIC raised concerns about what information is accessed and stored by the Company as well as concerns questioning the role of any third party involved in the practice of traffic shaping.114 As explained in the following section, these privacy concerns are based on a misunderstanding of the Company’s use of DPI as part of its P2P file sharing traffic management practices during peak periods.

181.Also, in the course of this proceeding, the Commission asked the Company a number of interrogatories. Interrogatory 7 dated 15 May 2008 was directly related to this issue. The Commission asked Bell to explain “whether the DPI technology deployed by Bell Canada has the capability to examine the content of the P2P traffic being shaped and to identify the sender and intended recipient.”

182.It is the Company’s position that any privacy-related issues concerning individual end-users are not relevant to the tariff dispute between CAIP’s members and the Company. Furthermore, the Company is currently cooperating with the Office of the Privacy Commissioner of Canada in a privacy investigation under PIPEDA as a result of the privacy complaint filed by CIPPIC regarding any possible privacy implications that may arise resulting from the Company’s use of DPI technology.

183.Nevertheless, in the following paragraphs, the Company revisits the Commission’s interrogatory and clarifies CAIP’s and CIPPIC’s misunderstandings regarding the Company’s practices. In short, the Company’s use of DPI technology as part of its traffic management practices is such that the actual contents of the communication exchange are not examined. Rather, only the protocol headers are examined, and as described in detail below, the DPI equipment does not retain the information reviewed in the packet headers.

What is Deep Packet Inspection (DPI)?

184.The Internet traffic management solution that is being applied by Bell Canada is based on network equipment that can perform DPI. DPI is used to examine each of the protocol headers that wrap the content, in order to identify the type of package being transmitted. The actual contents of the communication exchange are not examined, just the protocol headers encapsulating the content. To use a postal analogy, DPI can look at other identifying characteristics of the envelope, but not inside the envelope (see figure below).

Figure 18

i) DPI has been designed for flow classification, not content inspection

185.It is called “Deep Packet Inspection” because it looks beyond the routing and transport headers, deeper into the application packet headers, to determine the type of application that is communicating, but not the content itself (see figure below).

Figure 19

186.The reason “deep packet inspection” is needed is because not all applications identify themselves correctly. Although there is an accepted practice for applications to use commonly defined ports to communicate on the Internet, this is commonly flouted by aggressive applications. Most standard applications leverage registered ports (from 1024 to 49151) and well known ports (from 0 to 1023). For example, HTTP commonly uses Port 80. P2P typically uses a randomly unassigned port from an open usable range (from 49152 to 65535). There is evidence that some P2P file sharing applications traverse the network using the TCP characteristics of web or other forms of traffic such as using Port 80 normally used by HTTP traffic. By way of example, it is quite common for movie file sharing applications to encode themselves as Web, in order to disguise their use and attempt to bypass traffic shaping controls. DPI therefore looks for protocol headers, commonly referred to as signatures, which properly identify the traffic as a P2P file sharing application regardless of how the application declares itself.

187.DPI uses a set of “signatures” or unique fingerprints to identify an application regardless of how it declares itself in the Application, TCP (or UDP) and IP protocol headers that are encapsulated around the content. DPI does not examine the content and typically only the application packet header of the first few packet exchanges is examined for the unique application signatures.

188.In the example shown above, the BitTorrent content has been encoded as Port 80 which is reserved for Web application traffic in the Internet, and does not identify P2P file sharing traffic. The “deep packet inspection” of the packet and application headers would yield the correct identification, by matching the BitTorrent “signature” and ignoring the encoded Port 80 Web declaration in the TCP Header.

189.Therefore, before the introduction of DPI, network equipment or routers only looked at the IP addresses and TCP/UDP port in the headers. With the use of DPI, it is now possible to properly identify P2P file sharing applications from other applications such as VoIP. Once the P2P file sharing traffic is properly identified, the DPI equipment implements a selective traffic shaping function on the identified P2P traffic. The DPI equipment does not retain the information that it has reviewed from the packet headers and the content itself is never reviewed, analyzed or stored.

190.The design centre for the DPI devices deployed in Bell Canada’s network is based on managing traffic “flows” and not inspecting individual content. The entire product architecture and feature set is anchored on this design and product approach.

191.In theory a signature could be used to find a particular string in the packet “payload”, i.e., the actual content. However, in practice it would be operationally impractical and technically infeasible to use the DPI devices deployed in Bell Canada’s network in this fashion. A specific signature would have to be configured for every unique content instance because the DPI device does not learn or discover content instances. A “content instance” is each separate instance of data being sent from one application of a device to another. For example, a content instance could be an email message or a file attachment on an email. While DPI would classify the application, it would not identify each file attached to the email nor would it detect each individual email message. Moreover, the DPI architecture and product design do not have the system resources for this type of use. The management of such an enormous signature base would be operationally infeasible. Paragraph 205 below also discusses the operational and technical infeasibility of developing a unique signature for each individual user.

192.The “deep packet inspection” or signature detection of the DPI is used to classify a communications exchange between one or more endpoints in order to resolve the exchange to a “flow entry” which is maintained in the hardware of the DPI device. The architecture of the DPI device uses only the headers of the initial few packets of a communications exchange to identify the application (not the content) in order to associate the exchange to a particular flow entry or establish a new flow entry. Each flow entry is identified by a unique combination of information obtained from the packet headers in the communications exchange, and this combination is then used as a “key” to index a table of flows in the DPI device. If the key is not found in the flow table, then a new flow entry is created by the DPI.

193.Flow entries are used by the hardware to maintain the identified traffic management policy on each flow; no content is stored or cached.116 The flow entry is essentially a key that is used for managing the communications exchange represented by the flow. This type of flow-based architecture is sometimes referred to as “classify once; switch many”. The software in a CPU117 (called the slow path) is used to classify packets into hardware-based flows, allowing greater performance and scale of switching packets at the hardware level (called the fast path). The CPU is used because it can execute more complex decisions, such as which service plan the subscriber has. The hardware, on the other hand, is much better at performing much simpler tasks, like determining which flow a packet belongs to. Hardware-based flows allow all subsequent packets that match a flow to be processed by the same classification rules of what triggered the flow. For example, once classified as a P2P flow, all packets in the flow will be treated the same way without having to have the CPU inspect and classify each individual packet.

194.As mentioned above, many applications, such as P2P file sharing applications, do not properly identify themselves in the appropriate headers. The signature detection capability of DPI is therefore employed to correctly identify the application, such as the P2P application BitTorrent when it is disguised as Web traffic. Bell Canada has approximately # signatures

defined in its DPI configuration to date.

It isimportant to note that each flow is based on the source IP, destination IP and protocol attributes, with no content-specific attribute as part of the flow entry or key, as shown in the diagram below.

Figure 20

195.After the DPI parses the information from the protocol headers, the DPI stores the information in a flow table. The flow entry is made up of the multiple packet attributes such that each flow will have its own key.

196.For purposes of P2P traffic shaping, the DPI does not look for the filename or the file type in order to classify the application, nor does the DPI distinguish the types of content that are being exchanged. More specifically, the use of text, audio or video is not part of the DPI’s signature detection capability.

197.The DPI does theoretically have the technical capability of assigning a filter on a specific location in the packet payload, i.e., the actual content. This can be used to create a customized rule that can attempt to match a particular content name or extension. However, this application would be very impractical since the current Bell Canada architecture and design is not tailored for this type of use. The required resources for the matching of this type of traffic would exceed the resources of the DPI’s CPU. Additionally, in most file sharing protocols, the filenames are obfuscated by hash names so the DPI, even if a filename filter were developed, would not be able to identify the specific content.

198.Therefore, while in theory a customized signature could be used to find a particular string in the packet payload, the current DPI solution will not be able to support this manner of packet processing with the current network load and design of Bell Canada’s network.

ii) Traffic management and understanding aggregate trends in Internet usage

199.In the DPI, a set of well-known categories of applications is identified for the purpose of traffic management and usage accounting: e.g., web, email, streaming, VoIP, P2P file sharing, and other are typical examples. Because the DPI is used to classify the application, it defaults to “wild-carding” the destination IP address when establishing flow entries. This means, for example, that all flows for web traffic from a single household would be classified and managed as a single flow entry in the hardware of the DPI. In this example, while all web traffic would typically be masked as a single flow entry (single key), Bell Canada could isolate certain web IP flows to be managed differently. For example, CNN.com’s IP address or range of IP’s (subnet) could be segmented off, and traffic to www.cnn.com would have its own key separate from the web flow key. This allows the DPI to create flow entries for specific IP address destinations for classification and manageability.

200.For the purpose of understanding aggregate trends in Internet usage, the DPI is capable of sampling HTTP packets for URLs. The DPI then logs and counts the “hits” in order to generate a read-only “top URL” report which shows the most popular URLs by access for all of the HTTP traffic in aggregate, but never for a single session, individual user or specific group of users. This type of report was purposely developed to be an aggregate report based on sampling that would also maintain the privacy of individual users. This would be similar to a turnstile in a metro station where one could generate a report of how many passengers entered a metro station on a given day without knowing who.

201.However, under certain circumstances, such as legal intercept of traffic pursuant to a court order or for network testing diagnostics, the DPI may be configured to copy specific application or user traffic to an “auxiliary” interface where an external capture device can be connected. This copy feature is not currently in use by Bell Canada. Nevertheless, this is a common technique of wire sniffing or packet capturing. Many vendors on the market have tools to capture and analyze traffic without the need for DPIs. Many ISPs use packet capture software or devices to troubleshoot, without deploying DPI. Furthermore, many free software-based tools, such as WireShark, are available to capture network data.

iii) Limits of identifying senders and intended recipients

202.The DPI technology deployed by Bell Canada has the ability to identify the source IP address and the destination IP address of both the sender and the receiver of the communications exchanges, when creating and managing flows. These fields are contained in the IP header encapsulating the application headers and packet payload, regardless of the type of application or content.

203.The DPI has a pair of active network interfaces: one used to connect to the access network (toward subscribers in the Bell Canada access network) and the other used to connect to the network (the Internet). On its own, the DPI does not learn or discover IP addresses in the Internet, only those IP addresses in the Bell Canada access network. Therefore, the DPI can identify either the IP address of a sender or a receiver when they are on the Bell Canada access network, but not when they are on the Internet.

204.This normal operation of the DPI can be overridden with a configured destination-specific filter, which can be used to establish flows with any IP source IP address going to a filter-specific destination IP address (fully-qualified 32-bit IP address). This would require Bell Canada to configure the specific destination IP address for any flows it wanted to be processed matching the filter. Telstra, for example, uses a similar feature in regards to a service called Telstra “Unmetered Entertainment” to exempt traffic to certain destinations from usage billing when accessed by their subscribers.

205.Furthermore, the DPI does not discover the intended sender or intended recipient from the content itself. However, Bell Canada could configure a specific filter, to match a specific value at a specific packet offset in order to isolate a specific communication exchange. But this information would have to be known beforehand by Bell Canada in order to set the specific fields and offsets to match. That is, in theory Bell could configure a signature as an exact match to each specific user name to track senders or receivers. However, the set up of more than one of these signatures would be operationally infeasible. If that number were to increase to hundreds or millions it would be technically infeasible. Thus, although in theory it may be possible, it is not operationally or technically feasible and Bell is not introducing any such configurations. Additionally, this type of filter could likely be placed on any network element and is therefore not unique to DPI technology. Thus, there is nothing unique about the theoretical capability of DPI technology for this particular task.

iv) Focus on user network identity, not personal identity

206.The closest identifier to an individual subscriber that the DPI currently does maintain and store is a “subscriber id” which is actually Bell Canada’s user ID assigned by network authentication in order to bind a user ID to an assigned IP address. Since the DPI devices deployed in Bell Canada’s network are used for delivering consumer broadband services, the DPI is capable of identifying network users and associating dynamic IP addresses that have been assigned to each user. Often, IP addresses are assigned dynamically in order to accurately account for usage billing or other service attributes, the IP address is resolved to a unique identifier that remains consistent even across different IP address assignments to the same user over time. An example of this binding is shown in the following table, where you will note the same user “b1XXXXXX” has been assigned three different IP addresses over three different points in time.

Figure 21

207.An important aspect of the User Identifier is that it is used to identify the endpoint of the Bell Canada network, which is usually a device on the customer premises, such as a DSL modem. So in reality, even though a User Identifier is associated with a specific IP address at a given point in time, it still does not uniquely identify the actual person accessing the network through the customer premises device – it really only identifies the customer premises device – since multiple users can access the network from the same household. While there is no capability for the DPI device itself to resolve an IP address to a specific human user of the network, this information may be used by Bell Canada for purposes of bandwidth consumption management, e.g., if a customer has a specific Internet access service plan with a bandwidth cap. This mechanism is no different than how Internet service providers operate when using RADIUS servers. Wholesale ISPs that subscribe to Bell’s GAS service make use of RADIUS servers to authenticate their end-users’ access. This RADIUS system references the user ID to an IP address when the end-user is logged in. RADIUS also measures how much traffic is sent and received for that particular user ID. The only difference with DPI technology, as mentioned above, is that it aggregates traffic trends to allow Bell to know how its network is being used.

v) What Bell Canada does not do with DPI

208.While the Company has explained in detail what its DPI devices are capable of doing, it is helpful to summarize what they do not do. By design, the DPI devices deployed in Bell Canada’s network do not:

- use any personal identification information of an individual user;

- store or log any personally identifiable information;

- have specific knowledge of a user’s real identity;

- have knowledge of a user’s content;

- have knowledge of a user’s URL browsing history;

- have knowledge of a user’s Internet search activity;

- have knowledge of a user’s email topics or content;

- store content accessed by a user;

- cache any content, including user-specific content, whatsoever;

- capture and playback any communications exchange; or

- install or require any specific software on user machines.

Bell is compliant with its privacy obligations

209.CAIP relies on section 7(i) of the Act to support its allegation that Bell is in violation of its privacy obligations under the Act. Section 7(i) of the Act states:

It is hereby affirmed that telecommunications performs an essential role in the maintenance of Canada’s identity and sovereignty and that Canadian telecommunications policy has as its objectives… (i) to contribute to the protection of the privacy of persons.

210.Section 7(i) is a legislative objective. It can help clarify the purpose of the legislation and can be relevant to decision making, but it is not a power-conferring provision.118 Nonetheless, there is no live privacy issue here because Bell is not engaging in the behaviour alleged by CAIP and questioned by CIPPIC.

211.The two key reasons why these privacy concerns are unfounded are (i) the actual content of the communication exchange is not examined, just the protocol headers encapsulating the content, and (ii) the DPI equipment does not retain the information that it has reviewed from the packet headers and the content itself is never reviewed, analyzed or stored as part of the Company’s traffic management measures.

212.To be clear, Bell, as well as any third party or vendor contracting with Bell, does not access individual user information such as the particular user, IP address, account, or geographic location.119 Therefore, contrary to suggestions by certain parties120, Bell does not disclose such user information to any third party for any purpose.

213.As mentioned in the sections above, the Company’s traffic shaping is applied in the same manner to all identified P2P file sharing traffic. As part of its traffic shaping efforts, Bell looks at the encapsulation headers but does not look at the data or content. It is useful to understand that each layer has its own encapsulation header. Thus the headers of the application are part of the IP payload just as the IP header forms part of the TCP/UDP payload. Therefore, looking beyond the PPPoE header to headers of other layers does not equate to looking at the end-user data or content.121 Furthermore, the GAS Tariff states that GAS supports PPPoE across the Company’s backbone network.122 The word “supports” in no way means that Bell will limit its network management at the PPPoE level. Finally, as explained in greater detail above, though it is theoretically possible to examine any packet payload, i.e. the actual content, it is not operationally feasible. The current Bell Canada architecture and design is not tailored for DPI to look at all packet payloads. It would be cost prohibitive for Bell to introduce such a regime.

10.5 Bell is not in violation of section 36

214.In its Application, CAIP alleges that:

92. […] Bell is reducing the throughput available to the end-user customers of these ISPs by as much as 90 per cent. At such speeds, mainstream content available on the Internet, such as audio or video content (e.g., the CBC’s “Next Great Prime Minister” program), would be slowed beyond recognition or meaning. In fact, Bell degrades the service to the point of, in some cases, rendering the content inaccessible or at least, highly undesirable. Bell is, therefore, clearly interfering with and, indeed, exercising control over this content by isolating it from other content, classifying it as low priority vis à vis other types of content and quarantining the content until Bell decides that it can be released to the end-user recipient in a manner determined wholly by Bell.

93. Similarly, Bell is influencing the “meaning” and the intended “purpose” of this content by preventing it from being delivered in the manner and within the time frames intended by the content sender and the content recipient. To use a case in point, if a musical selection that is lawfully downloaded from the Internet is constantly interrupted by Bell’s traffic shaping measures such that it can only be heard in fragments or only with the repeated clicking sounds that come from delays and re-buffering, then the meaning of the musical selection has been influenced by measures deliberately adopted by Bell.

215.CAIP is essentially claiming that the slowing down of a transfer of a file that uses a certain application qualifies as controlling the content or influencing the meaning or purpose of the telecommunication.

216.This contention is based on an expansive interpretation of the Act and a misunderstanding of Bell’s use of DPI technology. Bell’s network management practice of shaping P2P file sharing traffic is not a violation of section 36 of the Act. Section 36 states:

Except where the Commission approves otherwise, a Canadian carrier shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public.

217.Bell’s DPI traffic shaping activity does not qualify as controlling the content or influencing the meaning or purpose of telecommunications for the following two key reasons. First, slowing the delivery of content does not amount to “controlling” it. Second, Bell is not involved in any way with the editorial control of content being transmitted through P2P file sharing nor is it creating content or preventing access to content. The shaping technique is content and content provider agnostic. Furthermore, suggestions that shaping of P2P file sharing traffic is related to the legality of the content transferred are misguided.123 As a common carrier, Bell does not look at the content of P2P file sharing packets. The choice to shape P2P file sharing traffic is based on bandwidth consumption and has nothing to do with the content.

Bell does not “control” the content in P2P file sharing applications

218.A canvass of the few decisions on section 36 shows that traffic shaping is easily distinguishable from past Commission determinations on what qualifies as “controlling the content or influencing the meaning or purpose of telecommunications”.

219. In an early decision regarding the concern of separation of carriage and content, the Commission determined that carriers “should not be permitted to engage in electronic publishing involving editorial control over content or in the creation or distribution of its own data bases”124. This focus on editorial control of content, as well as content the carrier creates or owns itself, has continued through more recent section 36 decisions. For example, the Commission has stated that if a carrier offers “full channel TV service over its facilities, it is, with respect to that service, controlling the content of telecommunications it carries”.125 The same applies if a broadcast carrier is involved in the “selection of any content for a carrier’s own Internet Service”.126 Similarly, in Telecom Decision 99-4127, the Commission decided that selecting links to other websites and creating a home page is controlling the content. Unlike in the case where the carrier was providing a “full channel TV service” (96-1), selecting content to put on its own Internet Service (98-9), creating links to web pages (99-4), creating its own web portal (99-4), or creating its own data base service (84-14), Bell is not, in this case, creating or selecting any aspect of the content being delivered via P2P file sharing applications.

220.Letter Decision CRTC 92-5128 provides more insight into the Commission’s concern with carrier editorial control over content. In that Decision, Bell was denying a third party access to billing and collection based on the content of the phone call. The Commission concluded that “Bell’s refusal to provide a 976 Service Provider with access to billing and collection service unless they agree to not carry sexual content would jeopardize the ability of that person to offer 976 Service and that such a refusal based solely on content could amount to controlling the content or influencing the meaning or purpose of messages.”129 Bell’s traffic shaping activities are quite a departure from the facts in Letter Decision 92-5, because here Bell’s practices are content agnostic. For example, if a movie file is downloaded by a user through P2P file sharing or downloaded directly from the Apple iTunes web site, the user will in both cases ultimately receive the same content, but the route the movie file will have taken to get to the user will be different depending on the option chosen by the user. During peak Internet usage periods when traffic shaping is in place, the file sharing option will most likely be slower, but in both cases the content will arrive unaffected by Bell.

221.In summary, in the section 36 cases cited above, the issue was whether the Commission should grant carriers permission to control content. In this case, there is no question of granting permission to control content. The traffic shaping technique deployed by Bell is content agnostic. Bell cannot influence the meaning or purpose of the telecommunications because Bell has no knowledge of the content itself. It is therefore clear that Bell is not involved in the editorial control over the content, creating the content, and is not denying any party access to any content on the Internet, including content accessed using P2P file sharing applications.

Bell does not “influence the meaning or purpose” of P2P file sharing communications

222.It is inconceivable that Bell’s traffic shaping activities could “influence the meaning or purpose of the telecommunications” being delivered, in contravention of section 36 of the Act, because Bell has no knowledge of the content itself. Bell’s shaping practices are limited only to P2P file sharing which is distinguishable from other P2P applications such as voice (e.g., Skype) and video (e.g., Joost). Bell has no idea of the content that is being distributed through the P2P file sharing application. CAIP’s argument that slowing down P2P file sharing influences the ‘meaning and purpose’ of the telecommunication is without merit. Since P2P file sharing applications are not time sensitive, there is no change, impact or influence of the “meaning or purpose” of the telecommunication if the delivery is delayed. The content, unaffected by Bell, is eventually delivered and available to the end user.

11. Unwarranted policymaking and/or regulatory measures could hurt innovation, impede competition and decrease the efficiency of Canadian Telecommunications

223.As the Internet developed, network providers have had to learn how to deal with rapid growth by managing available resources and augmenting network capacity when required. With increasing demand, network providers will need to continue to invest in new capacity, hardware and software, as well as applying technological innovations to manage traffic intelligently and efficiently. While some may argue for an increased role for policymakers in dealing with Internet capacity issues, Jason Kowal, previous Head of Research of the Analysys Masons Group and current principal of Global Thinking, argues that policymakers should be guided by three simple principles:130

First, careful attention should be paid to any new regulation which might adversely impact the business case for internet investment or set preference for one business model over another.

Second, policymakers should consider methods to encourage network investment, particularly for the last mile of underserved locations.

Third, regulators should not inhibit Internet service providers’ flexibility to experiment with new traffic management technologies and strategies in order to deliver new services with the quality and security options that Internet users desire.

224.These principles are consistent with those established by the Governor in Council through its Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives P.C. 2006-1534, 14 December 2006131 (the Policy Direction). The Policy Direction states that:

(a) the Commission should

(i) rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and

(ii) when relying on regulation, use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives;

225.The Commission must consider the policy objectives of the Act, particularly:

7(b) to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada;

7(c) to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications;

226.As stated by Cisco at page 4 of its 12 June 2008 submission:

Even if more bandwidth could be added overnight, peer-to-peer (”p2p”) applications are currently designed to use all of the bandwidth that is available. Thus, network management is the only realistic response to the current change presented by p2p and other bandwidth intensive applications.

It would therefore be counter to the objectives of the Act promoting the efficiency and reliability of Canadian telecommunications if the Commission were to deny Canadian carriers the ability to manage their networks as deemed appropriate.

227.Some parties, such as UdC132, have also claimed that decisions related to network investment, deployment or management practices must not reside solely with network owners. Far from enhancing efficiency and competitiveness, such a path of ex ante approval for all network related actions would lead to a series of inefficiencies from regulatory delays in a highly competitive market to lessened innovation due to decreased competition. Indeed, if Canadian carriers are not given an environment in which they are comfortable investing, Canadian telecommunications networks will never keep up with global developments or have any incentive to develop a better service.

228.As the Commissioner of Competition remarked at this year’s Telecom Summit:

The Telecom Review Panel was equally clear: intervention should always be based on clear, stated objectives. And so if the government’s goal is protecting new entrants – or incumbents for that matter – say so, and explain why it is necessary. If the goal is protecting consumers, then be very clear about why having the captains of industry hugging the harbour rather than navigating the high seas benefits the consumer.

The reason for intervention should not be so vague as “finding an appropriate balance.” Balance of what? Why cannot that balance be created ultimately by market forces? Often the pursuit of “balance” is little more than the protection of the status quo. Those who enjoy a market advantage will say that we have struck the right balance. They do not want more regulation, but neither do they want deregulation to open the market to new competitors. Is protecting the status quo the best way to increase innovation and prosperity? If you believe that, then state it, and let the debate begin.

The Bureau’s experience in both telecom and broadcasting has taught us a lot about regulation and other forms of public policy intervention. We know that there are benefits, but we also know that there are always costs: administrative complexities, unforeseeable distortions, and, as is increasingly the case, falling behind the speed of technological innovation. These too should be carefully weighed by policy makers.

The temptation is often to use intrusion to balance several different objectives at once. That’s often the recipe for reaching none of the stated objectives, while at the same time calling down the harpies of unintended consequences.

Finally, and again as the Panel suggested, any intervention should be the least intrusive among the possible options. Sometimes that may be a mechanism that influences the price, such as a tax or a subsidy. Sometimes it may require a quantity or concentration restriction, such as a spectrum cap. And sometimes, where there are persistent market power concerns, it may require full economic regulation. But I believe that regulation should always be viewed, not as a first step, but as last resort. Regulation if necessary, but not necessarily regulation. And each intervention in the market should be constantly subject to review to assess whether the objectives remain valid and whether more market friendly solutions exist.

[…]

The CRTC will be making important determinations in this area over the next year, starting with their review of wholesale traffic shaping and continuing with their new media proceeding next year. Certainly feelings run high on both of these topics. But that may be even more reason to rely on cold hard facts and analysis when determining whether to intervene. The Internet has grown dynamically and dramatically over the last ten years, and new services are being introduced almost daily without any regulatory hand. We need to be clear what our objective is, and what the effects of intervention will be, if we choose to change that system now. Any regulatory initiative that may limit consumer access to content or disincent investment in next-generation networks should be considered very carefully. [Emphasis added]

229.Several parties have claimed that traffic management will hinder innovation. The Commission should see these claims for what they really are: the use of policy rhetoric devoid of substance in order to promote vested business interests. Indeed, the opposite of these claims is clearly the case; necessity is the mother of invention. Without any regard to network capacity, P2P file sharing application designers could develop applications designed, as Mike Lee describes, to sense if there is more space on a network and if so, to flood that space with more requests.133 As network owners take steps to ensure an adequate QoS for all applications and a better user experience for the majority of its customers by slowing, but not blocking and certainly not rendering unusable, these P2P file sharing applications, P2P file sharing application designers are finally stepping up to the challenge of addressing bandwidth capacity. It is no coincidence that P4P is emerging as a possible solution with regards to P2P file sharing at a time when ISPs around the world are starting to implement traffic shaping measures. Indeed, P4P is still very much a nascent framework that has yet to be deployed for widespread use. The Company is confident, however, that competition and market forces will encourage, as it has already done, the development of new, better and fairer P2P file sharing applications.

230.Until that time, the Company has endeavoured to limit its traffic shaping to what it sees as a reasonable measure in order to address network congestion. Just like a car owner should change the oil long before the engine seizes, the Company has implemented this solution prior to the network’s succumbing to “rampant congestion” as it seems that some parties would prefer that the Company do. It has opted, in an objective and rational manner, to direct its network management solution solely to P2P file sharing traffic and not other forms of traffic. Finally, it has opted to engage traffic shaping only during peak traffic hours and not 24 hours a day.

12, A FINAL Note

231.As a final note of caution, the Company notes that the Commission has asked the Company in the interrogatory stage a number of questions related to the state of congestion in its network. Further, in its Interim Answer and in this submission, the Company provided very detailed explanations of its Internet traffic management solution, a large amount of which Bell

Canada has chosen to place on the public record. Its decision to offer these detailed explanations (mostly on the public record) is in response to the large interest in the media and the blogosphere, and to correct the miscomprehension about how Bell Canada is actually managing its network and the impact that it is having on its Internet end-users (retail and GAS customers). GAS customers generally, including the Applicants, have used and continue to use unsubstantiated allegations regarding the facts to then jump to inappropriate conclusions. The Company understands the Commission’s need to examine the detail of this congestion in order to satisfy itself that there is no unjust discrimination or anti-competitive motive underlying the Company’s actions. Outside of that one concern, the Company submits it is not for the regulator to second guess the Company’s engineering decisions. As the Commission has stated: “a carrier should be free to implement the standards and specifications of its choice within its network. To require otherwise could be costly and inefficient to some carriers, while possibly decreasing opportunities for product differentiation.”134 The Company has established that there can be no validity to any claims of unjust discrimination or anti-competitive conduct. The Company therefore submits that there is absolutely no need for Commission intervention in this case.

13.0 Conclusion

232.For all of the reasons above, the Company asks that the Commission deny the relief requested at paragraph 116 of CAIP’s Application.

Definitely stay tuned

Jon Newton – p2pnet

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This entry was posted on Saturday, July 12th, 2008 at 8:42 am and is filed under Freedom, P2P. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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