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lAw Times • April 27, 2009 FOCUS PAGE 17 New fuel added to net neutrality debate BY GLENN KAUTH Law Times major Canadian media company added new fuel to the debate over net neutrality recently with complaints that not just standard Inter- net providers – but also wireless com- panies – are engaging in discriminatory traffic management practices. In a written submission to the Canadian Radio-television and Telecommunications Commission's proceedings on net neutral- ity, Pelmorex Media Inc. detailed a series of complaints about how mobile phone companies are allegedly favouring certain content on their web browsers over others. "Pelmorex is concerned that the com- mission might adopt a definition of net neutrality or traffic management that will be too narrow and will not fully address all of the instances where a network operator might manipulate traffic to its benefit," Paul Temple, the company's senior vice president for regulatory and strategic affairs, wrote. "While not currently a concern for wire- line [Internet service providers], there are a number of commercial or business practices being employed by wireless network opera- tors that limit access to their networks." The debate over net neutrality has tra- ditionally focused on whether service pro- viders have the right to shape web traffic to A handle bottlenecks in Internet use. Com- panies argue such practices are necessary in order to keep heavy users of music down- loading sites, for example, from gobbling up too much bandwidth. As a result, they might slow speeds to such sites in order to reserve bandwidth for other users. At the same time, concerns have been raised about whether providers can offer tiered service that would allow content providers to pay extra for faster transmission of their web sites. Critics charge the practices violate the notion that the Internet should be free of interference by Internet service providers. In the latest salvo launched by Pelmorex, which operates the Weather Network, the company argues wireless carriers have be- gun adopting similar tactics. "The wireless part of it emerged in this CRTC proceeding that is generally on Internet traffic manage- ment, and Pelmorex raised the issue of net neutrality and the importance of the wire- less web relative to the wire-line web," says Charles Dalfen, counsel with Torys LLP and a former CRTC chairman. "It raises pretty similar kinds of issues, which essentially can be summed up [that] the carriers have a right and an obligation to manage traffic so that it's run in the most efficient and effective manner. The question is: Are the criteria for doing that objective, transparent, and fair to all?" In Pelmorex's case, examples of alleged telecom misdeeds mobile companies are blocking Pelmorex's ads on its web site. As well, the company claims carriers are removing tracking codes that allow it to deliver ads or keep count of how many web pages it delivers to so-called feature phones. Pelmorex argues phone companies are giving preferential service to content providers that buy packages for their web sites while customers are forced to pay higher data charges to access other content. In addition, it criticizes the phone operators for directing users to their own homepages when users go online and for charging extra for text messages that include ads. As a result, Pelmorex is asking the CRTC to adopt an expanded definition of net neu- trality to include wireless service. It also sug- gests it require wireless carriers to comply with s. 27(2) of the Telecommunications Act that forbids discrimination or prefer- ence in the provision of service. "For some reason, mobile carriers are exempt from s. 27(2), so that allows them to discriminate or unjustly favour themselves," Temple alleges. Phil Rogers, a partner with Osler include claims that Hoskin & Harcourt LLP in Ottawa, says the principle of net neutrality is important given the non-discrimination provisions in federal legislation governing the telecom- munications sector. "I think many people going into this proceeding would prob- ably start with the assumption that con- tent which is otherwise legal should not be blocked," says Rogers. "Most people would probably agree with that. Those are the kinds of principles which the com- mission is hoping to establish and also get beyond the simple statement of principles and say what in practice does that mean." But how Pelmorex's complaints will stand up to scrutiny won't come until it presents its arguments at upcoming CRTC hearings. As Rogers points out, it's not obvious that charging content providers more for bet- ter service is necessarily wrong given that consumers can already due so to get faster connection speeds. "So far, you don't really hear too many objections to that," he says. "If you flip it around to the suppliers' side — the company that is producing the con- tent — you see that some of them would have a commercial interest in saying that 'I would like my content to be available more quickly and [be] more responsive to those who demand it. As a result, those who seek my content will get better service, and I'm prepared to engage in a commercial deal to make that happen.'" But for Pelmorex's Temple, the issue is an important one given the expansion of wireless services. "The real issue is that it's an area that's going to see tremendous growth and it's taking a lot longer and the process is becoming more complicated to develop ap- plications [for mobile phones]," he says. LT Lawyer says case law will make rules opposite . . . the Lord Dennings who will come up and make leaps that are appropriate." Abramovitch, meanwhile, pre- dicts many of the rules will come from case law. While in Canada, there have yet to be significant cases on the issue, she expects it will Continued from page 14 Losses predicted Continued from page 14 resistance," he says. "So tower shar- ing is advocated and promoted in the recent policies issued by Indus- try Canada. That means you have to negotiate access with incumbent tower providers because the possi- bility of erecting your own towers becomes increasingly remote." As a result, Rogers says that while the new entrants certainly foresaw profit when they bid for new wireless airwaves, he doesn't expect they'll be making big mon- ey soon. "There's no doubt there's money to be made, but it's im- portant to remember how long it took them to get there," he says, citing the early struggles of one of Canada's first wireless compa- nies, Cantel, in the 1980s. "Those companies lost money on wireless for years and years. They probably only turned cash positive certainly [after] more than 10 years. "It might have been more than 15 years. It was a long time get- ting to the point where you can say there's money to be made in the business. I don't know how long it's going to [take] before people can make positive returns from the new entrants that are coming on. But it' likely arise first in areas such as mari- tal disputes where, for example, two divorcing spouses are battling over who gets a piece of virtual prop- erty. "I bet in Canada the first real judicial case we're going to see is in family law cases," she says. Of course, the very notion of fighting over assets in cyberspace seems odd to many people, but as Ferstman points out, the emerging legal disputes are just one more sign of how relationships are becoming increasingly depersonalized. "It's been a long time coming. You see it with texting. You see it with this re- cent murder case with this kid who commanded her teenage lover to kill the rival where there was no hu- man connection," he says, referring to the recent proceedings against two people convicted of killing Ste- fanie Rengel in Toronto. "People have talked for many years about why people kill each other so of- ten in car accidents. They can't see the individual as an individual and they don't care about them. Why are people so nasty on the road when they would never be that nasty in person?" In the end, he sees the need to regulate virtual property as being akin to the need to de- velop driving laws following the introduction of cars. "If a particular activity becomes so prevalent that many people consider it important [and] it actually has political impact, there have to be rules covering it. People will just expect that. There's a massive body of law dealing with driving and cars. If there weren't cars and driv- ers, there would be nothing. I'm sure nobody thought of setting up those rules prior to that." LT O'Brien's Encyclopedia of Forms, Eleventh Edition, Computers and Information Technology, Division X Editor: Louis H. Milrad Internet version included with your print subscription This four-volume set delivers all of the appropriate and up-to-date forms of agreements to manage IT issues. It also provides checklists and optional clauses that assist in quickly customizing the agreements to your interests. With the Internet version, easily search for agreements and clauses, integrate and customize them into documents. Looseleaf & binders (4) • $515 Releases invoiced separately (1-2/yr) • P/C 0886030000 Vol. 1/2/3 ISBN 0-88804-267-1/-358-9/-436-4 Vol. 4 ISBN 978-0-88804-467-9 Outsourcing Transactions: A Practical Guide Fasken Martineau DuMoulin LLP Edited by: C. 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