Net Neutrality in the U.S. – what does it mean for Canadians?
Last month, the Federal Communications Commission (FCC) voted 3-2 in support of net neutrality in the United States, after a year of strong lobbying by senior Republications and the major American telecom networks.
Net neutrality is “the concept that all online traffic must be equally accessible.” This means no blocking, no speed throttling and no paid prioritization. In a major business partnership between Netflix and Comcast, Netflix reluctantly paid Comcast for interconnection (direct) access to its broadband network instead of using intermediaries. In the four months up to the business close, Netflix reported a 27% decrease in streaming speed due to Comcast throttling bandwidth.
In a nutshell, Netflix paid Comcast for better internet speeds so its customers could enjoy streaming movies and TV shows.
Therefore, the FCC passing net neutrality means all websites would have equal streaming speeds and no discrimination on any front – traffic, bandwidth and accessibility. It’s impactful for small businesses and start-ups. If these new regulations had not passed, their speeds would have slowed down dramatically, making it difficult to maintain an online presence. In order to have a competitive marketplace, most businesses would have had to clamour for faster speeds. Essentially, the FCC removed the barriers to accessibility.
The reason why the passing of net neutrality is essential to Canadians is that a vast amount of our internet activity is routed through the United States. The CRTC already passed net neutrality regulations in 2009, and our framework became a major reference for the FCC in deliberating their February decision. Likewise, rules set by the FCC also reinforce those set by the CRTC.
If the vote for net neutrality in the United States went the other way, businesses such as Google and Netflix would have had to pay for fast lanes. However, in Canada, any data coming from the US would have an unequal footing, which would force open the debate of net neutrality in Canada again to allow us to be on-par with our southern neighbours. Furthermore, higher prices for faster online traffic would trickle into Canada, as the limitations would affect speeds up north.
How would this affect Canada? Right now, not as much as previously thought. Canada already has a provision that major carriers need to provide wholesale bandwidth to smaller providers, in an effort to increase our own marketplace competition.
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Overall, the US policies are aligning closer to Canadian policies. However, if the major telcos choose to sue, they have within 60 days of publication of the new rules, and analysts say Verizon may step forward on this challenge. If this court challenge passes and allows major telcos go back to deregulation of bandwidth, we may be forced to look at new regulations in Canada.