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TORONTO (Hollywood Reporter) - Canada's TV regulator dealt a blow Wednesday to network neutrality -- the concept calling for Internet service providers (ISPs) to treat all Web content the same with regard to transmission speed -- by upholding the right of domestic ISPs to control online content and traffic.
In a much-awaited ruling, the Canadian Radio-television and Telecommunications Commission (CRTC) said major phone and cable giants can employ controversial "traffic-shaping" practices to manage the flow of Internet content on their networks, but must tell subscribers when and how they are doing so. The landmark CRTC decision comes as the Federal Communications Commission in Washington prepares to vote Thursday on proposed network neutrality rules that will codify how much control U.S.-based ISPs have over online traffic.
In its Canadian market ruling, the CRTC ordered the ISPs to give notice to subscribers of efforts to "throttle," or slow down, Internet traffic. And they must shape Internet traffic only when necessary, after employing "economic measures" that include upgrading networks to ease congestion and usage limits.
"Technical means to manage traffic, such as traffic shaping, should only be employed as a last resort," the CRTC told ISPs in its ruling.
CRTC critics view rulings or policies that allow ISPs to slow down Internet traffic, charge subscribers for how much bandwidth they use or offer discounts for off-peak usage as violating the principal of network neutrality, where all Internet traffic is treated equally.
But the regulator defended the use of traffic shaping by ISPs to ensure continued innovation.
"Canada is the first country to develop and implement a comprehensive approach to Internet traffic management practices," CRTC chairman Konrad von Finckenstein said in a statement.
"The centerpiece of our approach is a framework of analysis that will be employed to determine whether economic and technical practices are acceptable," he added.
As part of its new policy to police the Internet, ISPs must provide residential customers with 30 days' notice of any changes to network management, and 60 days' notice to wholesale customers.
The ISPs must explain who will be affected by various types of traffic shaping, when it will occur and how it will impact Internet speeds.
The CRTC said that written notice will enable customers to make "more informed decisions about the Internet services they purchase and use."
The regulator also ordered ISPs to detail on monthly customer bills various usage plans so consumers can compare Internet services and match bandwidth needs to what they can afford.
The CRTC upheld the right of ISPs to use traffic shaping after summer hearings in which Bell Canada and other phone giants told the regulator they needed to throttle serial file-sharers that greatly slow the time it takes online subscribers to transfer music, video, software and other large files in the course of legitimate transactions.
Editing by SheriLinden at Reuters