Legal and Regulatory Confusion

in the Transmission of

Unlicensed Music over P2P

Networks

A Voluntary Collective Licensing Proposal based on the use of Internet

Traffic Management Practices

Andreas Kalogiannides

Edited by Bob Tarantino

2

In Society of Composers, Authors and Music Publishers of Canada v. Canadian

Association of Internet Providers, where SOCAN sought to collect royalties from Internet

Service Providers (ISPs) for their role in communicating musical works to the public by

telecommunication, Justice Binnie stated that “there is no doubt that the exponential growth of

the Internet has created serious obstacles to the collection of copyright royalties”.1 This author

agrees with this statement and offers one of his own: copyright law should have been keeping

pace with the technological development of Internet communication and the social norms that

drive it. These statements convey the difficulties faced by the music and telecommunications

industries in assigning liability for the transmission of unlicensed copyrighted material over peer-

to-peer (P2P) networks. In the context of P2P transmissions, one of the most important issues is

the extent to which ISPs may be liable for authorizing copyright infringement of musical works.

Notwithstanding the newly-introduced Bill C-32,2 the Copyright Act has not been

equipped to address the issues of distributing media content (e.g. music) in digital format over

the internet. Parliament carved out a “user” exception for intermediaries in the form of s.

2.4(1)(b) in the amendments to the Copyright Act in 1988 – a time the Internet as we know it did

not exist – which held that “persons who only supply “the means of telecommunication

necessary for another person to communicate” are not themselves to be considered parties to an

infringing communication”.3 That exception, sometimes referred to as the “common carrier”

exception, had the effect of shielding ISPs from liability for the transmission of copyrighted

material and facilitated the making of investments in internet infrastructure and technology. In

the early years of its commercial exploitation, intervening or managing individual packets of

1 SOCAN v. CAIP [2004] 2 S.C.R. 427, 2004 SCC 45 at para 129 [SOCAN]. 2 Bill C-32, An Act to Amend the Copyright Act, 3rd Sess., 40th Parl. June 2010.

3 Ibid SOCAN supra note 1 at 3.

3

traffic on the internet was technologically impossible; routers “didn‟t have the resources to

examine traffic as it went by”.4 In addition to the common carrier exception, the 1988

amendments included the addition of section 3(1)(f) “to communicate the work to the public by

telecommunication…and to authorize any such acts”.5 The 1988 Amendments further specified

that service providers “who only provide “the means of telecommunication necessary” are

deemed not to be communicators”.6 The definition of “telecommunication” in section 2 has been

held to constitute “any transmission of signs, signals, writings, images or sounds or intelligence

of any nature by wire, radio, visual, optical or other electromagnetic system”.7 While this

definition was intentionally designed broadly to capture future developments in communications,

its breadth has meant that Supreme Court of Canada and the Canadian Radio-television and

Telecommunications Commission (CRTC) (and to some extent the Copyright Board of Canada)

have been charged with the task of interpreting the legislature‟s intent in crafting the copyright

and telecommunications policy environments.

In an attempt to add some clarity and predictability to the role of ISPs in the delivery of

copyrighted musical content, this article sets out normative and technological arguments for the

creation of a new licensing framework under which ISPs may be liable for transmissions of

music over P2P networks. More specifically, this article proposes an Internet traffic

management practice (ITMP)-based voluntary collective licensing model that establishes a set of

criteria that determine when an ISP must pay a license fee for the transmission of music over

P2P networks. Essentially, the more a traffic management practice interferes with content, the

higher the license fee which would be payable to the collective music society. This article will

4 Somayaji, Anil. Deep Packet Inspection is Essential for Network Neutrality. Office of the Privacy Commissioner

of Canada Dec 4th 2009 <http://dpi.priv.gc.ca/index.php/essays/deep-packet-inspection-is-essential-for-net-

neutrality/>. [Somayaji] 5 see SOCAN supra note 1 at para. 42. 6 Ibid at para 86. 7see SOCAN supra note 1 at para. 42.

4

demonstrate that current ITMPs, namely ones that use Deep Packet Inspection (DPI) technology,

exert sufficient control over P2P content so as to remove themselves from protection afforded to

persons who act as mere “conduits” under s. 2.4(1)(b) of the Copyright Act. A thought

experiment might help illustrate this point. Suppose Canada Post had a technology that scanned

the contents of your letter to see to whom it was being sent and what was inside. Then, based on

this information, it would classify and prioritize the delivery of your mail. Imagine also that it

develops a system for prioritizing mail depending on how much of a hassle it is to deliver the

mail or the resources Canada Post would have to expend to deliver the mail. A post card from

Florida is trivial and easy to send, so it is delivered promptly, but a large birthday package is

delivered more slowly; or, perhaps a letter to your mother is deemed not as important as a letter

from your insurance company telling you that your policy has lapsed. Like ISPs, Canada Post is

the conduit through which you receive your mail and although it does not change the substantive

content of the mail, it controls the speed at which it travels. By doing so, Canada Post is

deciding for you how important this information is to you. Its “meaning and purpose” is decided

for you – and after you have already paid for the service. Granted, Canada Post does not treat all

mail equally. It uses economic “mail traffic management” by offering to ship different packages

at different prices: if you want to ship a large, heavy package to New York, you will be charged

more than sending a birthday card to Vancouver. This type of discrimination is permissible

because it is done upfront, with your consent and, importantly, does not involve copyrighted

material. However, this is not the case with traffic shaping using DPI – control over content is

exerted without your consent. P2P users are paying for an Internet subscription that supposedly

guarantees them the same quality of service given to non-P2P users.

The manner in which DPI technology is used invariably impacts on the legal question of

whether ISPs “authorize” infringing conduct and whether or not they are mere “conduits” for

5

information. If DPI allows ISPs to differentiate P2P traffic from other traffic and ISPs can

effectively “see” what is being transmitted in the packets, then this makes them aware that

infringing material is being passed through their pipes. ISPs maintain that they should have the

right to control the speed and delivery of the information flowing through their pipes; in effect, a

certain amount of control over how and when Internet users consume content. However, this

proposal is grounded in the idea that if ISPs exercise their ability to control content, then they are

no longer passive conduits and so cannot claim to be shielded from liability for enabling or

permitting copyright infringement – and thus they should also have a license from the copyright

owner to do so.

This article will begin by outlining how ISPs shape traffic, focusing on DPI technology,

to illustrate how aggressive throttling of P2P results in interference with content. This article

takes the stance that DPI technology is neutral; it is neither good nor bad. Rather, the issue with

DPI is the extent to which it interferes with the content of a message, thereby obviating legal

protections for ISPs under s. 2.4(1)(b) of the Copyright Act. The normative framework for the

licensing model is based primarily on two decisions. This article will discuss how the Supreme

Court of Canada decision in SOCAN v. CAIP and the CRTC‟s decision in CAIP v. Bell have

created a contradictory legal and regulatory environment and how this dissonance has resulted in

a misunderstanding of ISPs‟ role as “gateways” to the Internet. Both decisions take a position on

what constitutes ISP control over content, but they arrive at different conclusions. In SOCAN v.

CAIP, the court examined control over “acts that do not relate to the content”, relying on

conclusions drawn by the Copyright Board; specifically, this article will discuss how the

interpretation of sections 2.4(1)(b) and 3(1)(f) of the Copyright Act was driven by the Supreme

Court‟s lack of technical knowledge of telecommunications technology and P2P networks. This

will be followed by a discussion of the CRTC decision in CAIP v. Bell and CRTC Telecom

6

Regulatory Policy 2009-657.8 In CAIP v. Bell, the CRTC interpreted control more narrowly,

equating ISP control to influence over the editorial content and meaning and purpose. This led

the CRTC to incorrectly find that the throttling of P2P traffic does not violate s. 36 of the

Telecommunications Act. The Supreme Court decisions in SOCAN v. CAIP and CAIP v. Bell,

considered in combination with the CRTC Telecom Regulatory Policy, have failed to establish a

stable framework for the evaluation of the use of internet traffic management practices as they

pertain to the degree of control over copyrighted content exerted by ISPs. This article will

conclude with a proposal for an ITMP-based voluntary collective licensing model where license

fees would be payable by ISPs to copyright owners depending on an ISP‟s use of “intelligent”

traffic management practices to manage P2P traffic. Such a system would reconcile the legal

and regulatory contradictions with respect to ISP liability for the transmission of copyrighted

music and also provide a revenue stream for copyright owners.

Internet Service Providers, DPI and P2P Technology

P2P services use the Internet infrastructure provided by ISPs to create a computer

network where users can freely exchange computer files.9 In a more technical sense,

A peer-to-peer network is a type of network in which workstations may act as clients

(requesting data), servers (offering data) and/or „servants‟ (both a client and a

server). P2P technology enables the sharing of computer resources and services,

including information, files, processing cycles and storage by direct exchange

between systems (without the use of central servers).10

8 “---. Review of the Internet Traffic Management Practices of Internet Service Providers. Vol. 2009-657. Ottawa,

Canada: Canadian Radio-television and Telecommunications Commission, 2009.

[Review of ITMPs]. 9 There are two main types of P2P technology: centralized P2P services, where a network of users can access files

stored on one central computer; and, the more common decentralized P2P services, where users access files

contained on any computer on the network. 10

Meeting the Challenge of Today‟s Evasive P2P Traffic. Waterloo, Ontario: Sandvine Incorporated, 2004.

[Sandvine] at 2

7

P2P applications are a double-edged sword for most ISPs: on the one hand, they are a strong

driver of subscriber accounts and contribute to consumers‟ increasingly price-elastic attitude

towards internet subscriptions and quality of service demands;11

on the other hand, however,

increasing the amount of P2P traffic can also adversely affect the service of other subscribers by

making less bandwidth available on the network for other uses, notably, “time sensitive”

applications like VoIP and online gaming that require constant bandwidth availability. As such,

the main disadvantage of P2P networks for ISPs is the additional cost of bandwidth consumed by

P2P applications; for example, on a typical ISP network, over 60% of the bandwidth consumed

is by P2P traffic.12

There are also additional costs involved in moving data from around the

world and the “over-subscription” business model of ISPs - where they provide service to more

subscribers than their bandwidth can accommodate knowing that most subscribers will not use

the Internet at the same time - is rendered less effective.13

P2P applications are able to consume many times their bandwidth share by opening

multiple parallel connections to many different servers (their peers) in order to maximize

download speeds;14

in comparison, other applications, such as Web browsers, open only one

parallel connection to a server. Effectively, then, P2P applications take advantage of a certain

feature of internet technology, the Transport Control Protocol (TCP). TCP is the method by

which data is reliably transmitted from host to host.15

TCPs encourage equitable distribution of

bandwidth by ensuring that each network application uses only one TCP connection to send data

to a given receiver.16

P2P applications take advantage of this by opening hundreds of parallel

11 Ibid at 1. 12 Ibid at 2. 13 Ibid at 3. 14

Mochalski, Klaus, and Hendrik Schulze. Deep Packet Inspection: Technology, Applications and Net Neutrality.

Leipzig, Germany: Ipoque, 2009 [Ipoque White Paper] at 5. 15 Ibid at 6. 16 Ibid at 6.

8

server applications, allowing them to achieve maximum download speeds. Notably, TCPs do not

have an enforcement mechanism that prevents applications from opening multiple parallel server

connections.17

As P2P traffic (like most other forms of Internet data communication) is designed to look

like regular Web traffic so that it can pass as quickly as possible through the networks,18

ISPs

have resorted to managing Internet traffic by inspecting data packets.19

Some ISPs have resorted

to using Deep Packet Inspection technology to look past the “outer layers” of a packet file and

into the IP and TCP payloads.20

DPI is used to ensure fair access to internet bandwidth and is

tailored to the needs of each network application. If the amount of bandwidth for P2P

applications is limited, then there is more bandwidth available for “bandwidth sensitive”

applications, such as Skype or online-gaming. DPI accomplishes this by providing either a

bandwidth guarantee or giving certain data packets priority over others. P2P applications often

try to conceal their activities through a range of evasion tactics, including using mathematical

operations to hide the true nature of the packet and spreading the identity of the information

across multiple packets which makes identifying the information type more difficult.21

To

combat such concealment, DPI uses statistical and behavioural analyses of data flows of Internet

traffic to discern P2P traffic from other data.

Network management is considered to be the most useful at critical times of network

congestion when bandwidth is swallowed up by certain Internet users, namely the users of P2P

applications.22

The counter-argument, however, is that traffic shaping practices, specifically the

17 see Ipoque White Paper supra note 14 at 6. 18 see Sandvine supra note 10 at 9-10. 19 Packet inspection needs to be used by ISPs for monitoring and changing traffic for the purposes of maintaining

their networks. see Somayaji supra note 4. 20 see Ipoque White Paper supra note 14 at 3. 21 see Sandvine supra note 10 at 9. 22 see Sandvine supra note 10 at 9.

9

use of DPI technology, might prejudicially impact the speed and quality of the connections of

other non-P2P users because

Shaping requires that each data packet be inspected to determine which are P2P. This

introduces significant network latency and slower processing times for all traffic, as

each packet is queued, inspected, and then queued again for transmittal. Shaping

therefore indirectly penalizes non-P2P users for the P2P traffic that is on the

network; every user on the network suffers these lags. This damages the subscriber

experience immensely. High network latency erodes the performance of services that

require real-time performance; low quality VoIP, jittery streaming video, and online

gaming hang ups leave subscribers scratching their heads and looking for

alternatives23

One approach is called protocol or application-agnostic bandwidth management24

where ISPs

simply limit the amount of bandwidth that is available in periods of network congestion.25

The

problem with application-agnostic bandwidth management is that bandwidth requirements differ

among various types of applications. For example, VoIP applications requires very little

bandwidth, but the bandwidth must be available at all times to ensure that the call does not keep

cutting out.26

DPI helps ISPs manage their networks by understanding what is passing through them

and how to get information to its end destination. DPI has been used for many years in the

context of e-mail spam filtering, anti-virus filtering for e-mail, content caching for Web pages

and firewalls27

without attracting any controversy. However, whether or not the use of DPI

technology is necessary to facilitate internet communication and reduce network traffic is

separate from the legal issue of how DPI regulates P2P traffic in the context of copyright and

telecommunications policy. This is especially so because different service providers use DPI

differently, while some do not even use it at all. Bell openly admits to using DPI technology to

23 Ibid at 10. 24 see Ipoque White Paper supra note 14 at 6. 25 Ibid at 6. 26 Ibid at 9-10. 27 see Ipoque White Paper supra note 14 at 3.

10

throttle P2P applications,28

whereas Rogers does not provide very much information on its uses

of DPI, except to say that it does engage in traffic shaping;29

TELUS has publicly stated that it

does not use DPI.30

This presents a conundrum when trying to answer the legal question of whether the use of

DPI may amount to interference with content, thereby removing ISPs from the ambit of

protection afforded under s. 2.4(1)(b) of the Act. The interpretation of section 2.4(1)(b) in

SOCAN v. CAIP treats all ISPs in a similar fashion irrespective of how they employ DPI when,

as a practical matter, they all apply DPI differently. In effect, all ISPs benefit from the decision

in SOCAN v. CAIP because they are deemed to be Internet intermediaries who do not engage in

acts relating to the content of the communication and only provide a “conduit” for information;31

yet, they all use the technology differently. This situation effectively creates a paradox: ISPs are

not deemed aware of what passes through their pipes for the purposes of receiving legal

protection under s. 2.4(1)(b) of the Copyright Act; yet, as a practical matter, they are aware of the

P2P traffic for the purpose of network management. Even the Recording Industry Association of

America (RIAA) has recognized that ISPs are aware of– or can accurately determine – what data

passes through their networks because the RIAA abandoned its legal campaign against file-

sharing and moved towards enforcing copyright infringement through ISP throttling.32

28 Section 8.3 of Bell Canada‟s 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” see Bell Canada. Bell Canada Terms of Service. Ottawa, Canada:

Canadian Radio-television and Telecommunications Commission, 1986.

[Bell Terms of Service] at 6; see also Canadian Radio-television and Telecommunications Commission. The

Canadian Association of Internet Providers‟ Application regarding Bell Canada‟s Traffic Shaping of its Wholesale

Gateway Access Service . Canadian Radio-television and Telecommunications Commission. Telecom Decision

CRTC 2008-108, 2008. [CAIP v. Bell] at para 16, 19 and 20. 29 Ibid at 23. 30 Anderson, Nate. “How Canadian ISPs throttle the Internet”. Ars Technica, Business. January 21, 2009 31 see SOCAN supra note 1 at 6. 32

Rosenblatt, Bill. "RIAA Drops Lawsuit Campaign " DRM Watch 2008. December 4 2009

<http://www.drmwatch.com/legal/article.php/3793161?utm_source=feedburner&utm_medium=feed&utm_campaig

n=Feed%253A+DrmWatch+%2528DRM+Watch%2529&utm_content=Netvibes>.

11

The Supreme Court and SOCAN v. CAIP

In SOCAN v. CAIP, the Canadian Association of Internet Providers (CAIP) argued

against imposing liability for copyright infringement on ISPs, arguing that ISPs are not liable

because they do not “regulate or are even in the usual case aware of the content of Internet

communications which they transmit”.33

The important aspect in this case was the Supreme

Court‟s analysis for determining whether or not ISPs are “conduits” for information. Section

2.4.(1)(b) of the Copyright Act provides a safe harbour for ISPs that transmit copyrighted

material through their networks. The Court held that so long as the ISP “does not engage in acts

that relate to the content of the communication, i.e. whose participation is content neutral, but

confines itself to providing “a conduit” for information communicated by others, then it falls

within s. 2.4(1)(b).”34

There are several interesting things at work in the decision. First, the phrase “does not

engage in acts that relate to the content of the communication” is vague and not adequately

interpreted by the Supreme Court. Moreover, the Supreme Court never defines what it interprets

to be „content‟. Perhaps the Court assumes that content refers to all content, such as music,

movies, blogs, or on-line gaming, but the Court is not clear on this issue. This is problematic

because by not defining what it considers to be content‟, the Supreme Court‟s analysis of s.

2.4(1)(b) is ignoring the most important part in interpreting s. 2.4(1)(b). At issue is the whether

or not ISPs might be liable for transmitting copyrighted content; in the context of P2P

applications, „content‟ has a particular manifestation. Admittedly, the technology of P2P

networks makes capturing this definition even more complicated: when data is transmitted over

P2P applications, digital files are fragmented into thousands of different file packets. The

33see SOCAN supra note 1 at para 4. 34 Ibid at para. 92.

12

Supreme Court seemed to understand this much, relying on the Copyright Board‟s conclusion

that the transmission of the individual packets does indeed constitute communication of the

work.35

For example, when CAIP argued before the Copyright Board against imposing

copyright liability on ISPs on the basis that ISPs only transmitted packets of incomplete music

coded in computer language, the Board disagreed, stating that

fragmentation into packets was dictated by the “technical exigencies of the internet”.

While some intermediaries may not be transmitting the entire work or a substantial

part of a work, all of the packets required to communicate the work are transmitted

from the server on which the work is located to the end user. Consequently, the work

is communicated.36

Thus, the Supreme Court seems to be saying that it is permissible for an ISP to carry these data

packets through their pipes, as this act alone “does not relate to the content of the

communication”.37

However, the Supreme Court does not adequately consider this conclusion in light of how

an ISP throttles P2P traffic by slowing down the pace of content delivery over its network. Is

this also not an act that relates “to the content of the communication”?38

The Supreme Court

does not articulate a nuanced and balanced view of how ITMPs work and how DPI, in particular,

affects the delivery of Internet content. The Supreme Court does not consider this – and by

failing to do so, its interpretation of s. 2.4(1)(b) is not only incomplete, but also incompatible

with modern Internet technology. It is tempting to conclude that if the Supreme Court were to

revisit the issue again in SOCAN v. CAIP with this enlightened understanding, the decision might

be more nuanced and take into account the technological realties of internet communication.

35 see SOCAN supra note 1 at para. 22. 36 Ibid at para. 22. 37 Ibid at para. 92. 38 Ibid.

13

Moreover, the Supreme Court‟s failure to define „content‟ creates a tension between its

view of content and the CRTC‟s view of content, which will be discussed in more detail below.

The CRTC maintains a narrow definition of what constitutes control over „content‟; its definition

is linked with “editorial” control and manipulation of specific content. For example, in CAIP v.

Bell, the CRTC decided that Bell‟s traffic shaping of P2P traffic was permissible because it did

not “involve any editorial control over the content of the telecommunications and does not

involve blocking any telecommunications”. 39

In the context of P2P applications specifically, the

CRTC ruled that “the fact that a transmission is delayed does not alter its meaning or purpose”.40

But again, as in SOCAN v. CAIP, the CRTC glosses over the real issue. In P2P networks, the

speed of the content is (or at least determines the nature of) the content because, for example, an

on-line game which is subjected to interruption as a result of delayed packet transmissions is a

game which is markedly less enjoyable to, perhaps even unplayable for, the user. The content of

the message is necessarily fragmented into data packets so that it can be transmitted using

Transmission Control Protocol (TCP) technology. It is impossible to at once argue that ISPs

throttling P2P files “does not relate to the content of the communication”41

and also that ISPs can

delay the transmission of a P2P file without altering the meaning and purpose of its content.

The second interesting aspect of the Supreme Court‟s interpretation of s. 2.4(1)(b) relates

to the question of what counts as a “conduit”. The Supreme Court‟s decision relies on the

Copyright Board‟s definition in Tariff No. 22.A42

of the attributes of a “conduit”; notably a “lack

of actual knowledge of the infringing contents, and the impracticality (both technical and

39 see CAIP v. Bell supra note 28 at para 55. 40 Ibid at para 58. 41 see SOCAN supra note 1 at para. 92. 42 Copyright Board of Canada. SOCAN Tariff no. 22. A Statement of the Royalties to be Collected by SOCAN for

the Communication to the Public by Telecommunication, in Canada, of Musical Or Dramatico-Musical Works.

Ottawa, Canada:2008.

14

economic) of monitoring the vast amount of material moving through the internet”.43

However,

because the court does not consider the extent to which traffic management practices interfere

with content, this definition does not delve far enough into the question of “are ISPs str ictly

conduits”? The Supreme Court decision does not grasp that the use of ITMPs that incorporate

DPI technology to shape P2P traffic necessarily means that ISPs have (at minimum) implied

knowledge of infringing content. If ISPs use DPI technology to shape the traffic that flows

through their pipes, then they cannot be “blind” conduits. Traffic shaping measures that involve

the use of DPI are capable of “monitoring the vast amount of material moving through the

internet.”44

After all, the purpose of DPI is to look past the packet headers to classify and

prioritize P2P traffic. Moreover, the reality of how P2P applications are used in practice

illustrates that the majority of P2P traffic is copyrighted material.45

If ISPs are managing P2P

content, even for the purposes of relieving network congestion, how can they be seen as being

mere “conduits” as defined by the Supreme Court?

Furthermore, if we look at the discussion of authorization for the transmission of

copyrighted works in CCH Canadian Ltd. v. Law Society of Upper Canada46

, the tension in

SOCAN v. CAIP is perhaps even more startling. In CCH, Justice McLachlin stated that there is

a presumption of non-authorization for copyright transmission that can be rebutted “if it is shown

that a certain relationship or degree of control existed between the alleged authorizer and the

persons who committed the copyright infringement”.47

By contrast, in the SOCAN decision, the

Supreme Court said that “when massive amounts of non-copyrighted material are accessible, it is

not possible to impute to the ISP an authority to download copyrighted material as opposed to

43 see SOCAN supra note 1 at para 101. 44 Ibid at 101. 45 P2P traffic accounts for up to 60% of total traffic on a typical residential network. see Sandvine supra note 10 at

1. 46 CCH Canadian Ltd v. Law Society of Upper Canada. 2004 SCC 13, [2004] 1 S.C.R. 339 [CCH]. 47 CCH supra note 47 at para. 38.

15

non-copyrighted material”48

(emphasis added). Is this position realistic given what is possible

through traffic management such as DPI? While the Supreme Court‟s reasoning might apply in

the case of host servers posting hyperlinks to copyrighted material, for example, the situation is

entirely different in the case of P2P applications that allow users to exchange copyrighted music

files. It is more than fair to impute such knowledge to ISPs because they are fully aware of what

type of material is being sent through their networks as a result of their use of ITMPs. When an

ISP slows down P2P traffic, it is exercising a “degree of control” over the content and

authorization can be implied because the use of DPI technology creates the requisite “certain

relationship or degree of control” between the P2P user and the ISP.

Conversely, it could be objected that authorization may require more than imputed

knowledge. Indeed, the Supreme Court even stated that “knowledge that someone might be

using content-neutral technology to violate copyrights is not necessarily sufficient to constitute

authorization”.49

However, the Supreme Court also makes numerous references to the idea that

authorization can be imputed through actions or interference with the content of copyrighted

works. For example, the Supreme Court wrote that authorization requires that the defendant “did

give approval to, sanction, permit, favour, or encourage the infringing conduct”.50

Further, at

paragraph 124, Justice Binnie points out that “copyright liability may well attach if activities

cease to be content neutral”51

(emphasis added). The reality is that traffic management practices

that use DPI are by definition not content neutral. DPI is effective precisely because it targets

specific applications and data traffic while ignoring others. As a result, the SOCAN decision

48 SOCAN supra note 1 at para 123. 49 Ibid at para. 7. 50 Ibid at para. 127. 51 Moreover, reference was made to C.B.S. Inc. v. Ames Records & Tapes Ltd, where it was held that an ISP may be

held liable because “indifference, exhibited by acts of commission or omission, may reach a degree from which

authorization or permission may be inferred. It is a question of fact in each case” see SOCAN supra note 1 at para.

124 and 126.

16

illustrates that ISPs are not liable for authorization of copyright infringement even though their

traffic management policies permit (and even encourage) control of the delivery of copyrighted

content via P2P platforms. There remains a disconnect between that legal conclusion and the

practical reality - service providers are at once both conduits and “dumb pipes” but also active

participants in exerting control over content.

The next section of this article discusses how the CRTC decision in CAIP v. Bell and the

Telecom Regulatory Policy CRTC 2009-657 also does not appreciate the realities of P2P

technology. Both CAIP v. Bell and the CRTC‟s Review of Internet Traffic Management

Practices demonstrate contradictory policy decisions that have distorted the Canadian legal

copyright and the telecommunications regulatory frameworks.

CRTC: CAIP v. Bell and Telecom Regulatory Policy CRTC 2009-657

The CRTC decision in CAIP v. Bell contains a deficient understanding of how Internet

and P2P technology works. The CRTC was incorrect in ruling that traffic shaping is the only

option that is “technologically and economically suitable” to address network congestion.52

First, traffic shaping is not the only solution to traffic management and there are other suitable

alternatives, such as will be explained below. Secondly, as described above, traffic shaping does

amount to influence over the “meaning and or purpose” of P2P file-sharing communications

because control over the speed of transmission of P2P files amounts to controlling content. The

CRTC also closed the door on alternative solutions, stating that it agreed with “Bell Canada's

submission that the traffic-shaping approach it has implemented is the only practical option that

is technologically and economically suitable, at this time, for addressing congestion in its DSL

52 see CAIP v. Bell supra note 28 at par 33.

17

network”.53

The Commissioned noted that there is “no evidence on the record regarding the

availability, feasibility or utility of alternative solutions.”54

More importantly to this discussion, however, is the CRTC‟s ruling that Bell‟s traffic

shaping practices do not violate s. 36 of the Telecommunications Act. Under s. 36 of the

Telecommunications Act, common carriers cannot influence the “meaning or purpose” of the

content they transmit. The CRTC held that when Bell throttled P2P traffic by means of DPI

technology, the contents “reach their intended recipients with their content unchanged”,55

and as

such, Bell Canada has no “editorial control” over the content. But that narrow approach ignores

how P2P technology actually works. (This perspective of content also does not correspond with

the Supreme Court‟s understanding that content transmitted over the internet is necessarily

fragmented into data packets). The decision makes the error of distinguishing between the speed

of the telecommunication and its content. This distinction does not hold in the context of P2P

where data files are necessarily fragmented and control over the speed of the download is control

over the content. Before a file can be accessed by the end-user all the data packets must have

arrived. The CRTC even noted as much, saying that even without traffic shaping practices, file-

sharing applications “require time for the complete file to be transmitted before an end-user can

access it”.56

It is also interesting that the Commission notes that the contents of the file are

unchanged, yet concedes that the file may arrive “more slowly than if traffic shaping had not

been applied.”57

It does matter if only 99.9% of all the data packets have reached their

destination because if the other 0.1% has not yet arrived, then the file cannot be accessed at all.

The entire file must reach the end-user before it is accessible and thus content will “mean”

53 see CAIP v. Bell supra note 28 at para. 33. 54 Even though the Commission did note that CAIP and others did suggest alternative traffic management

approaches for Bell. see CAIP v. Bell supra note 28 at para. 33. 55 Ibid at para. 54. 56 Ibid at para 56. 57 see CAIP v. Bell supra note 28 at para. 54.

18

something else if it takes a longer amount of time to reach the user. According to the CRTC‟s

reasoning, Bell could hypothetically reduce transmission speed so much so that it could take

hours (or days) to hold a VoIP conversation and that would be deemed to have had no influence

over the meaning or purpose of content.

In an era of instantaneous communication, there is a definite value in being able to access

content now as opposed to accessing it later. Reduced to Internet traffic, copyrighted music on

the internet is no different than any other form of information, like “hot news” or VoIP - its

“meaning” will be different tomorrow. As such, the decision in CAIP v Bell evidences a shallow

understanding of content and does not take into account the nature of how P2P files are

transmitted over the Internet. By analyzing s. 36 of the Telecommunications Act solely with

reference to substantive “editorial” interference with content, the CRTC‟s decision misses the

point much like the Supreme Court‟s decision in SOCAN. In the context of P2P applications, the

“concept of control of content is broader than editorial control.”58

Furthermore, while the ITMP framework articulated by the CRTC in its “Review of

Internet Traffic Management Practices” decision (Telecom Regulatory Policy CRTC 2009-657)

aims to accomplish several laudable goals, its recommendations lack the depth required to create

a strong, predictable framework for the legal analysis of how ISPs employ ITMPs. The

Commission notes that transparency is important, specifically the principle that “[w]here ITMPs

are employed, ISPs must be transparent about their use.”59

This is important in the context of

P2P throttling given that some ISPs use practices like DPI and others do not. But while

transparency is included as an important principle, there are no bright-line rules spelling out how

ISPs should give effect to that principle. Bright-line rules are a necessity when a common carrier

58 Ibid at para. 120. 59see Review of ITMPs supra note 8 at 1.

19

might be interfering with content because, for example, consumers should have all the available

information to make informed purchasing decisions.

Also, the CRTC underscores the need for balance between encouraging new innovative

networks and managing network traffic, as laid out in the principle: “When ITMPs are employed,

they must be designed to address a defined need and nothing more”.60

Technical approaches,

such as DPI, are prioritized over economic approaches, such as time-of-day pricing and monthly

bandwidth limits, which are likely to work very well in curbing P2P traffic. With respect to

economic alternatives to technical ITMPs, the Commission is understandably hesitant to mandate

economic approaches as the CRTC does not want to be viewed as overly interfering in “the

operation of competitive market forces.”61

ISPs view economic approaches as too dangerous,

fearing that they will alienate customers if they do not price accordingly. As such, the ITMP

framework proposed by the Commission “interferes with market forces to the minimum extent

necessary”, giving ISPs the freedom to decide what approaches will work best for them.62

Economic approaches can be very useful in reducing network congestion specifically caused by

P2P users. It is generally acknowledged in the industry that “20 percent of network users

generate over 80 percent of the traffic.”63

Most of these users are also the same people who

share files over P2P networks. Why not tax these users according to how much bandwidth they

use? Time-of-day pricing (TOD) is but one example of how economic approaches would help

reduce network congestion. Electricity providers use TOD pricing to reduce pressure on the grid

and it works well for them. Using technical traffic management practices that use DPI, such as

limiting user bandwidth or throttling P2P applications, is like the electricity company reducing

power to appliances that consume the most energy. An analogy would be to imagine having

60 Ibid at 1. 61 Ibid at para. 17. 62 Ibid at para. 18. 63 see Ipoque White Paper supra note 14 at 6.

20

enough energy to run a toaster and a lamp but not enough to run your energy-sucking high-

definition flat-screen television. Furthermore, it is possible that favouring technical approaches

over economic ones does not correspond to the analysis employed by the Supreme Court of

Canada in SOCAN v. CAIP. Neither does the CRTC seem to appreciate the legal force of the

Supreme Court‟s definition of what constitutes a “conduit” nor that authorization for copyright

infringement can be implied from actions that “sanction, permit or encourage” the infringement

and that to enjoy immunity ISPs must provide services that are “content-neutral”.

The biggest flaw with the recommendations contained in the Review of Internet Traffic

Management Practices is how the “Oakes-like” test proposed by the CRTC is only meant to

regulate violations of s. 27(2) of the Telecommunications Act.64

The real issue in the context of

P2P throttling is not under s. 27(2), but rather with s. 36 of the Telecommunications Act, which

requires that telecommunications “carriers must have prior Commission approval when they

control the content or influence the meaning or purpose of telecommunications they carry”.65

Aimed at balancing “the freedom of Canadians to use the Internet for various purposes with the

legitimate interests of ISPs to manage traffic thus generated on their networks”,66

the CRTC‟s

proposed framework is a step in the right direction. The Commission goes on to state that the

ITMP framework “would not be used to evaluate the use of such ITMPs”67

where it is alleged

that the ISP is controlling or influencing the “meaning and purpose” of the communication. The

crux of the issue is neither that P2P users are unjustly discriminated against nor that other users

are given undue preferential treatment. Rather, the issue is whether or not slowing down P2P

traffic amounts to controlling the content of the communication under s. 36 of the Act. (If

anything, P2P users should be discriminated against – by using pricing strategies tied to specific

64 see Ipoque White Paper supra note 14 at 6. 65 see Review of ITMPs supra note 8 at para. 117. 66 see CAIP v. Bell, supra note 28 at para. 7. 67 see Review of ITMPs supra note 8 at para. 128.

21

threshold levels of DPI-use in traffic management.) Even when the CRTC discusses s. 36

violations, a lack of understanding of P2P technology is clear, just as the Supreme Court

struggled with similar issues in SOCAN v. CAIP. For example, the distinction between “time-

sensitive” and “non-time sensitive” content does not hold in the context of P2P traffic because

the speed of the transmission determines the content of the transmission. The CRTC framework

needs to be modified to deal with P2P throttling which involves interference with content under

s. 36, not unjust discrimination or undue preferential treatment under s. 27(2). The CRTC traffic

management framework does not reflect a nuanced understanding of the goals of Canadian

Internet policy and how traffic management practices impact content delivery over the Internet.

An ITMP-based Collective Licensing Model

In light of the fact that the CRTC appears to want to provide a fair degree of latitude to

ISPs in selecting ITMPs, the balance of this article proposes a licensing model for copyrighted

material based on the degree of traffic management. Under this model, ISPs would pay a pre-

determined license fee to a music collective society based on the degree to which they use

content-neutral traffic management practices to manage P2P traffic. The proposal focuses on

license fees for music because the Supreme Court‟s decision in SOCAN v. CAIP dealt with music

royalties and as music files are very easily shared over P2P networks, they have been the focus

of much of the contemporary debate on the role of copyright in Internet communication. In this

proposal, ISPs would pay a license to a centralized licensing agency that represents the various

music collectives, creating a one-stop-shop where users can obtain any and all types of

licenses.68

There are two advantages to a centralized licensing agency: first, ISPs would not

have the burden of identifying the rights holder for each and every song downloaded (or

68Gervais, Daniel. Fragmented Copyright, Fragmented Management: Proposals to Defrag Copyright Management

(2003) 15 Canadian Journal of Law and Technology 33 [Gervais].

22

throttled); and second, a centralized licensing agency would ensure that consumers got access to

all the music they want. Licensee fees would be determined by the Copyright Board and would

be based on the extent to which the ITMPs used by ISPs are “intelligent” or use DPI technology

and aggressively shape traffic. An intelligent traffic management solution would consist of a set

of simple technological modifications to peer-assisted protocols which “can provide a cost-

effective solution that can be exploited by content providers to scale and accelerate the delivery

of content to millions of users without pushing ISPs towards regulating or blocking such

traffic”.69

The criteria for whether an ITMP is “intelligent” could be the following:

The extent to which it slows down the network

The extent to which the practice affects just P2P users or all subscribers

The extent to which it is costly to implement (resulting in higher retail prices to

consumers)

The extent to which the practice interferes with „content‟

Here is what the ITMP license fee structure might look like:

69

Rodriguez, Pablo. "Should Internet Content Providers Fear Peer-Assisted Content Distribution?” UseNix

Measurement Conference 2005. Berkeley, California, October 19-21.

<http://www.usenix.org/event/imc05/tech/full_papers/karagiannis/karagiannis.pdf>. [Rodriguez]

23

ITMP-based License Fee Structure

Traffic Management Practice

% of License Fee

Payable

Stateful Packet management

15% (Min. Fee)

Utilize network Caching

25%

Bandwidth Caps

50%

Acquiring more Bandwidth

65%

Shape P2P traffic using DPI

80%

Block P2P traffic

100%

The following discussion clarifies the concepts used in the foregoing table.

Stateful Policy Management (similar to locality aware technology): Stateful policy

management is an ITMP that manages “P2P traffic both on the downstream and on the

upstream.”70

When a file is being downloaded, the P2P traffic is redirected along the

network “path of least resistance”, while upstream P2P activity is controlled at the same

time using P2P session management techniques.71

Interestingly, stateful policy

70 see Sandvine supra note 10 at 11. 71 Ibid.

24

management is heavily DPI-dependent because packets must be inspected

“intelligently” and then classified and routed accordingly.72

More importantly, only

P2P traffic is affected, leaving all non-P2P traffic free to pass through the network.

The ISP is essentially “listening in” on the P2P traffic, directing it where to go and

diverting downloads to local download points if that is possible. This technology is

“locality aware”, connecting P2P applications with local servers instead of servers that

might be located in another part of the world. Currently, P2P applications connect to

any server that has the file being downloaded or the server with the fastest transfer

speed (most applications allow the user to select which criteria are used). The server

might as easily be in India as it might be in a house a few kilometers away. P2P

applications just seek the best and most available TCP connections to maximize their

efficiency. Using session management, an ISP can “limit the number of P2P

connections made to external users”.73

A study of P2P traffic management practices

conducted by Microsoft Research found that “locality results in less than half the

resource requirements when compared to the client-server model”.74

Moreover, the

study also found that “the benefits of a peer-assisted locality solution increase with the

logarithm of the number of active users”.75

The more P2P users, the better the system

works. Stateful Policy Management can be very useful in “absorbing peak loads and

reducing the monetary impact on ISPs and content providers”.76

Stateful packet

management, although it involves DPI technology, is highly effective at reducing

72 Ibid at 12. 73 see Sandvine supra note 10 at 12. 74 see Rodriguez supra note 69 at 11. 75 Ibid at 13. 76 Ibid.

25

network congestion, reducing costs for the ISP and maintaining a very subscriber

friendly network.

Utilize Network Caching: Network caching involves ISPs maintaining copies of the

most frequently accessed P2P files on their servers.77

When a file is searched by a P2P

user, this cache of popular songs would be accessed first and the user can download this

copy of the file.78

Network caching minimizes some of the downstream bandwidth that

causes network congestion, although it does little to solve the problem of upstream

congestion.79

Bandwidth Caps: Implementing bandwidth caps means limiting a subscriber‟s

bandwidth activity over a given period of time.80

This approach is typically used in

tiered-pricing schemes and as such would be a valuable economic ITMP. However, caps

do not deal with the problem of upstream congestion (e.g. having too many users

uploading files to an ISP server or a P2P network) and lack the specificity required to

deal with P2P traffic only – the entire user‟s connection is throttled, not just P2P

activity.81

Even more problematic for the average P2P user, who routinely runs a P2P

client where content is being uploaded to their servers, uploaded files are likely to “eat

up” all of their bandwidth, long before the user has downloaded her fair share.82

Acquiring more Bandwidth: Under this category, ISPs provide more bandwidth to their

consumers by building new Internet infrastructure. Although subscribers might initially

experience higher speeds from their connections, this would likely encourage P2P

77 Ibid at 7. 78 Ibid. 79 Ibid. 80 Ibid. 81

see Sandvine supra 10 note at 7. 82 Ibid at 8.

26

congestion because more users would be able to download and at faster rates.83

Therefore, this solution could easily result in delayed performance.84

Furthermore,

adding bandwidth to a network is cost prohibitive, making this a high-cost, low-benefit

solution that does not result in any increased network efficiency or optimization.85

Shape P2P traffic using DPI: As discussed in this paper, P2P traffic shaping is not an

ideal solution to address network congestion. Traffic shaping involves the use of DPI,

with each incoming packet being inspected and prioritized; P2P traffic is sent last after

all other “high priority” traffic is sent.86

This strategy is not likely to work to the extent

envisioned by the ISPs because P2P developers have found methods to deal with packet

inspection, such as: masking the true nature of the packet; “context” packet recognition;

and fragmenting packets to artificially split the packet identifier.87

The challenge for

ISPs is that they must have practices to deal with each of these P2P tactics in turn for

traffic shaping to remain effective;88

this is costly and inefficient. However, the biggest

disadvantage of traffic shaping is that it harms the user experience of all internet

subscribers, not just P2P users.89

Inspecting each packet slows down the network and

each user will experience some lag.

Block P2P traffic: Blocking P2P traffic is a strategy designed to fully avoid the costs of

P2P file sharing. However, as P2P file sharing is a big driver of Internet subscriptions,

there is a very real possibility that customers will not stand for this. In this model, an

83 Ibid at 4. 84 Ibid. 85 Ibid at 6. 86 Ibid. 87 Ibid. 88 see Sandvine supra 10 note at 9. 89 Ibid at 6.

27

ISP that blocked all P2P traffic would not survive because customers would vote with

their feet and move to another, P2P-friendly ISP.

Under this proposal, the extent to which an ISP‟s traffic shaping practices interfered with the

delivery of content would determine the license fee payable; for example, if an ISP were to

completely block all P2P traffic, it be responsible for would 100% of the set license fee. If the

ISP used network caching to store music on its servers, it would pay 25% of the set license fee.

The fee would also take in to account the ISPs subscriber share and market power. The ISPs

would file their ITMPs with the Copyright Board and keep the Board updated should they

change their traffic management practices. ISPs would also file their traffic shaping practices

with the CRTC so that there would be a public record on file.

An ITMP-based collective license model would create economic and technical incentives for

ISPs to adopt content-neutral but P2P-friendly traffic management solutions. The cost of the

license fee would simply be passed on the subscriber, adding perhaps $5 of $10 per month to a

subscriber‟s internet fee (it is outside the scope of this paper to get into a discussion of specific

voluntary collective licensing proposals; however, several of the more prominent collective

licensing proposals, e.g. Electronic Frontier Foundation‟s “Let the Music Play” white paper and

the Songwriter‟s Association of Canada‟s “A Proposal for the Monetization of the File-Sharing

28

of Music” call for a license fee of between $5 and $10).90

Interestingly, in its ITMP Policy

Framework, the CRTC has not even alluded to the possibility that there might be some technical

alternatives to simply throttling bandwidth. This licensing model would allow the ISPs to still

choose what ITMPs work best for them. It also would foster transparent practices because

technical approaches that use DPI would be regulated more by market forces and less by the

arbitrary whimsy of ISPs. Traffic shaping practices would be relocated into the marketplace

where subscribers are free to choose which carrier they want on the basis of their throttling

practices, increasing competition among ISPs for subscribers, forcing ISPs to disclose the

specific ITMPs they use and provide an incentive to refrain from disproportionally throttling P2P

traffic and interfering with content; because ISPs have purchased a license to “use” (or perhaps

more accurately, “manage”) the content, they could – in theory – shape P2P communications as

much as they want. This model would spark a natural re-organization of the market.

Undoubtedly, some ISPs would still choose to heavily manage P2P traffic using DPI technology

and would pay a higher percentage of the license fee for doing so; almost surely, this cost

increase would be passed on to Internet subscribers who use P2P services (it is safe to assume

that users who download extensively from P2P networks would be content to pay the increase).

Over time, given the continued and ubiquitous use of P2P networks, one or several ISPs might

determine that it would be profitable to offer a dedicated Internet connection package for P2P

90

Von Lohmann, Fred. A Better Way Forward: Voluntary Collective Licensing of Music File Sharing. San

Francisco, CA: Electronic Frontier Foundation, 2004. ; see also Songwriters and Recording Artists of Canada. A

Proposal for the Monetization of the File-Sharing of Music from the Songwriters and Recording Artists of Canada.

Toronto, Ontario: The Songwriters and Recording Artists of Canada, 2009.

<http://www.songwriters.ca/studio/proposal.php>. [SAC]; Terry Fisher‟s “entertainment tax” of $27 per household

per year would be enough to cover royalties on both music and movies. see Fisher, Terry. Fisher, Terry. Promises

to Keep: Technology, Law and the Future of Entertainment. Stanford, California: Stanford University Press, 2004.

29

applications; one way to do this would be to develop new Internet infrastructure that would

increase bandwidth capacity (which is generally very expensive but the infrastructure costs

would be absorbed by P2P users). As such, the market for Internet subscriptions would naturally

sort itself out because heavy users of P2P networks could “graduate” to a separate subscription

package in a higher fee category; whereas those who do not use P2P networks might even see a

decrease in the cost of their Internet subscriptions as the ISPs‟ investments in additional

bandwidth capacity (subsidized by P2P users) will make the service cheaper for “lighter”

Internet users. In theory, a P2P user could have access to a large catalogue of music at the

highest possible bandwidth speeds, as long as she pays for it. P2P users would face

discrimination in their monthly ISP bills, but not for their choice of Internet activities, further

enhancing the efficiency of the market.

This proposal also provides an ISP-controlled mechanism to compensate creators and rights

holders. Providing compelling reasons to ISPs to sit at the negotiating table with music labels,

publishers, artists and consumer electronics manufacturers has traditionally been very difficult;

in this proposal, they are in the driver‟s seat.91

Creators and rights holders would always be

compensated for having their works distributed online as there would be a minimum license fee

payable even if an ISP did not aggressively shape traffic. The minimum license would reflect

the ISP‟s role in transmitting copyrighted material. By combining both economic and technical

approaches into a single framework with built-in incentives, this system could reduce the usage

of aggressive traffic management practices, compensate rights holders and encourage a free and

open Internet. ISPs who did not want to participate in the license model could choose to opt-out

in exchange for adding a 6% “opt-out fee” to the price charged for internet subscriptions.

91

Personal Conversation with Jodie Ferneyhough, Manager, Universal Music Group Publishing. Andreas

Kalogiannides. E-mail and phone conversations, 2009. [Jodie]

30

Having an opt-out fee would create an incentive for ISPs to stay within the model and if they

chose to opt-out the opt-out fee would prevent them from significantly undercutting other service

providers.

The most obvious problem with the proposal might be that ISPs would simply choose not to

throttle P2P traffic at all or choose the least aggressive traffic management practices that would

result in them paying only the minimum license fee. There is the concern that this would not be

enough to compensate the music industry for copyright infringement. However, even if highest

license fee was $5.00 per month per subscriber, the minimum could be set at $0.75 per month per

subscriber. (There are no figures on the number of P2P subscribers in Canada, although in 2005

where was an estimated 1.6 billion music files shared on-line in Canada92

and there are

approximately 25 million internet users in Canada as of 2009.93

) If we assume that 25% of all

Canadian Internet users use P2P networks with some degree of frequency and if ISPs were to pay

the minimum $0.75 license fee per subscriber, the fee payable to the collective would be

$4,687,500 per month. That is $56 million each year distributed to labels, publishers and artists.

(It is beyond the scope of this proposal to specifically suggest how this amount would be divided

between all copyright owners; however, this proposal concedes that arriving at a number

acceptable to all parties will be quite difficult.) Another issue would be that ensuring that ISPs

are honest about their use of ITMPs would require some sort of monthly reporting mechanism,

i.e. where the ISPs would run an automated program that tabulates all the instances their traffic

shaping practices were engaged. (Almost certainly ISPs keep track of this sort of information

now for internal record keeping.)

92 see SAC supra note 90. 93

"Internet Usage Statistics: The Internet Big Picture." Miniwatts Marketing Group. 2010.

<http://www.internetworldstats.com/stats.htm>.

31

Lastly, it would be tremendously hard to get all the publishers, labels and licensing

agencies on board. A collective licensing system is not likely to placate the concerns of all the

music industry players who all have different interests even though they work together and

support each other. And though this is an entirely separate and complicated issue, it is by far the

biggest pitfall of this system. One need only look to the difficulties the Songwriters Association

of Canada has had in selling its proposal to monetize file-sharing through a voluntary collective

license model.

CONCLUSION

The CRTC should be the one calling for reform of the Canadian telecommunications

industry regulations. One need only realize that the Telecommunications Act does not even

mention the word „internet‟.94

By contrast, the U.S. Telecommunications Act 1996 provides

policy direction on what the internet should be like and how regulators should encourage that

vision of the Internet.95

The FCC and CRTC approach traffic management issues quite

differently. In Canada, the CRTC fully rejected the claims of CAIP et al in CAIP v. Bell.

However, in the United States, when Free Press et al launched a complaint against Comcast for

throttling P2P bandwidth, the FCC took a different approach96

stating that “although Comcast

asserts that its conduct is necessary to ease network congestion, we conclude that the company‟s

discriminatory and arbitrary practice unduly squelches the dynamic benefits of an open and

accessible Internet and does not constitute reasonable network management”.97

Another telling

difference between the how the CRTC and FCC approach traffic management is evidenced by

94

Perry, Mark, and Thomas Margoni. Interpreting Network Discrimination in the CRTC and FCC. London,

Ontario: University of Western Ontario, Faculty of Law, 2009. [Perry] at 4. 95 Ibid. 96 Ibid.. 97 Federal Communications Commission. Formal Complaint of Free Press and Public Knowledge Against Comcast

Corporation for Secretly Degrading Peer-to-Peer Applications. Federal Communications Commission 08-183 EB-

08-IH-1518. Washington, D.C.: 2008. [FCC].

32

the FCC‟s position on network neutrality: “[t]o the extent that providers choose to utilize

practices that are not application or content neutral, the risk to the open nature of the Internet is

particularly acute”(emphasis added).98

Given the differences between how the FCC and CRTC approach traffic management, a

collective licensing framework based on the use of ITMPs might have more political traction in

the United States. But this is not to say that the CRTC cannot – or should not – take another look

at its ITMP policy framework. Whether or not the CRTC might ever entertain the possibility of

such system is a different issue than whether the CRTC should take a more principled and

nuanced approach to traffic management practices in Canada. However, the most recent case

law and regulatory decisions illustrate the tensions between how the Supreme Court and the

CRTC approach the issue of liability for copyright infringement and internet traffic management.

Reconciling this tension will contribute to a stable and transparent legal and regulatory

framework for copyright and telecommunications law that can foster innovation both in P2P

technology and Internet communication.

98 Ibid at 31.