GATINEAU, Que. - Executives with some of Canada's biggest telecom companies said Monday regulators would only be hampering innovation and market growth if they get involved in Internet traffic management.

Top brass from Rogers Communications Inc., Quebecor Media Inc., and Shaw Communications Inc., said there is no evidence they are invading the privacy of consumers or unfairly favouring their own web content and services when they manipulate use on their networks.

The companies were appearing before the Canadian Radio-television and Telecommunications Commission (CRTC), which is considering the controversial question of whether guidelines are necessary for how Internet traffic is managed.

The Telecommunications Act prohibits carriers from interfering with content, or showing any undue or unreasonable preference towards any person in relation to the provision of a service.

"Market forces - not government fiat - are responsible for Canada's remarkable (Internet) success," said Mike Lee, chief strategy officers for Rogers.

"Many of the participants in this proceeding, perhaps with good intentions, want to change that. They want lawyers, not engineers, to design the networks. This would be a big mistake."

"All regulatory interventions in the workings of a market involve direct costs linked to conformity, but more importantly indirect costs associated with the slowing down of innovation," said Dennis Beland, director of telecom regulatory affairs for Quebecor.

"A regulatory agency must ensure that it's interventions are responding to real problems not speculative ones."

Telecom companies identify person-to-person (P2P) filesharing - such as uploading and downloading of movies - as the main problem they're trying to solve through traffic management.

In Rogers' case, the company uses complex technology to analyze what kinds of communications users are engaged in - sharing a Hollywood movie versus sending email, for example - and then "throttle" or slow down certain activities so the rest of their network moves faster.

The company compares P2P filesharing to a car that parks in one lane of a busy highway at all times of the day or night, clogging the roadways for everyone unless someone takes action.

Shaw said their traffic-management technology went down for a month, and severely slowed down traffic and sharply increased customer complaints.

Quebecor's Videotron cable service doesn't actually use any traffic-management technology, instead giving customers six different billing options based on what best suits their level of activity on the net.

Still, Beland said the company would like to keep the option open of using such technologies in the future.

Proponents of "net neutrality" argue that identifying certain types of transmissions and putting limits on them is just as much a threat to innovation. They argue the telecom industry will use traffic management as a way to get out of expanding bandwidth and improving their services.

And consumer groups say that it unfairly discriminates against certain kinds of applications and sites -, the online movie rental site, is one example.

"The problem with the Internet traffic management proposed by the companies is that Canadians risk not being able to access certain (new media) platforms because Internet Service Providers are slowing down their Internet connections," argued Anthony Hemond, of Quebec's Union des Consommateurs.

Commissioners challenged the big corporations on some of their statements, such as their claim that P2P filesharing is clogging the system.

"Everything I've heard in this proceeding seems anecdotal, and it's being used to suggest there's an epidemic," said Quebec commissioner Suzanne Lamarre.

Manitoba and Saskatchewan commissioner Candice Molnar pointed out that Rogers is marketing an "Extreme" Internet package to people who are engaged in big filesharing, but does not tell those customers it sometimes throttles this kind of activity.

One of the questions the CRTC is examining is whether companies should disclose their traffic-management practices.

"Don't we think the customer should have full access to information...?" wondered Molnar.

Ken Engelhart, senior vice-president of regulatory affairs at Rogers, said the company worried about giving up competitive information, but it not something they're "that upset" about.

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