Canada watchdog sides with BCE on Web traffic shaping

TORONTO, Nov 20 (Reuters) - Canada's telecoms watchdog has sided with BCE Inc (BCE.TO) in letting the company slow down certain file-sharing traffic on wholesale networks it leases to smaller, independent service providers.

The Canadian Radio-television and Telecommunications Commission said on Thursday that BCE's main telecom unit, Bell Canada, can continue to "shape" traffic on the leased networks, but will now have to notify wholesale customers at least 30 days in advance of making performance-affecting changes.

The CRTC's decision comes following a complaint by the Canadian Association of Internet Providers (CAIP).

Bell Canada and other large telecom companies engage in a practice called "traffic shaping" or "throttling," which basically involves slowing down some Web activity like peer-to-peer file sharing. Such file swappers usually exchange large, bandwidth-intensive music or movie files.

Bell and others like it argue the file swappers choke its network to the detriment of other users.

However, CAIP claims that, aside from peer-to-peer file sharing, audio and video streaming services like Internet radio or YouTube have also been affected by traffic shaping.

"Based on the evidence before us, we found that the measures employed by Bell Canada to manage its network were not discriminatory," CRTC chairman Konrad von Finckenstein said in a statement. "Bell Canada applied the same traffic-shaping practices to wholesale customers as it did to its own retail customers."

He added that a separate hearing will be held to address the extent to which service providers can manage the traffic on their networks.

BCE shares were down 65 Canadian cents at C$35.85 on the Toronto Stock Exchange.

($1=$1.29 Canadian) (Reporting by Wojtek Dabrowski; editing by Rob Wilson)