Fear that Canadian regulators were going to do their job has resulted in a welcome -- though likely brief -- return to unlimited broadband in Canada. Our friends to the north are well-known for some of the most predatory and punitive broadband caps and overages anywhere, courtesy of uncompetitive broadband markets and regulatory capture. Yet over the last few weeks, Canadian providers Rogers and Bell (and soon Videotron) have been offering Canadian consumers unlimited broadband as limited-time-promotions -- if they're willing to pay $10 to $30 extra.

Why the sudden change of heart? Fear.

Canadian broadband industry watchers have been expecting a new ruling from Canadian regulators most thought would lower wholesale rates, allowing independent ISPs to offer more viable unlimited services. As such, incumbent ISPs started offering these promotions in the hopes of beating independent ISPs to the punch. As it turns out, they didn't actually have much to worry about.

For the last five years Canadian telcos like Bell have been waging war on independent ISPs in an effort to drive them from the market. In 2009, they started to throttle independent ISP wholesale connections without bothering to tell independent ISPs (kind of important). Incumbent ISPs then gamed the regulatory system to impose new rules letting them charge independent ISPs both up front and based on usage, effectively allowing them to "double dip." All of this was designed to not only prevent indie ISPs from offering unlimited, throttled service superior to their own -- but to crush them.

Throughout most of this process Canadian regulators -- most of them former incumbent ISP executives -- played blind, deaf and dumb, holding unproductive public hearings under the pretense of consumer advocacy, but by and large allowing incumbent ISPs to use phantom network congestion as justification for anti-competitive behavior. Users in the States of course are more than a little familiar with this tactic.

Fast forward to this year, when the CRTC was forced to examine wholesale rates after pressure from consumer advocacy groups like Open Media. Open Media managed to pressure a large-scale review after they snagged half-a-million citizen signatures on a petition, directing large-scale consumer ire directly at the CRTC. Meanwhile, many Canadian users hoped that after a string of agency leaders that seemed like poorely-written Star Wars villains, new CRTC boss Jean-Pierre Blais would actually be driven by facts.

Unfortunately for the optimistic, the CRTC released their new rules governing wholesale rates today, and they weren't the kind of significant across-the-board wholesale rate cuts many people had expected. As users in our forums note, many of the rates everyone (including incumbent ISPs) expected to be lower -- are instead higher. Users note that rates for some dead-or-dying DSL services are lower, but by and large rates for future technologies are predominately higher -- specifically for independent cable ISPs operating through Shaw and Telus.

That's particularly frustrating since the push for regulatory review was driven primarily by the opinion that cable wholesale rates were too high. To have the CRTC suddenly raise cable wholesale prices was a slap in the face. Consumer hope was met with a giant glass of status quo, resulting in a generally sour mood in our Canadian broadband forums. Adding insult to injury is the fact that the CRTC's tone deaf rhetoric hasn't changed one iota under the leadership of Jean-Pierre Blais.

"Large and small independent service providers now have the certainty they need to continue offering Canadians a choice of innovative and competitive services," said the new boss, same as the old boss. "We are pleased to finally close this chapter after a careful examination of the wholesale rates, which included a review of the costing information."

What happens next? Operators likely leave their promotions up and running until they've netted a few more customers, then the promotions will probably slowly go the way of the Laserdisc and the war on independent ISPs will continue. The CRTC still seems to be basing a lot of their mathematics on network congestion and operation claims nobody seems willing to independently verify, and until that changes, nothing truly changes.

Meanwhile, incumbent Canadian ISPs are winning the PR war by pretending that they're easing off caps because of the "massive broadband network investments" they've been making. That was the same reason they gave for backing off throttling in late 2011. In reality, the threat of a regulator doing its job honestly spooked them for just a second -- but you'd be hard pressed to find a Bell or Rogers lobbyist or exec willing to admit that.

That does appear to be the biggest bright spot in this proceeding: if the faint threat of regulatory action nets that kind of response from giant incumbents, what could a real regulator accomplish? It's clear that the folks at Open Media and other Canadian broadband activists are on the right path, as even if Canada's clinging to the status quo -- we've felt the anti-competitive foundation tremble just a bit.