Canada's main telecom regulator said on Wednesday it will let Internet service providers slow or throttle traffic such as file-sharing that the companies say threatens to overwhelm their networks -- but only as a last resort.

Providers such as BCE, Telus and others should first rely on economic measures, such as limits on how much bandwidth a subscriber can use per month depending on how much they pay, the Canadian Radio-television and Telecommunications Commission said.

That approach to managing online traffic is the most transparent because its impact turns up on monthly bills paid by customers, the CRTC said in a long-awaited ruling on the thorny issue.

Technical means to manage traffic, such as traffic shaping, should only be employed as a last resort, the CRTC said in a statement.

The common practice of traffic shaping is also known as throttling. It basically involves a service provider slowing down some Web activity on its network. File swappers, for instance, often exchange large, bandwidth-intensive music or movie files.

Internet service providers have argued this chokes their networks to the detriment of other users.

The CRTC also said the service providers will have to give retail consumers at least 30 days' notice and wholesale consumers at least 60 days' notice before a change in traffic management takes effect.

(Reporting by Wojtek Dabrowski; editing by Frank McGurty)

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