The CRTC has issued a major new decision with implications for net neutrality, ruling that Bell and Videotron violated the Telecommunications Act by granting their own wireless television services an undue preference by exempting them from data charges. The Commission grounded the decision in net neutrality concerns, stating the Bell and Videotron services “may end up inhibiting the introduction and growth of other mobile TV services accessed over the Internet, which reduces innovation and consumer choice.”
The case arose from a complaint filed by Ben Klass, a graduate student, who noted that Bell offers a $5 per month mobile TV service that allows users to watch dozens of Bell-owned or licensed television channels for ten hours without affecting their data cap. By comparison, users accessing the same online video through a third-party service such as Netflix would be on the hook for a far more expensive data plan since all of the data usage would count against their monthly cap. Videotron was later added to the case, based on similar concerns with its mobile television service.
Bell raised several arguments in response, claiming that the mobile television services were subject broadcast regulation, not telecom regulation and that, in any event, the offering was good for consumers and should be encouraged.
The CRTC ruled that mobile television services effectively invoke both broadcast and telecom regulation, since a data connection is required to access the service. Indeed, it agreed with Klass that “from a subscriber’s perspective, the mobile TV services are accessed and delivered under conditions that are substantially similar to those of other Internet-originated telecommunications services.” That aspect of the decision is important, since it ensures that providers will not avoid the regulatory features of the Telecommunications Act by arguing that the services should be treated solely as broadcast.
Given the application of telecom regulation, the Commission examined whether the Bell and Videotron approach violated the rules undue preferences, which prohibit carriers from granting themselves an undue or unreasonable preference. It concluded that it did:
the Commission finds that the preference given in relation to the transport of Bell Mobility’s and Videotron’s mobile TV services to subscribers’ mobile devices, and the corresponding disadvantage in relation to the transport of other audiovisual content services available over the Internet, will grow and will have a material impact on consumers, and other audiovisual content services in particular.
The decision was clearly grounded with net neutrality principles in mind. CRTC Chair Jean-Pierre Blais, speaking just prior to the release of the decision, stated that there would be “no fast and slow lanes”, adding:
At its core, this decision isn’t so much about Bell or Vidéotron. It’s about all of us and our ability to access content equally and fairly, in an open market that favours innovation and choice. The CRTC always wants to ensure – and this decision supports this goal – that Canadians have fair and reasonable access to content. That everyone can access the bridges without restrictions. We also want to ensure that abuses of power in the system do not go unchecked.
It may be tempting for large vertically integrated companies to offer certain perks to their customers, and innovation in its purest form is to be applauded. By all means, we at the CRTC want broadcasters to move television forward by creating new and exciting ways to view content. But when the impetus to innovate steps on the toes of the principle of fair and open access to content, we will intervene. We’ve got to keep the lanes of our bridges unobstructed so that everyone can cross.
Yet despite the ringing endorsement of the principles of net neutrality, it should be noted that the decision did not apply the CRTC’s Internet traffic management practices (ITMPs). The ITMPs, which are frequently referred to as the net neutrality rules, were viewed as inapplicable, with the Commission ruling that Bell and Videotron were not using an ITMP as part of the service (though Videotron did at one point in time and later dropped it).
That distinction is important, since it suggests that the ITMPs may be more limited in scope than some had anticipated. Given that the CRTC found that the services still violated the rules under the Telecommunications Act, it points an evolving net neutrality framework in Canada that includes analysis of both the ITMPs and the principles of undue preference.
Would that also apply to FibeTV and Illico on-demand services? I don’t know if Illico’s solution is IP based but it still uses a significant portion of the last mile bandwidth. Is this not analogous? It feels unfair in the exact same way.
Illico is a digital cable service, which means that it’s delivered using a different technology than cable Internet, using spectrum outside of that which is usable for Internet service. It really is delivered as something distinct and unconnected to data service, since the current limitations of the DOCSIS standards which define data services would preclude the use of any spectrum freed up by the removal of digital cable. A coax cable line gives you up to around 1000MHz of spectrum to play with, and data services can only use a small part of that at a time.
That said, the standards are evolving such that the next version of the DOCSIS standard envisions that data services will take up most or all of the spectrum on the coax line, which would imply that television services would then be provided with IPTV. In this hypothetical future scenario, digital cable would operate in a similar nature to FibeTV. But today, they don’t. Today, they share infrastructure only in the way that over-the-air television and LTE cellular service both broadcast through the same air.
My only question is why the CRTC gave Bell 2.5 months to end the what the CRTC describes as an “unlawful” practice. The time frame seems excessive.
I think providing customers with some warning that their bills might be getting significantly larger is only fair. With no delay customers who use the service might be billed with no notification of change.
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While in principle this is the right decision, doesn’t this just mean that Bell will just charge $5 for the TV service and let people go over their data cap thus earning them even more money?
Sure, for the one month until the bill arrives. And then so many will complain about the bait & switch that Bell will have to give them their money back for that month. And then most people will stop watching Bell TV On their mobile devices until the rates are lowered for ALL data charges. That’s the big win, at least if the ruling stands up to the inevitable challenges.
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Yet another situation demonstrating why Bell et al. should NOT have been allowed to merge with media companies and why they should they should be split up ASAP.
I’ve also wondered how this applies to Shaw and Rogers Shomi service. Like Netflix, watching Shomi on the internet counts against your data cap, but unlike Netflix, Shomi can be watched via the cable company’s set-top-box which doesn’t count towards bandwidth usage.
If net neutrality rules applied here and forced Shaw/Rogers to remove Shomi from their STBs and offered it via data services only, this could be an example of where net neutrality actually works out worse for the consumer.
I don’t agree. I would probably make Shaw/Rogers more inclined to increase their bandwidth caps and it would provide a level playing field for competitors such as Netflix, Google and Apple.
I understand that it would be a step back for Shomi customers’, but most importantly, it would be a significant leap forward for everybody else.
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The gov’t should make the content providers and the services providers separate companies, even to the point of having different people on their board of directors.
Read this https://en.wikipedia.org/wiki/United_States_v._Paramount_Pictures,_Inc. and tell me that we don’t have the same problem in Canada with vertical integration, which calls for the same solution that the US implemented in 1948.
Our {laughable if it wasn’t so draconian} government and its ministries (Heritage / Industry) and their departments (Competition Bureau / CRTC) have consistently BLOWN all the important decisions about telecom / broadcasting / distribution for the past 8-10 years.
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Interesting post. I enjoyed reading it.