GATINEAU – New digital media offerings certainly have problems fitting into the various interpretations of the well-worn Acts and Regulations which the CRTC must attempt to apply to emerging new services and their packaging plans.
The latest target is Videotron’s Unlimited Music service. The Public Interest Advocacy Centre’s complaint about the service which launched in August by the Quebecor-owned cable and wireless company has found a number of supporters. Rogers Communications is standing alongside its media arm and other radio broadcasters in calling the streaming music service anti-competitive.
Rogers and its allies argue that the service breaks CRTC rules and contravenes the Telecommunications Act. Not only is it inconsistent with the Commission’s net neutrality policy, but it also confers an unfair advantage on Videotron and the five streaming audio services that so far form Unlimited Music, and disadvantages conventional radio stations which also stream online. They also say that Videotron is contravening the rules established by Broadcasting Telecommunications Decision 2015-26 – the ruling that forced Bell and Videotron to change their mobile TV offerings, which Bell has appealed to the Federal Court.
Videotron unveiled the streaming music service on August 27. It offers its wireless customers who subscribe to premium plans (2 GB of data or more per month, or 1 GB customers who also have an Internet plan) access to five radio services that they can stream over their devices without incurring any data charges (also referred to as “zero-rated”). The five services are: Stingray, Rdio, Google Play, Deezer and Spotify.
“This will have a material adverse impact on those audio service providers whose content is not zero-rated.” Rogers Communications
“If permitted to stand, Videotron’s discriminatory pricing policy will only encourage other wireless service providers (and perhaps ISPs) to adopt similar business models that grant significant advantages to only certain content providers online,” Rogers writes in its October 15 comments. “This will have a material adverse impact on those audio service providers whose content is not zero-rated, as well as those consumers who do not want to pay higher data charges just to access the content of their choice online and through wireless devices.”
At launch, the company argued the unlimited music service doesn't go against CRTC regulations because it doesn't offer any undue preference to itself. "Any other player that wants to offer, we'd be happy to accept them," said Vidéotron CEO Manon Brouillette during the launch event. "All regulatory verifications have been made."
That said, "any other player" doesn't include radio stations who offer live streaming, Myrianne Collin, Vidéotron's senior vice president, strategy and marketing told Cartt.ca in August. "It's a business decision" to offer this just to streaming music services and not to radio stations or other spoken-word services, she said.
Newcap Radio, Rogers Media, Corus Entertainment, Jim Pattison Broadcasting, Vista Radio and Golden West Broadcasting (Newcap et al.) argue in a joint submission that their collective 280 radio stations, the vast majority of which stream online and through apps to mobile devices, will suffer significant harm if Unlimited Music can operate unchanged.
These radio stations, the Newcap et al submission says, “are subjected to an undue and unreasonable disadvantage by Videotron’s Unlimited Music offering as streaming on these stations on Videotron’s wireless network would incur data charges.”
Rogers adds that Videotron is pushing the boundaries of what can be allowed under net neutrality. “The decision to favour certain types of audio services carried on its wireless network and to treat the data from those services differently than the data of other audio and audiovisual services, and online services in general, represents ‘the thin edge of the wedge’ in ensuring the integrity of Canada’s net neutrality rules,” says the company.
But not all parties are lining up to condemn the streaming service (it’s worth noting that Bell Canada, the largest radio operator in the country, but also the one appealing the Mobile TV decision, did not file anything on this matter). Telus argues that Unlimited Music is nothing more than a natural response in a highly competitive market.
“Retail offerings such as Unlimited Music should be expected in a competitive retail marketplace and enhance the number of choices available to Canadians.” – Telus
“It is not, as the Applicants allege, an anti-competitive measure by Videotron that forces customers to move to higher service tiers in order to access content,” says Telus in its October 15 intervention. “Videotron does not have a monopoly over the provision of wireless service and no customer is under a compulsion to take service from Videotron. Retail offerings such as Unlimited Music should be expected in a competitive retail marketplace and enhance the number of choices available to Canadians.”
The western-based communications company notes that PIAC et al fail to understand that a competitive market is supposed to see unique and differentiated offerings – and Unlimited Music is exactly that.
“Offering consumers differentiated services in order to entice them to subscribe to a rate plan is normal in competitive markets where different groups of customers pay different prices depending on their demand for services. The remedy sought by the Applicants reduces service differentiation because it would remove a service offer that many consumers might find attractive,” argues Telus.
The Canadian Network Operators Consortium (CNOC), the association of independent ISPs, also had an opposing opinion of the PIAC complaint. “CNOC disagrees with the notion that a higher priced feature laden service package could ‘penalize’ low-income consumers who cannot afford it. Value-added services have costs that justify a higher price. This is simply a commercial reality. A consumer is not punitively deprived of high-tier service features if he or she chooses a basic package. So long as service providers do not apply practices that constrain consumer choice in a manner that is contrary to the Act, by for example, engaging in unduly discriminatory/preferential practices, there is nothing improper about different price tiers for different grades of services and features,” reads its submission.
The only other cable/broadband/wireless company to submit an intervention was Eastlink. The regional operator says at the outset of its short filing that wireless carriers should have the flexibility to offer customers unique offers and pricing. But it adds though as first blush, Videotron’s Unlimited Music service might be seen as contravening rules established in BTD 2015-26.
“A decision on this matter that could be interpreted by incumbent, vertically integrated mobile service providers as overturning part or all of the Mobile TV Decision could lead to offers that would unfairly disadvantage Eastlink and our customers with respect to mobile content access,” says the company.
Canadian Internet Policy & Public Interest Clinic (CIPPIC) also waded into the Unlimited Music debate. While its intervention focuses to a large degree on the net neutrality element, it does put some meat to the bones in terms of the amount of bandwidth that Videotron customers would get for free from the stream music service. (It’s worth noting that Videotron’s service will provide free music streaming as long as it’s streamed at speeds no faster than 128 kbps. Higher streaming speeds may result in overage charges.)
Streaming one hour of music daily at 128 kbps will consume nearly 2 GB per month, says CIPPIC, noting that bandwidth usage jumps considerably in lock-step with the amount of time music is streamed. Two hours every day will net 3.5 GB per month; three hours adds up to 5 GB per month; and four hours a day results in 7 GB.
“The benefit conferred to its own branded Unlimited Music service (and customers of that service) over other digital content is therefore significant,” says CIPPIC.
There is no definitive timeline yet as to when the CRTC will issue a decision on this matter.
