a.k.a. net neutrality…
GATINEAU – There is pretty broad consensus among many of the interveners in the CRTC’s differential pricing consultation that the practice can have a positive impact on the ISP business, content providers and consumers.
First round comments to the Commission’s Examination of differential pricing practices related to Internet data plans (2016-192) revealed though that it’s not a cut and dried issue. For instance, Bell Canada argued that zero-rating and sponsored data pricing mechanisms – two differential pricing practices or DPPs – are common in the communications world.
The company pointed to toll free calling and time of use rates for long distance calls as long established examples. The broadcast world has them too, such as free channel viewing or preview periods. Among the benefits that DPPs deliver, Bell highlighted enhanced Internet affordability, data cap overage prevention and the facilitation of application trials, among others.
As well, DPPs can enable smaller content providers to get their application in front of users. Contrary to the concerns of some that differential pricing imposes barrier to entry, “the practices actually offer a new way for content providers to compete more effectively against larger rivals,” argued Bell.
“The practices actually offer a new way for content providers to compete more effectively against larger rivals.” – Bell Canada
The company acknowledged that some stakeholders may feel they are being subjected to unjust discrimination under differential pricing but added if that’s the case, parties can pursue relief under section 27 of the Telecommunications Act and section 79 of the Competition Act.
Several providers – Telus, Rogers Communications and Eastlink among them – worried that differential pricing may give vertically integrated (VI) companies a leg up on competitors and could lead to anti-competitive behaviour. Telus, while it agreed with Bell that differential pricing is a characteristic of competitive markets and can deliver consumer benefits, the carriage of affiliated broadcasting services by VI entities is problematic.
“Allowing a vertically integrated entity to discount or zero-rate data in respect of affiliated broadcasting services will make it virtually impossible to apply two important criteria for assessing fair market value of a programming service,” the company argued, pointing to the standalone retail rate charged for the service and the retail rate for any packages in which the service is included.
Telus said that the Commission “should prohibit differential data pricing of affiliated broadcasting services” by VI companies under the Broadcasting Act.
Rogers’ submission went a step further and suggested while it’s not opposed to DPPs, all applications and content delivered over the Internet or mobile networks should be subject to standard data charges. As well, all customers should get these same rates regardless of the content or application. These are two guiding principles the Commission should establish in the proceeding.
The company added that rather than opt for preventative regulation (ex ante), the Commission should continue with a complaints driven, or ex post process.
With respect to Vidéotron’s Unlimited Music service, the offering which caused this proceeding, Rogers argued that exempting a small group of audio streaming applications from data charges constitutes an undue preference in favour of those services and the customers who subscribe to Unlimited Music. As well, those who don’t subscribe to the service and other audio services are subjected to an undue disadvantage.
Adopting its proposal, the company said, would “eliminate the incentive for ISPs to establish differential data pricing plans that are designed to prefer their own content and applications.”
“When an ISP applies a differential pricing practice to a specific piece of content or application, it is likely conferring an undue preference on itself and/or an undue disadvantage on others.” – CNOC
The Canadian Network Operators Consortium (CNOC) said the Commission has to be aware of differential pricing particularly when it’s applied to specific content or applications. The group of 30 smaller independent ISPs said “when an ISP applies a differential pricing practice to a specific piece of content or application, it is likely conferring an undue preference on itself and/or an undue disadvantage on others.”
ISPs should be allowed to apply DPPs to all or broad categories of content or applications, said CNOC, “but not to specific applications or content.”
A group of radio broadcasters (Newcap, Rogers Media, Corus Entertainment, The Jim Pattison Broadcast Group, Vista Radio, Harvard Broadcasting, Golden West Broadcasting, Bayshore Broadcasting, and Larche Communications – or Corus et al.) said that where differential pricing may undermine broadcasting policy, it should be banned.
“We believe that allowing differential pricing that has the effect of impeding the consumption of licensed commercial radio services on mobile and Internet platforms, would affect the ability of these services to reach key audiences that are now consuming their audio content on these platforms,” Corus et al. wrote in its intervention.
For some groups, the proceeding isn’t even about DPPs, it’s about data caps. The Equitable Internet Coalition – the Public Interest Advocacy Centre, the Council of Senior Citizens’ Organizations of BC (COSCO), the Consumers’ Association of Canada (CAC), and the National Pensioners Federation (NPF) – described caps as “an unnecessary evil” that, according to increasing evidence, aren’t designed to address technical issues such as network congestion.
The Coalition “believes that differential pricing plans are not a sign of, or response to, competition, but instead they may be a symptom of a lack of competition, manifested in the existence of data caps in the first place.”
Besides, there’s “a very limited basis upon which differential pricing could be permitted” under the Telecommunications Act, the group said.
It told the CRTC that “the greater good” is “served by keeping both the Commission and ISPs out of content shaping – which is exactly what differential pricing is – shaping what content is preferred and which content is not.”
The Commission will hold a public hearing starting on October 31.
