CRTC readies to set line on data prices
Providers, advocates faceoff at hearings
A fight over how Internet providers charge Canadians for data usage begins in Ottawa this week, with telecoms set to argue against further regulation and consumer advocates using the opportunity to demand an end to data caps.
The Canadian Radio-television and Telecommunications Commission kicks off its five- day hearing Monday to decide whether it should regulate data pricing mechanisms including differential pricing and zero- rating, which exempts certain apps or content from data charges.
Differential pricing is nothing new — airlines have always sold seats at different prices to different flyers and movie theatres offers discounts for seniors — but when it comes to data, some j urisdictions, i ncluding the Netherlands and India, have banned the practice in the name of net neutrality, which calls for all data to be treated equally.
The CRTC will decide whether further regulation is needed in Canada when it comes to data freebies, which are conversely seen as consumer perks or unfair gatekeeping. Telecom rules already prohibit carriers from giving any person undue or unreasonable preference or disadvantage, but the hearing is expected to clarify what qualifies as unjust.
The hearing comes as the demand for wireless and home Internet data explodes and becomes increasingly important to the bottom line for carriers anxious to offset declines in traditional platforms. It stems from Vidéotron’s introduction of an unlimited music service, which lets customers who buy the plan stream unlimited music from a variety of apps (Apple Music and CBC radio are notable exceptions) without getting dinged for data usage.
Proponents see this as an innovative promotion that amounts to a discount and gives carriers a new way to compete, while opponents see it as a threat to the principle that carriers should treat all data equally.
They also say it gives carriers too much gatekeeping power over content, especially if they own it or are compensated for encouraging access.
Heavy hitters BCE Inc., Telus Corp. and Shaw Communications Inc. will all speak in favour of differential pricing. (Facebook Inc. is also a fan.) They argue the practice results in a great deal for consumers, gives them a chance to set themselves apart from competitors and encourages innovative price models. They note the practice is not widely used in Canada and there is no proof it causes harm.
Rogers Communications Inc. split from its counterparts in the Big Three to take a stance against differential pricing. It submits that carriers shouldn’t have a hand in content selection, and that offering data for free skews people toward certain media instead of letting the content fight for attention on its own merits.
“There are only so many pipes,” said Dave Watt, Rogers’ senior vice- president, regulatory, in an interview. “There should be equal access to the pipe. Otherwise you’re really disadvantaging certain application providers and certain customers.”
Rogers does, however, call for a light touch when it comes to regulations.
The Competition Bureau submits that differential pricing should be banned when the provider receives a financial benefit from the owner of the content, a practice it argues harms competition. For unaffiliated content, it supports the practice as a way to increase choice.
Consumer advocates opposed to differential pricing intend to use the hearing as a forum to push for the end of data caps, even as the carriers argue that’s beyond the subject at hand.
OpenMedia, which advocates for affordable access to an open Internet, argues it’s fair game given the high price of data plans in Canada compared to other G8 countries, where unlimited data plans are more common. “Without data caps, there’s no reason to have differential pricing,” OpenMedia’s Katy Anderson said. “It’s not surprising to us to see telecom companies who make huge profits off overage fees say it’s not within the scope of the hearing.”
Ben Klass with the Canadian Media Concentration Research Project expects data caps will be addressed because zero- rating triggers concerns about their existence. Data caps were introduced as a way to manage Internet traffic, but Klass questioned whether networks really are struggling for capacity if providers let people stream as much as they want only on certain apps.
But the crux of the issue is whether common carriers should make editorial decisions on which apps become the most attractive.
“They’re not blocking the rest of the Internet, but if you have a choice between one video service and one that is so much cheaper or even free, you don’t really have a choice,” Klass said. “The commission needs to provide clarity about how these things are going to be approached.… Companies need to know where the line is.”