Wireless providers say CRTC report suggests they could face broadcast regulatory framework

The Canadian wireless industry says it is concerned that the language contained in a new CRTC report suggests wireless providers could face the same regulation as broadcasters. A 90-page CRTC report released this week, titled “Navigating Convergence: Charting Canadian Communications Change and Regulatory Implications,” contains a brief passage on the CRTC’s potential for regulating wireless services. “Any reasonable person reading that is going to worry that is going to intervene more in the wireless market,” Michael Hennessy, senior vice-president of regulatory and government affairs at Telus Communications Company, told The Wire Report. “You can’t really come to another conclusion.” The CRTC report says the commission may have to review how online and wireless content is “treated” as Canadians increasingly seek it out. “The potential for gatekeeping of these services, particularly in forborne environments such as the wireless industry, which has a high ownership concentration, may warrant review in the mid-term of how multi-platform content will be treated with respect to open networks and preferential treatment,” the report says. “Over time, the Commission’s hands-off approach to wireless may come under pressure as it becomes a more important platform tool to access all forms of communications and the distribution of Canadian content.” Hennessy noted that the differences between wireless service providers and ISPs are narrowing with the evolution of data plans and faster wireless networks. As a result, he said he is concerned that wireless providers could be asked to fund Canadian-produced new media and broadcasting developments, and that they will be required to meet more strict wireless Internet network management practices. Hennessy said he raised the issue in a discussion with the commission—he did not say with whom—on Feb. 11. He said he was assured that the commission wanted to look at the issue more broadly, but that market forces could serve as enough of a check on the wireless sector. During a proceeding on broadcasting through new media last year, the CRTC looked at regulating Internet service providers and wireless service providers to with a view to supporting Canadian new media and broadcasting developments. But the CRTC decided in 2009 not to regulate broadcasting on the Internet and on mobile devices, but subjected them to undue preference rules. “In fact, new media is currently being used in a complementary manner by many broadcasters for activities such as providing audiences with the ability to catch up on missed programs, promoting broadcast offerings and building brand loyalty,” the commission said in a June 4, 2009 decision. “For the reasons set out above, the commission does conclude that traditional broadcasting frameworks should not be imposed in the new media environment without evidence that intervention is warranted.” But the commission referred the issue to the Federal Court of Appeal, asking it to rule on whether ISPs should be regulated as broadcasters. No date has been announced for a court hearing. A Federal Court of Appeal decision could apply undue preference rules to wireless data. John Lawford, counsel with the Public Interest Advocacy Centre (PIAC), said that wireless Internet networks could soon surpass wireline broadband in terms of speed and capacity. “It’s not that different. Especially since they keep bragging about the new HSPA network they’ve just rolled out,” he said. Hennessy said wireless networks will face more difficulties managing bandwidth, given spectrum limitations. “Overall we’re concerned that the CRTC would decide to regulate wireless,” Bernard Lord, the president and CEO of the Canadian Wireless Telecommunications Association (CWTA), told The Wire Report. Lord said Canada has the best networks in the world thanks to new HSPA technology. “This is a result of free markets, not of more regulation,” he said. Michael Janigan, executive director and general counsel at PIAC, said more regulation, like fair billing practices for wireline services, is necessary to protect Canadian wireless consumers. “The services that have gone through a process of regulation are generally the ones which have the best prices and the highest rates of customer satisfaction,” he said. Hennessy said the wireless sector already has enough regulation. When Industry Canada auctioned off wireless spectrum in 2008, it opened up the market to new competitors like Wind Mobile and DAVE Wireless, and created new rules for tower sharing and roaming. There are now three to six carriers in “virtually any market” in the country, he said. Hennessy added that the thousands of applications available for the iPhone and Google’s Android operating system have created a “downstream market” that has given consumers more choice without any interference from carriers. “I think he’s confusing content with service,” Janigan said. “Yes, a lot of content exists, but that doesn’t necessarily mean that the way in which it’s delivered is all hunky dory.” On Feb. 10 the CRTC upheld its decision to review the forbearance framework for mobile data services and regulation related to wireless Internet traffic management practices. The decision means that Internet traffic management will be covered in the commission’s October hearing to review access to basic telecom services. Telus and the CWTA had argued that Internet traffic issues were not related to basic services and should be dealt with in a separate hearing. The CRTC’s review will examine whether it should re-apply sub-section 27(2) of the Telecommunications Act to mobile data services. Sub-section 27(2) says that Canadian carriers cannot unjustly discriminate and give “an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.” The PIAC argues that “technologically neutral” traffic management practices are at stake. Hennessy said that preferential treatment for wireless data services was a problem under the “walled garden” model a few years ago, when each carrier limited consumers’ choices to their own networks. Today, carriers have moved to open 3G networks where they do not control people’s access to different applications and services, he said. ---- CORRECTION: An earlier version of this article said undue preference rules do not apply to broadcasting in new media. However CRTC decision 2009-660 subjected new media broadcasting undertakings to undue preference rules.

Wireless providers say CRTC report suggests they could face broadcast regulatory framework

Broadcast | February 12, 2010

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