‘Mobile TV is a broadcasting service’: Bell

In defending their practice of charging rates separate from regular data charges for mobile-TV service, both Rogers Communications Ltd. and Quebecor Inc., in written submissions to the CRTC, talked about being in the early stages of trying to develop a market for this kind of service. BCE Inc., meanwhile, said its mobile-video service should be treated more along the lines of a television-broadcast service as opposed to an Internet service. Bell, Rogers and Quebecor’s Videotron are all subject to a complaint before the CRTC from telecom blogger Ben Klass and the Public Interest Advocacy Centre (PIAC). They claim that charging a basic $5 monthly rate for mobile-TV service, separately from regular charges for data usage, amounts to giving “undue preference” to their own content and applications on their networks. Among the questions the three wireless carriers were required to answer by the CRTC by Friday was why they feel their services do not constitute an undue preference. In response to this question, Bell answered: “Mobile TV is a broadcasting service whereas other apps such as Netflix, YouTube or CTV News Go are over-the-top (OTT) services which rely on the Internet for the distribution of their services. In other words, the fact that the service is accessed through an ‘app’ does not alter the fact that a broadcast service is a broadcast service or an Internet service is an Internet service.” Bell added that its Mobile TV app is accessible by WiFi for mobile customers without a data plan, and that content from broadcasters outside of its Bell Media division are also available on this service. Rogers said that “it is clear that even if there is such a preference, it does not reach the level of being undue. “Mobile television is at a nascent stage in its development. Today, very few consumers actually use their mobile devices to watch significant amounts of full-length video content. The price point that we have established for the RAP-TV mobile service simply reflects the low consumer demand that currently exists for the service.” Quebecor, in discussing its Videotron Illico Mobile service, said mobile TV “is an emerging market characterized by the experimentation in terms of availability of content, content assembly, marketing techniques, as well as pricing policies and billing. This experiment allows the set of suppliers to better know the market, finding new ways to make their offers attractive to consumers. ... For this reason, we believe that any preference that may exist because of our current billing methods can not be considered as being improper.” PIAC laywer Geoffrey White said he does not agree with the argument of mobile-TV being a small market that carriers are trying to develop with special pricing. “Rogers is on record as saying mobile-TV viewing has grown 700 per cent since 2011, and Bell Mobile TV has a million subscribers already, so I take issue with the actual justification for engaging in this undue discrimation,” he said in a phone interview. The CRTC also asked carriers how the subscription fee for their mobile-TV services are used for cost recovery. Bell, which charges $5 for the first 10 hours of viewing, after which it charges $3 per hour, said: “BDU rates, including those of exempt Digital Media Broadcast Undertakings (DMBUs) like Bell Mobile TV, are not regulated by the CRTC and certainly not based on Phase II costs as this question seems to imply. As such, no particular costs are assigned to particular fees.” Bell listed some of the aspects of its business from which it incurs significant costs, such as backhaul from cell towers, various signal transport costs, digital-rights management and mobile-TV servers. Rogers said the $5 basic charge for the first 10 hours of viewing, plus $1 per hour beyond that, is not based specifically on any costs it is trying to recover. “The fees charged for the RAP-TV mobile service are not cost-based,” it said. “Rather, they are designed to provide Rogers’ wireless customers with cost certainty related to their use of data to access full-length video content. Our objective is to encourage them to try the service and become comfortable with accessing this content over the wireless network.” Rogers said it has spent “billions of dollar to acquire wireless spectrum, as well as build and maintain our national wireless network,” including $3.29 billion in this year’s 700 MHz spectrum auction. Rogers added: “We will only begin to recover these costs when use of our wireless network to access video content is ubiquitous.” Quebecor said that its mobile-TV charges, which start at $5 for five hours of viewing for users of BlackBerry Ltd. devices and those running on Google Inc.’s Android software, is meant to recover “acquisition and delivery of content costs, construction, operation and maintenance of networks, marketing and customer acquisition, billing and customer service, while generating a return for its shareholders.” Quebecor added that its mobile-TV service “is part of a multi-platform strategy for the acquisition and retention of customers is still a largely experimental stage and whose individual elements cannot be analyzed .” Of the three responses that came in from carriers in this case, Klass, one of the complainants, said he was most encouraged by Videotron’s, since it noted that its mobile-video service for Apple Inc.’s iPhone’s is subject to regular data charges and can be accessed regardless of a user’s mobile-service provider. He noted how Videotron said it is considering changing its app for BlackBerry and Android devices to be more like it is for the iPhone. “In my discussion of the original complaint, I suggested alternative ways of providing these services, and that was one of them; offering more generous data caps and making the product available to a wider audience,” Klass said in a phone interview on Monday. “At face value, why wouldn’t you, as a service provider, want more people to subscribe to your service. From a business perspective, why would you limit your audience to your own existing customers if you’re trying to sell a video product.” Final responses in this case are due by May 12. Klass said he expects a decision around late summer. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Peter Henderson at phenderson@thewirereport.ca

‘Mobile TV is a broadcasting service’: Bell

Broadcast | April 28, 2014

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