Mobile-TV ruling could be harbinger of streaming regulation: Klass

The CRTC’s ruling on Thursday that BCE Inc. and Quebecor Inc.-owned Videotron can no longer exempt their mobile-TV services from data charges could have implications for the regulation of streaming services such as CraveTV and Shomi, according to the man behind the original complaint. Telecom researcher Ben Klass, who made the application to the CRTC about Bell’s exemption of its Bell Mobile TV service from data caps in 2013, said Thursday's ruling was largely about preventing the companies from tying exclusive content to one of their telecom services. “So to the extent that something like Shomi or Crave has got exclusive content and is tied to a particular ISP, that appears to me to be violating that sort of thing,” he said in a phone interview. The CRTC found that Bell and Quebecor, in allowing content from their own broadcast services to be watched without incurring data charges, had given undue preference to their own customers and their own content, and ordered them both to cease the practice within the next three months. The CRTC said in its decision that the practices being employed by wireless carriers with regard to mobile-video services were contrary to the Telecommunications Act, which bans "unjust discrimination and undue preference issues with respect to the provision of mobile wireless data services by Canadian carriers.” Klass said the CRTC has "highlighted that it's holding close to this principle of non-discrimination. They have said that the terms on which these types of services are provided have to be fair, and that the companies who control access to the infrastructure can't exert power over those services to favour their own related businesses.” Shomi, a joint venture of Rogers Communications Inc. and Shaw Communications Inc., is available only to television or Internet subscribers of those two companies. To get CraveTV, a customer has to subscribe to TV services from Bell, Telus Corp., Northwestel Inc. or Eastlink. Shaw CEO Brad Shaw said this month that he could envision Shaw eventually offering a service such as CraveTV to its customers and Shomi becoming available to Bell subscribers. Klass pointed out that Shomi and CraveTV are exempt from data caps when streamed through television boxes, though regular data charges apply when the services are streamed through a computer or mobile device. "It's somewhat problematic," he said, noting that in the case of Shomi, this results in different terms of service for Rogers' and Shaw's TV customers versus their Internet subscribers. "By all means, we at the CRTC want broadcasters to move television forward by creating new and exciting ways to view content," CRTC Chairman Jean-Pierre Blais said in announcing the decision at an event in London, Ont., Thursday. "But when the impetus to innovate steps on the toes of the principle of fair and open access to content, we will intervene. We’ve got to keep the lanes of our bridges unobstructed so that everyone can cross.” Klass pointed to Blais’ mention of streaming services in the speech. The chairman called it "regrettable ... that English Canada still lacks a true Canadian Internet streaming video-on-demand service that does not require a cable subscription." Klass commented: "I think sending a signal: Why are these OTT services connected and linked into the legacy services?” He said the mobile-TV decision was a test of the CRTC’s powers, as these mobile-TV services straddle the line between the two pieces of legislation that lay out different rules for the telecom and broadcasting industries. “The CRTC has demonstrated that it can navigate, capably, the space between broadcasting and telecom,” he said. “By laying down this approach, the CRTC is providing certainty for companies that are experimenting in this segment.” Klass made the initial complaint against Bell's TV application in November 2013. His file was later combined with an action by the Public Interest Advocacy Centre (PIAC), the Consumers’ Association of Canada and the Council of Senior Citizens’ Organizations of British Columbia against similar services from Rogers and Quebecor. PIAC executive director John Lawford said his organization was the first to put forward the specific arguments about undue preference under the Telecommunications Act that the CRTC used in its decision, which he said was an “elegant way” of avoiding the issue of defining mobile TV as a broadcasting service. “Part of the reason for that is that there are a lot of other services that they would have had to think hard about if they did that, like Shomi and Crave.” he said. “And they're probably not ready to do that right away. We never got there, because the commission said they could solve this without having to go into that detail.” Bell Media spokesman Scott Henderson said the CRTC's decision on mobile-TV pricing was a “shock." “Bell has led the world in mobile TV and we’ve worked to keep the price low,” he said in an email. “More than 1.5 million Bell mobile TV subscribers across Canada responded to that kind of innovation and affordability.” He said the implication that Bell’s mobile service provided only Bell content is wrong. “We offer mobile TV content from all of Canada’s leading broadcasters in English and French,” he said. Martin Tremblay, vice-president of public affairs at Quebecor, said his company is already in the process of switching over to a model in which all of its customers' mobile usage counts towards the data cap. The company released new Android and Blackberry mobile-TV apps on Jan. 17 that count toward the data cap, he said, and over the next 45 days will switch all of its customers to the new apps. The CRTC noted in its news release Thursday that Videotron had informed the regulator of its intentions to end service to its Illico.tv mobile-TV app for Android and BlackBerry devices by the end of 2014, and that the company must confirm the shutdown by March 31 of this year. The deadline for Bell to switch to regular data charges is April 29. Users with Apple Inc. devices, which Videotron began offering last year, have always had their mobile-TV watching count against their data usage, Tremblay said. “Clearly, we think that it’s a better way. It’s more convenient for our customers,” he said. “We welcome today’s decision.” In August, Rogers changed the policy for its Anyplace TV app so that regular data charges would apply. Previously, customers could pay $5 a month for the first 10 hours of programming without affecting their data charges, just as Bell was charging with its mobile-TV app. Quebecor has been charging $5 for the first five hours of mobile-TV viewing. When reached on Thursday, Rogers spokesman Patricia Trott said in an email her company would not comment on decisions regarding other companies. Lawford said a concurring opinion filed with the decision by CRTC commissioner Raj Shoan, in which the he called for the CRTC to use both the undue preference rules in the Telecommunications Act and the digital media exemption order in the Broadcasting Act to prevent Bell and Quebecor’s data exemptions, as evidence that the commission chose not to make a more expansive ruling. “They're in a tough spot until they really buckle down and get into those hard issues,” he said, “It's getting harder and harder to walk that line, because the own everything on both sides, and technology allows them to deliver what used to be only deliverable over the air quite easily on the Internet now.” In Shoan’s concurring opinion, he wrote that the decision was too “narrow” in scope and that the case involved both telecommunications and broadcasting activities. "As such, in my view, the undue preference provisions of both instruments should have been engaged,” he wrote. The CRTC said in its decision that the carriers’ preferential approach to their own content necessarily implied a disadvantage to other available video content, a gap that would only increase as mobile TV becomes more popular. “It may end up inhibiting the introduction and growth of other mobile TV services accessed over the Internet, which reduces innovation and consumer choice,” the CRTC said in the decision. The CRTC said it was also significant that the vertically integrated nature of both companies, which offer both wireless and broadcasting services, allows them to “treat the transport of their mobile TV services in such a significantly different fashion” than other providers. "So long as these types of loopholes exist, where companies can take advantage of incentives to prefer their own related services, they're certainly going to do that,” Klass said. “By putting their foot down, the CRTC is saying they hope companies will innovate, they will encourage companies to innovate, they hope companies like Bell and Quebecor will continue to experiment with their services but not use unfair advantages not available to others.” Josh Tabish, campaigns manager at activist group OpenMedia, welcomed the CRTC's decision. “This is a big win for wireless users across Canada,” he said in a press release. “Today’s announcement shows the CRTC is upholding the net neutrality rules Canadians worked so hard for.” —With reporting by Peter Henderson at phenderson@thewirereport.ca and reporting and editing by Derek Abma at dabma@thewirereport.ca

Mobile-TV ruling could be harbinger of streaming regulation: Klass

Broadcast | January 29, 2015

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Mobile-TV ruling could be harbinger of streaming regulation: Klass

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