Advocacy groups take aim at data caps in zero-rating review

Questions around telecoms’ usage of data caps should be at the centre of the CRTC’s proceeding on differential pricing practices, advocacy groups said in interventions, calling for the commission to impose limits on their use. Data caps are “un-necessary evil,” said the Equitable Internet Coalition, whose members include the Public Interest Advocacy Centre (PIAC), which asked the CRTC to focus the proceeding on data caps and not differential pricing. The deadline for interventions in the process, which looks at practices like sponsored data and zero-rating among wireless and wireline Internet service providers (ISPs), was Tuesday. “The Commission should put the onus on the industry justifying the practice of imposing data caps in the first place given increasing evidence that data caps appear not to be designed” for technical issues, such as network congestion, the coalition argued. “In the event that the Commission finds that data caps continue to perform a legitimate technical role, then the Commission should require the discriminating carriers, or those wishing to discriminate, to justify the discrimination” under the Telecom Act. Differential pricing practices aren’t a sign of or a response to competition, but “a symptom of a lack of competition, manifested in the existence of data caps in the first place,” it argued. Differential pricing shouldn’t be allowed, the coalition said, adding it amounts to “shaping what content is preferred and which content is not,” and that it’s not the CRTC’s or ISP’s role to shape content. Differential pricing is more likely to “lead consumers toward pre-determined content and away from alternatives, creating a ‘walled garden effect’,” it said. Customers fear going over their data caps, and that fear is what makes zero-rating appealing to them, it added. “In the Coalition’s view, data caps are not about adding value — or giving subscribers more. They are about creating artificial scarcity — creating ‘less,’ so that the ISPs may charge for ‘more’ and therefore drive up revenue per customer.” The coalition said the development that ISPs now offer unlimited Internet usage for customers who bundle Internet with other services, or offer zero-rating, suggests “that caps have gone from legitimate network management practice to marketing scheme.” Advocacy group OpenMedia asked the CRTC to “ban the use of data caps in wireline Internet access, and ban or set high floors for data caps in mobile wireless Internet data plans.” The group added that data caps “inhibit the orderly development of Canada's telecommunications system by suppressing demand through disproportionately impacting consumer behaviour, and by inhibiting supply by weakening incentives for ISPs to invest more in their networks to meet natural demand.” Rogers Communications Inc. asked the CRTC to require all applications and content to be subject to the service provider’s standard data charges, and that all customers pay the standard data charges regardless of the nature of the content or application they’re using. That proposal wouldn’t prohibit ISPs from offering unlimited plans or charging different rates for various levels of consumption, for usage during a certain time of the day, or in different areas of the country. “Instead, our approach would simply not allow ISPs to offer data plans that are restricted to specific types of content or applications,” Rogers said. Allowing ISPs to implement differential pricing practices allows them to act as gatekeepers, which isn’t appropriate, Rogers said, arguing that “allowing ISPs to exercise a gatekeeping function would enable these carriers to erect barriers to competition among the various providers of content and applications, solely based on the whims and machinations of the carrier.” BCE Inc. argued that differential pricing practices are similar to promotional coupons or price discounts, such as toll-free long-distance service. Differential pricing is already used in the communications industry — for instance, in wireless, text messages are often unlimited while voice is billed by the minute, though they travel over the same network, Bell pointed out. “Zero-rating and sponsored data are examples of innovations in the telecommunications industry,” it said, noting that the federal government is currently developing its Innovation Agenda. “To facilitate innovation in the provision of broadband services, firms need the flexibility to experiment with new ways of doing business, including ,” it argued. Quebecor Inc. also said limiting differential pricing practices could harm innovation in the Canadian telecom market, arguing that such practices improve consumer choice. It said the CRTC should implement regulations based on best practices recently suggested by Sandvine Inc., such as not prioritizing zero-rated traffic and ensuring sponsored or zero-rated plans are open to all members of a sponsored/zero-rated data class. It also said that the CRTC should ban differential pricing in cases where the exempted content or application are affiliated with the company. The CRTC did so in an undue preference case against Bell and Quebecor’s Videotron’s mobile-TV services, a decision that was recently upheld in the court of appeal. The Competition Bureau said in a press release that only some types of differentiated pricing should be prohibited, such as cases “where a partner company pays an ISP to allow customers to download the company’s services without having the download count toward the customer’s data limit. This could harm competition when the customer’s product choice is caused by the favourable partnership between the company and the ISP, rather than the superiority of the application.” However, in cases where ISPs don’t receive a financial benefit from competition content providers, “competition is not likely to be harmed,” it said in a press release. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Charelle Evelyn at cevelyn@thewirereport.ca

Advocacy groups take aim at data caps in zero-rating review

Broadcast | June 29, 2016

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Advocacy groups take aim at data caps in zero-rating review

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