No proven harm from differential pricing: Bell

GATINEAU — The CRTC shouldn’t take the non-participation in this week’s hearing by content providers who might eventually benefit from zero-rating and other differential pricing practices as non-interest, a five-commissioner panel studying the issue heard Tuesday. The remarks were made by Blair Levin, an advisor to Facebook Inc., during his appearance before the panel. He was speaking in response to a comment from chairman Jean-Pierre Blais over whether the CRTC should be inferring anything from what Blais called the “non-participation or the reluctant participation or the discreet participation of potential partners in a DPP arrangement that some might want to put into place.” “Why shouldn’t I conclude that the absence of those potential partners… is not indicia that it’s not really important to them and in fact much more important to the ISP?” Blais asked. “In other words, it’s the ISP-focused issue and in fact the innovators that might want to have the content out there don’t really see this as a valuable vector to advance their innovations.” Levin, who Blais pointed out wasn’t a Facebook employee or executive, though a “very learned and insightful witness,” said he wouldn’t draw the conclusion that it’s not important to content providers, such as Spotify AB or other music streaming services, drawing from his own experience with the United States’ Federal Communications Commission (FCC) discussions on net neutrality. Levin served as the FCC chief of staff in the 1990s and, in 2009, led the “writing of the United States National Broadband plan,” he said during his presentation, noting he now serves as an “outside advisor on access issues” to the company. “One of the problems is always that, particularly in the context of net neutrality, the most important constituencies are the companies that don’t exist yet,” Levin said, during the second day of the week-long proceeding in Gatineau, Que. There shouldn’t be any roadblocks set out against differential pricing practices because we don’t know where innovations such as the Internet of Things (IoT) are going, BCE Inc. argued during its appearance Tuesday afternoon. Jonathan Daniels, Bell’s vice-president of regulatory law, said no one has demonstrated any evidence during the CRTC’s proceeding that practices such as zero-rating have produced actual harm in the market. “It is early days for IoT applications. The industry is figuring out which applications are possible and which ones will interest consumers,” Karen Ng, Bell’s director of wireless product marketing, said during the company’s opening presentation. “The role of DPPs for IoT applications is unknown, but it is likely that some, or many, may depend on DPPs for their success.” Daniels added: “Regulation that takes away options has the risk of interfering in the market and we don’t know what the outcome is.” Unlike Bell, which argued against any framework regulating differential pricing practices, Levin said that Facebook recommended the commission stick to principles of non-exclusivity, openness and transparency. These are all principles to which Levin said Facebook’s Free Basics platform adheres. At the beginning of the day, the Equitable Internet Coalition—comprised of the Public Interest Advocacy Centre (PIAC), the B.C. Public Interest Advocacy Centre, Council of Senior Citizens’ Organizations of BC and the National Pensioners Federation— expanded on their proposed framework that the CRTC adopt to identify acceptable differential pricing practices. The framework includes that the regulator examine the effect the practice would have on the “four Cs” — customers, content, carriers and competition. Blais was also looking for clarification regarding another c-word: controversy—namely, why wasn’t there the same kind of controversy over differential pricing for voice services. Indiana University telecommunications professor Barbara Cherry said the difference had to do with conduit compared to content. “So now you are going from a system that was initially designed for one specific purpose, purely a conduit to transmit voice where the content is not determined at either end by the carrier to now these kind of hybrid versions where now the conduit can be used to communicate or connect with other kinds of information,” Cherry said. Though officially outside the scope of the hearing, the issue of data caps was a well-trod subject. Unlike some of the other groups the panel will hear from during the hearing, the coalition noted they weren’t there to tell commission to “kill data caps.” Commission vice-chairman Peter Menzies said that in the absence of data caps and overage charges, “one assumes would have to make up that revenue someplace,” and asked the coalition whether it was more of a benefit to consumers “to have lower prices that are reflective of their usage—which our report showed last week, although growing considerably, is still under 100 GBs a month—or higher rates that effectively subsidize heavy users.” PIAC executive director John Lawford said “the theory that we’re working on is that if differential data pricing remains or becomes endemic, you’re going to have lower caps for longer… because there’s no incentive to raise them.” He added: “If there is free and open Internet access and applications that consumers desire that may or may not require higher and higher bandwidth, companies, in order to compete to get those consumers, will have to offer better, higher caps, perhaps eliminate them.” The hearing continues Wednesday at 9 a.m. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

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No proven harm from differential pricing: Bell

Broadcast | November 1, 2016

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