Grappling with regulatory challenges on multiple fronts, BCE Inc. is now turning to the courts in an attempt to overturn an order requiring the company to change the pricing of its mobile television app. At issue is whether the app is a form of broadcasting or an Internet service.
On Friday BCE-owned Bell Mobility Inc. filed an application with the Federal Court of Appeal seeking leave to appeal a Canadian Radio-television and Telecommunications Commission's decision on Bell's app, which lets customers stream live and on-demand TV programming on their mobile devices. (BCE owns 15 per cent of The Globe and Mail.)
The CRTC ruled last month that the way Bell priced the app – it costs $5 per month and allows users to stream up to 10 hours of television that do not count against their monthly wireless data caps – gave the company's mobile programming an unlawful preference over other applications or Internet services.
In a speech on the same day the commission released the decision, CRTC chairman Jean-Pierre Blais commented on the case and alluded to principle of Net neutrality, the idea that telecom providers should treat all content that flows through their networks equally.
"It may be tempting for large, vertically integrated companies to offer certain perks to their customers, and innovation in its purest form is to be applauded," Mr. Blais said at the time. "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."
The CRTC directed Bell to eliminate the pricing practice by April 29.
The court will only grant a leave to appeal on the basis of "a question of law or a question of jurisdiction," and Bell argued in its filing that the CRTC erred in law in basing its decision on the Telecommunications Act.
Bell said its mobile TV app – which attracted more than 1.5 million subscribers – is actually a broadcasting service and is therefore exempt from the provisions of the Telecom Act.
It said that when Bell Mobility provides its customers with access to other Internet-based video services it is simply acting as an Internet service provider and in that respect is governed by the Telecom Act.
In contrast, when it is operating Mobile TV, it said it is a broadcasting undertaking, noting, "Bell Mobility itself acquires, aggregates, packages and markets Bell Mobile TV content before retransmitting it to subscribers."
The company also argued the CRTC had no evidence that the app caused harm to customers and unfairly placed the burden on Bell to prove the pricing model had no adverse impact on competitive services.
Geoff White, counsel for the Public Interest Advocacy Centre, which was one of the groups that participated in the challenge to Bell's app, said in an e-mail Sunday the consumer advocacy group is reviewing the appeal.
"The commission's decision to enforce the unjust discrimination rule in telecom law despite the telecom data in question having an aura of broadcasting was something obviously PIAC supported," Mr. White said.
"In the broader context this represents another instance where providers of telecom services who also own media assets are taking one view of the rules to favour the latter via the former, in a way that, beyond being unlawful in PIAC's view, harms competition by independent service providers," he added.
Bell spokesman Mark Langton said Sunday that the company will file materials Monday seeking a stay of the CRTC's decision pending the outcome of the leave to appeal application.
"We look to the CRTC to support Canadian broadcast innovations like Bell Mobile TV," Mr. Langton said, adding that the commission itself said the service was a broadcast undertaking "and should obviously regulate it that way."
The commission did conclude that the app was a broadcasting service but it went on to find the Telecom Act applied when the company used its wireless network to deliver the service.
The Montreal-based communications giant is also dealing with other recent regulatory challenges related to its media business.
Earlier this month, the company said it was "exploring" the possibility of a challenge to the CRTC's ruling banning the long-standing practice of substituting Canadian commercials for American ads during Super Bowls (beginning in 2017) as well as on specialty channels.
Bell Media currently has the Canadian Super Bowl rights and BCE's chief legal and regulatory officer Mirko Bibic sought a meeting with the commission over the decision but was publicly rebuffed.
The company has also filed a request for the CRTC to dismiss a challenge launched by PIAC over its CraveTV video streaming service.