Consumer groups say Videotron's streaming service violates net neutrality

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Videotron Ltd.'s bid to make music streaming easier for its users hit its first roadblock Tuesday, just five days after its data-free streaming program was announced.

The company, a wholly owned subsidiary of Quebecor Inc., launched its "Unlimited Music" program last week, which lets users of various premium mobile packages stream music through a select, but flexible, number of partner services without eating into their data plan. Launch partners included global leaders such as Spotify, Rdio and Google Music.

A consortium of Canadian consumer advocacy groups, including the Public Interest Advocacy Centre, filed an application with the Canadian Radio-television and Telecommunications Commission on Tuesday morning, arguing that Videotron's new program gives "undue preference" to certain customers. They also contend that the Unlimited Music service makes Videotron's mobile service "more attractive and less expensive to use at the expense of all other Internet use," particularly when it comes to streaming audio services that haven't signed deals with the carrier.

All-access streaming services are quickly becoming a preferred way for consumers to get their music. Rather than pay for every song or album they download, people are turning to services such as Spotify and Apple Music to hear as much music as they want for either a flat fee or occasional ads.

Videotron's new program is a Canadian first, and a vote of confidence that consumers will continue to stream, particularly on mobile devices. The CRTC challenge is a reminder of just how fast music, and media in general, is changing, and of the regulatory growing pains that come with it. Consumers may be flocking to the streaming format, but it might take a while for the playing field to be declared fair.

There is a historical precedent to the consortium's Videotron challenge. Earlier this year, the CRTC ruled that Bell Mobility Inc. and Videotron had been giving unlawful preference to their TV services by exempting some of those services from mobile data usage, in turn bolstering their own business.

Videotron argues that the Unlimited Music program doesn't fall into the same category because it works with multiple partner services and is willing to team up with even more. But the CRTC challenge, filed by PIAC as well as the Consumers' Association of Canada and the Council of Senior Citizens' Organizations of British Columbia, argues that the program still puts non-partner services at a disadvantage while penalizing lower-tier Videotron subscribers.

Geoff White, external counsel with PIAC, said in an interview that the Unlimited Music program violates the principle of net neutrality, the idea of giving all data equal weight. It allows Videotron to effectively "pick and choose what succeeds and what will fail based on providing these sweet deals to certain customers," he said.

The consortium also lodged its complaint, Mr. White said, because it "hits hard for lower-income people who don't have privileged access to the premium plans."

They request the CRTC declare that the preferential rates violate the Mobile TV decision and that ask Videotron remove the "discrimination and preference" in its billing. They also say the practice leads to an important question about data caps. If it's so easy to disregard them for data-hungry music apps, Mr. White said, "why do they have data caps in the first place?"

In a statement to The Globe and Mail, Videotron called the allegations of undue preference "without foundation."

"Participation in the Unlimited Music service is open to all legal and authorized streaming service providers, and Videotron is not receiving any compensation from any provider," the company said. "This popular, democratic service is already receiving a great response from consumers, and we are confident the CRTC will see it as a fine example of innovation and diversification in the competitive mobile marketplace. At the end of the day, Videotron's customers greatly benefit from not worrying about [their] data usage."

Videotron has about 700,000 wireless customers across Quebec. The program will be offered to subscribers of Videotron's premium Canada-wide mobile packages with two gigabytes of data a month, and those with bundled Internet-and-mobile packages with one gigabyte of mobile data a month.

The CRTC declined to comment on the specific application, but a spokesperson said that once the regulator has gathered all the required information from the parties involved, it expects to issue a ruling within four months.