The latest fight over Net neutrality in Canada is coming to a head.
Last week, parties filed what are expected to be the final round of comments with the Canadian Radio-television and Telecommunications Commission (CRTC) on a regulatory challenge to Videotron Ltd.'s Unlimited Music program, which involves "zero-rating" music streaming services.
The Montreal-based wireless division of Quebecor Inc. launched the service in September, offering subscribers of some of its higher-end cellular plans the ability to stream select music services – such as Spotify, Rdio and Google Music – on their mobile devices without the bandwidth use counting against their monthly data buckets.
The service quickly faced criticism that it violated the principle of Net neutrality, which is the idea that telecom providers should treat all of the content that passes through their networks equally. There were numerous complaints about the service and the CRTC combined them into one proceeding in late September. The federal regulator has conducted several rounds of comments and replies, and also asked Videotron a number of technical questions about its service.
Opposition to Videotron's Unlimited Music service comes after a CRTC ruling in early 2015 that ordered Bell Mobility Inc. to change the pricing of its Mobile TV application. The commission ruled the company was giving its own television programming an undue preference by exempting up to 10 hours of viewing time from mobile data usage charges. Bell appealed the ruling and a federal appeal court heard arguments in January but reserved its ruling on the case.
Critics, including a group of consumer and public interest organizations known collectively as CAC-COSCO-PIAC, argue the Mobile TV ruling sets a clear precedent. They say the service runs afoul of the Telecommunications Act because it discriminates against customers of cheaper cellphone plans as well as other content on the Internet that users must actually pay to consume.
"Videotron has essentially argued that discrimination is a competitive necessity to attract younger people, which happens to now be technologically possible. The commission should reject this as a self-serving excuse, not a legal justification," the consumer groups argued in their filing last week.
But Videotron says its Unlimited Music service is different from the application in the Mobile TV case, where Bell was offering "free" data for its own television content. In the Unlimited Music example, the company argues it is "resolutely democratic in its approach to streaming partners and content." It says any music service can apply to be part of the offer and it does not receive any compensation from the music services.
Videotron says the offer is a legitimate effort to stand out from its competitors and attract customers. "In a diversified, competitive marketplace, different categories of consumers will make different choices and will find satisfaction in different ways. There is no requirement for every offering to please everyone.
"The opponents of Unlimited Music have a well-entrenched and, frankly, surprisingly inflexible view of innovation in the wireless marketplace," Videotron said in its filing. "In their world, network operators are the providers of dumb pipes. Their job is to spend billions of dollars on the pipes and then to refrain from making any effort to encourage greater, more effective, more diverse or more interesting use of them."
A similar debate is continuing south of the border where U.S. carrier T-Mobile U.S. Inc. launched a "zero-rated" service called Binge On, that allows users to watch video content from select providers with no effect on their data buckets. The U.S. Federal Communications Commission is formally scrutinizing the service now.
Videotron is also facing opposition before the CRTC from a number of individuals, the Canadian Internet Policy and Public Interest Clinic, Halifax-based cable and wireless operator Eastlink and Rogers Communications Inc., which says it has structured its own streaming music promotions to ensure they are subject to the same data charges as any other content.
A group of "concerned Canadian radio broadcasters" also opposes the service. For its part, Videotron says it would be prohibitive from a cost and administrative standpoint to include every radio station website in the service.
The CRTC typically rules on applications within four months of when the final materials are filed.