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The CRTC decision has implications for the Canadian approach to net neutrality, the principle that telecom providers should treat all content that flows through their networks equally, and not give any type of preference to content they own.

© Stephen Lam / Reuters

Canada's telecom regulator has ruled against a billing practice by cellphone providers that exempts certain television content streamed on wireless devices from customers' monthly data caps.

The decision, which applies specifically to mobile television applications offered by Bell Mobility Inc. and Videotron Ltd., sets a new limit on how companies that own both media and communications businesses can use television and sports content to bolster their wireless or Internet divisions.

It also has implications for the Canadian approach to Net neutrality, the principle that telecom providers should treat all content that flows through their networks equally, and not give any type of preference to content they own.

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The apps attracted controversy because, for a fee of typically $5 a month, the wireless data they use to stream up to 10 hours of TV programming do not count against a user's monthly data cap, while watching similar content on sites such as Netflix or YouTube does.

The Canadian Radio-television and Telecommunications Commission concluded Bell and Videotron were giving unlawful preference to their own mobile TV services by excluding the data usage from standard monthly caps. (Bell is owned by BCE Inc., which also owns 15 per cent of The Globe and Mail.)

"At its core, this decision isn't so much about Bell or Videotron. It's about all of us and our ability to access content equally and fairly, in an open market that favours innovation and choice," CRTC chairman Jean-Pierre Blais said in a speech delivered Thursday morning in London, Ont.

"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, adding the CRTC wants to see broadcasters create "new and exciting ways to view content."

"But when the impetus to innovate steps on the toes of the principle of fair and open access to content, we will intervene," he said. "We've got to keep the lanes of our bridges unobstructed so that everyone can cross."

Mr. Blais's comments echoed some of the growing discussion around Net neutrality in the United States, where the prospect of Internet fast lanes has attracted public ire and the President himself has said Internet companies should not be allowed to pick winners and losers.

The case before the CRTC was based on a complaint about Bell's Mobile TV app filed in November, 2013, by Ben Klass, a Manitoba graduate student. In January, 2014, the CRTC combined that application with two similar complaints launched by the Public Interest Advocacy Centre (PIAC) over apps offered by Rogers Communications Inc. and Quebecor Inc.'s wireless business Videotron.

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Videotron subsequently launched an iPhone version of the app that bills users on the amount of data consumed and said it would withdraw its illico.tv app for BlackBerry- and Android-based devices by the end of 2014. In August, Rogers stopped offering a $5 add-on for its mobile TV app and the CRTC dropped the complaint against it.

Bell, however, did not change its pricing, insisting its app complied with regulations, and BCE spokesman Mark Langton said Thursday the ruling was a shock.

"Bell has led the world in mobile TV and we've worked to keep the price low. More than 1.5 million Bell mobile TV subscribers across Canada responded to that kind of innovation and affordability," he said, adding the service offered programming from all of the country's broadcasters and only 20 per cent of the content came from Bell Media itself.

Geoff White, external counsel to PIAC, called the decision a "win for consumers" and said it will promote more competition online.

"It is certainly suggestive of the way the commission is viewing both the power of these converged telecom and broadcasting entities and also how the commission is thinking about Internet neutrality," he said.

Mr. White said the CRTC has grappled for years with issues raised by the vertical integration of broadcasting and television distribution companies. The increasing consumption of traditional television content online through streaming services has compounded those issues as those same companies often also control Internet and wireless businesses.

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"There's all sorts of creative thinking going on in terms of how to get around the rules, which are ultimately designed to promote competition and ensure content is treated fairly, no matter what its origin is," Mr. White said.

In a written decision the CRTC directed Bell to eliminate the pricing practice by April 29 and directed Videotron to confirm it has withdrawn its illico.tv app by March 31.

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