Data cap exempt content killed off by Canadian regulator

Canada's telecommunications regulator has moved to outlaw billing practices by telcos that exempt their own online media content from data caps while including data costs for downloads and streaming from competing content providers.

The Canadian Radio-television and Telecommunications Commission (CRTC) has ruled against a practice by telecommunications providers that exempts certain streamed television content on mobile devices from users' monthly data caps.

In a statement published on January 29, the CRTC said that as Canadians turn more to the internet for viewing content, it is important to make sure new platforms are made available to Canadians in a fair and open manner.

"In this regard, the CRTC issued a decision today that reinforces its commitment to an open internet," it stated. "The CRTC has directed Bell Mobility and Vidéotron to stop giving their mobile television services, Bell Mobile TV and, an unfair advantage in the marketplace, to the disadvantage of other internet content."

According to the CRTC, these companies had exempted their own mobile television services from their standard monthly data charges, while content from other websites or apps has counted against the customers' data cap.

"Bell Mobility must eliminate this unlawful practice by April 29, 2015," the organisation said. "For its part, Vidéotron indicated that it planned to withdraw its app for BlackBerry and Android devices by the end of 2014.

"Vidéotron must confirm by March 31, 2015, that this app has been withdrawn and ensure that any new mobile TV service it offers does not give it an unfair preference or advantage over similar services," it said.

The CRTC said it made the move in order to help ensure a more open and fair marketplace for mobile television services, and to encourage greater innovation and choice for Canadians.

The ruling follows an application received by the CRTC that was filed by University of Manitoba graduate student Ben Klass in November 2013, complaining about an alleged undue preference on the part of Bell Mobility. A similar application, filed against Vidéotron, followed a few weeks later.

"We agreed," said CRTC chairman Jean-Pierre Blais in a statement. "In our opinion, providers such as Bell and Vidéotron that offer linear content via their mobile TV apps cannot provide undue preferences or advantages. We therefore ordered Bell and Vidéotron to eliminate their unlawful practices.

"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. By all means, we at the CRTC want broadcasters to move television forward by creating 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. We've got to keep the lanes of our bridges unobstructed so that everyone can cross," he said.

The decision could have implications in the way Canada approaches net neutrality -- where internet service providers must treat all data, applications, and services carried over their networks equally -- at a national and industry-wide level.

It is a divisive topic that has been raging for some time within the halls of government of its southern neighbour, with the United States' Federal Communications Commission in November pushing back against the US president's calls to protect net neutrality.

Net neutrality is also being scrutinised globally, with two Dutch telcos -- KPN and Vodafone -- fined this week by the Netherlands Authority for Consumers and Markets for violating net neutrality laws.

The CRTC ruling also brings into focus content bundling practices by the likes of Australia's largest telco Telstra, which former chairman of the Australian watchdog Graeme Samuel has warned could pose a threat to competition.

In November last year, the former Australian Competition and Consumer Commission chairman said that Telstra has a "significant advantage" in its bundled content, specifically referencing its 50 percent stake in Foxtel.

"There is the constant risk that the exclusive tie-up of rights to such content for new and emerging markets will allow the rights holders to shut out competition across a wide range of services on the new networks," he said at the time.

"Ultimately, this could deprive consumers and advertisers of choice and quality, not only for broadcasting, but also voice, internet, IPTV, and innovative communications services, and determine the success or failure of a new competitor," he said.

The CRTC decision comes as Singaporean telecommunications giant and Optus parent company SingTel establishes HOOQ, a joint-venture startup with Sony Pictures Television and Warner Bros to offer a regional over-the-top (OTT) video service in Asia.

The company said on January 30 that HOOQ will enable customers to stream or download both Hollywood blockbusters and television series, as well as popular local movies and programs, on the device or platform of their choice.

"HOOQ is an important part of SingTel's digital strategy," said SingTel Group Digital Life chief Jonathan Auerbach. "We have unique assets that give us a right to play in this space, and with our partnership with Sony Pictures Television and Warner Bros Entertainment, we will achieve our vision to be the largest OTT video service in the region.

"Demand for OTT video has been growing and is poised for higher growth in these markets fuelled by better data networks and the growing supply of affordable devices. This is a more than S$1 billion opportunity in our markets," he said.