CRTC rules against zero-rating by telecom industry

From http://www.cbc.ca/news/technology/crtc-zero-rating-differential-pricing-decision-videtron-net-neutrality-2017-1.4077717

Your internet provider can’t pick which apps and services count against your data cap, says CRTC

In a win for net neutrality advocates, carriers can’t use a controversial pricing practice called zero-rating

By Matthew Braga, Last Updated: Apr 21, 2017

If zero-rating is allowed, an internet provider could decide to exempt a video streaming service such as YouTube from counting against a user’s data cap — a move that critics say is in violation of the principle of net neutrality. (Dado Ruvic/Reuters)

The move is a win for proponents of a principle known as net neutrality, under which carriers treat all content equally and do not privilege content that benefits them.

“Rather than offering its subscribers selected content at different data usage prices, Internet service providers should be offering more data at lower prices,” said Jean-Pierre Blais, chairman of the CRTC in a statement. “That way, subscribers can choose for themselves what content they want to consume.”

The decision stems from a 2015 complaint against the wireless carrier Videotron, which primarily operates in Quebec. Videotron launched a feature in August of that year, enabling customers to stream music from services such as Spotify and Google Play Music without it counting against a monthly data cap as a way to entice people to subscribe to Videotron’s internet service.

Broadly speaking, this differential pricing practice, known as zero-rating allows internet providers to charge different prices depending on the type of app or service a person uses.

Sponsored data is another approach, in which a company — say, Netflix — could pay your internet provider to exempt their product or service from counting toward your data cap.

Proponents of differential pricing — which include Bell, Telus, Videotron and Facebook, which relies on zero-rating to offer its social network for free around the world — argued that the practice was good for innovation and would mean more choice and lower costs for consumers.

But consumer advocacy groups, and even internet provider Rogers, disagreed, arguing the practice would inherently favour some types of internet activity and discriminate against others, in violation of net neutrality. The CRTC agreed.

The decision means that Videotron cannot offer its unlimited music streaming plan to subscribers in its current form — nor can other internet providers offer similar plans that zero-rate other types of internet content, such as video streaming or social media.

Past precedent

The CRTC came to a similar conclusion in 2015, when Bell and Videotron found themselves the subject of a similar complaint.

In that case, the two wireless carriers exempted their own streaming TV services from counting toward subscribers’ data caps. The CRTC ruled that the plans allowed Bell and Videotron to favour their own TV services.

The CRTC previously told the CBC that it believes the two cases are different, because Bell and Videotron showed preference to their own services, and not a third party’s. But consumer advocates in both Canada and the U.S. — where AT&T currently offers a zero-rated streaming service similar to the one previously offered by Videotron and Bell — have argued they both violate net neutrality in the same way.

AT&T announced last November that its DirecTV streaming service would also be zero-rated for AT&T customers, while wireless carrier T-Mobile has offered a service similar to Videotron’s unlimited music service — one that also includes video — for a number of years.

Some groups such as Open Media had hoped the CRTC would address the use of data caps head-on. If there were no restrictions on usage, they argued, then there would be no need to debate practices such as zero-rating in the first place.

“While the CRTC could have gone further,” the group said in a statement, “today’s ruling is still a very positive step in the right direction.”

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