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I.
INTRODUCTION/EXECUTIVE SUMMARY
[i]n the coming weeks and months, other popular services will be added to the list,
including Songza.4 Videotrons marketing materials indicate that those customers
who have Canada-wide premium plans5 are exempt from paying for mobile data
usage when they access one or more of these audio streaming services.
Videotrons mobile customers that access any other audio service that has not
entered into an agreement with Videotron will have to pay standard usage rates.
3. In Rogers view, the zero-rated Unlimited Music service provided by Videotron
suffers from the same legal flaws as the mobile television services that were offered
by Bell Mobility and Videotron earlier this year. Both of those mobile television
services were recently found to be offered in a manner that was contrary to
subsection 27(2) of the Telecommunications Act in Broadcasting and Telecom
Decision CRTC 2015-26 (BTD 2015-26). In that Decision, the Commission
determined that by exempting only certain mobile television services from standard
data charges, Bell Mobility and Videotron have:
given an undue preference in favour of subscribers of their respective
mobile TV services, as well as in favour of their own services, and have
subjected consumers of other audiovisual content services, and other
services, to a corresponding undue disadvantage. 6
4. The same legal analysis used in BTD 2015-26 should be applied to Videotrons new
Unlimited Music service. Videotron is acting as the gatekeeper with respect to the
audio services delivered over its wireless network. It has selected a handful of audio
streaming services to be exempt from data charges and it is making only those
services available to a segment of its subscriber base (i.e. those customers who
have Canada-wide premium plans) on a zero-rated basis. As a result, Videotron has
violated subsection 27(2) of the Telecommunications Act as follows:
4 See: http://www.newswire.ca/news-releases/agreement-with-leading-music-streaming-players--videotron-mobiles-new-unlimited-music-service-lets-customers-listen-to-music-without-using-data523091451.html.
5 Premium All-Inclusive Canada plans and the All-Inclusive Canada 1GB plan as part of an Internet +
Mobile Duo, which costs close to $65/month. See: http://support.videotron.com/residential/mobile/unlimitedmusic.
6 BTD 2015-26, Summary.
7 On Videotrons FAQ, it states: Unlimited Music lets you stream music at 128 Kbps, which is the average
transmission rate for todays apps. Data usage resulting from streaming music at speeds higher than 128
Kbps (high speed or high definition) may be deducted from your plans monthly data allowance. See:
http://support.videotron.com/residential/mobile/unlimited-music.
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usage charges to access the five audio streaming services. Other Videotron mobile
subscribers, however, will pay additional charges to access that same audio content.
In addition a subscriber that accesses any other audio service (even those offering
audio streaming services, like Canadian radio stations, that are substantially similar
to those offered by Stingray, Rdio, Google Play, Deezer and Spotify) on Videotrons
wireless network would be subject to Videotrons standard data fees.
III.BREACH OF SUBSECTION 27(2) OF THE TELECOMMUNICATIONS ACT
16. As was the case with Videotrons illico.tv service, Rogers submits that the companys
Unlimited Music service similarly contravenes the prohibitions against undue
preferences, unjust discrimination and undue disadvantages set out in the
Telecommunications Act in a number of different ways. Many parties are being
impacted by the manner in which Videotron is providing the Unlimited Music service,
including:
subscribers who are not required to pay additional data charges when they
access the Unlimited Music;
subscribers who are required to pay additional data charges when they
access other audio services on Videotrons wireless network;
the five audio streaming services offered as part of Unlimited Music;
every other audio service (including Canadian radio stations that are
streamed online) that is not offered as part of Unlimited Music; and
wireless competitors that have arranged their offerings to comply with the
determinations set out in BTD 2015-26.
17. In BTD 2015-26, the Commission outlined its two-step process for analyzing an
allegation of undue or unreasonable preference or disadvantage under subsection
27(2) of the Telecommunications Act: (i) it must first determine whether the conduct
in question constitutes a preference or subjects a person to a disadvantage; and (ii)
where it so determines, it must then decide whether the preference or disadvantage
is undue or unreasonable.13
13 At paragraph 44.
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streaming services, as well as in favour of the five audio streaming services that
agreed to be delivered as part of Unlimited Music. In addition, every other audio and
audiovisual service accessible online through Videotrons wireless network and each
competing wireless carrier are being subjected to a corresponding disadvantage.
(ii) The Preferences and Disadvantages are Undue
23. Having established the presence of preferences and disadvantages in respect of the
Unlimited Music service, it is also clear that each preference and disadvantage is
undue or unreasonable. Pursuant to subsection 27(4) of the Telecommunications
Act, Videotron has the burden of establishing that any preference or disadvantage is
not undue or unreasonable.
24. Charging some customers significantly more, with respect to data charges, for
accessing those audio services that are not included as part of Unlimited Music
represents a material disadvantage that is clearly undue and unreasonable. It is
simply unfair to those customers that may not want to subscribe to Stingray, Rdio,
Google Play, Deezer or Spotify, and instead choose to listen to other audio content
online. These customers will be forced to pay considerably more, in terms of data
charges, for obtaining that audio content.
25. At the same time, Videotron is unduly preferring certain audio services by entering
into agreements with only a select group of audio streaming service providers and
offering them as part of the unlimited Music service. Videotron is, in effect, picking
winners and losers by adopting a business model that would require an online audio
service provider (including Canadian radio stations that stream content online) to
accept Videotrons contractual requirements in order to receive the benefit of having
its content zero-rated.
26. The fact that Videotron appears to be limiting participation in its Unlimited Music
offering to a class of service is not relevant to the issue of whether Videotron is
giving the chosen class an undue preference or subjecting all other audio services to
an undue disadvantage. In fact, it is not apparent what that class would be. While
Videotron appears to suggest that any audio streaming service could be offered in
Unlimited Music,15 it is evident that this is not true. Only those audio streaming
services that have accepted the terms imposed by Videotron and entered into
agreements with the wireless carrier are granted the right to have their services
zero-rated. Even then, any audio service that does not accept Videotrons terms of
carriage or that finds those terms too onerous, would not be included in Unlimited
Music.
27. By choosing which audio services are included in its Unlimited Music service,
Videotron is positioning itself as a gatekeeper. It is creating an environment that will
cause significant harm to those other audio services that do not choose to do
business or enter into commercial agreements with Videotron because their content
will continue to be subject to data charges. Under Videotrons model, customers
15 See http://support.videotron.com/residential/mobile/unlimited-music.
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who subscribe to a select group of audio streaming services will incur no additional
data charges, while customers who subscribe to other audio services will incur
significant data charges. It is Rogers view that this will likely have a material
adverse impact on consumers and on the growth and development of these other
audio services.
28. Videotrons decision to adopt a business model for mobile audio services that
encourages customers to access data-intensive services is inconsistent with the
approach outlined in BTD 2015-26 and the manner in which it charges for other data
services, which is to impose data caps in order to optimize the efficiency of these
networks. If access to audio services continues to grow and consumers are
encouraged to access Videotrons Unlimited Music service because of the absence
of data charges, this might contribute to network congestion and result in a
degradation of those audio, video and other online services that have not accepted
Videotrons access terms.
29. Finally, competing wireless carriers in Canada, including Rogers Wireless, are also
being subjected to an undue disadvantage. Following the issuance of BTD 2015-26,
Rogers and other wireless carriers reassessed their mobile offerings and entered
into business arrangements that were designed to respect the conclusions reached
by the Commission in that Decision. The Commissions findings with respect to data
charges for mobile TV and the broad legal principles underlying those findings have
been accepted by Rogers and incorporated into our mobile offerings. Now, with the
launch of Unlimited Music, we are being subjected to an undue competitive
disadvantage in the marketplace because Videotron refuses to respect the legal
principles outlined in BTD 2015-26.
30. We would also note that, under section 28 of the Telecommunications Act, the
Commission must have regard to the broadcasting policy set out in subsection 3(1)
of the Broadcasting Act in determining whether any preference or disadvantage is
undue or unreasonable in relation to the transmission of programs. Section 28 is
particularly relevant in this case because of the impact Videotrons Unlimited Music
service could have on Canadian radio stations and other Canadian audio content
providers that have not accepted Videotrons terms of carriage or have not been
chosen by Videotron to participate in Unlimited Music. As the Commission is aware,
subsection 3(1) of the Broadcasting Act contains several policy objectives that
encourage the growth and development of Canadian programming, including
paragraph 3(1)(d) which provides that the Canadian broadcasting system should:
3(1)(d)(ii) encourage the development of Canadian expression by
providing a wide range of programming that reflects Canadian attitudes,
opinions, ideas, values and artistic creativity, by displaying Canadian
talent in entertainment programming and by offering information and
analysis concerning Canada and other countries from a Canadian point of
view.
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31. If the number of Canadian consumers who use their mobile devices to satisfy their
music and other audio needs continues to grow,16 the Commission must ensure that
Canadian radio stations and other content providers have a fair and equal
opportunity to reach those consumers online. This means that wireless carriers, like
Videotron, should not be able to adopt new business models and service offerings
that position themselves as gatekeepers. This would enable Videotron to force
Canadian radio stations and other Canadian content providers to accept Videotrons
business arrangement just to ensure that they could remain competitive with those
audio streaming services that have already accepted the wireless carriers terms.
32. In view of the fact that more and more Canadians are listening to radio stations
online through mobile devices, there is a very real likelihood that the Canadian radio
industry will suffer material harm if Videotron and other wireless carriers require
customers to pay additional data charges to access Canadian radio stations online,
while allowing the content offered by audio streaming services like Stingray, Rdio,
Google Play, Deezer and Spotify to be zero-rated. Moreover, this would severely
undermine Canadian audio services successful transition to digital platforms and
their ability to further the policy objectives of the Broadcasting Act.
IV.NET NEUTRALITY
33. Videotrons Unlimited Music service is also being offered in a way that is inconsistent
with the Commissions approach to net neutrality. The decision to favour certain
types of audio services carried on its wireless network and to treat the data from
those services differently than the data of other audio and audiovisual services, as
well as online services in general, represents the thin edge of the wedge in
ensuring the integrity of Canadas net neutrality rules. If permitted to stand,
Videotrons discriminatory pricing policy will only encourage other wireless service
providers (and perhaps ISPs) to adopt similar business models that grant significant
advantages to only certain content providers online. This will have a material
adverse impact on those audio service providers whose content is not zero-rated, as
well as those consumers who do not want to pay higher data charges just to access
the content of their choice online and through wireless devices.
34. The Commission has consistently expressed the view that ISPs (and presumably
wireless carriers) should not be permitted to act as gatekeepers or to favour or
disadvantage particular kinds of traffic on their networks:
We want to make sure that Internet service providers (ISPs) are neither
favouring nor disadvantaging particular kinds of traffic on their networks.
ISPs should not act as gatekeepers or censors. They should allow content
providers and users to communicate freely.17
16 This growth of online streaming is expected to continue. See, for example, Music streaming services
have racked up a trillion plays in 2015 alone, Chris Leo Palermino, August 13, 2015 (see:
http://www.digitaltrends.com/music/streaming-music-services-pass-1-trillion-plays-2015/).
17 Speech by Konrad von Finckenstein, Q.C., Chairman, Canadian Radio-television and
Telecommunications Commission, To the International Institute of Communications Telecommunications
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35. Videotrons Unlimited Music service does not respect these net neutrality principles.
V.THE WIRELESS CODE
36. In addition to the above, it is also Rogers view that Videotrons pricing policy for its
Unlimited Music service contravenes the provision relating to overage charges in the
Wireless Code. In the proceeding that resulted in the Wireless Code, consumers
expressed frustration with plans that are advertised as being unlimited, but are then
subject to unclear usage limitations or overage fees. As a result, the Commission
imposed the following obligation in section 3(i) of the Wireless Code:
(i) A service provider must not charge a customer any overage charge for
services purchased on an unlimited basis.
37. In the section of Videotrons Unlimited Music website dealing with frequently asked
questions (FAQs), Videotron indicates that customers who subscribe to Unlimited
Music and believe that the service can be accessed on an unlimited basis will, in
fact, be subject to additional charges. The FAQ provides as follows:
Does Unlimited Music work on the extended network? Yes. Data
usage generated on partner networks is not deducted from your plans
monthly data allowance. However, your total data usage is subject to
extended network usage rules.
What is the transmission rate for streaming music?
Unlimited Music lets you stream music at 128 Kbps, which is the average
transmission rate for todays apps. Data usage resulting from streaming
music at speeds higher than 128 Kbps (high speed or high definition) may
be deducted from your plans monthly data allowance. 18
38. If a Videotron Unlimited Music customer is streaming at a high speed and data
usage is generated on partner networks, the customer would then incur overage
charges in violation of the Wireless Code. In addition, as noted above, if a customer
streams audio via the five audio streaming services at transmission rates that
exceed 128 Kbps, data usage may be deducted from the customers monthly data
allowance.
VI.CONCLUSION
39. For all of these reasons, Rogers supports the Part 1 Applications filed by PIAC and
Vaxination and firmly believes that the Unlimited Music service is being offered by
and Media Forum Washington, D.C. (December 14, 2011).
18 See http://support.videotron.com/residential/mobile/unlimited-music.
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Yours truly,
David Watt
Senior Vice President Regulatory
Corporate Affairs
c.c.
Vaxination Informatique, jfmezei@vaxination.ca
Consumers Association of Canada, the Council of Senior Citizens Organization of British
Columbia, and the Public Advocacy Centre, gwhite@piac.ca and jlawford@piac.ca
Vidotron, dennis.beland@quebecor.com, yanick.boily@quebecor.com and regaffairs@quebecor.com
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