CRTC’s Hearing on Differential Pricing Leaves Some Questions Unanswered

The more than two-dozen testimonials presented during this week at the CRTC’s hearing on differential pricing weren’t enough to answer one simple question: Why do Telus, Rogers and Bell want or need differential pricing? (via Alphabeatic)

Crtc logo

Telus says it’s for wireless service providers to distinguish themselves from each other in the eyes of the consumer, Alphabeatic’s Peter Nowak highlights. That’s rather interesting, because until now these carriers who suddenly want to differentiate themselves have benefitted from sameness.

As an example (as pointed out by Nowak), they all have the same pricing for a smartphone plan with unlimited nationwide calling and texting and 1 GB of data in Ontario. And that’s just one example of price matching.

Also, their market share is similar, just like their revenues (the latest numbers were reported earlier), so Nowak rightfully questions their sudden demand for differential pricing.

Rogers’ position, on the other hand, seems more transparent: Canada’s #1 carrier wants its customers to pay for the bandwidth they use. Still it offers free Spotify subscriptions, which can be considered a differentiating factor compared to other carriers.

The CRTC’s review of zero rating was ignited by complaints against Videotron, which offers Unlimited Music, allowing its subscribers to stream music from certain third-party services without counting the data traffic towards their monthly data cap.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • mcfilmmakers

    Zero rating is a case supporting unlimited cell data. Why don’t we just have that? If I opt to stream Spotify 24/7, the data is free so how is that different than reading The Gazette 24/7? It isn’t.

  • Brian

    You’ll only stream Spotify at a zero rating because your carrier gets a kickback from Spotify to allow it. That’s how it’s different than The Gazette.

    Zero rating isn’t about unlimited data for you. It’s about your carrier choosing what you get (zero rated) access to based on what’s best for them and who they get the biggest kickbacks from.

  • Brady Hitch Johnston

    Towers are too spread out and don’t “offer enough coverage” to supply that much bandwidth at a consistently stable rate around canada apparently. Which some find to be bullshit since Canada has some of the fastest mobile network speeds in the world and it’s common knowledge that for the most part, a carriers biggest source of revenue is overage charges. They should atleast include some sort of data roll over option

  • mcfilmmakers

    The point I’m making is that their excuse for not offering unlimited data is bandwidth when zero rating objectively proves this not to be true. What I don’t get is why the CRTC doesn’t bring this up.

  • mola2alex

    That is one use but not the only use. Another was when bell didn’t charge data for their mobile TV data. So in essence it can be used to differentiate their own content.

  • Brian

    If by differentiate, you mean discriminate against competitors then you understand the dangers of differential pricing. It’s particularly dangerous in Canada where the CRTC had allowed so much vertical integration.

  • Brian

    Because zero rating only a small portion of vendors is not quite like opening the unlimited flood gates. Suggesting those are the same would just make the CRTC look naïve.

  • mola2alex

    I’m just pointing to another form of it, not giving my opinion on the matter. Basically, it’s not always about 3rd parties paying for the zero rating. Do you feel that IPTV should also have a data charge in addition to content or channel fees?

    An argument could be made that services delivered over private networks, should not be regulated the same as internet services. So for example, a carrier could deliver IPTV independently of internet service and IPTV traffic never goes over the public network (internet). Private networks inherently have advantages beyond cost but speed as well (less network hops, less bottlenecks etc). So should differential pricing apply to both public and private networks? Should all carrier delivered ip services (like VoIP) incur data fees even if the customer doesn’t buy internet service? To me that is a bit of a grey area.

  • mcfilmmakers

    Again, you are incorrect. Unlimited use of Spotify requires more BANDWIDTH than unlimited use of a newspapers website. Unlimited use of one vendor is IDENTICAL to unlimited use of all vendors. Unlimited = unlimited, how many vendors are involved is utterly irrelevant to the equation. Again, if videotron can offer unlimited bandwidth for one vendor there is no excuse for unlimited use of all vendors as the traffic flow is identical regardless of source.

  • Brian

    Right. Because that’s what everyone is going to do when they get unlimited data, right? Just go browse some newspaper sites. If you want to have a meaningful debate then I am interested, but if you are going to just throw up straw-man and otherwise unrealistic scenarios to support your argument then I can move on to others who want to engage in a real debate.

    And no, unlimited for one vendor != unlimited for everything. With only one vendor, the capacity to use an unlimited amount of data is limited to that one vendor and that means limited to the audience that is interested in that one unlimited use case and limited to the amount of data that one vendor will consume. You understand that the bandwidth that a Spotify user will use over a given period of time is significantly less than that of a Netflix user, right?

    Surely you can see how these are different.

  • mcfilmmakers

    The point sir, is that offering an unlimited amount of music data is identical to offering unlimited amount of any data at all. Whether it is limited to one vendor is utterly irrelevant to the bandwidth required to pass data to that one user.

    A user that runs Spotify all day long will use more data than a user that will watch Netflix for a couple of hours, and the use case for video on mobile is pointless. I could never watch hours of video on a small screen, which is why I’m comparing to TEXT sites, which is about 99% of all data traffic.

  • mcfilmmakers

    FYI, Facebook is a “newspaper site”. It is text based and serves to deliver information.

  • Brian

    No. Offering unlimited music, from one vendor is NOT the same as offering unlimited everything from every vendor.

    Unlimited music from just Spotify inherently limits the amount of data that can be used because (a) it only appeals to people who are interested in and subscribed to Spotify and (b) for every person that is, the amount of data they can use in a given time frame is limited to the bandwidth of a music stream.

    Contrast that with offering completely unlimited Internet. The amount of available media is much larger. It could be Netflix, or Youtube or Vimeo or any other of dozens of video streaming websites. It could be any other service that streams data. I just choose video since it clearly has much higher bandwidth needs than music and proves the point.

    In any case, if you have dozens of video streaming websites that people can stream from, more people are going to find something that they want to stream than people are going to be interested in Spotify. That alone means that the ISP will be transmitting much more data.

    Throwing up arguments like small screens and TEXT are strawman arguments. Compare apples to apples. Compare the amount of bandwidth that just Spotify users are going to use for an hour to the amount of bandwidth that a few dozen video streaming sites are going to use for an hour and you can clearly see why they are different.

    As for your “small screen” and TEXT argument, clearly you do not realise that the hearings that the CRTC are holding are for all services, including home Internet, not just mobile services don’t you?

  • mcfilmmakers

    The bandwidth is the same. You cannot download faster than the speed of your service. Unlimited = unlimited regardless of type of data or bandwidth. Also, zero rating goes against net neutrality in all of its definitions, there’s no disputing that.

  • Brian

    No. The bandwidth is not the same. Perhaps you don’t know this. Let me see if I can explain…

    When you download a file, you will use as much bandwidth as you and/or the server are downloading it from have available. So if you have a 100Mb/s service and the server only has a 50Mb/s service, you will use 50Mb/s for as long as it takes to get the file.

    When you consume a multimedia stream however, the bandwidth used is only as much as the stream was encoded to use. For an audio stream this could be in the neighbourhood of a low few hundreds of Kb/s. For a video stream however this can be in the neighbourhood of a few Mb/s.

    So what this means is that over the period of an hour, if you listen to Spotify you will consume 144MB at their highest quality. However if you watch an hour of Netflix you will consume 1GB.

    So, you can see, that if an ISP only allows unlimited (i.e. zero rated) Spotify they are limiting the amount of data you can use and not be charged for to 144MB/h.

    However if they went all-out unlimited, people even just using Netflix are going to use up 1GB/h of the ISP’s uplink. And believe me, if they offer all-out unlimited, people’s use won’t be limited to just a single Netflix stream, so that 1GB/h vs. 144MB/h is conservative.

    This is why your original position that zero-rating == unlimited (uncapped) so why not just have unlimited everything is wrong. Ultimately unlimited everything exposes the ISPs to much more risk of overall extreme data use than them allowing only some things unlimited.

    And yes, zero rating directly conflicts net neutrality and I oppose it. I was just trying to show you why your original argument (zero-rating some things == unlimited everything) was not valid.

  • mcfilmmakers

    No, it doesn’t because no one is going to watch a 1 he movie 24 hrs a day on Netflix on the mobile screen while many could stand to listen to music 12 hrs a day and that doesn’t explain away why I can’t browse this website unlimitwdly when the entire domain weighs less than a days worth of Spotify. Most sites used by mobile users fall into this category. You refuse to address this.

    Again, zero rating goes against net neutrality. It gives Spotify an unlimited highway to the competitive disadvantage of every other website out there. You have not addressed this.

    Video sites like Netflix and YouTube are the exceptions to the rule and do not pose a rhreat to bandwidth simply because the screen real estate makes it unlikely for users to commit to any detrimental abuse of the network.

    One could argue that tethering makes the threat real but in a world where networks offering. Cell service also offer traditional internet, I say it is time for the 21st century to kick the. In the ass.

    Cellular data is the same whether it is voice or data. You should not pay twice for using the same airwaves.

    THe internet is the internet. You should not pay twice for internet service regardless of method of access.

  • Brian

    What you might think people might do is entirely not the point. It’s about risk mitigation. The question is what *can* people do. And it’s what people *can* do that providers need to mitigate risk against.

    You must not be one of those households that has the TV on the moment somebody wakes up until everyone goes to sleep, just for “background”. Yes, there are lots of people who do that.

    Lots of people turn the TV on the moment the kids wake up and it stays on until they go to bed. I know people like that.

    Giving people something “unlimited” completely changes attitudes toward waste.

    I did address zero-rating. I said at the end of my last comment that it is wrong and I am against it. I am not addressing zero-rating. I am addressing your position that zero-rating is the equivalent of completely unlimited, but it’s not.

    But why do you keep talking about screen real-estate? I have already told you that the zero-rating hearings that the CRTC are engaged in are not just about mobile. They are about fixed-line (i.e. your home Internet). But that aside, technologies like Chromecast allow one to zoom their “small screen” to the big screen and could very well be done from their phone on mobile, if that is what you want to focus on.

    I’m not going to keep going around in cirlces with you on this.

    Quite simply, offering unlimited for a single app/website/use is not at all in the same risk category for providers and just providing completely unlimited and that is why they are not equal as you refuse to see.

  • mcfilmmakers

    Again, you refuse to address net neutrality. Zero rating only occurs in mobile. Traditional internet has unlimited service options so to argue this on your part is foolish – unlimited exists. The only place your position holds is in the mobile space. Again, on mobiles, no one is using Netflix for any significant amount of time. I exclusively use Netflix and YouTube as my TV source and cannot stand to use my phone screen to watch anything.

    So my position still holds while you continue to make circles without addressing any of my points.