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No Such Thing as Free Data

On October 31st, the CRTC held a hearing which examined “differential pricing practices” related to Internet data plans. ‘Zero Rating’, as it’s known, was one of the major topics of the hearing, and one that PIAC has been fighting against for some time, as can be seen in our past newsletters. The idea of zero rating is to give customers something ‘free’; in a recent case with Vidéotron, it was unlimited music streaming. You are allowed to stream music from certain providers without that data being counted against your data cap.

This ‘free stuff’ offer introduces a host of questions and problems, all of which lead to the conclusion that, at least in our opinion, there’s nothing ‘free’ about it.

The foundation of zero rating relies on your internet service provider making deals with certain companies to allow their data to stream over the network to its customers for free. If you’re a new or smaller content creator trying to break into the market in Canada with a music streaming service, you could face countless barriers which would ensure your work would never stand a chance. Your app or audience could be considered ‘too small’, your lack of notoriety as a new entrant could cause you to be overlooked, or an Internet Service Provider (ISP) could just find it not to be a good fit. If for whatever reason you can’t get in with an ISP, then you won’t get zero rated.

“Zero rating isn’t free,” John Lawford, Executive Director of PIAC stated. “It relies on unjust discrimination against other types of internet traffic and against other audio or video services that are not desirable partners of the ISP who zero rates. That costs everyone in terms of innovation, competition and most importantly, allows the ISPs to maintain data caps.”

Differential pricing creates an enormous burden for creators to create unless they are able to get zero rated by an ISP. If the providers are happy with their stable of content and the companies they’ve made deals with are happy, why let anyone else into the club when everyone’s making money? These are the results of zero rating and they mean that consumers lose out on new services, new perspectives and unmetered access to the whole of the internet.

Zero Rating also brings up a larger question about the internet in general: Why do we have data caps? Providers set caps for monthly data for consumers for a majority of plans, meaning customers have to worry about overage fees if they exceed their monthly cap. If ISPs can allow audio/video from providers who make deals with them to avoid a cap, it seems to point to these caps being an artificial problem for which they’ve provided a solution. Is the data scarce and so in need of a cap to keep customers within a reasonable ‘budget’ of data, or do these unlimited streaming plans unintentionally show that data is maybe not as ‘scarce’ as providers advertise? Consumers and net neutrality advocates would much prefer to experience new media and content without being herded in the direction of companies that make deals with application providers.

The CRTC sought the opinion of the /r/Canada forum on Reddit as part of the consultation process. The forum overwhelmingly agreed that zero rating was terrible for consumers, and that it allowed unjust discrimination against certain data. Consumers are more tech savvy than ever and they know when they’re getting a bad deal.

During the hearing, the commissioners were very probing of the ISPs who supported this practice. PIAC is hopeful that the depth that they went into with ISPs made it clear that the practice of zero rating gives no true benefit to consumers or innovators alike. PIAC wants to see a free and open internet with no deals between ISPs and content providers, and ideally, have the CRTC look at data caps and their validity. Final arguments were filed on November 23rd. PIAC is looking forward to a timely and well-reasoned decision, which takes into consideration the will and needs of consumers as well as possible technology upstarts in Canada.

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