In response to Bissonnette: Shaw's movie service is still problematic, and Bell's isn't better

The net neutrality violation that never was

OpenMedia.ca put out a press release this morning in response to comments Shaw president Peter Bissonnette provided to the Calgary Herald last night. The cable giant's head announced a new online movie service, which, he initially stated, would not count against Shaw customers' data caps.

After a barrage of unfavourable press (David Eaves, Financial Post, Vancouver Sun, Gigacom, CBC, Michael Geist), Shaw changed its tune and took steps to clarify a couple of things. Shaw_Nick stepped forward first, commenting on Eaves' blog:

We are absolutely committed to Net Neutrality. The new Movie Club service is delivered in two ways. The first way is using our QAM infrastructure to narrow cast the shows to your set-top box. This does not go over the internet infrastructure, so will not count against your usage. The second way is an online streaming method from vod.shaw.ca. This does use our internet infrastructure and will count towards your usage.

Kim Guttormson, the reporter who broke the Shaw video story last night, has made it clear that she did not misrepresent Bissonnette's original comments. She writes:

Thursday, Peter Bissonnette, Shaw Communications’ president, said viewing "on your box or online, this will not have any impact on your capacity or usage."

Shaw's president also wrote to OpenMedia.ca to ensure that we were clear about their adjusted announcement. We decided to use the exchange as an opportunity to discuss some further qualms we had with the way Shaw will deliver its service, namely their tied-pricing model, and their preferential treatment of television over the Internet. A selection of Steve Anderson's reply reads:

Are you still tying some of your plans in with other services? I don't have a problem with bundles, but I don't like forced bundles. All services should be available as stand alone without extra changes. If someone wants unlimited Internet, can they get that without having to subscribe to TV or pay an extra punitive fee? Can people cut their cable service and just rely on the Internet without being punished for it somehow? Looks like it is $134.90 for unlimited as a standalone but $114 or $119 as part of a bundle of services. That means if someone wants to cancel their TV service and rely on the internet for content they will need to pay $16 or more extra for Internet service.

...If it costs you money to deliver online video through the Internet and you must impose a limit/fee, then some sort of similar cost must also exist when you deliver via your TV network. So allowing your TV to be a completely flat rate service, while imposing limits/fees on Internet use, seems to be the result of a conflict of interest. If you were impartial, I would think it would be pricing parity for use. If those two divisions were delivered by separate autonomous companies in a competitive market, I would expect that both would be available at a flat rate, or would otherwise be available at a similar price point.

The concern that many Canadians have is that there is inherently a conflict of interest in a situation where a company owns content (global), a TV service (Shaw Cable), and Internet service, since there is an incentive for the former two to be prioritized over the latter. In this situation, you can more effectively control your TV service and thus one would assume you could more effectively monetize the outputs. In contrast, a lot of the Internet is outside the control of Shaw, and either non-commercial (Wikipedia), or monetized by others (Netflix, Google, Apple, etc.). Therefore, there appears to be a commercial incentive for Shaw and other vertically integrated telecom companies to overprice Internet use. In addition, if you consider your practice of slowing P2P services (throttling) but not throttling TV services, you can see that there appears to be a systematic discrimination against the Internet.

OpenMedia.ca will let Canadians know if/when Bissonnette responds.

Bell gives undue preference to their own channels

Shaw isn't the only big telecom company with an anti-Internet attitude though. Bell also plans to charge mobile customers differently for Bell Media than for competing services. Their proposal is to allow streaming of their own channels to be billed 'per hour', while billing for all other content uses 'per MB' (bandwidth-based) rates.

Bell Media, better known as CTV, is the result of an acquisition that took place in March. OpenMedia.ca responded to the giants' merger in a press release, foreshadowing the issues that have come about today:

Further, OpenMedia.ca believes this will create more incentive for Bell to discriminate against online content and services.

"The CRTC is playing dice with Canadians' communications by allowing these large takeovers," said Steve Anderson, OpenMedia.ca's Executive Director. "Canada's media system is already one of the most highly concentrated in the Western world. Rubber-stamping the Bell-CTV deal makes it clear that the CRTC has not heard the nearly half-a-million Canadians who are speaking out, via the Stop The Meter petition, against big phone and cable companies' control of our media."

Shaw's and Bell's discrimination against competing content, along with many other schemes by big telecom companies to prioritize their services over those found on the open Internet, are a threat to innovation, choice, and free expression.

One of OpenMedia.ca's underlying principles is the idea that "diverse Canadian ownership models, including independent, non-profit, campus, community and public media, help to ensure more diverse content and voices." Clearly this diversity is under siege.