Videotron Tests Neutrality In Canada: Biggest Music Apps Now Cap Exempt

from the bad-ideas-dressed-up-as-good-ideas dept

Canadian cable and wireless operator Videotron is hoping to see just how far Canada's net neutrality rules will stretch. The company last week was the latest to experiment with a new zero rated usage plan that exempts the biggest music services from the company's usage caps. Dubbed "Unlimited Music," Videotron's new effort will initially exempt services like Stingray, Rdio, Google Play, Deezer and Spotify from usage limits. Depending on popularity, additional services will be placed on the company's usage-allotment whitelist in the coming months. According to Videotron, this is about "getting ahead" of consumers' needs:

"We want to get ahead of our customers’ needs once again by bringing them a unique, innovative service: Unlimited Music will help make the connection between fans of music from Québec and around the world, and the major music streaming players."

On the surface most users initially like the idea of cap-exempt content. Indeed, carriers have tried to frame such a concept as "1-800" or "free shipping" for data, where the content company bears the brunt of the cost of delivering the content to the end user. Consumers pay less for data and select companies gain a marketing advantage. It's a huge win for everybody involved, right?

Well, no. Remember that usage caps imposed by carriers are utterly arbitrary and are barely bound to any real-world economics or engineering. These are artificial limitations carriers then charge consumers and companies to navigate. By letting the biggest companies be exempt from these arbitrary limitations (sometimes for pay, sometimes not), you've immediately put small businesses, independents, and non-profits at a massive disadvantage. This has been a huge issue overseas where Facebook and Google have faced fierce opposition to their dreams of turning the Internet into a zero rated, selectively curated, walled-garden advertising kingdom.

Back in the States, VC Fred Wilson put it this way a few years back:

"The pernicious thing about zero rating is that it is marketed as a consumer friendly offering by the mobile carrier – “we are not charging you for data when you are on Spotify." But what all of this zero rating activity is setting up is a mobile internet that looks a lot more like cable TV than our wide open Internet. Soon a startup will have to negotiate a zero rating plan before launching because mobile app customers will be trained to only use apps that are zero rated on their network."

For some reason, many people can't see the threat posed by zero rating. Stop by any Reddit thread on the subject, and you'll usually find most users utterly clueless to the potential pitfalls of letting carriers inject themselves as middle men in this fashion (free Spotify, bro!). Even T-Mobile, currently the US wireless industry consumer darling (whose "Music Freedom" idea Videotron is copying), doesn't understand the pitfalls of zero rating. Regulators too have gone out of their way to avoid seriously addressing zero rating, meaning that companies can dance over and under net neutrality rules, just as long as they're clever about marketing the violations as a boon to consumers.

In Canada, zero rating is supposed to be a subject the CRTC examines on a case-by-case basis. But when the CRTC can be bothered to enforce neutrality, they've only taken action against the most obvious offenses (like phone companies exempting their own video services from their caps, but not competing companies' traffic). Though they'll fumble in admitting as much, North American regulators see caps and zero rating as "creative" pricing experimentation.

With regulators napping and many consumers cheerfully and obliviously rooting against their own best self interests, it's pretty clear we intend to collectively discover just how stupid and slippery the zero rating slope can be. Perhaps real-world experience will be educational in a way that warnings about zero rating couldn't be. But it's kind of like the boiling frog anecdote; once you're fully aware of the temperature of the water, you've already traveled beyond the point of no return. Once we've accepted the carrier meddling and unlevel playing fields inherent in zero rating, it may be too late to backtrack.

Filed Under: broadband caps, canada, crtc, net neutrality, zero rating
Companies: videotron