Storm Clouds Ahead for Canadian Wireless World

Public frustration over the state of the Canadian wireless industry has generally focused on consumer-oriented concerns including pricey data plans, misleading system access fees, and text message charge policies.  Given the consumer focus, the effect on Canadian business is rarely discussed.  My weekly technology law column (Toronto Star version, homepage version) argues that that is set to change as one of Canada’s leading media companies has stepped forward with explosive allegations about how the wireless industry is engaged in practices that stifle innovation by privileging access or controlling content on their networks.

The claims can be found in a recent submission to the Canadian Radio-television and Telecommunications Commission by Pelmorex Media, the owner of the Weather Network in Canada.  While Pelmorex is not a household name, the Weather Network's websites rank at the top of Canadian media websites for online visitors.


Pelmorex wrote to the CRTC as part of the Commission's ongoing network management proceeding and was one of the few to focus on the management of wireless networks.  Although the submission does not name names, it claims that Canadian wireless carriers routinely impose restrictions on the ability of content providers to deliver advertising as well as restrict or charge more if a customer accesses that advertising.  These restrictions undermine the profitability of mobile websites.  Moreover, Canadian carriers have established "walled gardens" that feature preferred content.  When consumers seek access to alternative content, they typically face higher charges.

The submission points to the following specific incidents that Pelmorex says it has experienced first hand:

  • wireless reseller blocking ads from mobile sites
  • wireless carriers stripping out tracking codes embedded in web pages, thereby limiting ability to deliver ads
  • wireless carriers establishing "walled gardens" that provide preferential access that reduces data charges for sites within the walled garden
  • wireless carriers forcing users to use the wireless carrier homepage when accessing the Internet on feature phones
  • wireless carriers demanding prior approval of applications for use on smart phones
  • wireless carriers imposing additional fees for text messages that include advertisements
  • wireless carriers limiting to whom ads in text messages may be sold

The net effect of these practices dampens the potential for online innovation and has a negative impact on mobile electronic commerce in Canada.  This comes at a particularly bad time, since the mobile Internet has just begun to gain broad consumer acceptance with some Canadian media companies advising the CRTC that traffic to their mobile sites is now nearly equal to visits to their fixed Internet sites.

The global community is starting to take note of Canada's declining standing with regard to wireless networks and information technology.  Last week, the International Telecommunications Union released its latest ICT Development Index that saw Canada drop from 9th worldwide to 19th – the sharpest drop among countries ranked in the top 50 worldwide.  While there are several reasons for the decline, the virtual absence of competitive mobile broadband services in Canada was a key factor.

Canadian government officials have to date expressed little interest in wireless net neutrality, in contrast to the U.S., where the issue has been the subject of regulatory hearings, petitions to the Federal Communications Commission, and worked its way into spectrum policy arena. The CRTC is conducting hearings on net neutrality this summer, though it is not certain whether the Commission will adopt an expansive view of the issue to include both wired and wireless concerns.  If the Pelmorex allegations are accurate, putting wireless concerns on the agenda is likely to lead to some stormy conditions in the months ahead.


  1. There is more to this
    Oh yes. There is a big neutrality problem in wireless.
    -phones locked down to prevent you from using anything other than specific vendors for Email for a fee (no access to google, yahoo, and the likes).

    -Phones locked down to prevent you from using google maps via the web

    -phones locked down to prevent you from using google maps via their app

    -phones locked down so that you can only use the telco proprietary GPS app for a fee.

    -Defective phone being sold that require constant resets that make you lose all stored data. The telco makes you buy their “back-up service for a fee. (If you call in for a problem, the fix is a reset and the rep selling you the back-up premium service) Not allowed to use anything else.

    -Phones locked into specific new and weather websites IN THE STATES!

    -Charging “premium” fee’s for certain SMS

    -Certain websites completely locked out.

    -3rd party apps locked out

    Its a lot more than what Pelmorex stated and it has gone mostly unrecognized.

    (99% of all fee’s above are not one time, but a monthly recurring fee that must be subscribed to!)

  2. Robert Raymond says:

    Further to Wireless Net Neutrality, we should have Wireless Device Neutrality. I’m tired of researching a device online, buying it, and then finding out the Bluetooth stack has been crippled or you can’t load your own ringtones (among the many other scenarios).

  3. There is more to this says:

    Like shooting fish in a barrel
    Mr Geist, “Mobile neutrality” wasn’t really touched on in the “neutrality debate on the CRTC website, aside from Pelmorex.

    There are many mobile users paying through the nose right now and locked out of free services right now by the likes of Bell et al.

    This would make an additional nice addition to add by CIPPIC or PIAC or a Consumers Union, if its not too late.

    Many overlooked this and concentrated only in traditional Internet.

    Is the CRTC hearing on Neutrality as a whole? Should these mobile devices not be included?

    There are many people screaming right now within Bell Canada’s own forum about being locked out while US counter parts have more freedoms.

    So the Telco’s already took it upon themselves right now to do this and profit from it while locking people out and locking them into “premium” vendor specif services” w/o choice and locking alternatives out.

  4. totally agree says:

    We do have a choice
    I refuse to buy a smart phone specifically because of all the reasons stated above. I choose not to give them any of my money for things I really don’t need.

  5. Is adblocking bad?
    It seems to me that the telcos can reasonably claim that blocking tracking cookies and ads is a value added service to their clients, unless they’re serving ads themselves.

    You do not have a fundamental right to show me ads. I do have a right to block your attempts.

  6. New Players
    There are new carriers in the wings. Perhaps the added competition will change the way the big 3 “run” the industry. Some have big backing like Globalive who’s majority owner is a huge company from the Middle East.

  7. It’s up to you, folks!
    I totally agree with “totally agree” above – there is a choice and there is life without superfluous shiny toys.

    But most of you would rather take the child-like route and whine for a faux authority or bought-off government to intervene rather than be grownups and make sacrifices (as if it were a sacrifice – jeez think about how many people go without food every day for gosh sakes – get a grip!)

    Deprive the dinosaurs of enough food (i.e., money) and they will change or die. You just have to go without your toys for a while. Don’t worry – you’ll survive.

    It’s as simple as that.

  8. to Puckem

    Well who is the dinosaur?

    Its not a matter of not buying it. Its a matter of making sure neutral regulations are in place.

    This is the way things are going. This is the way its going to be.

    As is, right now, sites are blocked, certain Email is blocked, certain everything is blocked.

    You will be getting medical reports, medical history, medical analysis, school reports, school grades and everything else text’d to you.

    Want to be nickled and dimed to death? Want your kids and grandkids to be?

    This is the future. This is now. This is what your kids/grand0kids will be living with in a wireless world. Its happening now.

    So get out of your dinosaur suit and open your eyes a bit. Everything right now is a “premium service” with not much consumer protection at all.

    The CRTC better have open eyes as well.

    You can read the privacy commissioners Blog right now to see how educational institutions are implementing this for this year, and so is health canada and the hospitals.

    “superfluous shiny toys” is what it is. Its the future and the future is this year.

    pls review the privacy commissioners blog here:“trust-meit's-bleeding”/

    The telco’s got a tight grip on it, and they won’t let go of their “premium services” that cost you an arm and a leg easy.

    This is the online banking in a couple of years (if you need another example). Get used to it.

    As is, right now, The telco’s are fighting to not even have controls in place for the consumers. Look at the sidebar on the right of this website and the consumer unions CRTC filing.

  9. It’s not about shiny toys, it’s about innovation. And it’s not just about being able to access the cool stuff on your phone, it’s fundamentally also being able to BUILD cool stuff for phones.

    As a programmer and web developer, I’m hugely frustrated by the fact I can’t even test my own creations on my devices, because they’re so locked down.

    The internet on my phone (from Telus) is such a locked-in, walled piece of garbage that I don’t even bother with it.

    I fail to see why my ability to put applications on my phone should be in any way more limited by what I am able to put on my computer. I paid for the phone and I get gouged on a monthly basis for the service. That ought to give me the right to use my device as I see fit.

  10. The Real Shame Of It…
    …is that Canada has an opportunity to become one of the global leaders in mobile technology. Following up on the well-written responses from ‘My Name’ and ‘Ade,’ consider the following:

    - RIM is the #1 smartphone producer in the world.
    - Canada has some of the top schools for computer science and engineering, and many of them are a stone’s throw from Kitchener-Waterloo (home of RIM).
    - Canadians are naturally creative, innovative and media-savvy.
    - Canadians are multiculturalists, with a better sense for global software needs than virtually anywhere else on the planet.
    - The barriers to entry for mobile development and deployment are (in neutral circumstances) incredibly low — virtually ANYONE can develop apps and peripherals.
    - The one thing holding back this explosive ‘virtual cottage industry’ is the high cost of data and the locked-up feature sets of our handsets.

    My point in all of this is that this goes far beyond a consumer rights fight, although there is tremendous validity to that argument… There are key economic development concerns for Canada that are being crippled – at the expense of our own futures, and ensuring that only a few pockets get lined.

    So forget the ‘whiny’ early adopters… there is much more at stake.

  11. All in the name of greed
    Per this article:
    “Canada’s leading media companies has stepped forward with explosive allegations about how the wireless industry is engaged in practices that stifle innovation by privileging access or controlling content on their networks.”

    Now I know Prof. Geist is leaning more on the industry side here, but these revelations came out a while ago due to the consumers with blocked access.

    Pelmorex is bang on the money.

    What “Adam” and “Ade” said are also true.

    Look at one simple story here from a little bit ago:

    This story touches on it. People were duped into buying the Samsung instinct, the “Apple eater smartphone” as it was advertised.

    People lined up and bought this the day it went on sale in Au8, 2008.

    After all the media hype about how this is the “Apple eater” and all the stuff you can do with it, the truth then came out.

    Blocked Gmail
    Blocked Yahoo mail
    Blocked hushmail
    All mail blocked, except for Bell-MSN (which you have to pay extra to have the privilage of using.

    Blocked google maps (app version)
    Block google maps (online version)
    All blocked, you have to buy Bell’s GPS premium package.

    Blocked websites
    Blocked access to apps (Bell has a palm reader app you can buy at a premium. Anyone want their palm read?)
    Blocked weather sites
    Blocked Canadian news sites (get this, you click on the news thing and it only brings you to American news sites)
    Blocked IM
    Blocked PocketExpress

    The list goes on.

    This has been going one since last year.

    All these people wern’t sold an “apple eater”. They were sold a “wallet eater”.

    Also check Bell’s own forum about this here: Look in the “general catagory” and look at the customers yelling.

    Bell is now playing dumb in their forum pretending they don’t know and are not aware.

    Its Bell’s firmware!
    From what I read, Telus is the same thing.

    However, the American Samsung Intinct users don’t have these problems. Nothing is blocked out for them.

    Only in Canada eh, pity.

    Now Canadian content providers (the business side)? Pelmorex is right, but this has been going on a while. A long while.

    The whole CRTC event on New Canadian Media is a farce. No one can access it and the ones who create it are blocked.

    Anyone see a problem here?
    Anyone see the customer being used as a cashcow?
    Anyone see corproate greed at its best?
    Anyone see how Canadian content is being blocked?

    Think these users can create a free Canadian Email with a free Canadian Email hosting service? Think again.

    New Media per Bell and Telus terms.

    Good luck to anyone creating media, apps, services for the Canadian people. Bell and Telus block you out.

    Read that P2Pnet article and Bell’s forum.

    Eye opener.

    Who is going to fight for the consumer and the Canadian start-ups?

    Or is it more appropriate to say, who is going to pay off Bell and Telus to allow your small Canadian start-up, or your 15-year old kid from creating content/apps he can share?

    My eyes are open.

    I’m sure others can chime in with more than this as well.

  12. Jean Hébert says:

    open the mobile web
    I second Robert Raymond’s comments on wireless device neutrality. Why should a carrier be permitted to dictate what equipment is used to access their networks – which, if I remember correctly, operate on radio spectrum which we all own and license to them in the first place?

  13. The thing that makes me wonder.Is it not a CRTC ruling that there has to be a certain amount of Canadian content in media brodcasts in Canada??
    Phones locked into specific new and weather websites IN THE STATES!
    Blocked Canadian news sites (get this, you click on the news thing and it only brings you to American news sites)

  14. very concerned says:

    This issue is about allowing a monopoly or oligopoly to use the advancements in technology to make themselves more and more profit or supply a service. I argue the service should be generic or let more competition in the space.

    The “walled garden” is a pilot project to push the limits of the laws and try the same with all internet access.

    Why are Canadian ISPs and telecoms at war with the customer?