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Shaw Places Spotlight on Net Neutrality Rules With Online Video Service Plans

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Friday July 15, 2011
Two of the leading issues before the CRTC - over-the-top video and usage based billing - have come together as Shaw has announced plans to launch a new online movie service designed to compete with Netflix. Subscribers to the service, which will cost $12 per month, will be able to watch on their TV and computer. Most notably, Shaw says that the service will not count against subscriber data caps. Given the problems users of over-the-top video services have encountered with the caps, the Shaw approach places the spotlight on the CRTC net neutrality guidelines and undue preference rules. [Update: Shaw now says that watching movies via the Internet will count against user caps]

Last week I
examined the failure to effectively enforce the guidelines, however, this case raises the question of whether Shaw is violating the rules by offering an over-the-top video service that does not count against a user cap while traffic from competitors such as Netflix does. The obvious complaint will be that Shaw is giving itself an undue preference in violation of Section 27(2) of the Telecommunications Act:

No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.

Interestingly, the Internet traffic management practices (ITMPs) are generally focused on technical ITMPs such as throttling, however, this would involve an economic ITMP (data caps or linking rates to end user consumption). While the CRTC has said that economic ITMPs "would generally not be considered unjustly discriminatory", treating equivalent services differently for the purposes of an economic ITMP should surely qualify as unjust discrimination.

Indeed, a comparable service from Rogers - Rogers On Demand Online - makes it clear that data usage from that service counts against user caps.  Similarly, the conditions placed on the Comcast - NBCU merger earlier this year in the United States were specifically designed protect online video services from this form of discrimination (sadly the issue barely caused a ripple in the Shaw-Canwest and Bell-CTV merger hearings). At a minimum, assuming the service is as described in the article, it would seem that a CRTC complaint is a certainty and the pressure will be on the Commission to demonstrate that the law against undue preference in Canada has some teeth.
Comments (18)add comment

... said:

And so it begins....
Enter the age of preferential internet packages :( "30 GB monthly cap, pay 10$ more for facebook, gmail and youtube exemptions!!!"

CRTC GET OFF YOUR BUTT AND DO SOMETHING.
July 15, 2011

Shawn Drape said:

...
Isn't this the same thing that Bell has been doing for over a year now with its FiBE TV offering? http://fibetv.bell.ca/en/features/overview/

Why is there no outcry over that? Does there need to be an explicit competitor in the space before it violates these rules?
July 15, 2011

Timothy Friesen said:

Cell phone Internet comes into the home
As another comment pointed out... We are now seeing the way cell phone users get Internet access (unlimited access to social media, but nothing else, no web, no e-mail, etc...) coming home. I was really hoping this wouldn't happen.
July 15, 2011

... said:

@Shawn
Not sure on the technology FibeTV is using...

I mean, phone service is also offered over the same lines, but talking on the phone won't interfere with your internet bandwidth... can the same be said of FibeTV? Granted the internet connection could be expanded to include all the bandwidth the line provides, but that is unfortunately up to the owner of the line - Bell (at least, so long as it remains in their hands. This is a good reason for taking control of the lines from them, it should technically be up to us how the bandwidth of the line is used.)
July 15, 2011

Un-Trusted Computing said:

@...
Fibe TV travels on the same network (Bell's FTTN network)it's simply segregated on a separate VLAN. So the separation is a function of network administration of one network rather than the construction of a separate network for the transportation the IPTV signal.

Hopefully that clears things up a bit...
July 15, 2011

P said:

Isn't this anti-competitive behaviour on Shaw's part?
Wouldn't this be seen as anti-competitive, or at the vary least damaging in a good-neighbor context? (as you can tell, I'm no lawyer)
July 15, 2011

AndyJ said:

This is nothing new!
This "service" that Shaw is offering is nothing new - it's just part of their On Demand library that you can watch on your PC as well as your SetTopBox. I've ordered on demand movies from shaw several months ago - using my pc to direct and view the movie.
This is non-news and an old service rebranded by Shaw... nothing more. The thing is, they're only offering this service to Shaw customers - so the CRTC really can't say anything about it. If Shaw were to actually package this up to compete on the PUBLIC internet instead of their own walled garden... maybe then the CRTC would (and should) say more about it if they negated bandwidth charges to THAT site.
As it stands, I don't think Shaw is streaching out any further than Telus' Optik or Bell's FiBE, or even Shaw's own VoIP services.
Also, look at the price points. $12/month for shaw's offer or $8 for Netflix. Sounds like Shaw has a pricing disadvantage right there. Paying for in-network bandwidth maybe?
July 15, 2011

Crockett said:

Pull my finger ...
Amazing, apart from the audacity (or stupidity?) of the timing, this just stinks.

Up until this point my displeasure was aimed mostly at Bell, recently Shaw even made overtones of caring about consumer internet issues and I gave them kudos for it.

Now, I am recommending anyone who can switch off from Shaw to an independent to not spare the horses and switch as soon as humanly possible, letting Shaw know exactly why.

This is a slippery slope, no crevice, that the CRTC (or government) should meet forcefully. If Shaw had brought this service to compete with Netflix on an even playing field I would be singing their praises, now I want to see them fail for their hubris.
July 15, 2011

Spike said:

Fib
Fibe TV still travels over the SAME INTERNAL NETWORK that Bell is claiming to be "congested", figure that one out. The whole UBB mess is about wanting more money for transit over that INTERNAL NETWORK.
July 15, 2011

Socrates said:

@AndyJ
You make a valid point regarding the re-branding of Shaw VOD, however, as Michael Geist highlights, explicitly exempting the data used by this service from customer monthly caps (don't forget, you only need their wireless modem, not an HD box), provides preferential handling of "their" data. This is the crux of the issue and something that is in direct opposition to Net Neutrality AND the interests of Canadian users.
July 15, 2011

Tony said:

Shaw has recanted...
Well, looks like Shaw is saying the downloads now count towards your downloads limits (as of Friday). Still, the issue is bad for net neutrality!
July 15, 2011

Crockett said:

That was quick!
http://arstechnica.com/tech-po...ervice.ars

Seems Shaw has realized their blunder and pulled a Hail Mary! out of their hat.

Now it seem that the service deployed directly over their QAM cable infrastructure is still exempt (and if its not going over the internet backbone then I have no problem with that). If its accessed via an IP route to your computer or mobile then it is NOW COUNTING towards your monthly cap.

Werther that was the original intention or not we may never know, but still a bad PR move on their part, especially during the hearings 0_o
July 15, 2011

klm yiulky said:

...
Shaw just wants more Exec pay. That's all they care about. The cable cos are doing record profits it was also announced today.
July 15, 2011

Doug Webb said:

Shaw keeps trying
Shaw keeps offering me faster speed and data caps for only $10/month more than my unlimited service. They have yet to offer any insight into how this would benefit me. With faster service I would use up my data allotment on one HD movie. They have created a situation where everyone loses. I won't buy their faster service because of the data caps, I won't buy entertainment because it takes too long to download and I am not getting the connection service I deserve. lose lose lose.
July 16, 2011

Trademark Application said:

Similar Story
The debate continued Wednesday at the CRTC on how Internet service providers should pay the owners of those networks for their Internet usage.
Companies such as Bell, TELUS and Shaw are required to rent some of their network capacity to ISPs who then sell it to consumers.
July 17, 2011

maebnoom said:

the owners of those networks
Wasn't a fair chunk of "the network" subsidized by taxpayer's money in order to be built in the first place?

At any rate, at least Shaw fixed the wording on that. One has to wonder if they were just testing the waters or if they are really that stupid... We all know damned well that they (& the other "big guys") would do it, if they could get away with it.
July 17, 2011

Crockett said:

...
The network was not directly subsidized by the taxpayers as it is a private corporation but it was built, or at least expanded, by the the fees paid by the subscribers. So in a sense the subscribers should be enjoying the fruits of that contribution rather than being overcharged 1000%+ on UBB profit grabs.
July 17, 2011

Mark said:

...
Don't the telephone companies discriminate against me, who is located in Vancouver, for calling somebody in Edmonton, compared to somebody else in Edmonton calling the same person?

I personally think that Shaw not counting the movies that they provide against their customer's bandwidth caps while still counting movies that are downloaded from elsewhere is roughly equivalent to the notion that telephone companies utilize of having unlimited local calling, while still imposing a per minute fee on long distance calls.

Besides, Shaw really has no practical way to tell what actual content is being downloaded if it isn't actually coming from them... it might be content that a person paid another subscriber for, or it could be something totally different... but as far as the ISP is concerned, it's all just 0's and 1's that it's passing along. In general, the most they might know for data being access through them is a) what IP the data appears to be coming from (which could be entirely misleading if the data is being accessed through a proxy); and b) the port number that is being utilized for access (which tells the ISP about as much about what is being downloaded as you could infer about the content of an essay by knowing nothing more than what font the essay was written in).

If the ISP is not merely the intermediary, but the actual provider of the content being downloaded, they are in a position to know _exactly_ what the customer is downloading because they are the ones actually sending it to them. In any other case, they are merely passing it along, and not actually providing it. Charging more for the same service that they pass along to the customer than what they charge for the same service when they provide it isn't discrimination - it's competition.

Oh... and before anybody asks - I don't work for Shaw, nor do I have any vested interest in their ability to profit from this beyond the desire to live in a country where healthy competition ensures that a consumer always has sufficient choices among quality services.
July 20, 2011

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