There is much to like about last week’s CRTC’s differential pricing decision (also referred to as zero rating) with recent posts from Dwayne Winseck, Timothy Denton, and Peter Nowak providing some helpful analysis. My initial post focused on the CRTC’s key findings and the new framework that will govern differential pricing plans. In addition to those rules, however, there are several additional findings that will have significant implications.
One notable aspect of the decision is that the CRTC has effectively killed proposals to create Internet-style Cancon regulations. While there may still be efforts to impose requirements on companies such as Netflix, the ruling ends the possibility of granting preferential treatment to Canadian content in the provision of Internet services. Columnists such as Kate Taylor have speculated about new regulations and the Canadian Media Producers Association promoted the proposal in its submission to the CRTC:
the Commission should be open to considering ways in which differential pricing practices related to Internet data plans could be used to promote the discoverability of and consumer access to Canadian programming. There are different ways this might be accomplished. For example, the Commission could allow service providers to eliminate data usage charges for accessing trailers and other promotional materials specific to Canadian programs. This would assist the discoverability of Canadian programs. A broader and deeper approach would be to eliminate usage charges for accessing any qualified Canadian programs. Such an approach would not only promote discoverability but actual viewership.
In closing, the CMPA submits that high speed broadband presents a wealth of opportunities for Canadian audiences to access high quality informative and entertaining programming made by Canadians on the platform(s) of their choice. For this reason, we submit that the Commission should permit – or, if necessary, mandate – retail Internet access services to adopt practices, including differential pricing practices, which will serve to promote and improve these opportunities.
The possibility of mandating zero rating for Canadian content is directly addressed by the CRTC, which puts an end to the possibility. Its analysis acknowledges that differential pricing could be used to support Canadian content, but that the implementation of such a plan raises problems:
The creation, support, and discoverability of programming made by Canadians underscore many of the policy objectives set out in subsection 3(1) of the Broadcasting Act. Those objectives could be supported by differential pricing practices that would make that content available on Internet platforms in an easy and inexpensive way. However, the conception and implementation of such practices would be problematic for the same reasons that differential pricing practices based on content categories would pose a problem. For instance, while longstanding Canadian content recognition procedures are in place, the reliable identification by ISPs of this content, as well as the regulation and enforcement of the differential pricing practice, would be difficult.
When the parties who suggested such use of differential pricing practices were asked how they would implement their suggestion, they did not provide details at a practical or technical level. The record does not provide any basis to demonstrate that differential pricing practices could be fully and reliably implemented in such a way as to ensure that all programming made by and transmitted to Canadians in the online space would be properly captured.
In light of this analysis, the CRTC’s concludes:
Given all the drawbacks and limitations of using differential pricing practices as a way to support and promote Canadian programming, the Commission considers that any benefits to the Canadian broadcasting system would generally not be sufficient to justify the preference, discrimination, and/or disadvantage created by such practices.
The decision effectively means that efforts to establish regulations or policies designed to grant preferences to Canadian content on basic Internet services are likely to violate the differential pricing rules. As Canadian Heritage Minister Melanie Joly develops policy plans coming out of the Cancon in the digital age consultation, there is at least one tool that should come out of the toolkit.