Net Neutrality – the good, the bad and the neutral

CBS has begun competing with streaming titans Netflix by offering its own online subscription service, giving an unexpected benefit to net neutrality supporters. The new streaming service will offer customers access to thousands of hours of current and past CBS television shows at $9.99 a month. CBS Chief Executive Leslie Moonves believes that it is essential that CBS moves on with the times, stating:

“It is an important part of our future. Our job is to do the best content we can and let people enjoy it in whatever way they want. The world is heading in that direction.”

HBO and other channels follow suit.  

HBO has also followed suit in this and introduced their own online subscription service, whilst other channels are expected to introduce their own streaming services as well,  due to the fact that viewing habits have changed, following the success and subsequent cultural paradigm of Netflix. This may well result in a swell of support for net neutrality from cable channels. With the high demand for the premium shows and content that these channels produce, ISPs will now be in a weaker position in terms of what they have to offer to their subscribers. Everyone likes to watch TV shows, and services like Netflix have made it preferable to stream content rather than wait for a single episode to air on TV.

ISPs may increase prices

Net neutrality is the principle that internet service providers shouldn’t restrict access to any internet services or offer preferential treatment to others. This may sound like a win for the consumer, but something  has to give somewhere, as these things go. The knock-on effect this will have is price hikes from telecoms and internet service providers. TV and internet services are often provided by the same companies, some of which may use this as an excuse to introduce usage caps and higher access fees.

Is Netflix too big to care about net neutrality?

Former net neutrality supporters, Netflix appear to be unfathomed by the prospect of the Trump administration overturning the rules which prevent ISPs from changing which internet services get the most traffic. While Netflix Chief Executive Reed Hastings says that they still support net neutrality, he also asserts that this isn’t a primary concern and that net neutrality is “…not narrowly important to us because we’re big enough to get the deals we want”.

Too big to worry about Net Neutrality

It appears as though Netflix has safely filed net neutrality in the ‘this is not our business’ pile, a contrast to their previous stance, opposing big network providers such as Comcast, Verizon and AT&T and their plans to charge them and other streaming services more for their users to enjoy fast streaming speeds. Nothing ruins a film or TV show like slow buffering and poor quality.

Does Netflix actually oppose net neutrality?

It seems like a pretty drastic turnaround for Netflix, but their current platform of ambivalence may mean they truly believe they are too big to fail, and their shareholders may pressure them into supporting ISPs stance on this issue. They started way before net neutrality was even a ‘thing’ and didn’t get any special rules made to benefit them, but also, they had virtually no competition during their inception and rise to success. Now that they do, they might not even want to support something which benefits their competitors.

CRTC strikes is a blow for internet consumers with differential pricing reviews

Following a review by the CRTC (aka the Canadian Radio-television and Telecommunications Commission,) differential pricing, or zero rating is now banned in Canada.  Zero rating is when a telecoms provider doesn’t count traffic from particular apps or websites towards a user’s monthly usage, thereby offering certain platforms preferential treatment.  This sounds like good news for the consumer as data caps may be increased, but this decision may also lead to a price increase.

Communications student and Bell customer Ben Klass took on the tech giants of Canada and emerged victorious; Canada now has a ‘net neutrality code’ put forward by the CRTC which is intended to regulate internet and wireless providers and make them treat all content the same, not offering advantages to certain sites or apps with zero ratings.  Jean-Pierre Blais, the former chairman of the CRTC, was vocal in his support for net neutrality, stating

“A free and open Internet gives everyone a fair chance to innovate and for a vast array of content to be discovered by consumers. A free and open Internet also allows citizens to be informed and engage on issues of public concern without undue or inappropriate interference by those who operate those networks.”

Could net neutrality cause price hikes with internet and wireless providers?

Internet data usage caps are still alive and well, although the size of the caps is expected to increase over time as demand increases, competitors arise, and people use a wider variety of streaming services.  However, this trend is not expected to be followed by the big three wireless providers in Canada – Bell, Rogers, and Telus. Historically, new regulations have resulted in a price increase for wireless services and this looks to be no different.

Rogers supports net neutrality in an unexpected turnaround

It seems that net neutrality has an unlikely advocate in the form of Canadian telecoms giant Rogers. The company has come out in support of a complaint filed against Videotron by the Public Interest Advocacy Centre regarding Videotron’s ‘unlimited music’ package, which allows subscribers to use certain music streaming apps without the data usage counting towards their monthly allowance. This has been criticized as clear favoritism towards certain streaming services by the providers who more often than not, own these apps or own shares in them.

Rogers supports claims against Videotron

Rogers has filed a submission to the CRTC supporting the complaint against Videotron and its Unlimited Music service, suggesting that it is “fundamentally at odds” with the concept of an open and free marketplace for all audio streaming services. Rogers goes on to suggest that

“Videotron is, in effect, picking winners and losers by adopting a business model that would require an online audio service provider (including Canadian radio stations that stream content online) to accept Videotron’s contractual requirements in order to receive the benefit of having its content zero-rated.”

Rogers used to throttle data

In a surprising move from Rogers, who were accused for data throttling (intentional slowing down or speeding up of internet speed) in 2008, especially for file sharing. Rogers were until recently offering customers their own version of ’Unlimited Music’ in the form of zero ratings for video content on their wireless services! They only ceased in 2014 after complaints were made by consumers and advocates to the CRTC.

Rogers have a personal stake in music streaming services

It’s certainly no secret that Rogers own many radio stations all across Canada, and this may be the reason why they have a vested interest in an open market for music streaming apps.  Currently, only a handful of approved music apps benefit from Videotron’s ‘Unlimited Music’ package and none of these are the property of Rogers – only Rdio, Stingray, Spotify, Google Play, 8Tracks, Groove, Songza, and Deezer are part of Videotron’s zero rating deal. While they may have learned their lessons from past mistakes, Rogers continues to promote their own music streaming service Shomi to their customers, and also have a special deal with the popular streaming service Spotify.

Google and Rogers swap positions on net neutrality

It is interesting and perhaps ironic to see that Rogers and Google have effectively traded their opposing positions on net neutrality.  While Rogers was busy throttling file-sharing services back in the 2000s, they have definitely changed their tune as of late. The tech and communications behemoth Google have always been vocal in their support for net neutrality, although lately, they have been rather silent on the issue.  Google even assisted Verizon in their fight for exempting wireless services from net neutrality rules in the States, at least partly due to its interest in supporting the then-fledgling operating system Android. It appears as though they have even lobbied against net neutrality in India – perhaps to test the waters of zero rating in this rapidly growing telecom market?  Who knows.

Google could be supporting zero rating

Does this mean that  Google is going to start supporting zero rating and preferential treatment for certain internet services? This seems to fly in the face of their seemingly benevolent image.  While they haven’t said a word publicly against net neutrality, they offered up Google Play to be part of Videotron’s Unlimited Music package, suggesting that they are not opposed to zero ratings when it suits them.  Google continues to reap the benefits of appearing to be against ISPs giving special treatment to certain streaming apps.