Three years ago, when the CRTC ruled against Bell with respect to exclusive mobile access to NHL/NFL programming, then Chair Konrad von Finckenstein said:

Canadians shouldn’t be forced to subscribe to a wireless service from a specific company to access their favourite content. Healthy and fair competition between service providers will promote greater choice for Canadians.

As I wrote at the time, I disagreed with the decision – and I continue to think that the CRTC got it wrong.

I disagree with the concept that all carriers offering the same content promotes “greater choice for Canadians.” Exclusives create increased opportunities for differentiation, with not all carriers carrying the same content. If one carrier has such compelling content that it causes customers to switch service providers, then the other service providers will have to step up their game and find other ways to win those customers back.

We aren’t talking about essential services like access to emergency calling. It is an entertainment service.

Let’s fast-forward to today. Following a $5.2B investment in rights to NHL broadcasting, Rogers has launched a number of multi-platform delivery services, enabling a number of options for Canadian consumers to access more hockey games than ever before.

The games themselves are available to all Canadians, whether or not they subscribe to Rogers access services – cable, internet or mobile. Some capabilities, such as the GameCentre app, are available for a fee to all Canadians, although Rogers customers have free access until the end of the year; other capabilities, such as GamePlus (additional camera angles, statistics, analysis, etc), are exclusively available to Rogers customers.

Bell says that exclusive access to GamePlus constitutes a violation of sections 3 and 5 of the CRTC’s New Media Exemption Order.

3. The undertaking does not give an undue preference to any person, including itself, or subject any person to an undue disadvantage. In any proceeding before the Commission, the burden of establishing that any preference or disadvantage is not undue is on the party that gives the preference or subjects the person to the disadvantage.

5. Subject to paragraph 6, the undertaking does not offer television programming on an exclusive or otherwise preferential basis in a manner that is dependent on the subscription to a specific mobile or retail Internet access service.

Interestingly, in Bell’s application, it left out the first part of Section 5 in its quotation – that little bit about the exclusivity prohibition being “subject to paragraph 6”. We will see how relevant that exemption becomes.

Among the questions to be explored will be whether GamePlus is television programming. What is “television programming”? The Exemption Order defines it as “programming designed primarily for conventional television, specialty, pay or video-on-demand services.” Can you get those GamePlus capabilities on your TV set or were they designed primarily for some other form of delivery, like, say, a mobile app?

To what extent is Bell’s application more of a case of seeking clarification of the restrictions inherent in the 2011 NFL decision? Is Bell trying to determine the conditions under which an integrated carrier can lock up Canadian rights to an NFL version of GamePlus?

That may be one of the reasons that TELUS has joined in the fray, urging “the Commission to put a swift end to content exclusives”.

TELUS believes that the Commission should take immediate steps to establish a new clear and unequivocal prohibition of exclusives relating to online content where the content is owned or controlled by Canada’s large vertically integrated communications companies. The Commission must ensure that Canadians don’t have to subscribe to multiple networks in order to access all the content they want.

It was TELUS – the largest service provider in Canada with no content broadcasting assets – that launched the original complaint that led to the CRTC’s 2011 NFL decision.

TELUS says in its comments this week that Rogers is “using the coveted NHL rights to drive subscriptions to its network access services.”

I doubt there is any argument about that point.

The question to be resolved by the CRTC is whether a regulatory response is needed. If the CRTC rules that Rogers is entitled to package GamePlus as it wants, how will the marketplace respond? Will it drive lower prices, improved service and increased innovation by other service providers?

Will those responses serve the interests of consumers?

Ericsson has released its latest Mobility Report [pdf], providing a wealth of analysis and insights into current communications traffic and market trends.

As one of the leading mobile infrastructure providers, Ericsson has performed in-depth data traffic measurements since the earliest days of mobile broadband, leveraging its large base of live networks in all regions of the world.

The need for more spectrum and increased mobile investment is being driven by continued growth in mobile data traffic, in the order of 60% year-over-year.

Globally, there are 6.9B mobile subscriptions, 2.5B of which are mobile broadband, meaning that there is now 95% penetration – 19 mobile subscriptions for every 20 people on the planet. Ericsson acknowledged that in some cases, the count includes inactive subscriptions

Ericsson expects 800M smartphone subscriptions to be added by the time 2014 is done. They believe there will be 2.7B smartphone subscriptions in total by year end.

In the 3rd quarter, 65% of all phones sold were smartphones. This is one of the factors driving data growth. Ericsson finds that mobile phones are actually generating twice the traffic of PCs, tablets and routers. Globally, the average data usage per subscription is just under 1GB (900MB). Ericsson expects this to grow to 3.5GB per subscription by 2020.

Video is already the largest and fastest growing application on mobile networks. Devices are evolving with larger screens, enabling higher picture quality, resulting in more video being consumed on all types of devices and in higher quantities, at home and on the move. Ericsson expects video to continue to grow – by an order of magnitude by the year 2020 – to represent 55% of all mobile data traffic.

The Mobility Report talks about 5G in terms of Embracing a Network Society. It sets a vision for new capabilities and requirements. For example, as machines become networked, Ericsson sets an expectation for some devices to be equipped with batteries that could need to last 10 years. Although there will be tremendous growth in machine-to-machine connections, perhaps representing 50% of devices on the mobile network, Ericsson expects machine traffic to be very small – in the order of 0.1% of total traffic.

For the first time, Ericsson has released a North American regional appendix [pdf]. Ericsson says that 90% of North American households have at least 3 internet connected devices; 99% of US households have at least one connected device; 97% of US households have at least one mobile phone. [The US has a lifeline program that targets low income households.] The report shows that Canada’s LTE networks are delivering almost twice the speeds compared to US LTE networks, although increased demand led to slight performance declines in both markets. Continuing to invest in spectrum and “densification” is expected to provide relief.

Ericsson is working with MIT to examine mobile usage patters, overlaid with census data to provide interesting insights in demographics. There are a couple of pages in the report that show the kinds of information that can be gleaned by examining time-of-day mobile traffic, supplementing census data and empowering urban planning.

This is the seventh issue of the Ericsson Mobility Report, which shares forecast data, analysis and insight into traffic, subscriptions, and consumer behavior to provide insight into current traffic and market trends. Ericsson created a Traffic Exploration Tool to customize analysis using data from the report, filtering by region, subscription, technology, traffic, and device type.

Ericsson regularly performs traffic measurements in over 100 live networks in all major regions of the world. The Ericsson Mobility Report and Traffic Exploration Tool are valuable reference works, with information relevant for global and national research.

What differences drive the North American mobile market? How well are carriers responding to demand? Does Canada’s communications policy anticipate the needs being forecast?

For years, I have been writing about Canada’s well intentioned but misguided efforts to legislate against the scourge of spam.

Five and a half years ago, in 2009 I wrote about the potential for the legislation “to inadvertently chill some beneficial forms of electronic commerce communications.”

It isn’t that I like getting spam; or getting junk mail. The problem is that the Act seems to be banning electronic communications that would be completely legitimate in paper form. I’m not crazy about door-to-door sales people either, but we need to be careful about restricting communications in a democratic society. Instead, we can teach ourselves how to slam the door politely. And once in a while, we actually open our wallets and purchase something, due to an unsolicited communication, whether it was in person, on paper or transmitted electronically.

A year later, in 2010 I wrote that I was somewhat surprised with the response to the Act by people who normally stand up for civil liberties.

Typically, we see internet communications as being less restrictive than traditional media. We have so many people that talk about open access to information and actively promote it. I see so many cases of civil libertarians up in arms over attempts to block digital communications – even in cases where hard copies are stopped at the border or seized by police.

So it is somewhat satisfying to read on Barry Sookman’s blog that a new paper by Emir Crowne from University of Windsor’s Faculty of Law and Stephanie Provato says “the Act may not survive constitutional scrutiny as it unduly restricts freedom of speech.”

An essay in Time Magazine by Clemson economist Thomas Hazlett caught my eye. He opens “How to Neuter the Net Revolution” with a quote from Professor Lawrence Lessig:

The Internet revolution has ended just as surprisingly as it began. None expected the explosion of creativity that the network produced; few expected that explosion to collapse as quickly and profoundly as it has.

The kicker is that these words are from a paper written in 2001 promoting rules to ensure an open internet.

At that time, Lessig wrote:

The Internet promised the world — particularly the weakest in the world—the fastest and most dramatic change to existing barriers to growth. That promise depends on the network remaining open to innovation. That openness depends upon policy that better understands the Internet’s past.

The internet revolution didn’t come to an end in 2001 as Lessig warned. I agree that the openness of the internet “depends upon policy that better understands the Internet’s past.” However, I am not convinced that share the same understanding of that history.

Some observers are challenging some of the more idealized assumptions being set forth to justify government regulation. Hazlett writes “the idea that the Internet is everywhere neutral, that all bits are treated equally, is false.” Further, Frost & Sullivan principal analyst says Dan Rayburn wrote: “There has never been any rule or understanding that certain networks must carry traffic for free.” and in the Washington Post, Larry Downes writes “The engineering of the Internet has never been “neutral,” nor could it be. Voice and streaming video traffic, for example, which is much more sensitive to delays, is regularly given priority.”

Downes also writes in the Harvard Business Review:

As far back as 1999, at the dawn of broadband Internet access through DSL and cable modems, the same advocates were making the same urgent pleas. Absent immediate nationalization of the Internet, they argued, ISPs were certain to block or otherwise disadvantage start-ups, leaving the Internet in the hands of a few dominant content providers. You know, like AOL, GeoCities, and Blue Mountain electronic cards. (Google search was still in beta.)

Back then, fortunately, the White House, Congress, and the FCC ignored the doomsayers. Instead, a rare bipartisan coalition held fast to the view that for emerging technologies, light-touch regulation was more likely to encourage competition and discipline market participants than the heavy hand of regulators.

Plus ça change…

To better understand the past, it may be helpful to look to an FCC working paper from 1999 [pdf], entitled “The FCC and the Unregulation of the Internet“.

The author, Jason Oxman, cites 5 key FCC policy decisions that benefited the development of the internet:

• Fostering the development of an interconnected telecommunications network that ensured near universal availability of a reliable and affordable telephone system over which data services could be offered.
• Determining through the Computer Inquiry proceedings that computer applications offered over that network were not subject to regulation, giving rise to the unregulated growth of the Internet.
• Exempting enhanced service providers from the access charges paid by interexchange carriers, helping drive the availability of inexpensive dial-up Internet access.
• Deregulating the telecommunications equipment market while requiring carriers to allow users to connect their own terminal equipment, helping to foster the widespread deployment of the modem and other data equipment tools that can be easily attached to the public switched network.
• Implementing flexible spectrum licensing policies that permit innovative uses of wireless data services, leading to the development of wireless Internet applications.

And the paper cited fundamental lessons learned from 30 years of application of a deregulatory approach by the FCC:

• Do not automatically impose legacy regulations on new technologies,
• When Internet-based services replace traditional legacy services, begin to deregulate the old instead of regulate the new; and
• Maintain a watchful eye to ensure that anticompetitive behavior does not develop, do not regulate based on the perception of potential future bottlenecks, and be careful that any regulatory responses are the minimum necessary and outweigh the costs of regulation.

Prescient words from a paper from 15 years ago: “Do not regulate based on the perception of potential future bottlenecks, and be careful that any regulatory responses are the minimum necessary and outweigh the costs of regulation.”

A few weeks ago, I asked if Canada’s net neutrality rules has delivered the benefits to justify the costs of regulation:

Five years later, how many countries have followed Canada’s lead? Should we be reviewing the policy framework for traffic management and content delivery examining whether our rules are appropriate?

Canada may have been first, but one might ask if Canada can be considered a leader if other countries haven’t followed behind. Are Canadians – consumers, creators and carriers – well served by the current “comprehensive approach to Internet traffic management practices”?

As Dan Rayburn observed “Net neutrality is an incredibly complex set of problems that people keep trying to simplify and politicians try to turn into sound bytes.”

What lessons from the past can continue to be applied?

When the FCC issues its determination, it may be worthwhile for the CRTC to begin a fresh look at its regulatory policy framework to ensure that Canadians continue to be positioned to lead in a global digital economy.

In case Canadians thought only Canadian politicians couldn’t resist the urge to interfere with the deliberations of independent regulators, US President Barack Obama waded into the FCC’s open internet proceeding today with a statement on Net Neutrality. Importantly, the statement recognizes that his perspective is not the final word:

The FCC is an independent agency, and ultimately this decision is theirs alone. I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online.

The issue, of course, is more complex than that laid out in the President’s statement.

The Chair of the FCC, Tom Wheeler replied, thanking the President for his input and made it clear that it is just one submission of thousands received, with more to come:

I am grateful for the input of the President and look forward to continuing to receive input from all stakeholders, including the public, members of Congress of both parties, including the leadership of the Senate and House committees, and my fellow commissioners. Ten years have passed since the Commission started down the road towards enforceable Open Internet rules. We must take the time to get the job done correctly, once and for all, in order to successfully protect consumers and innovators online.

As Chairman Wheeler observed, there are different routes that can be followed and each presents challenges in creating an enforceable framework, able to withstand legal challenges: “The more deeply we examined the issues around the various legal options, the more it has become plain that there is
more work to do.”

Canadians should keep in mind that on this file, the CRTC is more than 5 years ahead of the United States. In October 2009, Canada’s regulator issued its rules on internet traffic management practices, ITMPs, in Regulatory Policy 2009-657.

The next day, more than 5 years ago, I observed: “Later today, there will be an announcement from the FCC that will be much heralded by many who confuse political rhetoric for action. It will be a long process before the US has any kind of net neutrality regulation, let alone the proposed framework that will be articulated today by the FCC.”

A long process. Hah!

Five years later, the US is still fighting over how it will regulate the internet.

Is it actually clear that the FCC will be able to regulate it? Indeed, is it clear that the internet should be regulated?