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Canadian telecoms clash over Videotron's wireless music streaming package

A model wears SMS Audio BioSport In-Ear Headphones at the Intel booth during the International CES, in Las Vegas on Jan. 6, 2015.
Image Credit: THE CANADIAN PRESS/AP, John Locher
October 17, 2015 - 6:30 PM

TORONTO - The way you listen to music on your smartphone is becoming a prickly issue with some of the country's wireless carriers.

A complaint filed by Rogers Communications to the CRTC this week says Videotron's new Unlimited Music package clashes with rules laid out by the regulator to prevent favouritism among customers when it comes to using wireless data.

In the filing, Rogers takes issue with how its competitor is giving subscribers the ability to stream music on the go without eating into their mobile data plan, but only if they pay for an upgraded package.

Launched in August, Unlimited Music eliminates a common complaint from music fans who say that frequent audio streaming can drive up monthly bills if they happen to go over their data limits.

However, there are a few stipulations to Unlimited Music: it's only included in Videotron's premium wireless plan and just a select list of streaming services like Stingray, Rdio, Google Play and Spotify are exempt from data caps. Both of those factors have raised concerns with Rogers.

The Toronto-based telecom company filed a complaint with the CRTC on Tuesday saying Unlimited Music contravenes a regulatory decision on how telecom companies market mobile exemptions to consumers.

David Watt, vice-president of Rogers' regulatory operations, said Videotron is "acting as the gatekeeper" by selecting which streaming companies fall under its data exemption, a strategy that gives some "an undue and unreasonable preference," according to the complaint documents.

Rogers also has a problem with Videotron making Unlimited Music available only to premium plan customers.

It said Videotron's favoured exemption of mobile data conflicts with a CRTC ruling earlier this year against Bell Mobility. The decision forced Bell to stop offering its customers an upgraded service for $5 a month, which let them stream a set amount of video on their phones without counting towards their monthly wireless data caps.

In January, CRTC chairman Jean-Pierre Blais said all mobile service providers should treat content flowing through their networks equally, without offering perks to their customers.

Rogers (TSX:RCI.B) alleges Videotron is essentially doing that with Unlimited Music and favouring certain music services while leaving others, like Apple Music, off the eligible list.

Videotron fired back at the criticism of Unlimited Music in its response to the regulator:

"It is astonishing at times to behold the range of ulterior motives that can be ascribed to a provider that is simply seeking to make its services more attractive to consumers," said Dennis Beland, vice-president of regulatory affairs at Quebecor.

"The truth is much less conspiratorial."

Videotron said it created Unlimited Music as a way to broaden its wireless package appeal to the 14- to 34-year-old demographic.

Streaming music has become an increasingly popular way for listeners to play their favourite tracks on demand. Most streaming companies not only offer services through mobile phone apps, but some also connect through desktop computer programs, tablets and even gaming consoles.

Rogers has its own streaming music agreement through the Fido brand. The company partnered with Spotify to bundle a commercial-free version of the service with its monthly plans. Unlike Videotron, Fido still counts streaming music as part of data packages.

Others within the telecom industry expressed mixed support for Videotron's new product.

A joint complaint filed with the CRTC in late September by the Consumers' Association of Canada, the Council of Senior Citizens' Organizations of British Columbia, and the Public Interest Advocacy Centre echoed the concerns over how Videotron's has packaged the new service.

The Canadian Network Operators Consortium, an industry organization for independent service providers, said there was a "strong argument" that Videotron was being "unduly discriminatory" to streaming services outside the Unlimited Music package.

However, it encouraged telecom companies to create service packages which use "innovative ways (to) respond to market trends and consumer demand."

Wireless competitor Telus Corp. (TSX:T) supported Videotron in documents filed earlier this week which said it didn't see a problem with Unlimited Music.

The complaints "fail to understand that Videotron is merely making available a competitive offering to consumers," a Telus executive wrote.

"No consumers are harmed by this offer being made available in the market and some might be significantly better off as a result of it."

A spokesman for Bell declined to comment and the company has not made submissions on the matter.

Follow @dj_friend on Twitter.

News from © The Canadian Press, 2015
The Canadian Press

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