Canadian carrier sues to block net neutrality rules for wireless TV

Bell Mobility is taking legal action to stop new rules that forbid Canada’s phone carriers from excluding their own wireless TV services from customers’ monthly data caps, a practice that regulators claim is anticompetitive.

In a filing last week with the Federal Court of Canada, Bell made a technical argument that the rules are illegal because wireless TV is a broadcasting service, not an internet service.

The legal fight comes just weeks after the Canadian Radio-television and Telecommunications Commission (CRTC) outlawed the data cap exemptions, which let Bell customers watch up to 10 gigabits of wireless TV streaming for a nominal $5 fee — provided the streams came from Bell’s own TV partners, and not a competitor like Netflix.

In announcing the decision, the CRTC’s Chairman said the agency would intervene in cases where customer perks offered by “large vertically integrated companies” stepped on the toes of equal access principles.

The tussle over wireless TV is likely to bring further attention to a practice known as “zero rating,” which is growing more contentious in both Canada and the U.S. at a time when regulators are moving to tighten net neutrality requirements.

Zero rating is when mobile internet providers exclude certain specific apps or services from customers’ data caps as a feature of their monthly plans. One current example in the U.S. is T-Mobile, which offers uncapped music service to its phone customers.

While such services are a nice feature for consumers, they can also amount to a violation of net neutrality principles, especially when offered by oligopolists like Bell, which controls large stakes in Canada’s internet, mobile and TV markets — including rights to the Super Bowl.

Critics like consumer group Open Media fear it will lead the telecom industry creating de facto fast lanes, and freezing out competing services like Netflix. The issue is also a hot topic in Europe where several countries have come out against zero rating.

Bell’s legal challenge, which was reported by the Globe & Mail, is likely to be the first of several on both sides of the border. In the U.S., AT&T has already warned the FCC that it will sue over new rules that are going to a vote this Thursday.