CRTC decision affirmed principles of net neutrality in mobile applications
The Federal Court of Appeal has ruled that Bell Mobility violated the Telecommunications Act by offering a video streaming application outside of customers’ usual data rates and caps. Bell Mobility Inc. v. Klass was an appeal of a finding of the CRTC that found the Bell Mobility product and a similar one offered by Videotron to be unlawful. Bell Mobility launched Bell Mobile TV, a new product that would permit its existing mobile customers to stream up to ten hours of video for a flat rate of $5.00 per month, outside the customer’s existing data plans and data caps. Additional video content was available for $3.00 per hour. Videotron offered a similar product under the name illico.tv.
The case arose from a complaint that the practice was in violation of s. 27(2) of the Telecommunications Act, which provides:
“No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.”
The CRTC had found that this section was violated. Media coverage referred to the CRTC Chairman’s take on net neutrality:
In a speech last year, CRTC chairman Jean-Pierre Blais commented on the case, stating it was “about all of us and our ability to access content equally and fairly, in an open market that favours innovation and choice.”
“It may be tempting for large, vertically integrated companies to offer certain perks to their customers, and innovation in its purest form is to be applauded,” Mr. Blais said. “But when the impetus to innovate steps on the toes of the principle of fair and open access to content, we will intervene. … We’ve got to keep the lanes of our bridges unobstructed so that everyone can cross.”
The CRTC and Court of Appeal decisions largely turned on whether this was a broadcasting activity under the Broadcasting Act because the Telecommunications Act provides that the Telecommunications Act does not apply to broadcasting by a broadcasting undertaking. The CRTC had found that, in this activity, Bell and Videotron were not acting as broadcasters:
22. In light of all of the foregoing, the Commission concludes that Bell Mobility and Videotron are providing telecommunications services, as defined in section 2 of the Telecommunications Act, and are operating as Canadian carriers, when they provide the data connectivity and transport necessary to deliver Bell Mobile TV and illico.tv, respectively, to their subscribers’ mobile devices. In this regard, they are subject to the Telecommunications Act. This is the case whether or not concurrent broadcasting services are also being offered.
The Court of Appeal framed the question thusly:
 The relevant question is whether the CRTC’s determination that, even though Bell Mobility was involved in broadcasting in carrying out certain activities, it was not broadcasting as a broadcasting undertaking in transmitting its programs, is reasonable. It is important to note that section 4 of the Telecommunications Act exempts an activity (broadcasting by a broadcasting undertaking), not a person or an entire undertaking.
The Court then went on to note that the activity in question was the transmission of programs:
 The activity that is in issue is the transmission of programs. Bell Mobility transmitted its mobile TV programs simultaneously with its voice and other data communications using the same network. The transmission of voice and non-program data to its customers is not “broadcasting” as they are not programs and therefore section 4 of the Telecommunications Act is not applicable to the transmission of that content. If the transmission of programs by Bell Mobility were to be treated as “broadcasting by a broadcasting undertaking”, then some of the transmissions made using the same network would be subject to the Broadcasting Act and other transmissions would be subject to the Telecommunications Act. In my view, it is a reasonable result that all transmissions by Bell Mobility would be subject to the same Act.
 In my view, this result is also reasonable based on the purposes of the two statutes. As noted by the Supreme Court of Canada in the ISP case, “the policy objectives listed under s. 3(1) of the [Broadcasting] Act focus on content, such as the cultural enrichment of Canada, the promotion of Canadian content, establishing a high standard for original programming, and ensuring that programming is diverse”. The policy objectives of the Telecommunications Act, as set out in section 7 of that Act, focus on the telecommunications system and the telecommunications service. Therefore, the focus of the policy objectives under the Telecommunications Act is on the delivery of the “intelligence” and not the content of the “intelligence”.
The standard of review for the CRTC’s decision was reasonableness, given that the CRTC was interpreting its “home statutes”. The Federal Court of Appeal found this interpretation of both Acts to be reasonable and the appeal was dismissed.