David Watt333 Bloor Street East 9th FloorToronto, Ontario M4W 1G9david.watt@rci.rogers.como 416.935.3515m 416.457.2772

October 14, 2015

FILED VIA: CRTC COMMENT FORM

Mr. John Traversy Secretary GeneralCanadian Radio-television and Telecommunications CommissionOttawa, ON K1A 0N2

Dear Mr. Traversy:

Re: CRTC File No. 8661-P8-201510199Videotron’s Unlimited Music Service – Rogers’ Intervention

I. INTRODUCTION/EXECUTIVE SUMMARY

1. Rogers Communications Inc. (Rogers) submits this intervention in support of the above-referenced Part 1 Application that was filed by the Public Interest Advocacy Centre (PIAC) on behalf of itself, the Consumers’ Association of Canada (CAC) and the Council of Senior Citizens’ Organization of British Columbia (COSCO) (collectively PIAC)1, as well as the Part 1 Application filed by Vaxination Informatique (Vaxination)2 on September 1, 2015 and September 3, 2015, respectively (together referred to as the Applications). Both Applicants demonstrate that Videotron’s mobile audio streaming service, known as “Unlimited Music,” contravenes subsection 27(2) of the Telecommunications Act. Rogers Media Inc. is also a member of a consortium of radio broadcasters that is filing an intervention in response to the two Applications and Rogers supports the arguments set out in that intervention.3

2. Videotron is a wireless telecommunications carrier. It announced on August 27, 2015 that it had launched the Unlimited Music service that currently offers to a subset of its customers access to a small number of audio streaming services -

1 Application 8661-P8-201510199.2 Application 8622-V42-201510735. As noted in a letter from the Commission dated September 28, 2105, this application will be considered with the PIAC in a single proceeding using the PIAC application number as a file reference.3 See Radio Consortium Intervention, October 5, 2015.

specifically Stingray, Rdio, Google Play, Deezer and Spotify. It also indicated that “[i]n the coming weeks and months, other popular services will be added to the list, including Songza.”4 Videotron’s marketing materials indicate that those customers who have Canada-wide premium plans5 are exempt from paying for mobile data usage when they access one or more of these audio streaming services. Videotron’s mobile customers that access any other audio service that has not entered into an agreement with Videotron will have to pay standard usage rates.

3. In Rogers’ view, the zero-rated Unlimited Music service provided by Videotron suffers from the same legal flaws as the mobile television services that were offered by Bell Mobility and Videotron earlier this year. Both of those mobile television services were recently found to be offered in a manner that was contrary to subsection 27(2) of the Telecommunications Act in Broadcasting and Telecom Decision CRTC 2015-26 (BTD 2015-26). In that Decision, the Commission determined that by exempting only certain mobile television services from standard data charges, Bell Mobility and Videotron have:

given an undue preference in favour of subscribers of their respective mobile TV services, as well as in favour of their own services, and have subjected consumers of other audiovisual content services, and other services, to a corresponding undue disadvantage.6

4. The same legal analysis used in BTD 2015-26 should be applied to Videotron’s new Unlimited Music service. Videotron is acting as the gatekeeper with respect to the audio services delivered over its wireless network. It has selected a handful of audio streaming services to be exempt from data charges and it is making only those services available to a segment of its subscriber base (i.e. those customers who have Canada-wide premium plans) on a zero-rated basis. As a result, Videotron has violated subsection 27(2) of the Telecommunications Act as follows:

it is giving an undue preference in favour of its customers who subscribe to the Unlimited Music service;

it is giving an undue preference in favour of the five audio streaming services that are currently offered as part of the Unlimited Music service;

it is subjecting to an undue disadvantage those of its customers that access or subscribe to other audio content services (or, possibly, to those subscribers who have Canada-wide premium plans and access the five audio streaming services at transmission rates that exceed 128 Kbps7);

4 See: http://www.newswire.ca/news-releases/agreement-with-leading-music-streaming-players---videotron-mobiles-new-unlimited-music-service-lets-customers-listen-to-music-without-using-data-523091451.html.5 Premium All-Inclusive Canada plans and the All-Inclusive Canada 1GB plan as part of an Internet + Mobile Duo, which costs close to $65/month. See: http://support.videotron.com/residential/mobile/unlimited-music. 6 BTD 2015-26, Summary.7 On Videotron’s FAQ, it states: Unlimited Music lets you stream music at 128 Kbps, which is the average transmission rate for today’s apps. Data usage resulting from streaming music at speeds higher than 128 Kbps (high speed or high definition) may be deducted from your plan’s monthly data allowance. See: Page 2 of 11

it is subjecting to an undue disadvantage other audio services (including Canadian radio stations that are streamed online), as well as other audiovisual services offered online, that are delivered over Videotron’s wireless network; and

it is subjecting to an undue disadvantage other wireless carriers that have respected the Commission’s determination in BTD 2015-26 and are now at a competitive disadvantage in the marketplace.

5. Videotron’s Unlimited Music service is also being offered in a manner that is inconsistent with the Commission’s net neutrality policy and the Wireless Code. The decision to favour certain types of audio services carried on its wireless network and to treat the data from those services differently than the data of other audio and audiovisual services, and online services in general, represents “the thin edge of the wedge” in ensuring the integrity of Canada’s net neutrality rules. There are also indications that Videotron’s customers could be subjected to overage charges that would contravene certain provisions in the Wireless Code.

6. Each of these violations under the Telecommunications Act is discussed in more detail below.

II. BACKGROUND

7. Rogers believes the facts relating to the Unlimited Music service offered by Videotron are accurately summarized in paragraphs 15 to 36 of PIAC’s Part 1 Application. Nevertheless, Rogers provides below a brief summary of the core facts that we believe are specifically relevant to the issue of whether Videotron’s provisioning of the Unlimited Music service contravenes subsection 27(2) of the Telecommunications Act.

8. On January 29, 2015, the Commission issued BTD 2015-26 in which it found that Videotron’s illico.tv service and Bell Mobility’s mobile TV service violated subsection 27(2) of the Telecommunications Act by exempting these audiovisual services from certain data charges. In that case, Bell Mobility and Videotron exempted their mobile TV services from the standard monthly data caps and data charges that were generally applicable to other audiovisual content and services delivered on their wireless networks. The Commission found that, in providing the data connectivity and transport required for consumers to access the mobile TV services at substantially lower costs to those consumers relative to other audiovisual content services, Videotron and Bell Mobility:

… conferred upon consumers of their services, as well as upon their services, an undue and unreasonable preference, in violation of subsection 27(2) of the Telecommunications Act. In addition, they have subjected their subscribers who consume other audiovisual content services that are subject to data charges, and these other services, to an

http://support.videotron.com/residential/mobile/unlimited-music.Page 3 of 11

undue and unreasonable disadvantage, in violation of subsection 27(2) of the Telecommunications Act.8

9. In reaching this conclusion, the Commission also emphasized that its Decision was designed to ensure that the market for mobile television services would be open and non-discriminatory:

This decision will favour an open and non-discriminatory marketplace for mobile TV services, enabling innovation and choice for Canadians.9

10.Rogers supports this objective and submits that the same approach should be adopted by the Commission with respect to mobile audio services. The Unlimited Music service offered by Videotron is fundamentally at odds with the objective of ensuring that there is an open and non-discriminatory marketplace for mobile audio services.

11.While Rogers is not privy to the terms of the contracts under which the five audio streaming services have agreed to be offered to Videotron’s customers, there is a sufficient amount of information that has been publicly disclosed for the Commission to conclude that the legal analysis and conclusions reached in BTD 2015-26 should apply equally to Videotron’s Unlimited Music service.

12.Videotron operates as a wireless telecommunications carrier and provides the data connectivity that enables its subscribers to access the Unlimited Music service. In this respect, it is the subscriber’s wireless voice plan, data plan or tablet plan that provides the basis upon which the end user is identified as a subscriber and upon which the subscriber is connected to the network. As such, the provision of this telecommunications service is subject to the Telecommunications Act. That is not in dispute.10

13.On the FAQ section of the Videotron Unlimited Music website, Videotron indicates that its Unlimited Music service is “included with Premium All-Inclusive Canada plans and the All-Inclusive Canada 1GB plan as part of a Internet + Mobile Duo.”11

14.Videotron also makes it clear on its website that there is a difference in the cost to the subscriber for accessing audio content over the Internet when compared to accessing the five audio streaming services through the Unlimited Music service. The Unlimited Music service “allows users to stream music without using their Mobile plan’s data allowance” when they access those five audio streaming services through the mobile apps provided by Videotron.12

8 BTD 2015-26, at paragraph 61.9 BTD 2015-26, at Summary.10 The Commission noted this with respect to Mobile TV services in BTD 2015-26, at paragraph 22.11 See http://support.videotron.com/residential/mobile/unlimited-music.12 Ibid.Page 4 of 11

15.A subscriber that has the Premium All-Inclusive Canada plan or the All-Inclusive Canada 1GB plan as part of an Internet + Mobile Duo does not have to pay data usage charges to access the five audio streaming services. Other Videotron mobile subscribers, however, will pay additional charges to access that same audio content. In addition a subscriber that accesses any other audio service (even those offering audio streaming services, like Canadian radio stations, that are substantially similar to those offered by Stingray, Rdio, Google Play, Deezer and Spotify) on Videotron’s wireless network would be subject to Videotron’s standard data fees.

III. BREACH OF SUBSECTION 27(2) OF THE TELECOMMUNICATIONS ACT

16.As was the case with Videotron’s illico.tv service, Rogers submits that the company’s Unlimited Music service similarly contravenes the prohibitions against undue preferences, unjust discrimination and undue disadvantages set out in the Telecommunications Act in a number of different ways. Many parties are being impacted by the manner in which Videotron is providing the Unlimited Music service, including:

subscribers who are not required to pay additional data charges when they access the Unlimited Music;

subscribers who are required to pay additional data charges when they access other audio services on Videotron’s wireless network;

the five audio streaming services offered as part of Unlimited Music; every other audio service (including Canadian radio stations that are

streamed online) that is not offered as part of Unlimited Music; and wireless competitors that have arranged their offerings to comply with the

determinations set out in BTD 2015-26.

17. In BTD 2015-26, the Commission outlined its two-step process for analyzing an allegation of undue or unreasonable preference or disadvantage under subsection 27(2) of the Telecommunications Act: (i) it must first determine whether the conduct in question constitutes a preference or subjects a person to a disadvantage; and (ii) where it so determines, it must then decide whether the preference or disadvantage is undue or unreasonable.13

13 At paragraph 44.Page 5 of 11

(i) Preferences and Disadvantages

18.With respect to this first step, there is no doubt that the manner in which Unlimited Music is being offered to Videotron subscribers constitutes a preference for some parties and a disadvantage for others.

19.Specifically, it is Rogers’ submission that Videotron is giving a preference to those of its wireless customers who subscribe to its Unlimited Music service. The fact that a certain group of Videotron customers is being given access to the five audio streaming services without being subject to the same standard data charges applicable to all other Videotron customers who access audio content means that a preference is being given to those customers. Similarly, the five audio streaming services (Stingray, Rdio, Google Play, Deezer and Spotify) that have entered into agreements with Videotron to have their content accessed by Videotron customers without the standard data charges applying are being given a preference. By ensuring that Videotron customers can access these five audio streaming services without incurring additional data charges is clearly a significant competitive advantage for the companies that operate these services.

20.As for those parties that are disadvantaged by the Unlimited Music service, they include Videotron’s wireless customers who do not subscribe to the Premium All-Inclusive Canada plan or the All-Inclusive Canada 1GB plan as part of an Internet + Mobile Duo, as well as those customers that want to access other audio services through Videotron’s wireless network. Today, a Videotron customer who accesses any other type of music or audio service, that is not provided by one of Stingray, Rdio, Google Play, Deezer or Spotify, will be required to pay standard data charges imposed by Videotron. In addition, other online audio content providers and audio streaming services, which include many of Canada’s licensed radio stations that stream their services online, are disadvantaged because any Videotron mobile customer that accesses one of those services will be required to pay additional data charges. Significantly, this disadvantage is being given despite the fact that many of these audio services offer content that is substantially similar to the music offered by the Unlimited Music service. Moreover, as PIAC notes in its Part 1 Application, providers of online content in general are disadvantaged for the same reason.14

21.Another group that is being disadvantaged by Videotron’s new service are wireless carriers that compete with Videotron in the marketplace. This group includes Rogers Wireless, which has designed its mobile audio and television offerings to comply with the determinations made by the Commission in BTD 2015-26. The fact that Videotron’s Unlimited Music service is being offered in a way that is contrary to the legal principles set out in that Decision places Rogers and other wireless carriers at a significant disadvantage in the marketplace.

22. In view of the above, it is very apparent that Videotron has given a preference in favour of certain of its customers who are not charged for accessing the audio

14 PIAC Part 1 Application, September 1, 2015, at paragraph 67.Page 6 of 11

streaming services, as well as in favour of the five audio streaming services that agreed to be delivered as part of Unlimited Music. In addition, every other audio and audiovisual service accessible online through Videotron’s wireless network and each competing wireless carrier are being subjected to a corresponding disadvantage.

(ii) The Preferences and Disadvantages are Undue

23.Having established the presence of preferences and disadvantages in respect of the Unlimited Music service, it is also clear that each preference and disadvantage is undue or unreasonable. Pursuant to subsection 27(4) of the Telecommunications Act, Videotron has the burden of establishing that any preference or disadvantage is not undue or unreasonable.

24.Charging some customers significantly more, with respect to data charges, for accessing those audio services that are not included as part of Unlimited Music represents a material disadvantage that is clearly undue and unreasonable. It is simply unfair to those customers that may not want to subscribe to Stingray, Rdio, Google Play, Deezer or Spotify, and instead choose to listen to other audio content online. These customers will be forced to pay considerably more, in terms of data charges, for obtaining that audio content.

25.At the same time, Videotron is unduly preferring certain audio services by entering into agreements with only a select group of audio streaming service providers and offering them as part of the unlimited Music service. 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.

26.The fact that Videotron appears to be limiting participation in its Unlimited Music offering to a class of service is not relevant to the issue of whether Videotron is giving the chosen class an undue preference or subjecting all other audio services to an undue disadvantage. In fact, it is not apparent what that class would be. While Videotron appears to suggest that any audio streaming service could be offered in Unlimited Music,15 it is evident that this is not true. Only those audio streaming services that have accepted the terms imposed by Videotron and entered into agreements with the wireless carrier are granted the right to have their services zero-rated. Even then, any audio service that does not accept Videotron’s terms of carriage or that finds those terms too onerous, would not be included in Unlimited Music.

27.By choosing which audio services are included in its Unlimited Music service, Videotron is positioning itself as a gatekeeper. It is creating an environment that will cause significant harm to those other audio services that do not choose to do business or enter into commercial agreements with Videotron because their content will continue to be subject to data charges. Under Videotron’s model, customers

15 See http://support.videotron.com/residential/mobile/unlimited-music.Page 7 of 11

who subscribe to a select group of audio streaming services will incur no additional data charges, while customers who subscribe to other audio services will incur significant data charges. It is Rogers’ view that this will likely have a material adverse impact on consumers and on the growth and development of these other audio services.

28.Videotron’s decision to adopt a business model for mobile audio services that encourages customers to access data-intensive services is inconsistent with the approach outlined in BTD 2015-26 and the manner in which it charges for other data services, which is to impose data caps in order to optimize the efficiency of these networks. If access to audio services continues to grow and consumers are encouraged to access Videotron’s Unlimited Music service because of the absence of data charges, this might contribute to network congestion and result in a degradation of those audio, video and other online services that have not accepted Videotron’s access terms.

29.Finally, competing wireless carriers in Canada, including Rogers Wireless, are also being subjected to an undue disadvantage. Following the issuance of BTD 2015-26, Rogers and other wireless carriers reassessed their mobile offerings and entered into business arrangements that were designed to respect the conclusions reached by the Commission in that Decision. The Commission’s findings with respect to data charges for mobile TV and the broad legal principles underlying those findings have been accepted by Rogers and incorporated into our mobile offerings. Now, with the launch of Unlimited Music, we are being subjected to an undue competitive disadvantage in the marketplace because Videotron refuses to respect the legal principles outlined in BTD 2015-26.

30.We would also note that, under section 28 of the Telecommunications Act, the Commission must have regard to the broadcasting policy set out in subsection 3(1) of the Broadcasting Act in determining whether any preference or disadvantage is undue or unreasonable in relation to the transmission of programs. Section 28 is particularly relevant in this case because of the impact Videotron’s Unlimited Music service could have on Canadian radio stations and other Canadian audio content providers that have not accepted Videotron’s terms of carriage or have not been chosen by Videotron to participate in Unlimited Music. As the Commission is aware, subsection 3(1) of the Broadcasting Act contains several policy objectives that encourage the growth and development of Canadian programming, including paragraph 3(1)(d) which provides that the Canadian broadcasting system should:

3(1)(d)(ii) encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity, by displaying Canadian talent in entertainment programming and by offering information and analysis concerning Canada and other countries from a Canadian point of view.

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31. If the number of Canadian consumers who use their mobile devices to satisfy their music and other audio needs continues to grow,16 the Commission must ensure that Canadian radio stations and other content providers have a fair and equal opportunity to reach those consumers online. This means that wireless carriers, like Videotron, should not be able to adopt new business models and service offerings that position themselves as gatekeepers. This would enable Videotron to force Canadian radio stations and other Canadian content providers to accept Videotron’s business arrangement just to ensure that they could remain competitive with those audio streaming services that have already accepted the wireless carrier’s terms.

32. In view of the fact that more and more Canadians are listening to radio stations online through mobile devices, there is a very real likelihood that the Canadian radio industry will suffer material harm if Videotron and other wireless carriers require customers to pay additional data charges to access Canadian radio stations online, while allowing the content offered by audio streaming services like Stingray, Rdio, Google Play, Deezer and Spotify to be zero-rated. Moreover, this would severely undermine Canadian audio services’ successful transition to digital platforms and their ability to further the policy objectives of the Broadcasting Act.

IV. NET NEUTRALITY

33.Videotron’s Unlimited Music service is also being offered in a way that is inconsistent with the Commission’s approach to net neutrality. The decision to favour certain types of audio services carried on its wireless network and to treat the data from those services differently than the data of other audio and audiovisual services, as well as online services in general, represents “the thin edge of the wedge” in ensuring the integrity of Canada’s net neutrality rules. If permitted to stand, Videotron’s discriminatory pricing policy will only encourage other wireless service providers (and perhaps ISPs) to adopt similar business models that grant significant advantages to only certain content providers online. This will have a material adverse impact on those audio service providers whose content is not zero-rated, as well as those consumers who do not want to pay higher data charges just to access the content of their choice online and through wireless devices.

34.The Commission has consistently expressed the view that ISPs (and presumably wireless carriers) should not be permitted to act as gatekeepers or to favour or disadvantage particular kinds of traffic on their networks:

We want to make sure that Internet service providers (ISPs) are neither favouring nor disadvantaging particular kinds of traffic on their networks. ISPs should not act as gatekeepers or censors. They should allow content providers and users to communicate freely.17

16 This growth of online streaming is expected to continue. See, for example, Music streaming services have racked up a trillion plays in 2015 alone, Chris Leo Palermino, August 13, 2015 (see: http://www.digitaltrends.com/music/streaming-music-services-pass-1-trillion-plays-2015/).Page 9 of 11

35.Videotron’s Unlimited Music service does not respect these net neutrality principles.

V. THE WIRELESS CODE

36. In addition to the above, it is also Rogers’ view that Videotron’s pricing policy for its Unlimited Music service contravenes the provision relating to overage charges in the Wireless Code. In the proceeding that resulted in the Wireless Code, consumers expressed frustration with plans that are advertised as being unlimited, but are then subject to unclear usage limitations or overage fees. As a result, the Commission imposed the following obligation in section 3(i) of the Wireless Code:

(i) A service provider must not charge a customer any overage charge for services purchased on an unlimited basis.

37. In the section of Videotron’s Unlimited Music website dealing with frequently asked questions (FAQs), Videotron indicates that customers who subscribe to Unlimited Music and believe that the service can be accessed on an unlimited basis will, in fact, be subject to additional charges. The FAQ provides as follows:

Does Unlimited Music work on the extended network? Yes. Data usage generated on partner networks is not deducted from your plan’s monthly data allowance. However, your total data usage is subject to extended network usage rules.

What is the transmission rate for streaming music? Unlimited Music lets you stream music at 128 Kbps, which is the average transmission rate for today’s apps. Data usage resulting from streaming music at speeds higher than 128 Kbps (high speed or high definition) may be deducted from your plan’s monthly data allowance.18

38. If a Videotron Unlimited Music customer is streaming at a high speed and data usage is generated on partner networks, the customer would then incur overage charges in violation of the Wireless Code. In addition, as noted above, if a customer streams audio via the five audio streaming services at transmission rates that exceed 128 Kbps, data usage may be deducted from the customer’s monthly data allowance.

VI. CONCLUSION

17 Speech by Konrad von Finckenstein, Q.C., Chairman, Canadian Radio-television and Telecommunications Commission, To the International Institute of Communications’ Telecommunications and Media Forum Washington, D.C. (December 14, 2011).18 See http://support.videotron.com/residential/mobile/unlimited-music .

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39.For all of these reasons, Rogers supports the Part 1 Applications filed by PIAC and Vaxination and firmly believes that the Unlimited Music service is being offered by Videotron in manner that contravenes the unjust discrimination provision in subsection 27(2) of the Telecommunications Act. By acting as a gatekeeper and selecting which audio services receive special zero-rated data usage treatment on its wireless network, Videotron has conferred upon consumers of these services, as well as upon the five audio streaming services that make up Unlimited Music, an undue and unreasonable preference. At the same time, Videotron has subjected their customers who subscribe to other audio content services, these other audio services and wireless competitors to an undue and unreasonable disadvantage.

40. In addition, the Unlimited Music service is being offered in a manner that is contrary to the Commission’s net neutrality rules and certain provisions in the Wireless Code.

41.Rogers appreciates the opportunity to address the issues raised in the Applications. We would be pleased to provide any additional information upon request.

Yours truly,

David WattSenior Vice President – RegulatoryCorporate Affairs

c.c.

Vaxination Informatique, jfmezei@vaxination.ca Consumers’ Association of Canada, the Council of Senior Citizens’ Organization of BritishColumbia, and the Public Advocacy Centre, gwhite@piac.ca and jlawford@piac.caVidéotron, dennis.beland@quebecor.com, yanick.boily@quebecor.com and regaffairs@quebecor.com

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