What does basic service mean in 2016?

Technology has changed much faster than the CRTC’s definition of what constitutes a basic telecommunications service that has to be available to all Canadians, which literally dates from the last millennium (1999, to be exact).

It stipulates, as the Wire Report noted (subscribers only) in a 2014 story, that basic service includes a telephone line “with capability to connect via low-speed data transmission to the Internet at local rates,” as well as services such as “Touch-Tone dialing” and “a copy of a current local telephone directory.”

Len Katz, a former CRTC vice-chairman of telecom, told the Wire Report in an interview at the time that the last time the commission looked at the issue in 2010-2011, it recognized that the definition was “old, antiquated and outdated,” but that the “technology was changing so quickly that we didn’t have a good handle on what speed was the most logical speed to mandate.”

Instead of updating the definition, it set speed targets of download speeds of 5 Mbps and upload speeds of 1 Mbps.

On Monday, the CRTC will tackle the issue again, beginning a three-week hearing during which 86 parties will appear in front of a panel, including large and small telecoms, representatives from the Yukon and Nunavut governments, advocacy and community groups and experts.

They’ll all weigh in on which services Canadians find necessary to participate in the digital economy, acceptable Internet upload and download speeds, the need for funding mechanisms to support the provision of modern telecom services, and the proper role of the CRTC, the government and industry players in the market.

Many parties have already made their positions known.  During the intervention phase, the large telecoms told the CRTC it’s not necessary to implement a subsidy system for broadband Internet service, while advocacy groups argued that relying on market forces and government funding alone hasn’t worked to ensure all Canadians have satisfactory Internet access.

The commission also asked Canadians for their input, and most selected a combination of government intervention, market forces and use of a CRTC-established fund as the approach that should be used to provide the minimum standard. Ahead of the hearing, it also published its results in a study of broadband Internet performance (which found speeds were beating benchmarks), and a map of broadband coverage.

In the debate about the best way to achieve the basic service goal, two issues are bound to come up.

As that map shows, service in rural and Northern Canada is very different from urban Canada, and the CRTC will hear about the challenges of bringing it up to par from service providers, government representatives, and various groups.

It will also consider the question of affordability. On Thursday, days before the start of the hearing, Rogers announced it would expand its Connected for Success program, which makes a $9.99-per-month Internet service available for those living in rent-geared-to-income housing, and it’s a model that’s also likely to engender some debate during the hearing. The Public Interest Advocacy Centre will advocate for an affordability subsidy for low-income households.

The CRTC isn’t the only regulator grappling with these questions. The U.S. Federal Communications Commission recently said it would begin providing subsidies of $9.95 towards Internet service for low-income individuals.

We’ll be watching the hearings closely over the next few weeks to see where the discussion goes. As for whose arguments and proposals the CRTC finds most persuasive, we’ll have to wait until the decision—which typically takes a few months—to find out.

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Are in-house ad agencies on the horizon for broadcasters?

As Vice Media makes the move from online giant to Canada’s newest broadcaster, it’s bringing to TV not only the attitude and style that made the company a digital juggernaut, but its ad strategies too.

That includes operating its own ad agency and making ads in the Vice style — the TV equivalent of sponsored content articles or videos.

Advertising money was the reason Vice decided to launch Viceland in the first place, which debuted Monday as part of a $100-million joint venture between Vice and Rogers.

Vice said (subscribers only) at a CRTC hearing last month that it’s hoping to draw more advertising from the likes of car companies and banks with a traditional TV platform than it was able to operating online-only.

“It sounds a bit crass, but absolutely we did it for the money,” Vice’s chief international growth officer David Purdy admitted at the time.

While sponsored content is commonplace on the Internet, it’s less so in TV’s hourly ad blocks. After all, TV broadcasters don’t normally have their own in-house ad agencies.

The ads will be “editorially relevant” to the show they’re accompanying but not “disguised as editorial,” Rogers and Vice executives told the Wire Report in interviews. They’ll be produced by Vice’s marketing and ad agency, Virtue, in the company’s Toronto studio, and be broadcast in addition to traditional 30-second spots.

As broadcast consultant Kelly Lynne Ashton noted, it makes sense Vice would be the company to export ad models from the Internet to television and not traditional broadcasters.

How well will it work? Less than a week into Viceland, that’s still to be determined.

The TV industry already knows it needs to evolve its ad offerings. It’s been a couple of years since Canadian TV first started playing with targeted ads, but as recently as last month Shaw Media president Barbara Williams was saying TV needs to step up that ability.

She said at a conference last month that TV will have to provide better audience data in order to keep up with digital competition, which allows advertisers to understand and target their audience more precisely.

Maybe the model offered by Viceland will see a quicker adoption by Canadian TV than targeted ads did if it turns out to be successful. That still remains to be seen. As Rick Brace, president of Rogers’ media business unit, said in an interview, right now “it’s bit of a wait and see.”

“But I think if 30 per cent of your population is millennials … advertisers will begin to flow,” he added.

And if it turns out the types of ads produced by Virtue for Viceland are a good way to reach that audience — which, after all, we hear all the time is becoming increasingly scarce on linear TV — others are likely to consider giving it a shot.

Canada’s biggest media and telecom companies are already Internet and TV service providers, phone companies, TV and radio broadcasters, magazine publishers, and more.

So why not ad agencies, too?

— Anja Karadeglija is editor of The Wire Report. She can be reached at akarad@thewirereport.ca.

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Tracking where you are will soon be a $40-billion business

Most Canadians with a smartphone know that certain apps are keeping track of their location, for example, when they order a ride from Uber or monitor the distance they’ve jogged.

But they may not be aware that other apps on their phone — like the free game Angry Birds — are also tracking where they are. So are retailers and wireless providers, as part of an industry projected to grow almost fivefold in the next four years.

The Public Interest Advocacy Centre put out a report (subs only) Tuesday, asking both the CRTC and the Office of the Privacy Commissioner to do more research on the practice of tracking Canadians through their mobile devices. PIAC concluded that it’s “not clear if Canada’s privacy regime is sufficiently responsive to Canadians’ concerns with location-based informational privacy.”

A phone survey PIAC commissioned in 2014 showed that 30 per cent of respondents said they didn’t know whether or not their smartphones were subject to tracking, while 77 per cent of respondents were very or somewhat uncomfortable with the concept, according to the report.

And there are a number of different ways Canadians’ whereabouts are monitored. Location tracking is being increasingly integrated into more and more apps, for instance. Some telecom companies are commercializing their ability to know where your phone is. Rogers, for instance, has a service that texts customers who have signed up when they are near a participating retail location. And the use by businesses of radio-frequency identification (RFID) technology is growing, PIAC said.

Some stores have sensor systems known as mobile location analytics (MLA), which allows retailers to track mobile devices within their range, gather data like how many repeat visitors stores have, store wait times and ratios of employees to customers.

In one example cited by the PIAC report, a Toronto restaurant using services provided by Turnstyle Analytics Inc. started carrying workout tops with its logo because it knew that 250 of its customers had been to the gym that month.

There are also companies that gather information from multiple sources and resell it. Toronto-based Via Informatics Inc. buys location data from wireless providers and collects data from sensors that detect WiFi and Bluetooth-enabled devices, and from geo-stamped social media posts. It aggregates the customer profiles and related analytics, and sells them to “businesses and public entities that want to know more about the customers that are found in their physical locales,” the report said.

Knowing where you are is worth a lot of money. PIAC cited a forecast from a U.S. research company called MarketsandMarkets that said the global location-based services market will grow from $8.12 billion US in 2014 to $38.87 billion US in 2019.

But whether that means regulatory bodies in Canada will start paying more attention is unclear.

The CRTC declined to comment on PIAC’s call to hold a fact-finding process into “into the collection, use, and disclosure of location information by telecommunications service providers.”

PIAC also said the Office of the Privacy Commissioner should look into consumer awareness and expectations regarding the practice, and “produce clear guidance on the level of consent required from smartphone users before their location can be collected.”

Privacy commissioner spokeswoman Tobi Cohen said in email that while the office is “certainly aware of this report and are reviewing it with interest,” she couldn’t say “at this point in time whether we will be developing guidance that focuses specifically on the form of consent required with respect to location data and smartphones.”

Anja Karadeglija is senior reporter at The Wire Report. She can be reached at akarad@thewirereport.ca.

 

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For telecoms, it’s all about the Internet

This week, both MTS and Bell launched new Internet plans that were a departure from the status quo — MTS joined its home Internet and wireless data in one plan, while Bell announced a new gigabit Internet service.

In interviews, representatives from the companies said they introduced the new services because, well, the Internet is becoming increasingly important to Canadians and we’re using more and more of it.

“Their applications, their personal content, the information that they’re looking for on the web; it’s just become such an important part of everyday life,” Paul Norris, MTS’ vice-president of brand and consumer marketing said (subs only) regarding the new Total Internet service. It offers both unlimited home Internet at 10 Mbps and wireless data, which has no overage fees, for between $60 for one person to $160 for five.

Bell wouldn’t release pricing for its Gigabit Fibe, which will first be available to about 50,000 homes and businesses in Toronto this summer, later to be extended to 1.1 million, as well as other cities in Quebec, Ontario and Atlantic Canada (essentially, where Bell already has deployed its fibre-to-the-home network). It’s the first big telecom to offer gigabit service, which at 1,000 Mbps is much faster than the average Canadian’s Internet speed (5 and 49 Mbps for downloads and about 1 Mbps for uploads, according to the CRTC).

“Increasingly we see that consumers’ lives revolve around the Internet, and more so in 2015 than ever,” said Nicolas Poitras, vice-president of marketing for Bell’s residential services.

Poitras said Gigabit Fibe would mark a “major shift” in Canadian telecom, while Norris described Total Internet as a “game-changer.” It seems likely we’ll see competitors release interesting offers of their own in the near future.

But MTS’ and Bell’s new services are also symptoms of an ongoing trend toward Internet service becoming telecoms’ core service.

TV watching is moving over-the-top, and the growing popularity of messaging and voice apps and services mean you don’t actually need traditional voice and text or to pay for cable or IPTV service to call your friends or watch TV.  Interestingly, voice and text are an optional add-on to MTS’ new service, making it the only Canadian telecom to offer a data-only plan.

So after decades in which these companies moved from a market where Canadians bought their phone service from the phone company and TV from the cable company to competing with each other in the provision of bundled telecom services, it’s all in the process of shrinking down to one battlefield.

In a world where there’s only one product that matters, all our telecom needs will be met by the Internet service provider.

If this week’s announcements are any indication, it’s going to be an interesting transition to watch — especially given that we’ll find out the new battle rules soon, with the CRTC’s release of its decision on the wholesale wireline market.

Anja Karadeglija is senior reporter at The Wire Report. She can be reached at akarad@thewirereport.ca.

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‘Socially unacceptable’ or not, VPNs aren’t going away

Bell Media’s new boss made headlines this week when she chose to focus her first speech since taking over Kevin Crull’s job on the use of virtual private networks (VPNs) to watch content not available in Canada.

Mary Ann Turcke said using VPNs in this way is “stealing,” and stated that it’s become “socially unacceptable” to admit to such practices — in the same way as throwing garbage out of a car window.

It wasn’t a new position for Bell Media, given that Turcke’s predecessor also equated (subs only) such practices to piracy earlier this year.

But is it the right one?

I’d imagine more people are likely to confess to VPN use at their next dinner party than Turcke would like to admit, but that may be based on an occupational hazard — when I tell people I’m a telecom/media reporter, it’s the kind of topic that tends to come up.

Plus, it’s a practice at least one-third of Canadian Netflix users are willing to admit to, given that’s how many told a recent Media Technology Monitor survey they access American Netflix.

Whether VPN use is actually theft may also not be as clear-cut as Turcke would like it to be. University of Ottawa law professor Michael Geist disagreed in a blog post last year, stating that while the practice may be in a legal “grey zone,” it’s not stealing.

He was one of the panelists at a recent discussion during the Rebooting Canada’s Communications Legislation conference, where he and former CRTC commissioner Timothy Denton pointed to the dangers of trying to control such technology.

Denton said using firewalls to control Internet access isn’t compatible with a democratic society, while Geist pointed out VPNs have more important purposes than accessing TV content, including safeguarding communications and privacy, both in Canada and in countries where free speech isn’t a given.

It’s a topic that’s been coming up more frequently in the past year or two (Bell rival Rogers denied an executive called for a ban on VPNs earlier this year).

Turcke’s comments inspired commentary in the telecom/media blogosphere, with Denton arguing that if “government were to engage in a technical arms race with consumers to block access, they will only tunnel deeper to get under the wire.” Peter Nowak wrote that if Bell wants to stop VPNs use, it should make it easier for customers to access the content they want, calling Bell’s tying of its CraveTV streaming service to a TV subscription “extortion.”

It’s a discussion that seems set only to intensify with the growth of streaming services like CraveTV and Rogers’ and Shaw’s Shomi in Canada, and from the likes of HBO, Showtime and CBS in the U.S.

As VPN use becomes a bigger thorn in the side of those selling and buying content, and those selling the streaming services housing that content, it seems likely the courts could eventually be called to weigh in on the issue (though I’ll leave it to the legal experts to speculate on how that would actually play out).

There’s also the possibility, as the Wire Report reported last year, that VPN use could instead eliminate geographic licensing, and we could see content being sold on a world-wide basis instead.

That’s a scenario consumers would likely welcome, but one in which streaming would presumably be dominated by global giants like Netflix — an outcome the likes of Bell and Rogers aren’t likely to relish.

Anja Karadeglija is senior reporter at The Wire Report. She can be reached at akarad@thewirereport.ca.

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