Motion record: appeal of BTD 2015-26 (mobile TV zero-rating) by Bram Abramson

Court File No. FEDERAL COURT OF APPEAL BETWEEN: BELL MOBILITY INC. Moving Party - and BENJAMIN KLASS, THE CONSUMERS' ASSOCIATION OF CANADA, THE COUNCIL OF SENIOR CITIZENS' ORGANIZATIONS OF BRITISH COLUMBIA AND THE PUBLIC INTEREST ADVOCACY CENTRE, THE CANADIAN NETWORK OPERATORS CONSORTIUM INC., BRAGG COMMUNICATIONS INC. (CARRYING ON BUSINESS AS EASTLINK), FENWICK MCKELVEY, VAXINATION INFORMATIQUE, THE SAMUELGLUSHKO CANADIAN INTERNET POLICY & PUBLIC INTEREST CLINIC, DAVID ELLIS and TERESA MURPHY Respondents MOTION RECORD IN WRITING OF THE MOVING PARTY, BELL MOBILITY INC. (Motion for leave to appeal Broadcasting and Telecom Decision CRTC 2015-26, rendered by the Canadian Radio-television and Telecommunications Commission on January 29, 2015) (Section 31(2) of the Broadcasting Act, Section 64(2) of the Teleconununications Act and Rule 352 of the Federal Courts Rules) McCarthy Tetrault LLP Suite 5300, TD Bank Tower 66 Wellington Street West Toronto ON M5K 1E6 Neil Finkelstein Brandon Kain Richard Lizius Tel: 416-362-1812 Fax: 416-868-0673 Solicitors for the Moving Party, Bell Mobility Inc.

TO:

Benjamin Klass Box 22, Whiteshell Post Office West Hawk Lake, MB ROE 2H0

AND TO: Canadian Radio-television and Telecommunications Commission Les Terrasses de la Chaudiere Central Building 1 Promenade du Portage Gatineau, QC J8X 481 AND TO: The Honourable Peter MacKay Minister of Justice and Attorney General of Canada 284 Wellington Street Ottawa, ON KIA 0148 AND TO: Geoffrey White and Jean-Francois Leger the Canadian Association of Consumers, the Council of Senior Citizens' Organizations of British Columbia, and the Public Interest Advocacy Centre One Nicholas Street, Suite 1204 Ottawa, ON K1N 7B7 AND TO: William Sandiford Canadian Network Operators Consortium Inc. 107-85 Curlew Drive Toronto, ON M3A 2P8 AND TO: Natalie MacDonald Bragg Communications Inc. (carrying on business as Eastlink) 6080 Young Street, 8th Floor Halifax, NS B3K 5M3 AND TO: Fenwick McKelvey 7141 Sherbrooke Street West Montreal, QC H4B 1R6 AND TO: Jean-Francois Mezei Vaxination Informatique CP 1016 Succ Pointe Claire, QC H9S 4H9 AND TO: Tamir Israel The Samuel-Glushko Canadian Internet Policy & Public Interest Clinic University of Ottawa, Faculty of Law, CML 57 Louis Pasteur Street, ON K1N 6N5

2 AND TO: David Ellis 510-131 Bloor St. West Toronto, ON M5S 1S3 AND TO: Teresa Murphy Registry of the Federal Courts 180 Queen Street West, Suite 200 Toronto, ON M5V 3L6 AND TO: Denis Wand Quebecor Media Inc. (Quebecor), Videotron Ltd. and Videotron G.P. 612, rue St-Jacques, 15th etage, Tour Sud Montreal, QC H3C 4M8 AND TO: Ann Mainville-Neeson TELUS Communications Company 215 Slater Street Ottawa, ON K1P 0A6 AND TO: Steven James May Registry of the Federal Courts 180 Queen Street West, Suite 200 Toronto, ON M5V 3L6 AND TO: Peter Kovacs Rogers Communications Partnership 333 Bloor Street East, 9th Floor Toronto, ON M4W 1G9

INDEX

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INDEX

Tab

Document Description

Notice of Motion seeking leave to appeal Broadcasting and Telecom Decision 2015-26, rendered by the Canadian Radio-television and Telecommunications Commission on January 29, 2015, dated February 20, 2015 Broadcasting and Telecom Decision 2015-26, Complaint against Bell Mobility Inc. and Quebecor Media Inc., Videotron Ltd. and Videotron G.P. alleging undue and unreasonable preference and disadvantage in relation to the billing practices for their mobile TV services Bell Mobile TV and illico.TY, dated January 29, 2015

Affidavit of Katherine Stubits, sworn February 20, 2015

4 Tab A.

B. C.

E. F.

H. I.

J. K.

Document Description Exhibit "A": Application requesting fair treatment of Internet services by Bell Mobility, Inc., pursuant to CRTC 2010-445 and CRTC 2009-657 and The Telecommunications Act, s. 24 & subsection 27(2) of Benjamin Klass, dated November 30, 2013 Exhibit "B": Abridged Answer of Bell Mobility Inc, dated January 9, 2014 Exhibit "C": Intervention of the Canadian Association of Consumers, the Council of Senior Citizens Organizations of British Columbia, and the Public Internet Advocacy Centre, dated January 9, 2013 Exhibit "D": Letter from Mario Betrand of the Canadian Radiotelevision and Telecommunications Commission to various parties, dated January 31, 2014 Exhibit "E": Comments of Benjamin Klass, dated March 5, 2013 Exhibit "F": Supplementary Intervention of the Canadian Association of Consumers ,the Council of Senior Citizens Organizations of British Columbia, and the Public Internet Advocacy Centre, dated March 5, 2014 Exhibit "0": Letter from Philippe Gauvin of Bell Canada to John Traversy of the Canadian Radio-television and Telecommunications Commission, dated April 25, 2014 containing the Abridged First Responses to Requests for Information of Bell Mobility Exhibit "H": Abridged Reply Comments of Bell Mobility Inc., dated May 12, 2014 Exhibit "I": Reply Comments of the Canadian Association of Consumers ,the Council of Senior Citizens Organizations of British Columbia, and the Public Internet Advocacy Centre, dated May 12, 2014 Exhibit "J": Final Reply Comments of Benjamin Klass, dated May 12, 2014 Exhibit "K": Letter from Philippe Gauvin of Bell Canada to John Traversy of the Canadian Radio-television and Telecommunications Commission, dated August 21, 2014 containing the Abridged Second Responses to Requests for Information of Bell Mobility

5 Tab

Document Description

Exhibit "L": Letter from Philippe Gauvin of Bell Canada to John Traversy of the Canadian Radio-television and Telecommunications Commission, dated October 14, 2014, containing the Abridged Third Responses to Requests for Information of Bell Mobility.

Memorandum of Fact and Law of the Moving Party, Bell Mobility Inc., dated February 20, 2015

Tab 1

NOTICE OF MOTION FOR LEAVE TO APPEAL

TAKE NOTICE THAT Bell Mobility Inc. ("Bell Mobility") will make a motion to the Court in writing under Rule 352 of the Federal Courts Rules. THE MOTION IS FOR: (a)

an Order granting leave to appeal, pursuant to s. 31(2) of the Broadcasting Act and s. 64(2) of the Telecommunications Act, from Broadcasting and Telecom Decision 2015-26, rendered by the Canadian Radio-television and Telecommunications Commission ("CRTC") on January 29, 2015 ("Decision 2011-765", or the "Decision");1

(b)

costs against the Respondents; and

Complaint against Bell Mobility Inc. and Quebecor Media Inc., Videotron Ltd. and Videotron G.P. alleging undue and unreasonable preference and disadvantage in relation to the billing practices for their mobile TV services Bell Mobile TV and illico. TV â&#x20AC;&#x201D; Broadcasting and Telecom Decision CRTC 2015-26, 29 January 2015.

2 (c)

such further and other relief as counsel may advise and/or this Honourable Court may permit.

THE GROUNDS FOR THE MOTION ARE:

I. Overview 2.

Bell Mobility is a wholly-owned subsidiary of BCE Inc., and provides wireless services

throughout Canada. 3.

One of the services which Bell Mobility offers is Bell Mobile TV, a service that allows

subscribers to view television "broadcasting content" consisting of programming services and other programs on their wireless devices. 4.

The process by which Bell Mobility distributes Bell Mobile TV is significantly different

from the process by which Bell Mobility provides subscribers with wireless Internet connectivity to access Internet-based streaming video applications such as Netflix or YouTube: (a)

Bell Mobility itself acquires, aggregates, packages and markets Bell Mobile TV content before retransmitting it to subscribers. By contrast, Bell Mobility has no involvement with the content of third-party Internet-based video services that are accessible via Bell Mobility's wireless data service, but simply acts as an Internet service provider ("ISP") who enables subscribers to access those Internet services through connectivity to its wireless network.

(b)

Bell Mobility only distributes Bell Mobile TV to persons who subscribe to a wireless voice, data or tablet plan with Bell Mobility or one of its affiliates, using point-to-point technology that is accessible from those subscribers' mobile devices. By contrast, the Internet-based programming services that Bell Mobility enables subscribers to access in its capacity as an ISP are simply uploaded by their programmers to the Internet, where they become accessible to anyone with an Internet connection regardless of whether that connection is provided by Bell Mobility or a different ISP.

-35.

In operating Bell Mobile TV, Bell Mobility is regulated as a broadcasting undertaking

("BU") that is exempt from the licensing and regulatory requirements of the Broadcasting Act under s. 2(b) of the Exemption Order for Digital Media Broadcasting Undertakings (the "DMBU Exemption Order").2 Conversely, in providing subscribers with wireless connectivity to Internet-based video programming and other telecommunications services, Bell Mobility is regulated as a telecommunications common carrier ("TCC") under the Telecommunications Act. 6.

Bell Mobility does not require that subscribers who access Bell Mobile TV pay the

standard data charges which apply when they access Internet-based services using Bell Mobility. Instead, Bell Mobility charges subscribers $5 per month to access up to 10 hours of Bell Mobile TV, and $3 for each additional hour. 7.

On November 20, 2013, Mr. Benjamin Klass filed a complaint against Bell Mobility

under s. 27(2) of the Telecommunications Act, alleging that its practice of exempting Bell Mobile TV from standard data charges confers an undue preference upon Bell Mobility, and unjustly discriminates against wireless customers that consume mobile Internet-based video services along with Bell Mobility's competitors. 8.

In Decision 2015-26, the majority of the CRTC allowed the Klass complaint, holding

Bell Mobility gave itself and its subscribers an undue preference, and subjected other subscribers and competitors to an undue disadvantage, through the Bell Mobile TV data charge exemption. 9.

Commissioner Shoan delivered a concurring opinion in which he dissented from

significant aspects of the majority's reasoning. 10.

The CRTC majority ordered Bell Mobility to eliminate the Bell Mobile TV data charge

exemption by no later than April 29, 2015. 11.

Based on the two grounds set out below, and described more fully in Bell Mobility's

Memorandum of Fact and Law, Bell Mobility submits there is an arguable case that the CRTC

Amendments to the Exemption order for new media broadcasting undertakings (now known as the Exemption order for digital media broadcasting undertakings) â&#x20AC;&#x201D; Broadcasting Order CRTC 2012-409, Appendix, 26 July 2012, BOA.

4 made errors of law and jurisdiction. Accordingly, leave to appeal should be granted under s. 31(2) of the Broadcasting Act and s. 64(2) of the Telecommunications Act. 2. The Grounds of Appeal a. The CRTC Erred in Finding the Telecommunications Act Applicable 12.

The CRTC majority held that Bell Mobility acts as a TCC that is subject to s. 27(2) of the

Telecommunications Act when it retransmits Bell Mobile TV content to its subscribers, on the basis that Bell Mobility does so through the same wireless network and subscriber interface Bell Mobility uses to provide subscribers with access to the Internet and other telecommunications services. However, the majority also held that Bell Mobility operates Bell Mobile TV as BU that is governed by the Broadcasting Act. 13.

Both statutes are clear that BUs are exempt from the Telecommunications Act and are

governed by the Broadcasting Act. Further, the case law treats BUs as indivisible entities for jurisdictional purposes, and the Broadcasting Act must be applied in a technologically neutral manner which does not depend on the method by which broadcasting services are delivered. 14.

The CRTC therefore had no jurisdiction to apply s. 27(2) of the Telecommunications Act

to Bell Mobility in respect of Bell Mobile TV.

b. The CRTC Had No Evidence and Misapplied the Burden of Proof 15.

The CRTC majority made significant findings of fact that were unsupported by any

evidence. It found that the Bell Mobile TV data charge exemption would impact consumers, despite the fact that there was no evidence of harm to consumers and the data charge exemption in fact means lower prices for Bell Mobile TV subscribers. Further, despite acknowledging that there were no complaints or interventions filed by competing service providers, the majority speculated that the Bell Mobile TV data charge exemption had the potential to adversely impact such competing services in the future. 16.

The CRTC majority also improperly shifted the burden of rebutting the findings to Bell

Mobility under s. 27(4) of the Telecommunications Act. The issue of whether Bell Mobile TV's

5 exemption from standard data caps would have a material adverse impact on other competing services is something that the CRTC rather than Bell was in the best position to provide evidence about. In these circumstances, the presumption that legislation complies with procedural fairness required that s. 27(4) be interpreted so that the onus of proof did not shift to Bell. 17.

In making significant findings without evidence, and wrongly shifting the burden of

proof to Bell, the CRTC erred in law and jurisdiction, and breached Bell's right to procedural fairness. 18.

By engaging in these acts, the CRTC erred in law and jurisdiction.

THE FOLLOWING LEGISLATIVE PROVISIONS will be relied on at the hearing of the motion: (a)

the Broadcasting Act, S.C. 1991, c. 11, as amended;

(b)

the Copyright Act, R.S.C. 1985, c. C-42, as amended;

(c)

the Department of Canadian Heritage Act, S.C. 1995, c. 11, as amended;

(d)

the Department of Industry Act, S.C. 1995, c. 1, as amended;

(e)

the Telecommunications Act, S.C. 1993, c. 38, as amended;

(f)

the Radiocommunication Act, R.S.C. 1985, c. R-2, as amended;

(g)

the Federal Courts Rules, SOR/98-106, as amended; and

(h)

such further and other legislative provisions as counsel may advise and/or this Honourable Court may permit.

THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the motion: (a)

the affidavit of Katherine Stubits, sworn February 20, 2015; and

(b)

such further and other grounds as counsel may advise and/or this Honourable Court may permit.

February 20th, 2015 McCarthy Tetrault LLP Suite 5300, TD Bank Tower 66 Wellington Street West Toronto ON M5K 1E6 Neil Finkelstein Brandon Kain Richard Lizius Tel: 416-362-1812 Fax: 416-868-0673 Solicitors for the Moving Party, Bell Mobility Inc. TO:

Benjamin Klass Box 22, Whiteshell Post Office West Hawk Lake, MB ROE 2H0

AND TO: Natalie MacDonald Bragg Communications Inc. (carrying on business as Eastlink) 6080 Young Street, 8th Floor Halifax, NS B3K 5M3 AND TO: Fenwick McKelvey 7141 Sherbrooke Street West Montreal, QC H4B 1R6 AND TO: Jean-Francois Mezei Vaxination Informatique CP 1016 Succ Pointe Claire, QC H9S 4H9 AND TO: Tamir Israel The Samuel-Glushko Canadian Internet Policy & Public Interest Clinic University of Ottawa, Faculty of Law, CML 57 Louis Pasteur Street, ON K1N 6N5 AND TO: David Ellis 510-131 Bloor St. West Toronto, ON M5S 1S3 AND TO: Teresa Murphy Registry of the Federal Courts 180 Queen Street West, Suite 200 Toronto, ON M5V 3L6 AND TO: Denis Beland Quebecor Media Inc. (Quebecor), Videotron Ltd. and Videotron G.P. 612, rue St-Jacques, 151" etage, Tour Sud Montreal, QC H3C 4M8 AND TO: Ann Mainville-Neeson TELUS Communications Company 215 Slater Street Ottawa, ON KIP 0A6 AND TO: Steven James May Registry of the Federal Courts 180 Queen Street West, Suite 200 Toronto, ON M5V 3L6 AND TO: Peter Kovacs Rogers Communications Partnership 333 Bloor Street East, 9th Floor Toronto, ON M4W 1G9

Tab 2

Radio-television and Telecommunications Commission 14,1â&#x20AC;˘ Canadian

Conseil de la radiodiffusion et des telecommunications canadiennes

Broadcasting and Telecom Decision CRTC 201546 PDF version Route reference: Part 1 applications posted on 22 November 2013 and 10 January 2014 Ottawa, 29 January 2015 Mr. Benjamin Klass, and the Consumers' Association of Canada, the Council of Senior Citizens' Organizations of British Columbia and the Public Interest Advocacy Centre

Applications 2013-1664-6 and 2014-0013-4 File numbers: 8622-B92-201316646 and 8622-P8-201400134

Complaint against Bell Mobility Inc. and Quebecor Media Inc., Videotron Ltd. and Videotron G.P. alleging undue and unreasonable preference and disadvantage in regard to the billing practices for their mobile TV services Bell Mobile TV and illico.tv The Commission finds that Bell Mobility Inc. (Bell Mobility) and Quebecor Media Inc., Videotron Ltd and Videotron G.P. (collectively, Videotron), violated subsection 27(2) of the Telecommunications Act by exempting their mobile TV services Bell Mobile TV and illico.tv from data charges. Subsection 27(2) prohibits Canadian carriers from conferring an undue disadvantage to others, or an undue preference to itself or others. 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. In light of the above, the Commission directs Bell Mobility to eliminate its unlawful practice with respect to data charges for its mobile TV service by no later than 29 April 2015. Further, the Commission directs Videotron to confirm by 31 March 2015 that it completed its planned withdrawal of its illico.tv app for Blackberry- and Android-based phones by 31 December 2014, thereby removing any undue preference for its mobile TV service, and ensure that any new mobile TV service complies with the determinations set out in this decision. This decision will favour an open and non-discriminatory marketplace for mobile TV services, enabling innovation and choice for Canadians. The Commission is very supportive of the development of new means by which Canadians can access both Canadian-made and foreign audiovisual content. However, mobile service providers cannot do so in a manner contrary to the Telecommunications Act.

A concurring opinion by Commissioner Raj Shoan is attached to this decision.

Canada

Applications 1. Mr. Benjamin Klass filed an application in regard to billing practices by Bell Mobility Inc. (Bell Mobility) for its Bell Mobile TV service (application 2013-1664-6; file number 8622-B92-201316646). Subsequently, the Consumers' Association of Canada, the Council of Senior Citizens' Organizations of British Columbia and the Public Interest Advocacy Centre (collectively, PIAC et al.) filed an application in regard to billing practices by Quebecor Media Inc. (Quebecor), Videotron Ltd. and Videotron G.P. (collectively, Videotron) for Videotron's mobile TV service illico.tv (application 2014-0013-4; file number 8622-P8-201400134).1 For the purposes of the present decision, Mr. Klass and PIAC et al. will be referred to collectively as "the applicants," and Bell Mobile TV and illico.tv will be referred to collectively as "the mobile TV services." 2. The applicants objected to the practice by Bell Mobility and Videotron of exempting the mobile TV services from the standard monthly data caps and data charges (to be referred to collectively in this decision as "data charges") generally applicable to their wireless services. They requested that the Commission prohibit Bell Mobility and Videotron from exempting their mobile TV services from data charges as this practice confers upon themselves an unfair advantage, gives their mobile TV services an undue preference, and unduly discriminates against their wireless customers that consume mobile online video services, and against Bell Mobility's and Videotron's competitors, in violation of subsection 27(2) and, according to Mr. Klass, section 24, of the Telecommunications Act, which read as follows: 24. The offering and provision of any telecommunications service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission. 27.(2) 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. 3. Mr. Klass also characterized the data charges as an application-specific economic Internet Traffic Management Practice (ITMP) and requested that the Commission prohibit the use of application-specific ITMPs for the purpose of providing unduly preferential access to mobile TV services. Background 4. The mobile TV services are accessed on mobile devices via apps (i.e., mobile application software) developed by Bell Mobility and Videotron (for Videotron, on Android- and Blackberry-based phones). These services offer aggregated broadcasting content: they offer PIAC et al. also filed a Part 1 application (2014-0014-2) in regard to the billing practices by Rogers Communications Partnership (Rogers) for its mobile TV service Rogers Anyplace TV. However, by letter dated 9 September 2014, this Part 1 application was closed after the Commission was informed by Rogers that it no longer offers the $5 mobile service data plan for that service.

mostly live streaming of television stations, and other related television programming services, with access to a limited library of video-on-demand content. 5. The choice of television services offered on these mobile TV services varies. Bell Mobility's customers have a greater choice of television services if they are also Bell Fibe and/or Bell Express Vu customers. In regard to Videotron, only its cable subscribers can become customers of its mobile TV service. Videotron determines the channels that are available to customers, depending on a customer's billing address and on whether the customer subscribes to that channel as part of its cable subscription. 6. To access the mobile TV services on a mobile device, a subscriber must also subscribe to a wireless voice plan, data plan or tablet plan. In regard to Bell Mobile TV, the subscriber must subscribe to a Bell Mobility service or to one of its affiliates, such as Virgin Mobile. The data consumed in accessing the mobile TV services over Bell Mobility's 2 and Videotron's mobile networks is exempt from those service providers' wireless data charges, subject to the following: â&#x20AC;˘

Bell Mobility charges its subscribers $5 per month to access its service on their mobile devices, which covers up to ten hours of content.3 It charges $3 for each additional hour.

â&#x20AC;˘

Videotron charges its subscribers $5 per month to access five hours of content, $10 per month for 15 hours of content, and $15 per month for 30 hours of content, with any additional hours in each plan charged at $1.50 per hour. These Videotron rates were in place for only Android- and Blackberry-based phones when PIAC et al. filed its application.

Proceeding 7. The following parties participated in this proceeding: the Canadian Network Operators Consortium Inc., Bragg Communications Incorporated, TELUS Communications Company, Vaxination Informatique, the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, York University, Bell Mobility, Quebecor, on behalf of its affiliate Videotron G.P., and various individuals, as well as Mr. Klass and PIAC et al. In addition to their submissions, Bell Mobility and Videotron filed responses to written interrogatories addressed by Commission staff. The public record for this proceeding, upon which the Commission's determinations in the present decision are based, is available on the Commission's website at www.crtc.gc.ca or by using the file numbers provided above. Issues 8. After examining the complete public record of this proceeding, the Commission considers that the issues it must address are the following:

Bell Mobility's mobile TV service is also accessible via any Wi-Fi connection. 3 One hour of viewing equals approximately 0.5 gigabytes of data. 2

â&#x20AC;˘

whether Bell Mobility and Videotron are providing telecommunications services and are operating as Canadian carriers in regard to the transport of their mobile TV services to subscribers' mobile devices;

â&#x20AC;˘

if Bell Mobility and Videotron are operating as Canadian carriers providing telecommunications services in regard to the transport of their mobile TV services to subscribers' mobile devices, whether in doing so they are acting in violation of the Commission's ITMP rules, as alleged by the applicants; and

â&#x20AC;˘

if Bell Mobility and Videotron are operating as Canadian carriers providing telecommunications services in regard to the transport of their mobile TV services to subscribers' mobile devices, whether in doing so they are acting in violation of subsection 27(2) of the Telecommunications Act, as alleged by the applicants.

Are Bell Mobility and Videotron providing telecommunications services and operating as Canadian carriers in regard to the transport of their mobile TV services to subscribers' mobile devices?

9. The Telecommunications Act applies to the provision of telecommunications services by Canadian carriers and, in some respects, to other telecommunications service providers.4 Section 4 of the Telecommunications Act provides that the Telecommunications Act does not apply to broadcasting by a broadcasting undertaking, which is subject to the Broadcasting Act. 10. The threshold issue in dispute in this proceeding is whether Bell Mobility and Videotron, in the transport of the mobile TV services to end users' mobile devices, are operating as Canadian carriers providing telecommunications services and are therefore subject to the Telecommunications Act and policies made pursuant to that Act. Positions of parties

11. Mr. Klass submitted that the means by which Bell Mobile TV is delivered to customers is a telecommunications service subject to the Telecommunications Act and related rules. He argued that Bell Mobile TV is accessed and delivered over the same telecommunications facility that is used by Bell Mobility customers when they access any other online video, Internet or telecommunications service on their mobile devices, and that Bell Mobility has not contradicted this in its statements on the record. Mr. Klass also argued that the distinction between "delivery over the Internet" and "point-to-point delivery" does not exist for consumers who access content on their mobile devices. From this perspective, Bell Mobile TV operates no differently than any other Internet-enabled mobile service. 12. Videotron submitted that a mobile TV service is a broadcasting service because it offers television content to its subscribers and is exempt by virtue of the Exemption Order for Digital Media Broadcasting Undertakings (DMBU exemption order).5 Bell Mobility 4 Telecommunications Act S.C. 1993 c. 28 as amended. In particular, see amendments set out in Economic Action Plan 2014 Act, No, 2, S.C. 2014, c. 39. 5 This exemption order is set out in the appendix to Broadcasting Order 2012-409.

submitted that when providing its mobile TV service, it is operating as a broadcasting undertaking that is in accordance with paragraph 2.b) of the DMBU exemption order. It further submitted that by virtue of section 4 of the Telecommunications Act, this Act cannot apply to it, and that when offering and providing Bell Mobile TV, it is therefore not subject to the Telecommunications Act. Bell Mobility also argued that the Commission is precluded from applying subsection 27(2) of the Telecommunications Act to mobile TV services as this provision applies to the provision of a telecommunications service by a Canadian carrier. In its view, when it offers its mobile TV service, it is not acting as a Canadian carrier but as a broadcasting distribution undertaking (BDU). As such, its mobile TV service is not a telecommunications service. 13. Bell Mobility stated that, in contrast to an Internet service provider (ISP) that has no involvement with the content it distributes, it has acquired the necessary programming distribution rights from the relevant copyright owners in order to wirelessly distribute its mobile TV service. It asserted, among other things, that regardless of whether subscribers have a wireless data plan, it activates and deactivates subscribers simply by selling or cancelling the mobile TV service. Bell Mobility submitted that in contrast to apps that launch connectivity to Internet-based video services, its mobile TV app launches a BDU delivered using point-to-point technology and accessed by way of mobile devices. 14. In Bell Mobility's view, it is a broadcasting undertaking when offering Bell Mobile TV, and it is acting as a Canadian carrier offering a telecommunications service when providing wireless connectivity that enables its subscribers to view programming on their mobile devices. Commission's analysis and decision 15. The Commission considers that Bell Mobility and Videotron, in acquiring the mobile distribution rights for the content available on their mobile TV services, in aggregating the content to be broadcast, and in packaging and marketing those services, are involved in broadcasting. In this regard, it notes that no party to this proceeding disputed that mobile TV services constitute broadcasting services as contemplated by the DMBU exemption order. 16. Further, the Commission considers, and no one disputed, that Bell Mobility and Videotron operate as Canadian carriers when they provide access to the Internet and other voice and data services to their subscribers. In particular, consistent with Bell Mobility's submission, the Commission considers that Bell Mobility and Videotron are acting as Canadian carriers providing a telecommunications service when they make available the wireless data connectivity used by subscribers to view programming services over the Internet. It also considers that Bell Mobility's and Videotron's roles as Canadian carriers in providing wireless data connectivity and transport services to enable subscribers to access content on their mobile devices are not necessarily transformed into those of broadcasting undertakings merely because they are involved in the content. Rather, it is necessary to examine in each case the facts to determine the true nature of the services being provided. 17. The Commission finds that in order to transport their mobile TV services from their servers to subscribers' mobile devices, Bell Mobility and Videotron use their respective wireless

access networks.6 These are the very same networks they use to deliver their wireless voice and data telecommunications services, which are clearly telecommunications services subject to the Telecommunications Act. Moreover, these services' traffic is currently treated the same as other traffic in Bell Mobility's and Videotron's wireless access networks. Based on both Bell Mobility's and Videotron's submissions, the data path is the same regardless of whether the Bell Mobile TV or illico.tv subscriber has a wireless voice plan, data plan or tablet plan. 18. Further, given the network descriptions provided by Bell Mobility and Videotron, the Commission finds that the functions performed by Bell Mobility and Videotron to establish the data connectivity and provide transport over their wireless access networks would be the same whether the content being transported is their mobile TV services, other broadcasting services, or non-broadcasting services. That is, the purpose of these functions is to establish data connectivity and transport the content â&#x20AC;&#x201D; agnostic as to the content itself. 19. As submitted by Mr. Klass, from a subscriber's perspective, the mobile TV services are accessed and delivered under conditions that are substantially similar to those of other Internet-originated telecommunications services. Also, as indicated by Mr. Klass, the consumer accesses the mobile TV service on its mobile device in the same way that it accesses other apps. 20. Subscribers to the mobile TV services require data connectivity whether or not they have a data plan.? Data connectivity is required to authenticate the end user as a mobile TV service subscriber and to transmit the content to end users' mobile devices. 21. In the facts of the present case, the data connectivity required to access the mobile TV services cannot be established unless the subscriber obtains a telecommunications service from Bell Mobility or Videotron. In the case of Bell Mobility, only an end user that subscribes to a Bell Mobility (or Bell Mobility affiliate) mobile wireless voice plan, data plan or tablet plan can subscribe to Bell Mobility's mobile TV service. In the case of Videotron, a customer needs to subscribe to a mobile wireless voice service to use the app. As such, 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 noted above, this necessary data connection enables that end user to access the mobile TV services' content. 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 In this regard, see, for example, in addition to the submissions, Bell Mobility's response to the Commission's interrogatory #7 of 4 April 2014, which can be accessed on the Closed Part 1 Applications page by clicking on "Responses to requests for information". 'In this regard, see, for example, in addition to the submissions, Bell Mobility's response to the Commission's interrogatory #13 of 5 August 2014, which can be accessed on the Closed Part 1 Applications page by clicking on "Responses to requests for information". 6

Telecommunications Act. This is the case whether or not concurrent broadcasting services are also being offered. 23. The fact that the transport of the mobile TV service constitutes a telecommunications service is reinforced when the availability of Bell Mobility's mobile TV service over Wi-Fi is considered. When Bell Mobility's mobile TV service is accessed by subscribers over a Wi-Fi network (whether public, such as in restaurants and cafĂŠs, or private, such as in their homes), the content is transported over the Internet by another telecommunications service provider (TSP) to the end users' mobile devices. As such, Bell Mobility's wireless access network is not engaged. 24. In the Commission's view, just as the TSP provides a telecommunications service when it transports the mobile TV service accessed by a subscriber using so too is Bell Mobility providing a telecommunications service when it provides the transport, and data connectivity, so that the mobile TV service can reach its subscribers' mobile devices. 25. The Commission therefore rejects Bell Mobility's and Videotron's arguments that the relief claimed pursuant to the Telecommunications Act should be denied on the basis that they are not subject to that Act. Section 4 of the Telecommunications Act does not apply as a shield to the application of the Telecommunications Act in this case given that Bell Mobility and Videotron are acting as Canadian carriers in providing transport and data connectivity services required for the delivery of their mobile TV services, as discussed above. Accordingly, the Commission considers below the requests made by Mr. Klass and PIAC et al. in regard to the Commission's ITMP rules and for relief pursuant to its powers under the Telecommunications Act to prevent unjust discrimination, or undue or unreasonable preference or advantage. Are Bell Mobility and Videotron, when operating as Canadian carriers providing telecommunications services in regard to the transport of their mobile TV services to subscribers' mobile devices, acting in violation of the Commission's Internet Traffic Management Practices rules?

26. ISPs employ ITMPs to address possible congestion in their networks, including linking rates to user consumption. In Telecom Regulatory Policy 2009-657, the Commission established an ITMP framework that provides clarity and a structured approach to evaluating whether existing and future ITMPs are in compliance with subsection 27(2) of the Telecommunications Act. Positions of parties

27. Mr. Klass submitted that Bell Mobility employs two different data caps, one of which is specific to the mobile TV service, the other to all other Internet traffic. He characterized Bell Mobility's exemption of its mobile TV service as an application-specific economic ITMP, set at ten hours of viewing per month, and noted that the second data cap varies according to the rate plans offered by the operator. In his view, the $5 that customers are charged for access to Bell Mobility's mobile TV service constitutes an ITMP that is substantially less than the ITMP that applies to other Internet traffic.

28. One individual who intervened in this proceeding took the view that hourly billing or data usage-based billing are economic ITMPs that manage Internet use by charging customers based on some measure of their consumption. 29. Bell Mobility submitted that its mobile TV service is not an ITMP and that it was never designed as a measure to manage traffic generated over the Internet. It challenged the assertion that the $5 monthly charge for ten hours is an ITMP, arguing that it is the charge for a television service delivered over a mobile wireless access network. 30. Videotron also submitted that a billing model does not necessarily constitute an ITMP. Noting that there are many billing models with different characteristics, it stated that its practice is clear and easy to understand. Videotron further submitted that differences between billing models do not necessarily lead to undue preference or unjust discrimination, especially when the service in question is being offered in an experimental environment. Commission's analysis and decision

31. Wireless carriers can use ITMPs to manage traffic and address possible congestion in their networks. The data charges relating to the data connectivity and/or transport by Bell Mobility and Videotron of their mobile TV services could be a form of an economic ITMP; that is, they could be established in a way to manage traffic. 32. The Commission considers, however, that the current data charges in question are intended to encourage the consumption of the mobile TV services on mobile devices, rather than to address possible congestion. 33. Moreover, there is no evidence that Bell Mobility and Videotron are using any technical ITMPs in relation to the transport of the mobile TV services. In this regard, Videotron stated that although it had been prioritizing illico.tv content on its network, it has ceased this practice. 34. In light of all of the above, the Commission is of the view that Bell Mobility and Videotroii, in regard to the transport and data connectivity of their respective mobile TV services, are not using any ITMPs that fall within the scope of the Commission's current ITMP framework. Accordingly, they are not in violation of the Commission's ITMP rules. Are Bell Mobility and Videotron, when operating as Canadian carriers providing telecommunications services in regard to the transport of their mobile TV services to subscribers' mobile devices, acting in violation of subsection 27(2) of the

Telecommunications Act?

35. In light of its finding that Bell Mobility and Videotron are operating as Canadian carriers providing telecommunications services in regard to the transport of their mobile TV services to subscribers' mobile devices, and are therefore subject to the Telecommunications Act and policies made pursuant to that Act, the Commission must determine whether in doing so, they are acting in violation of subsection 27(2) of that Act.

Positions of parties

36. The applicants and supporting interveners submitted that Bell Mobility and Videotron unduly prefer their own mobile TV services, thereby subjecting competitors to an undue disadvantage. Specifically, they argued that the mobile TV data is subject to relatively lower data usage rates and exempted from the application of data caps. They further argued that the operators are leveraging their distribution channels to provide their own data-intensive applications with significant advantages that no other data-intensive application can offer in competition. 37. Certain parties submitted that Bell Mobility and Videotron unduly prefer subscribers of their own mobile TV services and unduly disadvantage their other subscribers who face considerably higher usage charges to access competitors' DMBU services. In this regard, some noted that customers are charged up to 800% more for all other forms of video and other Internet-based data. In regard to Bell Mobility's mobile TV service, Mr. Klass noted that subscribers currently have two options for watching ten hours of Canadian Broadcasting Corporation (CBC) programming on their tablets using a mobile network during a given month: a) using the mobile TV service at Bell Mobility's price of $5 (or sometimes for free when the service is offered as a promotion or a bonus), or b) using one of several CBC services accessed over the Internet with their data plan at Bell Mobility's price of $40. 38. Mr. Klass submitted that a mobile TV service is a data-intensive application, and that to the extent that mobile networks are susceptible to capacity constraints, it is reasonable to conclude that the use of mobile TV services contributes to network costs and congestion in proportion to the similar use of Internet services. 39. Finally, certain parties submitted that although Bell Mobility and Videotron stressed the purported benefits of their respective services in relation to broadcasting policy objectives set out in the Broadcasting Act, there is no quantifiable evidence to demonstrate the magnitude of those benefits. 40. In Bell Mobility's view, its mobile TV service is a broadcasting service and thus cannot be compared, under subsection 27(2) of the Telecommunications Act, with telecommunications services that it is providing when acting as an ISP. It submitted that the claim that the pricing of mobile TV services is "too low" is incorrect, and that the rates are in line with those of similar new distribution services recently launched by Rogers Communications Partnership and Quebecor. Both Bell Mobility and Videotron argued that this claim also ignores the fact that mobile TV services are experimental new broadcasting distribution services. 41. Bell Mobility also submitted that the claim that its mobile Internet data rates for the viewing of Internet content are "too high" is incorrect. It noted that the retail wireless data telecommunications market has long been forborne from price regulation. It further noted that the Commission, in the proceeding that led to the issuance of the wireless code decision,8 concluded that the telecommunications market continues to be sufficiently competitive to protect users such that there is no need for the Commission to resume s Telecom Regulatory Policy 2013-271

regulating wireless data rates. Bell Mobility argued that there is no evidence indicating a change in these circumstances. 42. According to Bell Mobility, the Bell Mobile TV service is precisely the type of innovative, Canadian content-rich, consumer-focused service the Commission's new media policy was intended to foster. It argued that its mobile TV service contributes to the achievement of broadcasting policy objectives of the Broadcasting Act by ensuring that more Canadian programming is accessible to Canadian consumers online and on their mobile devices. Bell Mobility added that this type of pro-Canadian, pro-consumer and pea-creator wireless broadcasting service needs to be nurtured, not discouraged. For its part, Videotron stated that this experimentation allows all providers to better know the market, and to find better ways to make their offers more attractive to consumers. It argued that as Canadians get used to consuming television content on their mobile devices, this could only have a positive impact on all providers of such content. For this reason, Videotron concluded that any preferences that may exist because of the billing methods in question cannot be considered undue. Commission's analysis and decisions

43. In Telecom Decision 96-14, as well as in subsequent decisions, the Commission forbore from regulating mobile wireless data services, which are used, among other things, to provide Internet access to mobile wireless service subscribers. In Telecom Decision 2010-445, the Commission amended the forbearance framework for mobile wireless data services by making the offering and provision of data services by Canadian carriers subject to its powers and duties under section 24 and subsections 27(2), 27(3) and 27(4) of the Telecommunications Act. In that decision, it considered that amending the forbearance framework to provide for the application of those sections of the Telecommunications Act to mobile wireless data services was appropriate and would enable it to address, among other things, unjust discrimination and undue preference issues with respect to the provision of mobile wireless data services by Canadian carriers. 44. The Commission's analysis of an allegation of undue or unreasonable preference or disadvantage under subsection 27(2) of the Telecommunications Act is conducted in two phases: â&#x20AC;˘

it must first determine whether the conduct in question constitutes a preference or subjects a person to a disadvantage; and

â&#x20AC;˘

where it so determines, it must then decide whether the preference or disadvantage is undue or unreasonable.

Determination of preference or disadvantage

45. As set out above, the functions performed by Bell Mobility and Videotron to establish the data connectivity and provide transport over their wireless access networks are the same whether the content being transported is their mobile TV services, other broadcasting services, or non-broadcasting services. In the Commission's view, from the perspective of the consumer, the mode of transport of these services â&#x20AC;&#x201D; whether over the public Internet or

through a point-to-point connection using Internet protocol â&#x20AC;&#x201D; is immaterial and likely even unknown. 46. Nevertheless, there is a significant difference in cost to the consumer of accessing, by means of the wireless network, audiovisual and other content over the Internet when compared to accessing the mobile TV services. As discussed above, the amount of time spent by the subscriber accessing the mobile TV service does not count towards the data cap of a subscriber's wireless plan. Rather, consumers pay a set charge to access a number of hours of mobile TV services on their mobile devices, which charge is not based on the number of gigabytes of data consumed. In contrast, other content services (even those offering programming services that are substantially similar to those offered by the mobile TV services) count towards a subscriber's data cap (for example, on a one gigabyte data plan, a customer could reach this cap after watching two hours of video programming). 47. As noted above, it is the subscriber's voice plan, data plan or tablet plan that provides the basis for the data connectivity required for an end user to access the mobile TV service. Notwithstanding this, given that access to the mobile TV services is exempt from the standard data plans, and given the minimal charge imposed to access the services, the charge to consumers to access content from other audiovisual content services on their mobile devices is significantly higher than the charge to access their respective mobile TV services. As a result, Bell Mobility and Videotron consumers have a significant economic incentive to access content through the mobile TV services rather than through other content services. Conversely, Bell Mobility and Videotron consumers of other data services are subject to a corresponding disadvantage by having to pay more to access content on their mobile devices and by facing a data cap. This incentive also provides the mobile TV services with an advantage and other data services a corresponding disadvantage. 48. The Commission therefore finds that in providing the data connectivity and transport required for consumers to access their respective mobile TV services on their mobile devices, Bell Mobility and Videotron have given a 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 disadvantage. Undue or unreasonable nature of the preference or disadvantage

49. Preference or disadvantage in and of itself is not contrary to the Telecommunications Act; the preference or disadvantage must be undue or unreasonable. The Commission must therefore determine whether the above-noted preference or disadvantage is undue or unreasonable. In this regard, pursuant to subsection 27(4) of the Telecommunications Act, the burden of establishing before the Commission that any preference or disadvantage is not undue or unreasonable is on the Canadian carrier that confers the preference and subjects the person to a disadvantage. 50. In addition, pursuant to section 28 of the Telecommunications Act, the Commission is required to have regard to the broadcasting policy set out in the Broadcasting Act in determining whether any preference or disadvantage is undue or unreasonable in relation to the transmission of programs.

51. As discussed previously, Bell Mobility and Videotron have taken the position in this proceeding that their mobile TV services are broadcasting undertakings. Bell Mobility specifically argued that the distribution of these services can only be considered under the Broadcasting Act and is not subject to the Telecommunications Act. As noted above, Bell Mobility stated that its mobile TV service supports the achievement of numerous objectives of the Broadcasting Act, and that its broadcasting service needs to be nurtured, not discouraged. It also submitted that its data caps are competitively neutral and treat all online video service content the same, including its own content, which is available on websites such as www.ctv.ca or www.tsn.ca. Bell Mobility further submitted that there is no unjust discrimination in regard to its customers or in regard to content providers, whether they are online video service content providers or not. Finally, it argued that to the extent that there is any discrimination or preference, online video service content providers continue to show strong growth in Canada, and there is no evidence that such discrimination has resulted in a substantial lessening of competition. 52. According to Videotron, the charges allow providers to better know the market and to find new ways to make attractive offers to consumers. In its view, should Canadians get used to consuming television content on their mobile devices, this could only have a positive impact on all service providers of such content. 53. The Commission considers, however, that encouraging customers to access these data-intensive services is inconsistent with the carriers' approach in regard to other data services, which is to impose data caps in order to optimize the efficiency of these networks. If access to mobile TV services continues to grow, which is a reasonable expectation, the data charges for these mobile TV services, the disproportionately high data limits, and the encouragement for subscribers to use these services, might result in a degradation of other services by contributing to network congestion. 54. The Commission notes that Bell Mobility, in support of its argument that there has been no lessening of competition, solely referenced growth rates for online video services on all platforms (not specifically for, mobile devices) as evidence that competition in the mobile content viewing market has not been harmed. This position was echoed by Videotron, who further stated that its own mobile TV service benefits consumers through its innovation, finding new ways to make its offerings attractive to consumers. 55. The Commission acknowledges that no complaints or interventions were filed by competing service providers. It nevertheless considers that Bell Mobility's and Videotron's arguments are not persuasive: not only do they fail to address the impact of the significant difference in data charges on consumers, they also do not address the potential for significant harm in the future to other audiovisual content services accessible on subscribers' mobile devices that are subject to data caps. Given the considerable difference in the data charges in question, the Commission is not convinced by the arguments provided by Bell Mobility and Videotron that there has been no material impact, or that such an impact is unlikely in the future, either on consumers or on the growth of other services. 56. Over the last few years there has been steady growth in the adoption of smartphones in Canada, as well as a steady increase in the amount of television and Internet content accessed by Canadians on their mobile devices. In 2013, there were 17.6 million mobile broadband subscribers in Canada, up from 14.3 million in 2012. In 2013, 62% of Canadians

owned a smartphone, compared to 14% in 2009. Currently, 77% of Francophones and 84% of Anglophones access the Internet on their smartphones. In 2013, 14% of Francophones and 18% of Anglophones watched television on their smartphones, compared to 2% and 5%, respectively, in 2009.9 57. In regard to the mobile TV services, the data is mixed. The Commission notes, however, that Bell Mobile TV has more than 1.4 million subscribers, a significant number that the Commission's expects would have an impact on competing services in the future as monthly usage and familiarity with the service grows. 58. In light of the above, the Commission finds that the preference given in relation to the transport of Bell Mobility's and Videotron's mobile TV services to subscribers' mobile devices, and the corresponding disadvantage in relation to the transport of other audiovisual content services available over the Internet, will grow and will have a material impact on consumers, and other audiovisual content services in particular. As an example, it may end up inhibiting the introduction and growth of other mobile TV services accessed over the Internet, which reduces innovation and consumer choice. 59. The Commission also considers it significant that Bell Mobility and Videotron are in a position to treat the transport of their mobile TV services in such a significantly different fashion when compared to other audiovisual content services, given the leverage that comes from owning both the means of transport and the rights to the content. 60. Although section 28 of the Telecommunications Act applies in the present case to the extent that the preference and disadvantage relate to the transmission of programs, the Commission notes that the broadcasting policy set out in the Broadcasting Act is not in itself determinative of the issue. The favourable terms offered by Bell Mobility and Videotron for the transport and data connectivity required for their own mobile TV services might support certain objectives of the broadcasting policy. However, the disadvantage to consumers in accessing other Canadian programs on their mobile devices, and to these other programs, could not be said to further these objectives. Accordingly, the Commission considers that the preference or disadvantage cannot be justified in regard to the broadcasting policy set out in subsection 3(1) of the Broadcasting Act. 61. In light of all of the foregoing, the Commission is of the view that Bell Mobility and Videotron have not discharged the burden of establishing before the Commission that any preference or disadvantage is not undue or unreasonable. Accordingly, it finds that Bell Mobility and Videotron, 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, have 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 undue and unreasonable disadvantage, in violation of subsection 27(2) of the Telecommunications Act. 9

All figures and percentages are from the Communications Monitoring Report 2014.

62. Accordingly, the Commission directs Bell Mobility to eliminate its unlawful practice with respect to data charges for its mobile TV service by no later than 29 April 2015. In the Commission's view, the elimination of the exemption from data charges for mobile TV services is a way to address the undue and unreasonable preference and disadvantage. 63. In regard to Videotron, the Commission notes that this operator, in a letter dated 14 October 2014, stated that the illico.tv app for Blackberry and Android devices would be withdrawn at the end of 2014 and that users of the app will have access to the app until the end of March 2015. It further stated that the app will be replaced by a service that does not have a data charge exemption. Accordingly, the Commission directs Videotron to comply with its planned withdrawal of the illico.tv app by the dates outlined in its letter, and to confirm by 31 March 2015 that the app has been withdrawn. The Commission further directs Videotron to ensure that any new mobile TV service complies with the determinations set out in this decision. 64. The Commission notes that certain parties raised an issue relating to whether Bell Mobility and Videotron, in regard to their billing practices for their mobile TV services, have conferred an undue preference under the DMBU exemption order adopted pursuant to the Broadcasting Act. Given the above determinations, and noting that the applications by Mr. Klass and PIAC et al. were filed pursuant to the Telecommunications Act, the Commission does not consider it necessary to address this issue. Policy Direction ng 65. The Policy Direction l째 states that the Commission, in exercising its powers and performi in out set s objective policy the nt its duties under the Telecommunications Act, shall impleme . Direction section 7 of that Act, in accordance with paragraphs 1(a) and (b) of the Policy the 66. The Commission considers that its findings in the present decision are consistent with (f) (c), (b), 7(a), ns subsectio in out set Policy Direction and advance the policy objectives and (h) of the Telecommunications Act." the 67. Consistent with subparagraph 1(a)(ii), the Commission considers that eliminating unlawful practice with respect to data charges in relation to the mobile TV services is efficient and proportionate to its purpose, and interferes with the operation of market forces to the minimum extent necessary to meet the policy identified above. As set out above, the , Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives SOR/2006-355 Act are: II The cited policy objectives of the Telecommunications that serves to 7(a) to facilitate the orderly development throughout Canada of a telecommunications system regions; its and Canada of safeguard, enrich and strengthen the social and economic fabric to Canadians in to 7(b) render reliable and affordable telecommunications services of high quality accessible both urban and rural areas in all regions of Canada; of Canadian 7(c) to enhance the efficiency and competitiveness, at the national and international levels, telecommunications; to 7(/) to foster increased reliance on market forces for the provision of telecommunications services and ensure that regulation, where required, is efficient and effective; and 7(h) to respond to the economic and social requirements of users of telecommunications services. 10

Commission considers that eliminating the exemption from data charges is one way to address the undue and unreasonable preference or disadvantage. Further, the Commission considers that the elimination of the unlawful practice with respect to data charges neither deters economically efficient competitive entry into the market, nor promotes economically inefficient entry, consistent with subparagraph 1(b)(ii) of the Policy Direction. Quite the reverse, in removing a significant impediment to competition, it will allow for efficient competitive entry into the market. Secretary General

Related documents •

The Wireless Code, Telecom Regulatory Policy CRTC 2013-271, 3 June 2013

• Amendments to the Exemption order for new media broadcasting undertakings (now known as the Exemption order for digital media broadcasting undertakings), Broadcasting Order CRTC 2012-409, 26 July 2012 •

Modifications to the forbearance _framework for mobile wireless data services, Telecom Decision CRTC 2010-445, 30 June 2010

•

Review of the Internet traffic management practices of Internet service providers, Telecom Regulatory Policy CRTC 2009-657, 21 October 2009

•

Regulation of mobile wireless telecommunications services, Telecom Decision CRTC 96-14, 23 December 1996

Concurring opinion of Commissioner Raj Shoan I wholly agree with the result of the majority decision; the mobile TV service providers at issue in this process should eliminate their unlawful practice with respect to charging for data. I do not, however, agree with the narrow rationale of the majority. In my view, the undue preference provisions of the Digital Media Exemption Order (DMEO) apply in tandem with the undue preference provisions of the Telecommunications Act in this instance. Alternatively, the majority should have given greater weight to the applicability of section 28 of the Telecommunications Act to this matter. In either case, I am of the view that the Commission should not have confined its analysis solely to the application of section 27 of the Telecommunications Act. The applications pertain to the provision and associated billing of broadcasting services. As technologically neutral legislation, the applicability of the Broadcasting Act is not limited to a particular platform. It was drafted and designed as an evolving statute. As such, the manner in which programming is delivered to Canadians is immaterial; the Broadcasting Act is intended to capture certain activity, namely, the provision of programming to Canadians by way of radio waves or other telecommunications. This is why, despite the fact that virtually 95% of Canadians receive their programming via cable or satellite companies, the Broadcasting Act does not refer to these distribution technologies as encapsulating the only method by which programming can be disseminated. It was purposefully designed to be platform neutral. Telecommunications technology employed by way of radiocommunications or other technology underpins both the Broadcasting Act and Telecommunications Act. On a basic level, the fundamental difference between two statutes is the nature of the captured activity. Simply put, broadcasting is the provision of programming to the public over such technology and telecommunications captures what remains â&#x20AC;&#x201D; mainly, transport of messages, including exchanges of a private nature between individuals and commercially motivated interactions. Why was this distinction made? Decades ago, as a matter of law and policy, broadcasting and telecommunications were deemed to have differing social, economic and, in the case of broadcasting, cultural impacts worthy of public policy support. Such public policy support has changed over time through statutory amendments and the adoption of new legislation altogether. The nature of such support and the corresponding obligations of licensees or entities of both regimes have also changed and evolved over the years. It is important to understand and appreciate this background when considering the issues raised by applicants. In an era of rapid transformation in both the broadcasting and telecommunications industries, recalling the fundamental distinction between the two industries informs decisions both present and future. There was a time when telecommunications regulation in this country was federally regulated under the Railway Act. The modem era Broadcasting Act was not enacted until 1968. Today, both industries are thriving with national, regional and local enterprises. The fundamental

distinction between the two industries, however, has not changed â&#x20AC;&#x201D; broadcasting is the act of providing programming to the public over such technology and telecommunications captures transport of private or commercial services. The foregoing introduction is intended to simplify the very complex regulatory regimes at play in this matter. Often, the complexity associated with these types of files results in a measure of inaccessibility when CRTC decisions are released to the public. Without a comprehensive understanding of the Commission's policies, industry jargon and the technology itself, it can be very difficult for the average consumer to understand the intricacies of Commission decision-making. For this reason, in order to make this concurring opinion more easily understood by all readers, I have chosen to separate this opinion between the issues of interest to the industry and the impacts of the majority decision on the Canadian consumer. For the industry As noted in paragraph 4 of the majority decision, the mobile TV services in question are accessed on mobile devices via apps (i.e., mobile application software) developed by Bell Mobility and Videotron (for Videotron, on Android- and Blackberry-based phones). These services offer aggregated broadcasting content â&#x20AC;&#x201D; mostly live streaming of television stations and other related television programming services â&#x20AC;&#x201D; with access to a limited library of video-on-demand content. The majority decision considers that Bell Mobility and Videotron are involved in broadcasting and notes, in this regard, that no party to this proceeding disputed that mobile TV services constitute broadcasting services as contemplated by the DMEO. I agree. The divergence between the position of the majority and this concurring opinion occurs when assessing the role of the carrier in the distribution chain. At paragraph 16, the majority decision states that it "considers that Bell Mobility's and Videotron's roles as Canadian carriers in providing wireless data connectivity and transport services to enable subscribers to access content on their mobile devices are not necessarily transformed into those of broadcasting undertakings merely because they are involved in the content. Rather, it is necessary to examine in each case the facts to determine the true nature of the services being provided." The majority decision then goes on to discuss the pertinent facts in this case. This first relevant fact, as stated in paragraph 17, is that the mobile TV services in question are offered over wireless access networks and these are the "very same networks they use to deliver their wireless voice and data telecommunications services, which are clearly telecommunications services subject to the Telecommunications Act." The second relevant fact, at paragraph 18, is that "the functions performed by Bell Mobility and Videotron to establish the data connectivity and provide transport over their wireless access networks would be the same whether the content being transported is their mobile TV services, other broadcasting services, or non-broadcasting services. That is, the purpose of these functions is to establish data connectivity and transport the

3 content â&#x20AC;&#x201D; agnostic as to the content itself." On the basis of these two facts, at paragraph 22, the Commission finds that Bell Mobility and Videotron are acting as Canadian carriers when delivering programming to end users. With respect to my colleagues, I have difficulty accepting their argument. It is the nature of the activity that defines a service, not the nature of its platform, and a reasonable argument can be made that evolving activity on a platform may change elements of the nature of the service. It may be true that certain networks were initially used solely for wireless voice and data but if, over time, they become networks for programming distribution, that fact must be reflected in Commission decision and policy-making. Secondly, it is differential pricing by carriers of content on their wireless platform that has spurred the applications â&#x20AC;&#x201D; meaning, to some degree, carriers are not acting in an agnostic manner. They have identified certain programming applications as being worthy of preferential treatment and instituted processes over their networks to give effect to that preference. As such, in my view, the second premise underpinning the majority decision is suspect. In contemplating the application of the Broadcasting Act and, by extension, the DMEO in this matter, the majority did not, in my view, give sufficient consideration as to whether any of the undertakings that comprise a broadcasting undertaking could reasonably apply to the activity of the mobile carriers in this matter. On a basic level, the provision of programming services by way of radio waves or other telecommunications to end users has always been an activity captured by the Broadcasting Act. That activity has been statutorily split between distribution activity, programming activity and network activity. An exception has been granted to Internet service providers (ISPs) by the Supreme Court in circumstances when they provide passive access to broadcasting over the Internet. I am not necessarily convinced, however, that wireless service providers (WSPs), such as Bell Mobility and Videotron, can avail themselves of this exception; their billing practices seem to demonstrate a degree of programming consumption management that could not be described as passive. As stated at paragraph 28 of Distribution of satellite subscription radio services by direct-to-home broadcasting distribution undertakings, Broadcasting Decision CRTC 2006-615, 3 November 2006, the Commission has determined that the definition of broadcasting undertaking "includes" programming services, distribution services and a network but may also include other services not specifically named. Given that the applications pertain to billing practices associated with mobile television services, and given further that the preferential billing practices employed in this matter call into question the degree of control carriers exercise over programming consumption by consumers, I am of the view that the Commission should have employed the DMEO to resolve the preferential treatment until satisfied that the billing practices employed were related to a valid network issue. Network management has traditionally been a telecommunications issue; programming consumption control strikes me as a broadcasting control measure. The submissions by carriers in this process indicated that the fees associated with mobile television services were not related to managing network

4 congestion. Given this fact, I would have erred on the side of applying the DMEO in conjunction with the undue preference provisions of the Telecommunications Act until satisfied that preferential billing practices were not being employed to favour certain online programming services over others.

For the consumer Leaving aside the considerations discussed above, the majority decision has a number of implications for Canadian consumers. By foregoing the undue preference provisions of the DMEO as well as the meaningful application of Section 28 of the Telecommunications Act, the majority decision avoids consideration of broadcasting policy objectives in such matters in the present decision and, by implication, sets a significant precedent on a going forward basis. For the consumer, this means that, in the future, if a broadcast undertaking, whether programming or distribution based, that is operating over a telecom carrier's network wishes to avail itself of a remedy against said carrier in order to further a broadcasting policy objective, it will have a very high threshold to cross. In fact, given the majority decision, it may be next to impossible. Why is this problematic? In an era of convergence typified by merging distribution and business models, there is an element of short-sightedness for any regulator to foreclose against certain jurisdictional arguments when industries and services are constantly being re-defined by business realities and are in a state of flux. At paragraph 84 of his application, for example, the applicant, Benjamin Klass, makes the argument that, through its inequitable billing practices, Bell is charging unfairly for the consumption of CBC programming, a free over-the-air service, on mobile networks. One could argue that all Canadians have already paid for CBC programming and that Bell is inappropriately profiting from its distribution on a new platform. Typically, this would be a programmer/distributor matter that would be dealt with under the auspices of the Broadcasting Act through a tool such as a 9(1)(h) order. As a result of this decision, however, a complainant/applicant would need to find an applicable policy objective under the Telecommunications Act to challenge such billing behaviour. Given that the majority decision states that such a scenario would not fall under the current Internet Traffic Management Policy (ITMP),12 it is not clear whether such an objective is readily apparent. In addition, at paragraph 35 of its supplementary intervention, CAS-COSCO-PIAC questions how imposing price barriers on on-line video services, which compete with those of the large vertically integrated service providers, promotes the growth and development of new media. The promotion of the growth and development of new media, however, would be a broadcasting policy objective. As such, this argument would be 12 In this scenario, a fee associated with accessing CBC programming over a cellular network would not be related to managing network congestion. As such, according to the majority decision, the current ITMP does not apply.

5 difficult to make in the future in these circumstances pursuant to this majority decision given the particular policy objectives of the Telecommunications Act. The majority decision could also have a number of other unforeseen consequences due to its avoidance of a broadcasting lens in its consideration. Subsection 27(2) of the Telecommunications Act, for example, prohibits an undue preference and/or unjust discrimination against any person. In other words, nationality is irrelevant. According to the logic of the majority decision, any non-Canadian, exempt digital broadcasting undertaking offering an online service in Canada could make an undue preference claim against a Canadian telecommunications carrier if charges associated with its consumption domestically are not comparable to like entities. This could be particularly challenging for carriers serving high cost serving areas. It could also have an impact on the development of zero-rated applications. Conclusion

In light of the above and given that the purpose of the preferential billing in this matter benefits the related programming services of the carriers in question, I am of the view that the undue preference provisions of the DMEO should properly have been applied in conjunction with undue preference provisions of the Telecommunications Act in this matter. The Telecommunications Act is engaged by virtue of the fact that we are dealing with common carriers but the nature of the billing preference clearly relates to broadcasting undertakings. As such, in my view, the undue preference provisions of both instruments should have been engaged. As a final commentary, I note the following comments contained in the interventions and replies submitted for this process: "The fact that no Canadian or foreign content provider participated in this proceeding, even to provide comments on our mobile television offering, indicates that these online services do not view the RAP-TV mobile service as a competitor." — Rogers' Reply (par. 21) "Rogers has, wrongly and irrelevantly, invited the Commission to find that the lack of any interventions in this proceeding from any Canadian or foreign content provider should be taken as support for the billing practices at issue." CAS-COSCO-PIAC Reply (ES6(ii)) "The Commission should not accept lack of intervention in a proceeding such as this one as anything other than that fact — it should not be taken as support for the behaviour at issue." — CAS-COSCO-PIAC Reply (par. 36) "Bell has, wrongly (and for a second time in this proceeding), posited a test for undue preference that looks to a "substantial lessening of competition", and fails to consider, as required, the broader public interest." — CAS-COSCO-PIAC Reply (par. 41)

6 The undue preference/unjust discrimination test is, at its core, a complaints-based remedy. A party must take the initial step to identify a preference or discrimination. This first step, however, is not enough. In order to be effective as a regulatory tool, it requires industry-wide input in order to build a comprehensive public record for the purposes of meaningful debate and decision-making. Given the confidentiality associated with normal business practices in both the broadcasting and telecommunications industries, without the participation of other parties to demonstrate that they are also being treated not only differently but on an undue basis, undue preference complaints cannot work to resolve unfairness. Once, both the broadcasting and telecommunications industries were sufficiently balanced in terms of the market power such that the Commission could be assured that, through a public process, all of the various points of view and perspectives would be captured for its consideration. Both industries, however, have seen substantial consolidation in recent years. Today, a handful of companies are dominant in terms of overall industry revenues. In an industry dominated by a few strong players who control access to key platforms, market dynamics could be challenged in capturing all of the necessary arguments to formulate a comprehensive view of the issues before the Commission in the context of a public process. Independent services could fear economic reprisals when they submit commentary opposed to large, vertically integrated players. This has a domino effect on policy and regulatory development when the tool employed — such as the undue preference test — relies heavily on industry and public input. In the context of these applications, for example: •

there was no intervention from competing broadcasting services that indicated that the programming offered by the mobile television services in question was or was not being done on an exclusive or preferential basis;

•

there was no evidence on the record that other mobile service providers are prevented or have experienced difficulty in offering an equivalent mobile television service;

•

no programming services submitted evidence that they were being denied access to the mobile broadcasting platforms of the large vertically integrated companies; and

•

no programming services at all intervened to comment on the fact that the online programming services of the vertically integrated companies were receiving preferential treatment.

Instead, the Commission relied upon the input of students, citizens, not-for-profit organizations and volunteer-based charitable organizations .to reach its determination in this matter — a unanimous decision that the billing processes were not acceptable. These individuals are to be commended for their input, participation and engagement.

7 On a broader scale, however, it is worrisome that a business practice that the entire Commission found to be unacceptable elicited little commentary from the industry at large. While I do not presume to know what remedy to employ to correct this current state of affairs, the Commission and the industry surely have a joint role to play in ensuring the ongoing engagement of all entities â&#x20AC;&#x201D; licensed or exempt â&#x20AC;&#x201D; on a going forward basis. It may be timely for the Commission to consider amendments to its undue preference practices that allow for more frank and meaningful input. Alternatively, the creation of an Office of a Public Intervener who can address media and communication issues directly to the Commission, Canadian public or Parliament may be a worthwhile consideration. When industry dynamics are such that students, not-for-profits and charities are forced to contend against the deep pockets of large, national, vertically integrated entities in order to bring to light relevant issues of public interest without the support of affected parties (i.e. Canadian broadcasters), it does not bode well for future developments, regulatory or otherwise, in an industry. The Commission is limited in terms of shaping debate and dialogue in a public process given the requirement that it remain, at all times, neutral and objective. A Public Intervener for Communications and Media could provide the type of meaningful input required for informed decisions without the risk of reprisal from the industry due to pre-existing business relationships. I, for one, would support the creation of such an office and certainly encourage the pertinent parties to explore it further.

Tab 3

AFFIDAVIT OF KATHERINE STUBITS (sworn February 20, 2012) I, Katherine Stubits, of the City of Toronto, MAKE OATH AND SAY: 1.

I am a Law Clerk at McCarthy Tetrault LLP, lawyers for Bell Mobility Inc. ("Bell

Mobility") in this action. 2.

Attached and marked as Exhibit "A" is the Part 1 Application requesting fair treatment of

Internet services by Bell Mobility, Inc., pursuant to CRTC 2010-445 and CRTC 2009-657 and The Telecommunications Act, s. 24 & subsection 27(2) of Benjamin Klass, dated November 30, 2013. 3.

Attached and marked as Exhibit "B" is the Abridged Answer of Bell Mobility Inc, dated

January 9, 2014.

2 4.

Attached and marked as Exhibit "C" is the Intervention of the Canadian Association of

Consumers, the Council of Senior Citizens Organizations of British Columbia, and the Public Internet Advocacy Centre, dated January 9, 2013. 5.

Attached and marked as Exhibit "D" is a letter from Mario Betrand of the Canadian

Radio-television and Telecommunications Commission to various parties, dated January 31, 2014. 6.

Attached and marked as Exhibit "E" is the Comments of Benjamin Klass, dated March 5,

2013. 7.

Attached and marked as Exhibit "F" is the Supplementary Intervention of the Canadian

Association of Consumers ,the Council of Senior Citizens Organizations of British Columbia, and the Public Internet Advocacy Centre, dated March 5, 2014. 8.

Attached and marked as Exhibit "G" is a letter from Philippe Gauvin of Bell Canada to

John Traversy of the Canadian Radio-television and Telecommunications Commission, dated April 25, 2014 containing the Abridged First Responses to Requests for Information of Bell Mobility. 9.

Attached and marked as Exhibit "H" is the Abridged Reply Comments of Bell Mobility

Inc., dated May 12, 2014. 10.

Attached and marked as Exhibit "I" is the Reply Comments of the Canadian Association

of Consumers ,the Council of Senior Citizens Organizations of British Columbia, and the Public Internet Advocacy Centre, dated May 12, 2014.

3 11.

Attached and marked as Exhibit "J" is the Final Reply Comments of Benjamin Klass,

dated May 12, 2014. 12.

Attached and marked as Exhibit "K" is a letter from Philippe Gauvin of Bell Canada to

John Traversy of the Canadian Radio-television and Telecommunications Commission, dated August 21, 2014 containing the Abridged Second Responses to Requests for Information of Bell Mobility. 13.

Attached and marked as Exhibit "L" is a letter from Philippe Gauvin of Bell Canada to John

Traversy of the Canadian Radio-television and Telecommunications Commission, dated October 14, 2014, containing the Abridged Third Responses to Requests for Information of Bell Mobility. 14.

I swear this affidavit to support of the moving parties' motion for leave to appeal.

SWORN BEFORE ME at the City of Toronto, on February 20, 2012.

CLoce-//â&#x20AC;&#x201D; Commiss. er for takin ffidavits Janet Lynn Jones, a Commissioner, rte., Province of Ontario, for McCarthy IMMO LT, Barristers and Solicitors. Expires June 18, 2016.

Katherine Stubits

TAB A

Benjamin Klass Box 22, Whiteshell Post Office West Hawk Lake, MB, RoE 2110 Mobile 204-998-2983 Email benjildass@hotrnail.com benklass.wordpress.com

Submitted via GC-Key

November 20, 2013 Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, ON MA oN2 Dear Mr. Traversy,

...... ... refs Wr This is ExhIbi i A-4-4A414 affidavit of.. 11-sworn before e, this 20

day of

aAL-9-1v-TyafAviTS 4ttFs" " ce 11Pro o n ano, o earthy it u1 u.r, Banisters and Solicitors. Expires June 18, 2016.

Subject: Part 1 Application requesting fair treatment of Internet

services by Bell Mobility, Inc., pursuant to CRTC 2010-445 and CRTC 2009-657, and The Telecommunications Act, 5.24 & subsection 27(2).

I. Summary 1.I, Ben Klass, make this application, pursuant to Part 1 of the CRTC Rules of Practice and Procedure, s.24 and subsection 27(2) of the Telecommunications Act, requesting that the Commission prohibit Bell Mobility, Inc from giving itself an unfair advantage by applying a separate data cap to its own new media broadcasting undertaking ("NMBU") service. 2. Bell Mobility, Inc. ("Bell Mobility") is a mobile wireless service provider ("WSP") that offers Canadians voice and data services. Bell Mobility also offers a NMBU service called "Mobile TV," which allows users to watch live and ondemand video over the Internet via an app on their smartphones. I put this application before the Commission because I believe that Bell Mobility, by applying an application-specific economic ITMP to Mobile TV, gives itself undue preference, and in so doing unjustly discriminates against consumers and competitors. 3. Bell Mobility is a subsidiary of Bell Canada Enterprises ("Bell"), which is Canada's largest communications company; in 2012 it accounted for 26.4% of all Page 1 of 26

4. Canadian communications industry revenues.' Another subsidiary of BCE, Bell Media, owns 12 of the 43 programming undertakings offered through Bell Mobility's Mobile TV service.2 As BCE's subsidiaries are part of a large, vertically integrated communications organization, and since BCE recently undertook a major corporate merger, any suggestion that its various operations may be exercising market power in an anti-competitive manner is cause for concern. Bell Mobility's preferential treatment of Mobile TV is one such case. 5.Mobile TV qualifies as a NBMU service under to the definition put forward in Public Notice CRTC 1999-84, as amended by CRTC 2009-660; in other words, it is an Internet service that is delivered to consumers' mobile devices. Given the status of NMBU Internet services, Bell Mobility is exempt from regulation under certain sections of the Broadcasting Act. However, this exemption is subject to a number of qualifications, most notably that Bell is prohibited from giving itself undue preference and that the CRTC retains the power to collect information when allegations of preference are registered. 6.Furthermore, as an Internet service, Bell Mobility's treatment of Mobile TV is subject to regulation under TRP CRTC 2009-657, "The ITMP Framework", which applies to mobile wireless data services (TRP CRTC 2010-445). 7.Bell has seen fit to make Mobile TV subject to a separate data cap than that which applies to all other Internet traffic. This practice results in discrimination which negatively affects all Bell Mobility customers, as well as a number of competitive service providers. In what follows, I provide evidence in support of the assertion that Bell gives itself undue preference. It does so by applying an application-specific economic Internet traffic management practice ("ITMP") to its Mobile TV service, causing unreasonable disadvantage to competitors and harming consumer choice. 8. For the reasons explained in this filing, I request that the Commission prohibit Bell from employing such an application-specific economic ITMP pursuant to section 24 and subsection 27(2) of the Telecommunications Act. 9.The Canadian mobile wireless data services market is complex and dynamic: "Due in part to the large number of existing ISPs", paragraph 46 of TRP CRTC 2009-657 established that "primary ISPs may continue to apply ITMPs to retail Internet services as they consider appropriate". 10.However, as per TRPs CRTC 2009-657 CRTC 2010-445, the Commission retains its powers to regulate the practices of WSPs when they give themselves 1 Figure 3, Canadian Media Concentration Research Project, "Media and Internet Concentration in Canada, 1984-2012", Accessed November 2, 2013. http://www.cmcrp.org/2013/10/22Jmedia-andteernetnoncentratin n-1984-2012/ 2 CRTC Communications Monitoring Report 2013, Table 4.3.14 2/6, http://www.crtc.gc.ca/eng/publications/ reports/policyMonitoring/2013/cmr.htm, Number of channels based on a customer who does not also subscribe to Bell Canada home BDU services.

Page 2 of 26

undue preference under 8.24 and subsection 27(2) of the Telecommunications Act. 11.The data caps which Bell Mobility selectively applies to the Internet services it offers customers appear to be unduly preferential. 12.The ongoing practices of Bell Mobility suggest that the issues raised herein may go beyond the singular practice of Bell's preferential treatment of its Mobile TV NMBU Internet service. If the Commission were to deem that these issues merit a broader proceeding, I would have no objection. Table of Contents I. Background • What is Mobile TV? • The ITMP Framework II. Does Bell give itself preference? • The Application-specific Economic ITMP III. What is the nature of the preference Bell gives itself? • Innovation: Congestion Abated • Clarity: The Defined Need? • Competitive Neutrality: Who pays for What? • Transparency: Hours vs GB IV. Possible and Existing Alternatives • Data Add-on and Competitive Neutrality • "Soft" caps • Capacity-based Billing V. Recommendation • Prohibit the Application Specific Economic ITMP VI. Concluding Remarks Appendix A

Page 3 of 26

P4 p6 p7

P19

p23 P24 P25

I. Background What is Mobile TV? 13. Bell describes Mobile TV as a "breakthrough wireless data service that offers on-the-go access to more than 40 channels of live and on-demand sports, news, entertainment and children's TV programming." In September 2013, Bell announced its i,000,000th subscriber to Mobile TV.3 14. Bell Mobility, by offering its customers the Mobile TV service, fits the definition of new media broadcasting undertaking ("NMBU") originally set out in CRTC 1999-84, as amended by Broadcasting Order CRTC 2009-66o, which states: "The undertaking provides broadcasting services, in accordance with the interpretation of "broadcasting" set out in New Media, Broadcasting Public Notice CRTC 1999-84/Telecom Public Notice CRTC Q9-14, 17 May 1999, that are: a. delivered and accessed over the Internet; or b. delivered using point-to-point technology and received by way of mobile devices."4 15. Mobile TV is "delivered using point-to-point technology and received by way of mobile devices", and it is "delivered and accessed over the Internet." 16. The Commission exempts Bell Mobility "from any or all of the requirements of Part II of the [Broadcasting] Act or of a regulation thereunder",5 albeit with several important caveats, including that: "The undertaking does not give an undue preference to any person, including itself, or subject any person to an undue disadvantage"; and that "The undertaking submits such information regarding the undertaking's activities in broadcasting in new media, and such other information that is required by the Commission in order to monitor the development of

3 Emphasis added. httpâ&#x20AC;˘llwww bee ea/news-and-media/releases/show/bell-mobile-tv-welcomes-onemillionth-vbseriber?page=1&perpage=10&year=&month=9Nceyword= 4 Paragraphs 5 & 9, http://www.crtc.ge.ca/eng/archive/2009/2009-660.htm See Also: Appendix A, CRTC 2009-330 http://www.crtc.gc.ca/eng/archive/2009/2009-330.htm

CRTC 1999-197. http://www.crtc.gc.cateng/archive/1999/PB99-197.HTM

Page 4 of 26

broadcasting in new media, at such time and in such form, as requested by the Commission from time to time."6 17.Although Mobile TV is not subject to certain broadcasting regulations as described above, as an Internet service, it is subject to regulation under the Telecommunications Act and regulations thereunder, in particular TRPs CRTC 2009-657 and CRTC 2010-445. 18.If Mobile TV were not an Internet service, it would not qualify for status as a new media broadcasting undertaking, raising the spectre of the need for regulation under the Broadcasting Act. In the concluding paragraphs of Broadcasting Regulatory Policy 2009-329, Commissioner Denton indicated in his concurring opinion that such regulation would be undesirable. 19.Furthermore, if Mobile TV were not an Internet service, the implication would be that it would be a standard broadcasting distribution undertaking ("BDU"). Bell Mobility would require prior consent from the Commission to offer such a BDU service under section 36 of the Telecommunications Act, consent which, to my knowledge, has not been granted as of this date. 2o. That Mobile TV is indeed an Internet service and not a BDU is confirmed by the fact that is available to customers who connect their smartphones to any home broadband network via Wi-Fi. It is interesting to note that, when viewed in such a fashion, Mobile TV is not subject to an application-specific ITMP; when delivered over a wired network, Mobile TV is treated like all other Internet services (subject to monthly caps). Viewed on a mobile network, Mobile TV is exempt from the standard data caps, a practice which is not technologically neutral. As is shown below, this preferential treatment is not related to the management of network congestion but instead is suggestive of anti-competitive practices by Bell. 21.My primary concern is whether Bell gives itself undue preference, thus causing unjust discrimination against consumers, competing WSPs and/or competing over-the-top (OTT) services through Bell Mobility's use of ITMPs. 22.Therefore, the proper frame of reference for evaluating Mobile TV is the ITMP framework set out in CRTC 2009-657 and CRTC 2010-445, discussed below. 23.In 2009, the Commission issued the "Review of the Internet Traffic Management Practices of Internet Service Providers,"7 commonly referred to as the "network neutrality framework." Subsequently in 2010 the Commission

BRP CRTC 2009-660, Appendix A, paragraphs 2 & 3. http://www.crtc.gc.ca/eng/archive/

2209120119:131him

Established by Broadcasting Order CRTC 2009-660. http.//www.crtc.gc_cateng/archive/2009/2009-660.htm

7 CRTC 2009-657 hftp://www.crtc.gc.cateng/archive/2009/2009-657.htrn, Page 5 of 26

determined that the framework applies to "mobile wireless data services."8 As was mentioned above, Bell explicitly categorizes Mobile TV as a "wireless data service." As well, Bell's website and financial reporting make repeated references to Mobile TV viewing as "data."9 24.In the ITMP framework, "The Commission establisheLd] a principled approach that appropriately balances the freedom of Canadians to use the Internet for various purposes with the legitimate interests of ISPs to manage the traffic thus generated on their networks, consistent with legislation".1째 25.Due to the "varied and evolving nature of networks, services being offered, and user needs"," the Commission determined that it would not establish "bright-line rules" for evaluating ITMPs, but rather take an ex post approach, in which complaints are to be addressed on a case-by case basis. What immediately follows is a description of how MobileTV relates to the ITMP framework. II. Does Bell give itself preference? Uncapping Mobile TV 26.Bell's preferred method of managing wireless network traffic is to apply a specific type of economic ITMP to the wireless data services it offers customers. Commonly known as "monthly data caps," the method by which this type of ITMP purportedly manages congestion is by "mate/Ong] consumer usage with willingness to pay, thus putting users in control and allowing market forces to work."12 27.However, here's the catch: Bell exempts Mobile TV from standard monthly data caps. "Any Bell customer with a smartphone and a data plan can get 10 hours of mobile TV viewing as a $5 a month add-on, without affecting the data allotment in their p/an."13 The two relevant facts that this statement shows are: a.) Bell's Mobile TV service gets special treatment; b.) Wireless service subscribers can watch up to 10 hours of content before reaching the Mobile TV cap.

8 CRTC

2010-445 bttp://che ge.ca/eng/archive/2010/2010-445.htm

9 "Plus, the data used for Mobile TV viewing will not impact your data plan"; "The data required for Mobile TV viewing on Bell's mobile and Wi-Fi networks is included and will not impact your data plan."http://www.bell.ca/Mobility/Products/Mobile TV

CRTC 2009-657 http://vvww.crtc.gc.ca/eng/archive/2009/2009-657.htm

11 ibid,

paragraph 37.

ibid.

-one13 Emphasis added. bllp-//www.bce.eafnews-and-rnedia/releases/show/bell-rnobile-tv-welcomes rnillionth-subscriber?page=1&perpage=10&year=Amonth=98(keyword= Page 6 of 26

28. In other words, Bell employs two different data caps, one of which is specific to the Mobile TV application, and another that applies to all other Internet traffic. The former is an application-specific economic ITMP, set at 10 hours of viewing per month, while the latter varies according to the rate plans offered by Bell. 29. By exempting Mobile TV from the caps that otherwise apply to all Internet traffic, including competing OTT services such as Telus's Optik-on-the-Go app, Netflix or the CBC Radio app, etc, Bell gives itself preference. This raises the question: is such preference undue? 30. The evidence presented in this application shows that Bell does indeed give itself undue preference, putting competing service providers at an unreasonable disadvantage and harming consumer choice. III. What is the nature of the preference that Bell gives itself? Innovation

31.A data cap is a form of usage-based billing ("UBB"), otherwise known as an economic ITMP. An economic ITMP is not a rate; the former is a means by which WSPs purport to manage traffic on their networks, while the latter is how a business generates compensatory revenue. The Commission currently forbears from regulating retail wireless rates (TRP CRTC 2012-556) but it does take an ex post approach when considering whether to regulate economic ITMPs (TRP CRTC 2009-657, section II). 32. Data caps are meant to 'discipline' consumers' use of the Internet. Due to the finite capacity of networks at any given time, 'congestion' is said to occur when `too many' users attempt to access the Internet concurrently. In economic terms, data caps are an inefficient means by which WSPs artificially limit demand by restricting output. Output is restricted by raising the price of services, in this case the price of monthly access to data, above competitive levels. The creation of artificial scarcity in such a way represents a distortion of market forces, albeit one that is purportedly necessary to ensure reliable service, assuming that congestion occurs past a certain threshold of concurrent Internet use. 33. The problem with static monthly data caps is that congestion is a highly dynamic, ephemeral phenomenon, particularly when it occurs on mobile wireless networks. Anyone who has attempted to access the Internet on their smartphone during an arena sporting event or concert intuitively knows this to be true. Minutes after a crowd has dispersed, service returns to normal. Similarly, congestion may occur in one geographic location with no effect in others. The link between a monthly data cap and fleeting moments of localized congestion is tenuous at best. 34. In response to an industry survey by Heavy Reading research, one mobile operator declared: Page 7 of 26

"We often have no clear understanding of outages and degradations and what causes them, and our RAN vendors often don't understand either."14 35.Rogers recently experienced one such high-profile outage. It identified the cause somewhat ambiguously as a "software glitch";15 in other words the outage was not, as one might have expected, due to "excessive usage" by consumers. 36.The Commission has stated that "Network investment is a fundamental tool for dealing with network congestion and should continue to be the primary solution that ISPs use." (TRP CRTC 2009-657, emphasis added) 37.WSPs have made considerable investments in their networks. From 2009-2012, Bell Mobility and Telus, who share network infrastructure, collectively made nearly $5 billion of capital expenditures on their shared mobile wireless infrastructure.16 In order to further expand network capacity, these companies have also spent considerable sums to purchase additional spectrum licenses as they have become available. In 2009, Bell and Telus deployed a shared HSPA network with a capacity of 21Mbps per unit. Since then, their network has been upgraded to HSPA+ (42Mbps) across most of their footprint, and LTE (150Mbps) in many areas. The 7ooMHz auction promises to contribute to the continuing trend of rising network capacity at historically flat levels of capital investment. 38.As well, part of the capital investment WSPs have made in their networks has gone toward fibre backhaul and high-capacity radio links, which have been steadily replacing copper and outdated microwave arrays as the means by which wireless towers are linked back to WSP central offices and the Internet. Further, carriers such as Bell have deployed ubiquitous Wi-Fi networks as an ITMP designed to offload traffic onto home and business networks, thus reducing the possibility of congestion on mobile networks. 39.Sandvine reports that average North American monthly mobile data consumption was just less than 450MB per month in the second half of 2013.17 This figure contradicts claims that there is 'explosive demand' for mobile data usage, and is likely more reflective of the behaviour of consumers who restrict

14 "Mobile Broadband brings High-Profile outages, Heavy Reading finds" accessed November 16, 2013. littplAwww.lightreading.com/services-appsibroadband-servicestmobile-broadband-brings-high-profileoutages-heavy-reading-finds/d/d-id/70620? see also: "Mobile Ops lose 15B yearly to Network Outages" accessed November 16, 2013 http://www.lightreading.com/mobile/mobile-security/mobile-ops-lose-515byearly-to-network-outages/d/d-id/706609?kmc=SM_LR_Edit

"Rogers says software glitch led to massive wireless outage" The Globe and Mail, accessed November 16, 2013. http://www.theglobeandmail.comireport-on-businessfrogers-not-clear-on-what-triggered-servicefailure/articte14797280/

Bank of America Merrill Lynch Wireless Matrix, 2013.

17 Sandvine, 2H 2013 Internet Phenomena Snapshot - North America Mobile, https://www.sandvine.com/ downloads/generaliglobal-internet-phenomena/2013/2h-2013-global-internet-phenomena-snapshot-na-

mobile=aclUsif Page 8 of 26

their use of available network capacity for fear of incurring punitive data overage fees (See appendix A). 40. On Bell's 15oMbps LTE network, a consumer could download this amount of data in just over 20 seconds at full bandwidth. Such abnormal use of the network may contribute to congestion for 20 seconds in a particular area for a very brief period of time, but the vast majority of the time normal usage does not cause congestion. Monthly data caps do little if anything to alleviate this type of situation; in fact it is likely that a mobile data user who wishes to avoid the risk of data overage fees might refrain from ordinary use of the Internet at times and in places where the potential for congestion is vanishingly small, if not otherwise nonexistent's Would consumers be making greater use of wireless networks to talk, watch, and shop in the absence of data caps? It seems likely. Would such ordinary use cause crippling network congestion? I sincerely doubt it. Should we consider normal use of the Internet excessive? Absolutely not. 41.Despite the expanding capacity of wireless networks, and the increasing availability of Wi-Fi 'safety valves,' data caps remain a primary feature of wireless services in Canada. This comes as a surprise, considering that all three national providers introduced new plans this summer, shortly after the debut of their new high capacity networks. The new plans' rates reflect the investment made by Bell, that is to say they increased. Curiously, the new plans' data caps did not similarly reflect expanded capacity. I sincerely doubt that the Commission's intention when issuing the ITMP framework was to encourage the continued use of metered service once network capacity became abundant. 42.In fact, data caps have become the most prominent distinguishing feature of mobile wireless advertising. Each of the 3 national providers advertises the speed of their LTE services, but differentiates their plans mainly based on data caps. Isn't offering a customer a LTE smartphone plan with a 1GB data cap like selling a sports car with a 1 litre tank, and then sending the driver off to the track? 43. Bell's current wireless data caps range from 25oMB/month to at most ioGB per month; even on the high end plan a consumer could reach their cap in under 10 minutes. On an average plan (1GB), under normal use a customer would reach their cap after watching just 1 hour of HD video. The fact of the matter is, wireless network investment has eliminated the need for restrictive data caps at this point in time and for the foreseeable future.'9 44.So why do national WSPs persist in universally applying data caps to their service plans? The short answer appears to be that data caps are not a proportional means of managing Internet traffic; rather they are used to restrict output (thus keeping prices artificially high), and, perhaps more importantly, they are a means to protect WSPs' programming and broadcasting distribution 18Pages

16-17 openmedia.r,R, "Reply Comments of openmedia.ra" to CRTC Telecom Notice of Consultation 2011-77, http://www.cric.gc.ca/PartVlifeng/2011/8661/c12_201102350.htm

Burstein, Dave. "First Look: How the Spectrum Shortage is Solved" Accessed November 19, 2013.

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affiliates. Left unchecked, this type of unduly self-preferential behaviour has the potential to stifle innovation and restrict consumer choice, and may have serious consequences for the ability of the broader Canadian economy to harness the potential benefits of digital networks. Clarity 45.In the ITMP framework, the Commission considered that "where ITMPs are employed, they must be designed to address a defined need, and nothing more."2째 46. Considering that Bell Mobility and others have made significant investments to expand their network capacity, I must ask: what is the "defined need" of creating a separate data cap for Mobile TV? 47.The press release for Bell's 2013 first quarter report stated: "Service revenues grew 7.2% to $1,303 million due to a larger smartphone base and higher blended average revenue per user {ARPU), fuelled by [...] increased use of data services like Bell Mobile TV by smartphone customers."2' 48. Bell's second quarter report for 2013 stated: "Data ARPU growth of 16.8% this quarter and 18.2% year to date reflected increased use of [...] mobile TV".22 49. Bell also identified "the increased adoption by customers of alternative TV services" as a "risk that could effect [sic] our business and results".23 5o. The same report stated: "Part of managing our business is to understand what these potential risks could be and to mitigate them where we can." 51. An academic study published in the Federal Communications Law Journal argued that "data caps may be a method for ISPs to price gouge and to protect an ISP's video business."24

2째

CRTC 2009-657, http://www.crtc.gc.ca/eng/archive/2009/2009-657.htm#1.

Emphasis added, Page 3, "News Release" http://www.bce.ca/assets/investors/Q1-2013/

9.1_21.3_Ereasaeleas242df

Page 16, 2013 Second Quarter Shareholder Report http:Ilwww.bce.ca/assets/investors/02_2013/ 02_2013Shareholderrepst.pdf

Page 27, ibid.

24Jacob Joseph Orion Minne,"Data Caps: How ISP s are Stunting the Growth of Online Video Distributors and What Regulators Can Do About It,"Federal Communications Law Journal, April, 2013, available at http:ll dx.dolorg/10.2139/ssrri2049174

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52.The above statements from Bell's financial reporting contradict claims that data caps are designed to address the defined need of managing network congestion, and nothing else. 53.It's no secret that Bell earns revenue by selling wireless data services. But by applying data caps to its mobile wireless services, Bell forces customers who make normal use of the network to bear a share of cost that is disproportionate to use. It seems that the primary effect of applying a separate cap to Mobile TV is not congestion management; rather its main effect is to put competitors at an unreasonable disadvantage. Competitive Neutrality 54.As noted above, Bell signed up its millionth Mobile TV customer in September 2013, and it has certainly added even more subscribers since then. This figure represents a significant portion of Bell's total wireless subscribers, who numbered 7,716,000 at the end of the second quarter.25 55.The large and growing number of Mobile TV subscriptions suggests that Bell Mobility's wireless network is capable of handling considerably greater data usage per user over and above the current monthly caps. Mobile TV content uses significant network capacity without creating disproportionate congestion and at existing levels of network technology and investment. 56.Mobile TV and other Internet services use the same network resources; they share end-users' devices, the spectrum between a tower and end-users, backhaul, and routing and switching facilities. Bell offers 5GB of Mobile TV content to "anyone with a smartphone and a data plan", in some cases at no charge; this fact implies that Mobile TV usage does not cause congestion disproportionately to other mobile Internet services using the same facilities. Yet the size of the data caps that apply to non-Bell content services are wildly out of proportion to those applied to Mobile TV, dollar for dollar. This disparity in data caps is tantamount to Bell reserving network capacity for its own content. Can there be any legitimate justification for such a practice? 57.Bell's practice of reserving network capacity for itself neither puts users in control nor does it allow market forces to work. 58.Actually this practice is an anti-competitive market failure. According to my analysis (see Appendix A), Bell applies a markup of at least 800% to customers' mobile use of Internet services like YouTube and Netflix, compared to the customer's cost of watching Bell's Internet content. 59.To my knowledge, "undue preference" in its statutory meaning and in the context of wireless communications refers to a situation in which a carrier charges different rates for services that have the same cost to the carrier, based BCE, Q2 2013 Investor Fact Sheet, tittp://www bce.catassets/investors/02_2013/ 02_2013nvestorjact_sheet.pdf

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solely or primarily on the ownership of those services. Unless Bell is forced to pay eight times more to transmit competing Internet data than it pays in underlying costs to transmit its own Mobile TV data, or its own service uses different spectrum resources than third party Internet traffic, then it is reasonable to conclude that the application-specific economic ITMP Bell Mobility applies to its own NMBU is unduly preferential, and by implication discriminates unjustly against Internet services not owned by Bell or BCE. 60. Bell's ability to give itself this undue preference necessarily depends upon its unrestricted use of retail UBB - in particular, data caps. Data caps are not the same as rates, as noted above, and the Commission's power to regulate the use of unduly preferential economic ITMPs such as these does not run afoul of its current approach to wireless forbearance, which was affirmed in TRP CRTC 2010-445 and again in CRTC 2012-556. 61.In the following paragraphs, I will use a series of hypothetical but representative situations to illustrate how the undue preference Bell gives to itself in its current operation results clearly and directly in reduced competition and harm to consumers. The figures employed are not hypothetical; they are based on Bell's online advertised rates, current as of November 19, 201326 (See Appendix A for tables). In setting out these scenarios I am drawing in part on an academic study prepared by by computer scientists Wei Dai and Scott Jordan, who have used mathematical modelling to show that "users with medium to high valuations on video streaming and low incomes are hurt by the data caps."27 62.Consider a consumer named "Mary" who lives in Alberta. Mary owns a tablet and subscribes to Bell Mobility's "Tablet Flex" data plan. The "Tablet Flex" plan is a data-only mobile wireless service; Mary purchased a SIM card from Bell that she uses for mobile Internet access on her tablet. 63.The "monthly access fee" for this plan is $5 with a 10MB cap; if Mary uses more data than that, her plan is automatically "bumped up" to the next tier, for which Bell charges $20/month with a J.GB cap and then $40/month with a 5GB cap.

At the 11C13 Canada Conference, Ottawa, November 18, 2013, Gerry Wall of Wall Communications indicated that his firm relied upon advertised pricing in order to analyse wireless prices. I have also checked these prices and the terms of service against what is being offered in the literature available from Bell's retail kiosks.

Dal, Wei and Jordan, Scott, University of California Irvine and the Don Bren School of Information and Computer Science "How do ISP Data Caps Affect Subscribers?" March 27, 2013. http://papers.ssrn.com/ sol3/papers cfm?abstractid=2240424

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64.After 5GB, each additional GB of use will cost Mary either $10 or $15.36, depending on which part of Bell's web page you read.28 65.Mary has also purchased Bell's "Mobile TV add-on" for $5, which fee allows her to watch lo hours (i.e. 5GB)29 of Bell TV. If Mary were to watch 5GB of a competitor's orr service, Bell Mobility would charge her $40. 66.In addition to her Bell mobile plan, Mary subscribes to Telus's Optik TV home BDU service, which includes many of the same channels as Bell's Mobile TV (e.g. CTV, CTV2, CBC, CBC NN, City TV). Included in the price of the Telus Optik TV service is access to the Optik-on-the-Go app, which Mary can use to watch TV on her tablet using Bell Mobility's Tablet Flex data plan. Telus's Optik TV app competes directly with Bell's Mobile TV app. 67.Let's say Mary watches 5GB of Optik TV on her tablet. To do so, she must pay Bell Mobility $40 on the Tablet Flex plan. According to the Tablet Flex plan's data caps, Bell would thereby be marking up her use of Optik TV by 800% compared to the rate she would pay if she watched exactly the same programs on Bell's Mobile TV at a cost to her of $5. Even though Mary is already paying for the Telus Optik-on-the-Go service, she has no choice but to pay Bell an extra $5 to watch programming on her tablet. 68.So why doesn't Mary cancel her Tablet Flex plan with Bell Mobility and switch to a similar plan with Telus Mobility? 69.First, Telus does not excuse Mary's use of the Optik app from standard data caps. Unlike Bell Mobility, Telus respects the CRTC's ITMP framework insofar as it does not apply an unduly preferential application-specific economic ITMP to its Optik-on-the-Go app. If Mary wanted to use the Optik app with Telus Mobility, it would count against her data usage. She.would have to pay $50, which is $40 more than she would to watch Bell Mobile TV or $10 more than she would to watch the Optik app as a Bell Mobility subscriber. Additional Optik viewing on Telus Mobility's network beyond the initial 5GB would cost Mary $51.2o/GB,3Â° whereas for a Bell Mobile TV subscriber the same amount of Optik app usage would cost only â&#x20AC;&#x201D;$15/GB. 70.Second, although the Optik app is available to mobile subscribers regardless of which WSP they choose, the converse is not true: Bell's Mobile TV service is "Data plans for tablets from Bell Mobility", accessed November 16, 2013. http://www.bell.ca/Mobility/ Cellphoneplans/Tablet_PQ_data_plans/Flex,_plans.tab Bell Mobility lists two contradictory prices on the web page for Tablet data plans. It prominently displays 'Data use exceeding 5GB will be charged $10/GB", however under the heading of "Additional Information" it says "Data usage over 5 GB: $0.015/MB", which works out to $15.36/GB. This is an example of the confusing nature of advertising commonly employed not just by Bell but by other national WSPs as well. See. Jittp://benklass.wordpress.com/2013/09/17/316/

29 "For example, 60 minutes of viewing uses about 0.5 GB of data." From Bell's Website, page: "What is the Bell TV app and how do l use it? : Information for Bell Mobility customers" Accessed November 19, 2013 http://support.bell.ca/tv/cbannels/what-is-the-bell-tv-app-and-how-do-i-use-it?step=5

30 "Data plans for tablets", Telus Mobility website, accessed November 16, 2013. http:llmobility.telus.comlen/ AB/ipad_plans/plen_ipad shtml Page 13 of 26

offered exclusively to Bell's mobile customers.31 While Telus's approach is competitively neutral as it relates to consumers' mobile access to the Optik app, Bell Mobility's self-preferential practices create a situation in which Mary must choose Bell's Tablet Flex plan. Because of the preference Bell gives to its own content, Mary cannot rationally choose to subscribe to Telus Mobility's mobile data plan. In any situation where Mary wants use a mobile network to watch TV on her tablet, her only choice is to subscribe to Bell Mobility's Tablet Flex plan and pay the extra $5 for Bell Mobile TV, regardless of the fact that she has already paid for the Optik service from Telus. 71.As far as I can tell, there is only one reasonable explanation for these discrepancies: the UBB data caps which Bell applies to all Internet usage other than Bell Mobile TV are not commensurate to the purpose of managing network congestion. Since Bell can offer its customers at least 5GB of Mobile TV without contributing disproportionately to congestion, in some cases for no charge at all, and by virtue of the fact that all other Internet services share the same network with Mobile TV, then there is no reason to believe that at least 5GB of any nonBell Internet service would contribute to congestion, either. 72.One question remains: why doesn't Mary switch to Wind Mobile, which offers `unlimited' data service for the considerably more reasonable price of $3032 One reason may be that unlike Telus's Optik app, Bell's Mobile TV is unavailable to Wind subscribers. If Mary wanted to watch the Optik app on her Wind mobile device, she would still have to pay $3o to Wind, $10 less than she would with Telus Mobility but still $15 more than Bell would charge for watching the same programming on Mobile TV. 73.Further, Wind's home network in Alberta is limited to urban Calgary and Edmonton. If Mary lives or travels outside these areas, she will be charged $1/MB ($1024/GB) for data use; unless Mary is independently wealthy, she effectively cannot use her data service outside the city limits of Calgary or Edmonton with Wind. 74.Even if Mary lives in a place where Wind offers coverage, she still has no choice but to subscribe to Bell Mobility's service if she wants to watch TV on her tablet. 75.This might explain why less than 3% of Alberta subscribers have chosen Wind's mobile data services.33 Few would deny that sufficient competition is desirable in the Canadian mobile wireless data services market. However, it is clear that, to this date, competition from new entrants has been insufficient to attract a significant market share, to provide adequate network coverage, and to 31 Curiously

Mobile TV is also offered as a $5 add-on to Virgin Mobile customers. Virgin Mobile, of course, is Bell Mobility's "flanker" brand: another wholly owned subsidiary of BCE.

"Plans" accessed November 16, 2013 http://www.windmobile.ca/plans-and-devices/plans#phone-plans

CRTC Communications Monitoring Report, table 5.5.5.

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induce the national WSPs to provide innovative new ways of offering service, particularly regarding the ITMPs they employ. 76. The only providers who enjoy significant market share and offer "unlimited" data plans are to my knowledge Sasktel and MTS. However, my opinion that the Prairie telcos are amongst the industry's best kept secrets notwithstanding, people are certainly not flocking here to take advantage of our abundant network capacity. Even here in "friendly Manitoba," no national carrier competes by offering UBB-free plans; this is reflected in provincial market shares. Here, $65 will get a Bell customer a 5GB data cap on a smartphone plan. However, in other provinces, national providers' data cap limits are actually lower dollar-for-dollar than they are in Manitoba and Saskatchewan (See Appendix A: Tables 3 & 4) 77.In Alberta and Ontario, for instance, $70 will get a customer a smartphone plan with 250MB (Roughly 1/loth the data for 1.07 times the price, see Appendix A: Table 5). This is in spite of the fact that Loxcel, a Canadian wireless industry analysis firm, has indicated that there are about twice as many towers per 10,000 inhabitants in Toronto or Calgary as there are in Winnipeg.34 It may cost more to install towers, but twice as many towers suggests greater network capacity, and therefore less chance of congestion, raising the question of why data caps are so low in Ontario and Alberta. 78. It seems that competition in the Prairies is such that the national carriers have been forced to offer slightly less parsimonious data caps, but their service coverage and data cap offerings have not been sufficiently innovative to attract customers away from MTS and SaskTel, who each offer province-wide coverage and plans with unlimited data and calling for $70 a month.35 79. In provinces like Ontario and Alberta, where Bell is an incumbent WSP competing with new entrants, its rates have increased, while its data caps have not 36 In Manitoba and Saskatchewan, where it competes with provincial incumbents, it continues to offer data caps at rates much higher than MTS or Sasktel. In MB, Across the nation, its unduly preferential treatment of its Mobile TV service continues unabated. 80. Marketplace competition is supposed to prevent unjustly discriminatory or unduly preferential behaviour. Even in the Prairies, Bell continues to apply data caps and unduly prefer its Mobile TV service. Everywhere else in Canada, their data caps are lower and prices higher, and Bell still gives preference to Mobile TV. Loxcel Geomatics, July 16, 2013. Cell towers/10,000 population, 20 largest cities http://www.loxcel.com/ canada-cell-tower-news.html

See: http.//www.sasktel.com/search/controller/JR-ProductServices_Talk%26°/02344%3EL_Text_%26amp • . • • •+ 11 l • 1 MTS plan $60 %3B_Datk_Plans and it alai, II . II • • I . a "UNLTD Talk & Surf" + $10 national LD add on. SaskTel plan "Ultimate 70."

Jeff Fan, presentation at 11C13 Canada Conference, Ottawa, November 18, 2013. 1GB cap plan price increased by 9% this summer, 3GB cap plan price increased by 19%. (This in spite of the rollout of LTE networks.)

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81. In the ITMP framework, the Commission determined that: "Consistent with the current regulatory approach, under which the Commission has granted forbearance for retail Internet services, primary ISPs may continue to apply ITMPs to retail Internet services as they consider appropriate, with no requirement for prior Commission approval. This approach remains valid due in part to the large number of existing ISPs. A change in the approach would amount to interference with market forces and would result in inefficient regulation, which is contrary to the Policy Direction."37 82. In the wired Internet market, "Canadians were served by over 500 Internet service providers"38 in 2012. By contrast, in the wireless market, "Canadians [were] served by three large facilities-based national WSPs, a number of smaller regional facilities based WSPs, and a small number of MVN0s."39 By my count, there are 16 non-national facilities-based WSPs and not more than half a dozen MVNOs. Most markets in Canada are served by 3 mobile providers or less. Furthermore, there is no wholesale framework for wireless services, and in no province did the top two providers account for less than 62% of all subscribers in 2012.4Â° 83. The current arrangement does not put the consumer in control nor does it allow market forces to function; it creates an unreasonable disadvantage to competing producers and is harmful to consumer choice. 84. At a time when many communities across Canada are losing their free overthe-air access to CBC,41 Bell is collecting revenue by charging Canadians for access to the CBC (amongst other programming). The increasing costs of wireless data access, coupled with preferential practices employed by Bell, means that Canadians are more and more being forced to pay private service providers for access to the public broadcaster. It is no small irony that the 700MHz spectrum to be auctioned for mobile data services in 2014 once provided free over-the-air broadcasting to Canadians nationwide. 85. Due to its ownership of both content and a network that consumers and OTT providers rely upon for access to and delivery of Internet services, and its ability 37

Paragraph 46, CRTC 2009-657. Emphasis added. http://www.crtc.gc.ca/eng/archive/2009/20.99-657.htm

38 Section 5.3, Communications Monitoring Report, 2013. hftp://www.crtc.gc.ca/eng/publications/reports/ policyMonitoring/2013/cmr5. htm#n 11 39

ibid, Section 5.5

ibid, Table 5.5.5.

41 May,

Steven J. "Handy list of communities that stand to lose CBC/Radio-Canada OTA TV after July 31, 2012", July 31, 2012. http://dudewhereismytv wordpress.com/2012/06/12/handy-list-of-communities-thatstand-to-lose-chcradio-canada-ota-tv-as-of-july-31-2012/

See Alsoâ&#x20AC;˘ CBC.ca, "Coverage Maps", Accessed November 3, 2013. http://www.cbc.radio-canada.ca/en/ explore/strategies/dtvicoverage-ma psi Page 16 of 26

to apply UBB to (i.e. mark up) competing Internet services, Bell Mobility has an irresistible incentive to employ an unduly preferential economic ITMP. Bell is giving preference to its own wireless data services at the expense of competing service providers and the "freedom of Canadians to use the Internet for various purposes." 86.It is clear from the evidence given above that Bell uses an application-specific ITMP to unduly prefer its Mobile TV service. As I understand it, according to subsection 27(4) of the Act, Bell will be given a chance to show cause for its use of the application-specific ITMP it gives to Bell Mobile TV, pursuant to the ITMP framework. Transparency 87.It is expected that ITMPs will be transparent: the Commission considers that "economic practices are the most transparent ITMPs."42 However, not all economic practices are created equal. 88.The application-specific data cap that Bell applies to Mobile TV is measured in hours of viewing. For consumers, this is a familiar and intuitive way of gauging time spent watching video. If a Mobile TV customer watches an extra hour (beyond the cap of 10 hours), they are charged $3. Simple. Transparent. 89.On the other hand, if a consumer wants to watch or listen to competitive OTT services like Netflix, Telus Optik-on-the-Go, CBC Radio, YouTube, or any other of the myriad choices available to Canadians on their smartphones, their usage is measured in gigabytes (GB), megabytes (MB), and or kilobytes (KB). This is not so intuitive. 90. Earlier this year, the Public Interest Advocacy Clinic released the results of an online survey of 2,002 Canadians about broadband advertising, conducted on their behalf in 2011 by Environics Research Group.43 While the survey mainly focused on home Internet connections, the results speak to how Canadians understand data plans and caps in general. 91.When asked how familiar they are with download speeds, 71% of respondents chose either 'somewhat familiar' or 'very familiar.' When asked about monthly data caps, 58% indicated similar familiarity.44 92.Despite this perceived familiarity, when asked "Do you happen to know what the speed of your home Internet service is according to the company that provides your service?" a stunning 75% of respondents answered that they didn't 42

ibid.

PIAC, Appendix A, "Transparency in Broadband Advertising to Canadian Consumers", January 2013. http://www.piac.caifiles/piac_transparency_broadband_ads_final.pdf

ibid, pg 49-50.

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know, which is all the more surprising considering their answers came by way of the Internet.45 93.Again, the primary subject of the survey was home Internet, not wireless, but the two products are marketed in a very similar fashion, in most cases by the same company. If anything, it would be harder to gauge the speed at which wireless data services are offered; considering that wireless speed and reliability are highly variable based on factors such as distance from the nearest tower, the existence of physical obstacles, and concurrent users, a consumer can hardly be expected to accurately gauge the quality of their service from one day to the next. Information pertaining to these conditions is largely absent in wireless advertising. 94.Unfortunately, the PIAC survey did not ask whether customers knew what their data cap was. But given that fewer customers indicated familiarity with caps than with speeds, I would speculate that the number who don't know what their cap is to be even higher. Other questions that would have been illuminating: how many megabytes in a gigabyte? How many hours of viewing per GB? 95.York University lecturer and telecom expert David Ellis has written extensively on the deep rift that exists in many peoples' minds between understanding a GB and understanding an hour as they relate to TV viewing.46 In my view this is only natural: computers understand bits and bytes, human beings understand seconds, minutes, hours. I'll be the first to admit that I have no idea how many MB a You-tube video takes up on my 3G iPhone 4. 96.In 2011 Howard Maker, the Commissioner for Complaints for Telecommunications Services, said to the Toronto Star that: "I don't know much about Measurement Canada, but standardization and transparency in the way usage is calculated would benefit consumers and allow the industry to maintain and regain consumer trust".47 97.This was said in the context of the revelation that Bell had "overbilled 2,700 customers [including wireless customers] because of a faulty Internet usage tracker." If the Commissioner for CTS isn't certain about how data is measured in Canada, is it reasonable to expect that ordinary Canadians should know? 98.This is a problem that is not limited to the distant past. In 2012-2013, the CCTS received 539 complaints related to wireless data charges, and 1,040 related

ibid, pg 50.

See: "Digital Literacy Topic List", itp://www.davidellis.ca/category/digital-literacy/

47 Roseman: Let's talk about faulty intemet meters, Toronto Star, Feb 11, 2011. nttp://www.thestar.com/ business/personal_financeLspending_saving/2011/02111/ rosemaniets_talk_aboutjaultyjnternet_meters.html

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to incorrect charges.48 Bell Canada was the subject of 28.56% of all complaints received,49 surpassed only by Rogers. The large number of complaints against Bell and Rogers represent Canadians' continuing dissatisfaction with their national wireless carriers. 99. The amount of data required by OTT services varies widely, not only by type of service, by provider, but as well by the particular device a consumer uses, and seems to be changing at a rapid pace. Consumers cannot be reasonably expected to measure their online content consumption in MB, nor should they be. At a fundamental level when we engage in activities that use data, we experience them in passing time, not in GB. 100. By offering their own Mobile TV service in hours when technological necessity forces consumers to measure all other services in bytes, Bell gives itself preference over its competitors. This situation results in an unreasonable disadvantage for competing OTT services who cannot hope to offer their customers a similar level of transparency when their services are accessed via Bell's wireless network. 101.Simply changing the way Mobile TV is offered to customers, from 10 hours to 5GB5째, would simply not solve the problem of preference as it relates to transparency. 102. By measuring Mobile TV usage in hours, Bell has taken steps to partially reduce another explicitly identified risk: "the complexity of our product offerings".5/ I wonder if the lack of similar innovation with regard to other data caps might contribute to the mitigation of the risk presented by increased adoption of alternate services? Possible and Existing Alternatives (That don't involve undue preference) 103. There are a number of readily available innovative alternatives that Bell could choose to employ: 104. Since it appears that Bell's network capacity is greater per user than is reflected by the current data caps, perhaps Bell or any other WSP wishing to offer new media broadcasting undertaking services could offer its customers a general purpose "open data add-on" that matches GB-for-GB the data offered by a WSP 49

Page 33, CCTS Annual Report 2012-2013, http://wfww.ccts-cprstca/wwwt9nt/uploads/pdfs/en/ Z- I I

ibid p 44

"60 minutes of [Mobile TV] viewing uses about 0.5 GB of data" bttp://support.bell.ca/tvichannels/what-is-

51 Page

28, ibid.

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for their own new media, for the same price. In the case where Mobile TV is offered as a 'bonus', customers could be given the option to pick either Mobile TV or the proposed open data add-on. 105.Under a second option, Bell could raise its data caps, eliminate the separate application-specific data cap, and offer Mobile TV as a subscription-based service like Netflix. In fact, wouldn't this option create the opportunity for Mobile TV to reach a broader audience, generating even more revenue for the company? Netflix reaches a broad international audience. Given that Bell Media owns many of the channels offered on Mobile TV, international licensing would hardly be a concern. So why has Bell restricted Mobile TV's audience to its existing mobile wireless customers? 106.Some providers, such as WSPs MTS and Wind Mobile and ISP Shaw, offer plans that do not apply "hard" data caps. Instead, "soft" caps are employed, whereby users do not face overage fees when they exceed the suggested data usage for the month. Instead, these providers employ an"excessive use policy": the provider exercises discretion as to what constitutes excessive use. Once it is determined that a user is negatively impacting the network, they can have their Internet capacity reduced in order to ensure that capacity is available for other customers. 107.The reduction in a subscriber's bandwidth would typically only be applied during demonstrable peak traffic times. Capacity would be reduced just enough to manage network congestion, but leave customers able to access a broad range of services. It would be important for providers to be specific about what constitutes excessive use. Simply stating that there is such a thing as 'excessive use' is not a transparent approach in and of itself. io8. As was mentioned, this type of system is in use by several Canadian WSPs and ISPs. This practice indicates that WSPs have the technical capability to control the speed of their users' services. As far as I know, Shaw does not as a standard practice charge its customers for excessive usage. No surprise bills, fewer complaints. 109. So, instead of offering a 150Mbps LTE plan with a IGB data cap, why doesn't Bell Mobility offer a 5Mbps plan with a tooGB soft cap? Or without a cap at all? If Bell wanted to be really innovative, this is an approach that they could readily adopt using existing technology. For instance, instead of offering 200, 5o0, or t000MB (etc) monthly caps, they could offer 5Mbps, toMbps, and 20Mbps (etc) plans, eliminating the need for hard caps. An analogous approach exists in the system by which wired ISPs provide wholesale resellers with service, and in fact retail capacity-based billing is employed universally by wired ISPs (Canada has the international distinction of being one of only 4 OECD countries whose ISPs almost universally apply data caps52). 52

New America Foundation, "The Cost of Connectivity 2013', Table 2. Accessed November 2, 2013.

Page 20 of 26

no. This approach would be considerably more efficient and dynamic than the current practice of using static monthly data caps; it would also better reflect the way people use the Internet on a regular basis. Right now, customers choose their monthly data usage when they sign their 2-year contracts, or in some cases on a month-to-month basis. In the proposed system, not only could WSFs more accurately predict how much network capacity they will need to provide with regard to peak traffic, but consumers could choose a plan based on how much data they would need to use at any given time, rather than only in monthly or biannual increments. in. It must be noted that this type of system is not the same as `throttling;' it does not 'slow down' specific Internet applications. Citing Akamai's State of the Internet Report, Richard Bennett, Senior Research Fellow at the Information Technology and Innovation Foundation recently wrote: "...web pages don't load substantially faster in cities with the highest network speeds than they do in the average American city. This is simply because network speed is less likely to be the limiting factor than is server capacity."53 112.Significantly, capacity-based billing would not prevent users from watching online video or using Skype, as Dr. Bennett elaborates further: "It's also the case that video streaming is a 2 â&#x20AC;&#x201D; 3 megabit/second application, and video conferencing runs at roughly the same rate divided between the upstream and downstream directions."54 113.In other words, what use is having ultra-fast LTE if you can (A) incur punitive fees after exceeding your cap in seconds and (B) realistically only ever require less than i/ioth of that capacity? If ioMbps is more than fast enough for all but the most demanding individual uses of mobile data services,55 what purpose does offering service at speeds that can cause a user to exceed their cap in seconds really serve? 114.These are just a few suggestions that illustrate the possibility of real, existing alternative approaches. I believe that each is superior to the current system of monthly caps in terms of empowering consumer choice and creating incentives

"Server capacity" here refers to the capacity of a third-party provider's servers, (i.e. google.ca, or crtc gr n', not the capacity of the WSP's residential network. Bennet, Richard, "Qu'ils mangent de la brioche?", October 28, 2013. bttp.//www.hightechforum.orgiquils-mangent-de-la-briocbe/comment-page-1/ #comment-265368

ibid.

55 i.e. using tethering to back up a large hard drive to "the cloud." However someone would have to be independently wealthy to use their phone in this manner, or completely ignorant of the financial consequences. Transferring even a small 16GB hard drive over Bell's mobile network in Ontario would currently cost a consumer with a 10GB monthly data cap $307.20 in overage fees. (6GB over cap)

Page 21 of 26

for innovation, and in each case, preference for applications is determined by the consumer, not the WSP. 115.The fact that Bell continues to apply an unduly preferential data cap to its Mobile TV service, and the fact that it continues to rely primarily on data caps with overage fees suggests that the current level of reliance on market forces visa-vis the ITMP framework is insufficient to motivate Bell to adopt innovative approaches to the ITMPs it employs for its retail services. Recommendation

116.In light of the above evidence, I request for immediate consideration that the Commission prohibit Bell from applying an application-specific economic ITMP to the Mobile TV service. 117.The separate cap that Bell applies to Mobile TV is just one particularly flagrant example of unduly preferential practices which result in unreasonable disadvantage to competitors and harm to consumers. At the heart of this problem, however, lies the persistence of WSPs in employing unnecessary data caps, confusing practices, punitive overage charges and who have been reluctant to innovate. 118.I gather that regulation in many cases is costly and can be burdensome. However, the practices of private providers sometimes comes into conflict with statutory public interest obligations. In the case in question, it appears that existing market forces have been insufficient to protect the interests of users of Bell's wireless telecommunications services. 119.However, the implications of the evidence presented in this application do not imply that ex-ante tariff approval is the only available option before the Commission. The Wireless Code is a prime example that shows the Commission is capable of protecting the public interest by implementing creative, flexible regulation that is consistent with the Policy Direction.56 120. Canadians have access to what is unquestionably the most diverse array of programming ever in history. We should be able to choose what to watch, when to watch it, and which screen we watch it on. What we don't want is the choice between a low rate for Bell's programming and an unfairly marked-up rate for all other programming. But this is the choice that many customers are stuck with. In fact, it's not much of a choice at all. 121.Bell is simply acting upon the irresistible incentive it has to exercise selfpreferential market power as the carrier of both its own new media broadcasting undertaking service and of third-party services that compete directly with

SOR/2006-355

Page 22 of 26

services owned by Bell. In light of this market failure, it is reasonable to conclude that some intervention from the Commission is required. 122. For the reasons stated above, I request that the Commission prohibit Bell Mobility from applying an application-specific ITMP to its Mobile TV NMBU, pursuant to TRP CRTC 2009-657, TRP CRTC 2010-445 and section 24 and subsection 27(2) of the Telecommunications Act.

123.It should be noted that the allegations of undue preference supported by the details above and in appendix A are also relevant in consideration of the prohibition against preference viz. NMBUs, found in Broadcasting Order CRTC 2009-660. 124.Considering the evidence put forward in this application, I believe it would be beneficial for the Commission to investigate further. The situation is dynamic, complex, and has far-reaching implications. 125.There is much to be lauded in the ITMP framework. The Commission has recognized that "dissociating the ability to innovate from the ownership of networks, and the costs of innovation from the costs of maintaining networks, has led to unprecedented innovation."57 Measures pertaining to ISP disclosure, fair-play rules for wholesale services, and privacy protection all contribute to the promotion of a vibrant Canadian communications system. However, there are serious issues with an approach that views UBB as a simple market mechanism that unproblematically results in positive outcomes. In fact, UBB's link to its purported designed need is tenuous at best. UBB is at the heart of the market failure that is the subject of this application, and as such I believe that it merits considerable scrutiny. 126.In light of the increasing importance of wireless data services in the lives of Canadians, and the apparent failure of market forces to spur innovative service offerings, it is my sincere hope that the Commission will take whatever action is necessary to ensure that users and providers of Inthrnet services in Canada are treated fairly by the WSPs upon whom they rely. Concluding Remarks 127.I consider myself blessed to be part of a supporting family, workplace, and community. Together, these factors have allowed me to dedicate the many hours of work it took to put together this application. 128.Most Canadians simply don't have the time to devote to such endeavours, yet we have no choice but to grin and bear the unjust practices of our wireless providers. 57

CRTC 2009-657, paragraph 3.

Page 23 of 26

129.At a time when the Commission is asking Canadians. to 'talk TV,' I believe that the information contained in this application and the requests made herein could be instrumental to ensuring that Canadians have an informed understanding of their communications environment. 130.My goal in writing and submitting this application has been to provide you with the truth that, left unchecked, Bell has abused the public trust invested in it as Canada's largest communications company. 131.It is my sincere hope that you will use whatever powers are at your disposal to protect the public interest in these matters. I would like to thank the Commission for considering this application. Yours truly, Ben Mass

Page 24 of 26

Appendix A: Bell Mobility: Mobile TV and UBB, Manitoba vs Ontario This analysis is based on the advertised rates found on Bell's website as of November 13, 2013. As such, it is based on the assumption that Bell earns revenue of at least $5/ month per Mobile TV subscriber, except under circumstances under which the 'Mobile TV add-on" is offered as a "bonus add-on" (for free). This figure may be greater depending on usage. The analysis also assumes that a customer does not exceed their usage limits, except in the case of Table 3. Bell's itemized financial reporting does not include line items for wireless data revenue or Mobile TV revenue, and therefore this analysis must be construed as a best-effort estimate based on the information that is readily available to consumers. Monthly plans offered by Bell in Alberta and Ontario are identical. compared the 5GB Mobile TV data add-on with the "Tablet Flex" plan, which offers only data, up to a 5GB cap. Table 1 shows that Bell marks up competing services that use data (including but not limited to Netflix, Youtube, and Telus's Optik-on-the-Go app) by 800%. Table 1: Monthly Data Rates

Month-to-Month, Manitoba

$40.00

800%

Month-to-Month, Ontario/Alberta

$40.00

800%

Source: Bell Website, Nov 13, 2013 Table 2 shows a comparison between the data overage fees charged for 500MB of usage (equivalent to i hour of Mobile TV programming) beyond the 5GB data caps that apply to the Mobile TV add-on and the Tablet Flex plan. Table 2: Data Overage Fees

Data Overage Fee

166.67%

per 500MB, past 5GB cap

Source: Bell Website, November 13, 2013 Table 3 shows a comparison between a 1GB voice and data plan offered by Bell Mobility in Manitoba and the same 1GB voice and data plan offered by Bell Mobility in Ontario. The Ontario plan includes a 'bonus' 1GB of data, as a promotion which is set to expire January 6, 2014. This comparison assumes that the Ontario plan will revert to 1GB after that date, for the same price. The only other difference in these plans is the province in which they are offered.

Page 25 of 26

Table 3: Manitoba vs Ontario/Alberta Voice & Data Plus 1GB Rate Plans

1GB Voice & Data

$55.00

$85.00

$30.00

I Plus Rate Plan, 2[ year contract

Sources: Bell Website, Nov 13, 2013 Table 4 compares overage fees in Manitoba vs Ontario for the plan described in Table 3. Table 4: Data Overage Fees, Manitoba vs Ontario/Alberta

1 GB Voice & Data Plus

$10

$25.00

Plan,Data Overage Fee per 500MB, past 5GB cap

Table 5 compares roughly price equivalent (ON/AB price = 1.07 times MB price) rate plans in terms of the data caps offered. Table 5: Roughly equivalent Price Voice & Data Plus Plan, MB vs ON/ AB

Voice & Data Plus 65 Rate Plan, MB $65/mo. Voice & Data Plus 70 Rate Plan, OWAB $70/mo.

***END OF DOCUMENT***

Page 26 of 26

TAB B

Bell Mobility Inc. Benjamin Klass Part I Answer

Page 1 of 23 Abridged

Part 1 Application requesting fair treatment of Internet services by Bell Mobility, Inc. pursuant to Telecom Decision CRTC 2010-445 and Telecom Regulatory Policy CRTC 2009-657 and the Telecommunications Act, ss. 24 and 27(2) This is

•

referrd to

affidavit of sworn before me, this..algt-

201..

day of ! A

Answer of Bell Mobility Inc.

9 January 2014

111 nAKI:B AFFID mmTFORtoT AC;c7/11Sesiocoofi ss et Aft, Janet •Lyrm Jones, Province of Ontario, for McCarthy Tdixauft LLP Banisters and Solicitors. Expires June 18, 2016.

Bell Mobility Inc. Benjamin Klass Part 1 Answer

Page 2 of 23 Abridged Table of Contents Page

1.0 EXECUTIVE SUMMARY 1.1 1.2 1.3

Bell Mobile TV: A Canadian success story No Undue Preference by Bell Mobility against competing OTT Content Providers No Undue Preference in Favour of Bell Media Content as Part of the Bell Mobile TV service

3 3 3 6

2.0 INTRODUCTION

3.0 BELL MOBILE TV: A CANADIAN SUCCESS STORY

4.0 NO UNDUE PREFERENCE BY BELL MOBILITY AGAINST COMPETING OTT CONTENT PROVIDERS 4.1

4.2

4.3

The Broadcasting Act and Telecommunications Act are mutually exclusive in their respective application solely to Broadcasting Undertakings and Telecommunications Common Carriers Bell Mobility's distinct pricing of broadcasting versus Internet services is no different from the way cable companies or 1LECs apply different pricing principles to their broadcasting and Internet services Even if Bell Mobile TV was a telecom service, it still would not constitute unjust discrimination

16 18

5.0 NO UNDUE PREFERENCE IN FAVOUR OF BELL MEDIA CONTENT AS PART OF THE BELL MOBILE TV SERVICE 20 6.0 CONCLUSION

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 3 of 23 Abridged

1.0 EXECUTIVE SUMMARY 1.1

Bell Mobile TV: A Canadian success story

El.

Bell Mobile TV service is the kind of innovative, consumer-oriented broadcast service

that the Commission intended to encourage when it first created licence-exempt new media broadcasting undertakings in 1999. Bell Mobile TV service provides 10 hours of viewing for $5/month, and provides customers with unprecedented access in the form of the most live channels compared with other Canadian wireless broadcast distributors. It is available to any of Bell Mobility's 7.8 million subscribers (provided they have a wireless enabled device that can support Bell Mobile TV), and over one million customers presently subscribe to the service.

E2.

Bell Mobile TV provides a new distribution platform for Independent Canadian

programmers to showcase their programming services, with almost one third of the 44 channels offered by Bell Mobile TV being provided by Canadian Independent programmers, while close to 90% of the 44 channels are Canadian-owned, including four Canadian public broadcast channels.

E3.

Bell Mobile TV also offers diversity in language, with six French-language channels as

well as three foreign language music channels provided by the Asian Television Network. During the 2010 and 2012 Olympics, Bell Mobile TV offered Olympic coverage in a variety of different languages including English, French, Polish, Ukrainian, Portuguese, Cantonese, Mandarin and Italian.

E4.

It provides Canadians with the flexibility to watch TV on any screen they like, anywhere

they like and provides Canadian creators with a welcome new source of distribution and revenue. This type of pro-Canadian, pro-consumer and pro-creator wireless broadcasting service needs to be nurtured, not discouraged. For this reason, the Commission should be wary of any attempts to place constraints upon it.

1.2

No Undue Preference by Bell Mobility against competing OTT Content Providers

E5.

The essence of the complaint is that by exempting Bell Mobile TV usage from data caps

that apply to usage of Internet-based programming content, such as competing over-the-top (OTT) services, Bell Mobility is giving itself undue preference relative to competing OTT services, such as Telus' Optik-on-the-Go app, Netflix or the CBC Radio app, etc. and that the

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 4 of 23 Abridged

so-called data cap for Bell Mobile TV constitutes an Internet Traffic Management Practice (ITMP). This argument is without merit and should be rejected in its entirety.

E6.

The flaw in this argument is its treatment of two different services as the same for

comparison purposes (i.e., the Bell Mobile TV broadcasting distribution service and Bell Mobility's wireless Internet service when used to view OTT services) when they are not the same type of service.

E7.

The Bell Mobility Mobile TV service is a broadcasting service, whereas when providing

other services, like wireless Internet connectivity to view OTT services like YouTube, Nethix and Optic Optik TV on the go wirelessly, Bell Mobility provides a telecommunications service.

These are also separate and distinct undertakings: Bell Mobile TV is a broadcasting

ES.

undertaking whereas Bell Mobility in its capacity as a wireless ISP is a Telecommunications Common Carrier (TCC). These separate and distinct services are governed by mutually exclusive legal and regulatory regimes. As a broadcasting service, the Bell Mobile TV service is governed by the Broadcasting Act, regulations and exemption orders enacted by the Commission pursuant to that Act. In sharp contrast, Bell Mobility's provision of mobile Internet access service is a telecommunications service governed by the Telecommunications Act and very different Commission policies enacted pursuant to that latter Act (namely the ITMP framework that Mr. Klass alleges has been violated by having different data caps for different Bell Mobility services).

E9.

As a result, allegations of undue preference under section 27(2) of the

Telecommunications Act are legally and jurisdictionally inapplicable to the Bell Mobile TV broadcasting service. The Commission's ITMP Framework is clear that its jurisdictional foundation lies in the Telecommunications Act, not the Broadcasting Act.' As such, the ITMP framework cannot be made applicable to Bell Mobility in its provision of the Bell Mobile TV broadcasting service.

E10.

Similarly, a claim of undue preference grounded in the undue preference provisions of

the Exemption Order for DMBUs (i.e., under the Broadcasting Act) is equally inapplicable to Bell

See for example, Telecom Regulatory Policy CRTC 2009-657 paragraphs 12-19 where the Commission references the Telecommunications Act statutory provisions under which it claims its jurisdiction to create the ITMP Framework and its compliance with the Telecommunications Policy Direction.

Bell Mobility Inc. Benjamin Klass Part 1 Answer

Page 5 of 23 Abridged

Mobility acting in its capacity as a TCC providing wireless Internet access telecommunications services.

El 1 .

Bell Mobility's distinct pricing of broadcasting versus Internet services is no different from

the same, long established, pricing practices that exist in the BDU and Internet wireline world. A Bell Fibe TV or a Rogers cable TV subscriber who watches a video-on-demand movie by means of their Fibe TV or cable TV or subscription does not incur Internet data usage charges for such viewing. However, watching the same movie on Netflix or via Apple TV, does count against that consumer's monthly Fibe or cable Internet usage cap, since this is Fibe or cable Internet access usage, rather than viewing of a TV service.

E12.

The Commission accepted this dual and separate regulatory status of a BDU's cable

television broadcasting undertaking as distinct from its Internet undertaking as far back as Telecom Decision 96-1, Regulation of Broadcasting Distribution Undertakings that Provide NonProgramming Services. These well established pricing practices continue to apply whether a consumer is accessing a program by means of a wireline or wireless BDU subscription. The separate and distinct pricing of Bell Mobility's Bell Mobile TV service and viewing of OTT services via a Bell Mobility mobile data plan is no different and similarly raises no undue preference concerns.

E13.

Given the current prevalence of wireless broadcasting services like Bell Mobile TV in the

industry, it is difficult to fathom how Bell Mobility, who negotiates with Canadian broadcasters and pays them for the right to distribute their content over wireless, is conferring upon itself an undue preference or somehow unjustly discriminating against competing OTT content providers. In order to justify such a claim one would have to demonstrate that Bell Mobility's practice results in a substantial lessening of competition. This is clearly not the case. Although Bell Mobility is proud of the Mobile TV service it offers; to the extent it competes with the likes of Netflix or YouTube, we note that the percentage of Canadians subscribing to Netflix has increased by 70% over the course of 2012, with Netflix expecting net additions to continue to remain steady or even increase. Similarly, YouTube continues to report impressive growth of usage of its OTT content. As this demonstrates, Bell Mobility's introduction of Mobile TV has not stifled OTT competition. There is also no evidence of a need to curb pro-consumer wireless TV, which provides Canadians with the flexibility to watch TV on any screen they like and which provides Canadian content creators with a welcome new source of revenue.

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 6 of 23 Abridged

1.3

No Undue Preference in Favour of Bell Media Content as Part of the Bell Mobile TV service

E14.

The other undue preference allegation, namely that Bell Mobile TV service has

disproportionately favoured its own, related, Bell Media programming services over those of unaffiliated and unrelated licensees is similarly without merit.

E15.

Well over half (66%) of the programming services comprising the Bell Mobile TV service

originate from programmers unaffiliated with Bell Media and close to a third of the total programming services on Bell Mobile TV are provided by Independent Canadian programmers. This represents a significant amount of programming diversity. Bell Mobile TV continuously strives to broaden the breadth of this diversity by adding still more unaffiliated programming services. The path to greater popularity is for Bell Mobile TV to broaden, not limit, the breadth and diversity of programming services available by appealing to the broadest possible cross section of Canadian consumers.

Conclusion

E16.

Based on the foregoing, neither allegation of undue preference against Bell Mobility has

any merit and both should be dismissed in its entirety.

Bell Mobility Inc. Benjamin Klass Part 1 Answer

Page 7 of 23 Abridged

2.0

INTRODUCTION

This is Bell Mobility's response to an Application from Benjamin Klass, dated

20 November 2013, which requests that the Commission prohibit Bell Mobility from applying an alleged application-specific ITMP to its Bell Mobile TV Digital Media Broadcasting Undertaking (DMBU).

In Mr. Klass' view, the fact that Bell Mobility's Mobile TV service is subject to a data cap

separate from other mobile wireless data services constitutes an application-specific 1TMP for Mobile TV, thus giving Bell Mobility undue preference by violating the rules established under the ITMP framework.2 Mr. Klass states3 that by exempting Mobile TV usage from other data caps that apply to usage of other Internet traffic, such as competing over-the-top (OTT) services, Bell Mobility is giving itself undue preference with respect to competing OTT services such as Telus' Optik-on-the-Go app, Netflix or the CBC Radio app, etc. Mr. Klass also notes that Bell Media, which like Bell Mobility is a subsidiary of BCE, owns some of the programming undertakings offered through Bell Mobility's Mobile TV service implying Bell's Mobile TV service is conferring an undue preference in favour of Bell Media content. We will address each of these two forms of alleged undue preference in turn below; first the alleged undue preference in favour of Bell Mobility's own Mobile TV service and alleged discrimination against competing OTT services, and second, the alleged undue preference in favour of Bell Media programming and against television programming of unrelated broadcasters as part of the Bell Mobile TV service. In each case, there is no preference. Moreover, to the extent there is, which is denied, in neither case is it undue.

The service that is the subject of Mr. Klass' complaint is Bell Mobility's innovative and

ground-breaking Mobile TV which is available to any of Bell Mobility's 7.8 million subscribers provided they have a wireless enabled device that can support Bell Mobile TV. Bell Mobile TV service provides 10 hours of viewing for $5/month, and provides customers with unprecedented access to a wide variety of linear and on-demand content, with a choice of 44 live and ondemand channels, with both English and French channels available. Over one million customers presently subscribe to the service.

Telecom Regulatory Policy CRTC 2009-657, Review of the Internet traffic management practices of Internet service providers (TRP 2009-657). 3 Klass' application, paragraph 29.

Bell Mobility Inc. Benjamin Klass Part 1 Answer 4.

Page 8 of 23 Abridged

With respect to the other services referenced by Mr. Klass, those services are, in

contrast, Bell Mobility's wireless data plans. These plans come in a wide variety of options'', but all of them provide Bell Mobility customers with wireless connectivity to the Internet, separate and apart from the Bell Mobile TV broadcasting service.

Bell Mobility's Mobile TV service is a broadcasting undertaking which provides a

broadcasting service not a telecommunications service. This is in contrast with the wireless Internet connectivity that Bell Mobility provides to its customers in order for them to view OTT Internet based broadcasting services like: YouTube, Netflix or Optik TV-on-the-Go. This wireless Internet connectivity is a telecommunications service. Understanding this distinction is critical to assessing the validity of this Application, since these different services are governed by two distinct legal and regulatory regimes, as discussed in more detail below.

Certain information contained in this response is filed in confidence with the Commission

pursuant to section 39 of the Telecommunications Act and the directions provided by the Commission in the Appendix to information Bulletin 2010-9615 to reflect the directives in TRP 2012-592.6 The Company is also claiming confidentiality pursuant to section 20 of the Access to Information Act. In particular, the information which the Company has provided in confidence is consistently treated in confidence. It is of a type which the Commission has indicated in the Appendix to Information Bulletin 2010-961 should be treated as confidential. Release of this information would provide existing or potential competitors with invaluable competitively-sensitive information that would not otherwise be available to them, and which would enable them to develop more effective business strategies. Release of such information could prejudice the Company's competitive position resulting in material financial loss and cause specific direct harm to the Company. An abridged version of this response is provided for the public record.

Some examples of Bell Mobility data plans are Tablet Flex data plans ($5/month for 10 MB of data, $20/month for 1 GB of data and $40/month for 5 GB of data) and Mobile Internet Flex plans which range from $10/month for 100 MB of data to $105/month for 15 GB of data. Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, and amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1 (collectively, Information Bulletin 2010-961). Telecom Regulatory Policy CRTC 2012-592, Confidentiality of information used to establish wholesale service rates (TRP 2012-592).

Bell Mobility Inc. Benjamin Klass Part 1

Answer

Page 9 of 23 Abridged

3.0 BELL MOBILE TV: A CANADIAN SUCCESS STORY 7.

Before addressing the issues raised by Mr. Klass, it is important to appreciate the Bell

Mobile TV service as the Canadian digital media success story that it is. Bell Mobile TV service is precisely the kind of innovative, consumer-oriented broadcast service that the Commission intended to encourage when it first created licence-exempt new media broadcasting undertakings in 1999.

In Broadcasting Public Notice CRTC 1999-84, New Media, in which the Commission first

determined to exempt new media broadcasting undertakings from the Broadcasting Act's licensing requirements and Commission regulations, the Commission stated the following: ... the Commission does not consider that it needs to impose any regulatory measures to support the development, production, promotion and distribution of Canadian new media content and services. On balance, while there may be both advantages and disadvantages in the future new media environment, the Commission is confident, based on the record of this proceeding, that the industry is moving in a direction that will result in a strong Canadian new media industry and a strong Canadian presence on the Internet. Most noteworthy was the expression of excitement and energy that was communicated by those who discussed their work in new media. The Commission does not intend to impede this creative energy through unnecessary regulatory measures but rather to encourage the continued leadership and innovation of the Canadian new media sector. [Emphasis added] 9.

In PN 1999-1977, where the Commission confirmed the text of the first proposed New

Media Exemption Order, the Commission rejected calls for a short exemption period and an early review of the first exemption order, stating, at paragraph 9 of that public notice: The Commission expects that the exemption of these services will enable continued growth and development of the new media industries in Canada, thereby contributing to the achievement of the broadcasting policy objectives, including access to these services by Canadians [Emphasis added] 10.

The Bell Mobile TV service is precisely the type of innovative, Canadian-content-rich,

consumer-focused service the Commission's new media policy was always intended to foster.

11.

Bell Mobile TV is the first wireless broadcasting distributor in Canada to offer CTV, CTV

Two and City on a mobile phone. The Bell Mobile TV service continues to offer the most live 7

Public Notice CRTC 1999-197, Exemption order for new media broadcasting undertakings (PN 1999-197).

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 10 of 23 Abridged

channels and most live sports channels on the go, compared with other Canadian wireless broadcast distributors. Bell Mobile TV is also the first service in North America to offer the Olympic Games and all NHL games live on a mobile phone. While some U.S. carriersa do offer mobile TV services, Bell Mobile TV provides Canadians with a superior level of service, offering more sports content than the U.S. mobile services, access to all content (not just specialty and premium packages offered by U.S. carriers) and offers more extensive conventional content (both live and on-demand) than its U.S. counterparts.

12.

Not only is Bell Mobile TV innovative, it also provides a new distribution platform for

Independent Canadian programmers9, that is, programmers unaffiliated with any of the Major Ownership Groups listed in Schedule I to the Broadcasting Distribution RegulationslÂ° to showcase their programming services. Almost one third of the 44 channels offered by Bell Mobile TV are in fact provided by Canadian Independent programmers, while close to 90% of the 44 channels are Canadian-owned. Included in that number are Canadian public broadcast channels, namely 4 CBC channels as well as TVO.

13.

Bell Mobile TV also offers diversity in language, with six French-language channels

included in the program offering (RDI, RDS, RDS2, Radio Canada, TVA and V Tele). In addition, the Asian Television Network offers three foreign language music channels. Bell Mobility expects the foreign language content will continue to increase, pending rights clearance of #

#. It is noteworthy that during

the 2010 and 2012 Olympics, Bell Mobile TV offered Olympic coverage in a variety of different languages including English, French, Polish, Ukrainian, Portuguese, Cantonese, Mandarin and Italian.

14.

Despite being a relatively new licence-exempt service, Bell Mobile TV is already making

a commendable contribution to the attainment of numerous Broadcasting Act objectives, including the following:

# Filed in copfidence with the CRTO.

8 For example, AT&T Mobile TV, Sprint TV and Verizon FiOS. 9 As per the Broadcasting Distribution Regulations, Independent Canadian programmers exclude related programming undertakings which is defined to mean a programming undertaking of which a licensee or an affiliate of that licensee, or both, controls more than 10%. 10 The "Major Ownership Groups" are defined to mean Shaw Television GP Inc. (General Partner) and Shaw Media Global Inc. (Limited Partner) carrying on business as Shaw Television Limited Partnership; BCE Inc. Quebecor Media Inc.; Remstar Broadcasting Inc. and Rogers Communications Inc.

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 11 of 23 Abridged

Section 3(1)(d)(iv): this is a cutting edge, high quality service demonstrating Bell Mobility's willingness to be readily adaptable to scientific and technological change, including by way of today's ever advancing mobile handsets and tablets and the wireless network capacity enhancements necessary to accommodate this increased mobile traffic; Section 3(1)(e) and (f):

by distributing an overwhelming majority of Canadian

programming services, Bell Mobile TV is contributing appropriately to the presentation of Canadian programming and to making predominant use of Canadian creative and other resources; Section 3(1)(q): the programming services currently presented are all of a "high standard"; Section 3(1)(il: the programming currently presented is varied, drawn from local, regional, national and international sources; Section 3(1)(j): the Bell Mobile TV is acting consistent with the values which the Broadcasting Act places upon educational programming by its distribution of educational services like TVO; Section 3(1)(k): Bell Mobile TV is distributing a range of English and French programming services, as these are made available for distribution; and Section 3(1)(t): As a mobile distribution undertaking service, Bell Mobile TV is giving priority to Canadian services; is providing efficient delivery of programming at affordable rates using the most cutting edge technologies.

15.

These facts show that Bell Mobile TV service is providing a new and growing

broadcasting distribution platform for Canadian content creators to showcase their talents, is good for Canadian consumers and good for the Canadian broadcasting system as a whole. Especially when one considers that all of this is available for just $5 per month for 10 hours of mobile television viewing.

4.0

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 12 of 23 Abridged

4.0 NO UNDUE PREFERENCE BY BELL MOBILITY AGAINST COMPETING OTT CONTENT PROVIDERS 16.

The essence of Mr. Klass' first undue preference allegation is that Bell Mobility applies

two different data caps: one to customers' Internet traffic, including their viewing of competing OTT services offerings, and a different, lower data cap to Bell Mobile TV content.11 It is said that because the data costs applicable to these competing OTT services is approximately 800%12 higher than that which applies to Bell's own Mobile TV service this results in a preference that is undue.

17.

The fatal flaw in this argument is its treatment of two different services as exactly the

same for comparison purposes (i.e., the Bell Mobile TV broadcasting distribution service and Bell Mobility's wireless Internet service when used to view OTT services). This error has both a factual and a legal component. The factual error is that they are not the same service. The Bell Mobile TV service is a broadcasting service whereas when providing other services, like wireless Internet connectivity to view OTT services like YouTube, Netflix and Optik TV on the go wirelessly, Bell Mobility is providing a telecommunications service. As factual matter, Bell Mobility's Mobile TV broadcasting service cannot be compared to Bell Mobility's wireless telecommunications service for the purposes of an alleged undue preference, or indeed for any other point of comparison, since they are two different services.

18.

Beyond this factual error there is also an equally fatal legal error. Because these are

two different services (the first broadcasting and the second telecommunications) they are also governed by two distinct legal and related regulatory regimes. As a' broadcasting service, the Bell Mobile TV service is governed by the Broadcasting Act, regulations and exemption orders enacted by the Commission pursuant to that Act. In sharp contrast, Bell Mobility's provision of mobile Internet access service is a telecommunications service governed by the Telecommunications Act and very different Commission policies enacted pursuant to that latter Act.

Klass' Application, paragraph 29. Klass' Application, paragraph 58.

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 13 of 23 Abridged

4.1

The Broadcastinft Act and Telecommunications Act are mutually exclusive in their respective application solely to Broadcasting Undertakings and Telecommunications Common Carriers

19.

When providing the Mobile TV service, Bell Mobility has the status of an "Exempt

DMBU" as defined under Appendix to Broadcasting Order CRTC 2012-409. This status results from the fact Bell Mobility's provision of the Mobile TV service constitutes "broadcasting" as defined in section 2 of the Broadcasting Act and also meets each of the following qualifying requirements in the Exemption Order for DMBUs to be an exempt DMBU:

It provides "broadcasting services" as this term was defined in New Media, Broadcasting Public Notice CRTC 1999-84/Telecom Public Notice CRTC 99-14, dated 17 May 1999; It provides such services using point-to-point technology that are received by way of mobile devices; and The television programming is designed primarily for conventional television, specialty, pay or video-on-demand (VoD) services.

20.

Because Bell Mobile TV is a "broadcasting undertaking" as defined in the Broadcasting

Act, it is regulated pursuant to the Broadcasting Act.

The fact that it is exempt from the

Commission's broadcasting licensing requirements pursuant to sub-section 9(4) of the Broadcasting Act does not alter its legal status as a broadcasting undertaking. Indeed there are many other types of exempt broadcasting undertakings (i.e., small cable systems serving less than 20,000 subscribers) which also continue to be subject to the Commission's broadcasting jurisdiction under the Broadcasting Act as broadcasting undertakings, notwithstanding that they too are exempt from licensing and certain other broadcasting regulatory requirements.

21.

In sharp contrast with Bell Mobility's Mobile TV broadcasting undertaking, when

providing wireless Internet access service used by consumers to access OTT broadcasting services, Bell Mobility has the status of a "Canadian carrier" as defined in section 2 of the Telecommunications Act. This status results from the fact Bell Mobility satisfies both of the constituent elements of the "Canadian carrier"13 definition on the basis that it is both: (i) a TCC, and (ii) is subject to the legislative authority of Parliament. The fact that Bell Mobility, as a provider of Internet access services that consumers use to access OTT broadcasting, has the capacity of a TCC and not a broadcasting undertaking is entirely consistent with Supreme Court 13 A

"Canadian carrier" is defined to mean "a telecommunications common carrier that is subject to the legislative authority of Parliament.

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 14 of 23 Abridged

of Canada's recent decision in Reference re Broadcasting Act.14 The Court in that case recently held that retail Internet service providers do not carry on in whole or in part, "broadcasting undertakings" subject to the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to "broadcasting". The Court concluded ISPs merely provide the mode of transmission and play no role in the selection of or have any knowledge concerning the content travelling over their networks.

22.

This finding is consistent with the notion of telecommunications service providers

providing the means of transmission (including network connectivity), but playing no role in terms of influencing the content of such transmissions.

23.

Thus, for the purposes of legal classification, Bell Mobility operates two separate

"undertakings" and has two separate legal statuses in this case. When providing its Bell Mobile TV service, it is a licence-exempt "broadcasting undertaking" providing a broadcasting service. Whereas, when providing wireless Internet access services through which consumers access data including OTT programming services, it is a TCC providing a telecommunications service. In other words, Bell Mobility has no role in selecting or packaging Netflix or YouTube content (or clearing rights for such content) for its users and instead merely provides Internet connectivity through which users may access that content. Conversely, with regard to its Bell Mobile TV service, Bell Mobility strikes deals with broadcasters and content providers for the purpose of offering a Mobile TV product to its mobile users. It selects live and on-demand programming, clear rights and purchases the programming. This explains why sometimes some Bell Mobile TV programming is subject to "blackouts" where the wireless distribution rights have not been obtained from the applicable rights holder. The operation of these two distinct undertakings also has crucial ramifications in terms of the Commission's separate broadcasting and telecommunications statutory jurisdiction over these two distinct undertakings.

24.

Because Bell Mobility is a "broadcasting undertaking" when providing the Bell Mobile TV

service, this activity is regulated under the Broadcasting Act. Section 4 of the Broadcasting Act is the relevant broadcasting jurisdiction-limiting provision. It states as follows: 4(4) For greater certainty, this Act does not apply to any telecommunications common carrier, as defined in the Telecommunications Act, when acting solely in that capacity.

[2012] 1 S.C.R. 142 (the ISP Reference).

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 15 of 23 Abridged

In effect, section 4 of the Broadcasting Act means that the Broadcasting Act applies to

25.

Bell Mobility when acting as a broadcasting undertaking providing the Bell Mobile TV broadcasting service, but does not apply to Bell Mobility when acting in its capacity as a TCC providing its mobile Internet services or other "telecommunications services".

26.

However, because Bell Mobility has the status of a TCC when acting as a TCC providing

wireless Internet service, a telecommunications service, this activity falls within the gambit of the Telecommunications Act.

Section 4 of the Telecommunications Act is the relevant

telecommunications jurisdiction-limiting provision under the latter Act. It states as follows: 4

This Act does not apply in respect of broadcasting by a broadcasting undertaking.

In effect, the Telecommunications Act solely applies to Bell Mobility's wireless Internet

27.

undertaking in the provision of retail Internet service (and voice and data telephony services), but does not apply to Bell Mobility in its capacity as an exempt mobile broadcasting undertaking providing the Bell Mobile TV broadcasting service.

28.

Two critical legal conclusions flow from the mutually exclusive application of the two

Acts.

29.

First, Mr. Klass' allegations of undue preference under section 27(2) of the

Telecommunications Act are legally and jurisdictionally inapplicable to the Bell Mobile TV broadcasting service. It is for this reason that the Commission's ITMP Framework relied upon by Mr. Klass in his first allegation of undue preference, cannot be applied to Bell Mobile TV. The Commission's ITMP Framework is clear that its jurisdictional foundation lies in the Telecommunications Act, not the Broadcasting Act.15 As such, the ITMP framework cannot be made applicable to Bell Mobility in its provision of the Bell Mobile TV broadcasting service, and it is inappropriate (legally and factually) to base a Section 27(2) undue preference complaint on a comparison of the Bell Mobile TV broadcasting service to the Bell Mobility wireless Internet access telecommunications service.

Bell Mobility Inc. Benjamin Klass Part 1 Answer 30.

Page 16 of 23 Abridged

Conversely, a claim of undue preference grounded in the undue preference provisions of

the Exemption Order for DMBUs is similarly inapplicable to Bell Mobility acting in its capacity as a TCC providing wireless Internet access telecommunications services. It is therefore equally inappropriate (legally and factually) to base an undue preference complaint under the Exemption Order for DMBU's on a comparison of the Bell Mobile TV broadcasting service to the Bell Mobility wireless Internet access telecommunications service.

31.

It follows that any undue preference complaint pertaining to the different pricing and data

caps associated with Bell Mobile TV service and the consumption of OTT services using Bell Mobility data plans is without merit both factually and legally and should be dismissed on these bases alone. In these circumstances, there is no breach of the ITMP framework, nor is there any appropriate basis to establish discrimination or preference, let alone unjust discrimination or undue preference.

4.2

Bell Mobility's distinct pricing of broadcasting versus Internet services is no different from the way cable companies or 1LECs apply different pricing principles to their broadcasting and Internet services

32.

This undue preference complaint is further undermined by the fact that, practically

speaking, the application of distinct and different Bell Mobility pricing of its broadcasting and Internet access services is no different from similar distinct pricing practices in the wireline world.

33.

It is useful to consider cable carriers' cable TV services and Internet services as an

example of this. When a cable carrier's cable TV customer views a television program via their cable broadcasting service, their viewing of that program is included under the customer's monthly cable TV fees. Viewing of this program in this manner does not count against any monthly Internet usage caps. This is in contrast with viewing that same program from Netflix's OTT service. When viewing the very same program via Netflix's OTT service by means of their cable carrier's Internet connection, such viewing would count against that consumer's monthly cable Internet data caps (depending of course on the customer's particular Internet access plan).

34.

The above point is equally applicable to a customer subscribing to Bell Fibe TV and

Bell's Fibe Internet services. By way of a further example, consider such a Bell Fibe TV subscriber who orders a video-on-demand movie by means of their Fibe TV subscription. In this

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 17 of 23 Abridged

scenario, viewing of that movie similarly does not count against that customer's Internet data usage, notwithstanding that Fibe TV operates by means of an IP-based distribution system. However, if the facts of the situation change and this same subscriber instead watches the same movie on Nefflix or via Apple TV, charges for this activity also change. In this latter scenario, the same consumer viewing the very same program does count against the consumer's monthly Fibe Internet usage cap, since in this latter scenario viewing takes place by means of the Fibe Internet access service, rather than the Fibe TV service.

35.

The Commission accepted this dual and separate regulatory status of a BDU's cable

There the Commission determined that in circumstances where a

broadcasting distribution undertaking uses its network facilities to provide non-programming services (which the Commission defined in that case to include security and Internet services) it operates as a TCC and is subject to regulation under\the Telecommunications Act, whereas its traditional broadcasting distribution services continue to be regulated under the Broadcasting Act.

36.

The key point is that the wireline BDUs' separate broadcasting and Internet services are

two separate distinct undertakings, even when using the same network facilities. Use of each service is priced differently and each is separately regulated under the Commission's distinct broadcasting and telecommunications jurisdictions. It is perfectly acceptable for two different services (TV distribution on the one hand and Internet on the other) to be priced differently, notwithstanding that the consumer may be viewing precisely the same program over these different platforms. If a consumer accesses a program by means of a wireline or wireless BDU subscription, that service is broadcasting and they are charged for the viewing of programs (either by program viewed â&#x20AC;&#x201D; VoD and pay-per-view (PPV); or by the month in the case of a traditional cable TV package; or by hours of programming consumed). In contrast, if that same program is accessed using their Internet subscription, the Internet access service is a telecommunications service and is likely to be priced against the customer's monthly allotment of data usage measured in MB or GB of data (unless the customer has an unlimited data plan).

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 18 of 23 Abridged

4.3

Even if Bell Mobile TV was a telecom service, it still would not constitute uniust discrimination

37.

The $5 monthly charge for up to 10 hours of Bell Mobile TV is not an ITMP. As

described above, it is the charge for a TV service delivered over a wireless network which explains why it is subject to the Broadcasting Act and not the Telecommunications Act. In fact, the $5 monthly charge is used in part to pay for rights clearances to broadcasters â&#x20AC;&#x201D; a type of payment that an ISP acting purely as a TCC would never make. In any case, even if Bell Mobile TV was a telecommunications service and not a broadcasting service, it still would not constitute unjust discrimination.

38.

With regard to the claim that Bell Mobility's Mobile TV offering somehow results in unjust

discrimination or an undue preference, we note that Bell Mobility is not the only WSP that provides a TV service over wireless. Rogers offers "Anyplace TV" to its wireless customers at a cost of $5 per month for up to 10 hours of viewing and $1 for each additional hour. Rogers' Anyplace TV provides access to 16 live channels as well as some seasonal live events and other content, such as VOD.

39.

Similarly, Videotron offers to its wireless customers who happen to also be Videotron TV

subscribers access to its "Illico Mobile" service. Illico Mobile provides access to mobile live channels to which the customer currently subscribes as a TV customer and is available for free to customers that subscribe to a mobile data plan of 1GB or more for the first 5 hours of viewing per month. 15 hours of viewing are available for $10 a month and up to 30 hours of viewing are available for $15 per month."

40.

Given the prevalence of such services in the industry, it is difficult to fathom how Bell

Mobility, who negotiates with Canadian broadcasters and pays them for the right to distribute their content over wireless, is conferring upon itself an undue preference or somehow unjustly discriminates against competing OTT content providers. In support of the claim that there is unjust discrimination or an undue preference, Mr. Klass asserts that Bell Mobility's practice of charging $5 on a monthly basis for up to 10 hours of Bell Mobile TV content is anti-competitive towards OTT content, such as YouTube or Netflix. In order to justify such a claim one would have to demonstrate that Bell Mobility's practice results in a substantial lessening of competition. This is clearly not the case. Indeed, Mr. Klass has failed to provide any such 16

http://www.videotron.com/residential/mobilefoptions#tabicat2240061.

Page 19 of 23 Abridged

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

evidence of lessening of competition. Although Bell Mobility is proud of the Mobile TV service it offers, to the extent it competes with the likes of Netflix or YouTube, we note that these latter services have actually increased market share and viewership since the introduction of Mobile W. In fact, according to Fig. 6.2.8 of the Commission's 2013 Monitoring Report, the percentage of Canadians subscribing to Netflix has increased by 70% over the course of 2012:

Figure 6.2.8 Percentage of Canadians subscribing to Netflix 18 16 14

6 4 2 0

Spring 2011

Fall 2011

Spring 2012

Fall 2012.

Source: MTM 2012 (Respondents: Canadians 18+)

41.

Netflix has also recently announced as part of its Q3 2013 financial disclosures that it

expects net additions in Canada "to be steady or up on a Q4 over Q4 basis."17

42.

Similarly, YouTube currently states on its statistics webpage that the "number of people

subscribing daily is up more than 3x since last year, and the number of daily subscriptions is up more than 4x since last year."18

43.

Whereas Mr. Klass asserts Bell Mobility's practice to "discount" usage data associated

with its Bell Mobile TV service results in an anti-competitive market failure19, he has failed to

Netflix Q3 13 Letter to Shareholders, page 2, available online: http://ir.netflix.com/results.cfm.

Is http://www.voutube.comM/press/statistics.html. 19

Klass' Application, paragraph 58.

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 20 of 23 Abridged

demonstrate any market failure. As we've demonstrated, Bell Mobility's introduction of Mobile TV has not stifled OTT competition. There is also no evidence of a need to curb pro-consumer wireless TV, which provides Canadians with the flexibility to watch TV on any screen they like and which provides Canadian content creators with a welcome new source of revenue.

44.

For all of these reasons, the argument that the charges for a certain amount of Bell

Mobile TV content constitute an economic ITMP and should be regulated by the Commission should be dismissed. Bell Mobility's data caps are competitively neutral and treat all OTT content the same, including Bell Media content that is available on websites such as www.ctv.ca or www.tsn.ca. There is also no unjust discrimination with regard to content providers, whether OTT or otherwise, as Bell Mobility negotiates with Canadian broadcasters and other rights holders, and pays them for the right to distribute their content over wireless. It is open to any television content provider to approach Bell Mobility to negotiate such a wireless distribution deal as part of Bell Mobility's Mobile TV service. To the extent there is any discrimination or preference, there is no evidence that such discrimination or preference has resulted in a substantial lessening of competition. In fact, OTT content providers continue to show strong growth in Canada.

5.0 NO UNDUE PREFERENCE IN FAVOUR OF BELL MEDIA CONTENT AS PART OF THE BELL MOBILE TV SERVICE 45.

The other undue preference allegation is that Bell Mobile TV service has

disproportionately favoured its own, related, Bell Media programming services over the programming services of unaffiliated and unrelated licensees. This claim is incorrect and should also be dismissed by the Commission as no preference is being shown on the basis of the following points.

46.

Well over half (66%) of the programming services comprising the Bell Mobile TV service

are licensed to programmers unaffiliated with Bell Media. Having two thirds of the total available programming services originate from unaffiliated programming licensees represents a significant amount of programming diversity. The following table illustrates the diversity of programming services currently available on the Bell Mobile TV service:

Bell Mobility Inc. Benjamin Klass Part 1 â&#x20AC;&#x201D; Answer

Page 21 of 23 Abridged

Table 1 Diversity of Bell Mobile TV programming services Programmer Status Independents Bell Media BCE-related (>10% ownership interest) Rogers Media Shaw Media (Corus) Remstar TVA Inc. Foreign-owned TOTAL 47.

Number of Channels in Mobile TV service 13 11 4 6 2 1 1 6 44

The extent of the diversity represented by the array of programming services which are

included in the Bell Mobile TV service is all the more impressive when one considers that Independent Canadian programmers20, that is, programmers unaffiliated with any of the Major Ownership Groups listed in Schedule I to the Broadcasting Distribution Regulations21, account for 13 of the services, representing a significant percentage (30%) of the total programming services offered. These Independent services include: Asian Television Network (seven channels), CBC (four channels), TVO (one channel), and Whitecaps FC (one channel). A further six services consist of foreign originated programmers, including: NFL, Bloomberg and the BBC. 48.

As demonstrated above, the Bell Mobile TV service is a true Canadian success story,

that not only benefits Canadian consumers but reflects programming that is almost 90% Canadian and as such provides an important showcase for Canadian broadcasters on new media platforms convenient to consumers. 49.

It also must be emphasized that the current 44 channel service offering is very much a

"work-in-progress". Bell Mobility initially targeted the most watched and popular services for inclusion in the Bell Mobile TV service in order to make it the most consumer-friendly and relevant service possible. Bell Mobile TV continuously seeks to supplement the variety and

As per the Broadcasting Distribution Regulations, Independent Canadian programmers exclude related programming undertakings which is defined to mean a programming undertaking of which a licensee or an affiliate of that licensee, or both, controls more than 10%. The "Major Ownership Groups" are defined to mean Shaw Television GP Inc. (General Partner) and Shaw Media Global Inc. (Limited Partner) Carrying on business as Shaw Television Limited Partnership; BCE Inc. Quebecor Media Inc.; Remstar Broadcasting Inc. and Rogers Communications Inc.

Bell Mobility Inc. Benjamin Klass Part

Answer

Page 22 of 23 Abridged

scope of programming services currently available to Bell Mobile TV subscribers. We are presently engaged in negotiations to renew programming service affiliation contracts or establish new ones with other programming providers.

50.

These facts entirely refute the insinuation that Bell Mobility seeks to limit the content of

its Bell Mobile TV service to Bell Media content by withholding or curtailing the distribution of competing programming services to the benefit of Bell Media services.

51.

Ultimately, from a regulatory perspective, any undue preference allegation that the Bell

Mobile TV service favours Bell Media services at the expense of unaffiliated programming services fails to satisfy either of the two steps which form part of the Commission's wellestablished test for broadcasting undue preference. The Commission recently articulated its broadcasting undue preference analysis as follows: When examining a complaint alleging undue preference or disadvantage, the Commission must first determine whether an undertaking has given a preference or subjected another person to a disadvantage. If the Commission finds that a preference has been granted or a person has been subjected to a disadvantage, it must then determine whether, under the circumstances, that preference or disadvantage is undue. In order to determine whether a preference or disadvantage is undue, the Commission examines whether the preference or disadvantage had, or could have, a significant adverse effect on the complainant or any other person and the effect that the preference or disadvantage had, or will have, on the achievement of the Canadian broadcasting policy objectives set out in the Act.22 52.

Turning to the first step, there exists no evidence of disadvantage or preference. As

noted, unrelated programming services significantly outnumber those of Bell Media on the Mobile TV service. This is because, commercially, the path to greater popularity is for Bell Mobile TV to broaden, not limit, the breadth and diversity of programming services available by appealing to the broadest possible cross section of Canadian consumers.

53.

Moreover, as noted above, for a relatively new service offering, Bell Mobile TV is making

a commendable contribution to the attainment of numerous Canadian broadcasting policy objectives.

See, for example: Broadcasting Decision CRTC 2011-755, paragraphs 16 and 17.

Bell Mobility Inc. Benjamin Klass Part I â&#x20AC;&#x201D; Answer 54.

Page 23 of 23 Abridged

Based on the foregoing absence of any preference or disadvantage, the absence of

causation of disadvantage by Bell Mobile TV and the evidence that the Bell Mobile TV service is making significant contributions to the achievement of Canadian broadcasting policies, any claim with respect to this form of undue preference should be dismissed by the Commission.

6.0 CONCLUSION 55.

Based on the foregoing, neither allegations of undue preference by Bell Mobility against

either competing OTT content providers or in favour of Bell Media content as part of the Bell Mobile TV service have any merit.

56.

With respect to the allegation of undue preference against OTT content providers,

Mr. Klass' attempts to compare the Bell Mobile TV broadcasting service that is subject to the Broadcasting Act to Bell Mobility's wireless Internet plans used to consume OTT services, which are telecommunications services subject to the Telecommunications Act, are both factually and jurisdictionally improper. Moreover, these pricing practices are no different from long standing and well accepted pricing practices in the wireline BDU and Internet worlds.

57.

Regarding any allegation that the Bell Mobile TV service unduly discriminates against

the programming services of non-Bell Media owned programming services, this claim too should be dismissed. Non-Bell Media services account for the overwhelming majority of content available on the service and Bell Mobile TV is continuously striving to broaden the appeal of the service by adding more such content. There simply is no evidence of preference.

All of which is respectfully submitted.

*** End of Document ***

Tab C

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.......... ... 1... i: .......... affidavit of ...... 'I ..................... sworn before me, this... IIP ............ .20 of..................... day

.... 0and Sohcitors. ......vinesTatZellt tars 18 ,2.016. 55ns Muds June BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION IN THE MATTER OF AN APPLICATION BY BENJAMIN KLASS PURSUANT TO PART 1 OF THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION RULES OF PRACTICE AND PROCEDURE AND THE TELECOMMUNICATIONS ACT FAIR TREATMENT OF INTERNET SERVICES BY BELL MOBILITY APPLICATION NO, 2013-1664-6 COMMISSION FILE NO,: 8622-B92-201316646

Intervention of the Canadian Association of Consumers, the Council of Senior Citizens' Organizations of British Columbia, and the Public Interest Advocacy Centre

9 January 2013 Geoffrey White Counsel to CAC-COSCO-PIAC (613) 562-4002 x24 dwhiteftDiac.ca do Public Interest Advocacy Centre One Nicholas Street, Suite 1204 Ottawa, Ontario KIN 7B7

Jean-Francois Leger Counsel to CAC-COSCO-PIAC (613) 562-4002 x28 iflegerAbiac.ca do Public Interest Advocacy Centre One Nicholas Street, Suite 1204 Ottawa, Ontario K1N 7B7

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014

Table of Contents 1.INTRODUCTION

2. RELEVANT FACTS

3. ISSUES

4. ANALYSIS

5. CONCLUSION

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass

9 January 2014 Page 1 of 13

1. INTRODUCTION 1. The Consumers' Association of Canada ("CAC"), the Council of Senior Citizens' Organizations of British Columbia ("COSCO"), and the Public Interest Advocacy Centre ("PIAC", collectively with CAC and COSCO, "CACCOSCO-PIAC") are in receipt of an application (the "Application") submitted pursuant to Part 1 of the CRTC Rules of Practice and Procedure from Benjamin Klass (the "Applicant), dated 20 November 2013.1 We are also in receipt of the Commission's directions on procedure dated 3 December 2013. 2. CAC is an independent, non-profit, volunteer-based charitable organization with a mandate to inform and educate consumers on marketplace issues, to advocate for consumers with government and industry, and work with government and industry to solve marketplace problems.2 COSCO is the largest federation of senior citizens' organizations in the province of British Columbia and is the umbrella organization of 79 seniors' organizations and a significant number of individual associate members.3 PIAC is a non-profit organization that provides legal and research services on behalf of consumer interests, and, in particular, vulnerable consumer interests, concerning the provision of important public services.4 3. CAC-COSCO-PIAC wish to be considered as an intervener in this proceeding and to participate in any future public hearing on this and related matters. 4. In the Application, the Applicant challenges the pricing by Bell Mobility Inc. ("Bell Mobility") and Bell Canada (collectively "the Bell companies" or the "Respondent") of wireless data used by their customers to consume the Bell companies' "TV Anywhere"5 service offerings. For the purposes of this intervention CAC-COSCO-PIAC assume that the scope of the Application captures Bell Mobility services offered through Bell Aliant Regional Communications, Limited Partnership. 5. The Applicant alleges that the Bell companies' pricing for mobile use of TV Anywhere constitutes an application-specific economic Internet traffic

2 3 4

Application No. No. 2013-1664-6; Commission File No. 8622-B92-201316646. See Consumers' Association of Canada, online: htto://www.consumerca/index.cho4. See Council of Senior Citizens' Organizations of BC, online: htto://coscobc.ca/. See Public Interest Advocacy Centre, online: http://www.piac.ca. htto://tvanywhere.bell.ca/en/

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 2 of 13

management practice ("ITMP") and that "the proper frame of reference" for evaluating Mobile TV is the Commission's ITMP framework.6 6. The Applicant alleges that Bell's pricing for TV Anywhere service is such that: (i). Bell Mobility customers who subscribe to TV Anywhere pay a much lower price for wireless data when using that service than other Bell Mobility customers pay when consuming any other wireless data; (ii). it is therefore more expensive for Bell Mobility customers and customers of competitors to consume competing over-the-top ("OTT") mobile TV services, such as TELUS's Optik TV or Netflix; and (iii). Bell customers wishing to consume mobile TV services will have no practical choice but to choose Bell's service. 7. The Applicant alleges that this constitutes an undue preference and unjust and unreasonable discrimination against the Bell companies' own customers, against competing wireless service providers, and/or against competing OTT broadcasting services contrary to Sections 24 and 27(2) of the Telecommunications Ace. The Applicant therefore requests that the Commission prohibit the Bell companies from applying the application-specific ITMP in question.8 8. CAC-COSCO-PIAC support the relief sought by the Applicant. CAC-COSCOPIAC differ from the Applicant, however, in the manner in which the issues for determination in this proceeding should be framed, as discussed further below. 9. Failure to respond to any comment or allegation in the Application should not be interpreted as acceptance of the comment or allegation.

2. RELEVANT FACTS 10.The service functionality at issue in the proceeding is the Bell companies' "TV Anywhere" family of service offerings. TV Anywhere provides access to broadcast services from a range of devices, including smartphones subscribed to Bell Mobility's network. This functionality is provided by Bell 6

Application at para. 22. S.C. 1993, c. 38. Application at para. 116.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 3 of 13

Mobility to its subscribers as "Mobile TV." TV Anywhere functionality is also provided to Bell TV BDU service customers, in which case TV Anywhere provides access to TV services over a Wi-Fi connection to an Internet service provider (including Bell Canada and Bell Aliant). 11.The Bell companies launched TV Anywhere on 18 July 20139. 12. Mobile TV (provided to Bell Mobility subscribers) appears to be a functionality which has been well received by consumers. By 17 September 2013 — only two months after the launch of TV Anywhere, the Bell companies announced in a press release that the Mobile TV offering had garnered one million subscribers.19 13.TV Anywhere is offered to the Bell companies' customers in three different configurations, depending on whether the customer subscribes to Bell TV, Bell Mobility, or both, as depicted in Bell's marketing material, reproduced below in Figure 1. Figure 1 — Bell's Mobile TV Offering" Bell 'NT°

Bell MobilityTM

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Bell Press Release, Bell Media Launches TV Everywhere With Bravo GO on July 18 (6 June 103), online htta://www.newswire.ca/en/storv/1178859/bell-media-launches-tvevervwhere-with-bravo-go-on-iulv-18. Online: http://www.bce.ca/news-and-media/releases/show/bell-mobile-tv-welcomes-onemillionth-subscriber httb://tvanywhere.bell.caien/ (Last accessed on 9 December 2013).

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 4 of 13

Figure 2 â&#x20AC;&#x201D; Bell's Additional Terms Legal .11 WAft compatilie i0S. Androkl and select Blackberry devices, {1) Available with a Bell Nand Bell Mobility post paid plan with the Mob& "IV add-on (551mo). Mobile Pi in &des 10 hours1mo;thereafter. 55Thr. For Bell TV, select lye channels and on demand programming can only be viewed if included in your Bell TV subscription and wit vary if viewed over Ihrt-Fi at homeroutside your home. Content viewed over VIA-Fi at home will count towards your monthly Internet data usage. Channels content subject to change vrithout notice and blackout periods may apply. Other conditions apply. IV Anywhere is a trade-mark of Bel Canada.

14.The terms and conditions vary according to whether the customer subscribes to either or both of Bell TV and Bell Mobility services, and also according to the TV channel being viewed. 15.The Bell companies' marketing material states that subscribers to Bell Mobility alone get access to over 40 TV channels. Bell TV subscribers get access to over 70 TV channels; and subscribers to both get access to over 100 TV channels.. 16. For Bell Mobility subscribers, Mobile TV is available for $5/month which provides the subscriber 10 hours of TV viewing on Bell Mobility's mobile wireless network. The Bell companies' marketing material states that there is "no impact on [Bell Mobility] subscribers' data plan."12 Additional hours are billed at a rate of $3/hour (also with no impact on the customer's data plan). 17.The Bell companies thus state that: Mobile TV is available as a bonus with many Bell Mobility data plans and any Bell customer with a smartphone and a data plan can get 10 hours of mobile TV viewing as a $5 a month add-on, without affecting the data allotment in their plan. 13

18. For Mobile TV subscribers, using the measurement rate provided by the Bell companies14 (see Figure 4 below) to convert Mobile TV viewing into data usage of 0.5 GB per Mobile TV hour consumed, this gives an effective price of $1 1 GB for the first 10 hours, and $6.00 / GB thereafter.

12 13 14

Bell marketing materials, Figure 1 and Figure 2 above. Bell Press Release, Bell Mobile TV welcomes one millionth subscriber (17 September 2013). Online: http:llsupport.bell.ca/mobility/rate_plans features/what-is-the-bell-tv-app-andhow-do-i-use-it?step=5.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 5 of 13

Figure 3 - Data Consumption for Mobile TV Managing Internet usage Watching TV with the Bell TV app connected to Wi-Fl will incur Internet usage_ For example, 60 minutes of viewing uses about 0.5 GB of data.

19. The manner in which TV viewing from a Bell Mobility customer's smartphone would be billed, if the consumer wants to use a competitive OTT service would be substantially different. Whereas a Bell Mobility subscriber to Mobile TV pays $5 for 10 hours of Mobile TV, and those 10 hours do not count toward the customer's monthly data allotment, if a Bell Mobility customer wanted to view a competitor's OTT service, that customer would be charged for the data consumed under whatever data plan the customer had, and the data use would count toward that user's monthly data allotment. 20. Using the same data/viewing hour conversion measure as provided by the Bell companies, to watch 10 hours of a competitor's OTT service, the customer would incur 0.5 GB of data usage per hour of TV viewing, but that customer would not be able to do so without consequence to their monthly data allotment. 21. Furthermore, a Bell Mobility customer wishing to watch a competitor's OTT service would not be able to consume that service at the preferred rates offered by the Bell companies for its own Mobile TV service. 22. The following table compares Bell's effective price per GB for Mobile TV to the cost of data which the consumer would incur to access competitors' OTT services. As can be seen from the table below, data usage costs (and the overall cost to the consumer) associated with a competitor's TV service are considerably greater than the costs incurred for Bell Mobile TV usage.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 6 of 13

Figure 4 â&#x20AC;&#x201D; Comparison of Effective Data Prices $ / GB (initial amount)

$ / GB (overage)

Effect on Monthly Data Allotment

Bell - Mobile TV

$1 (in the first 10 hours of viewing)

$6 per GB

Bell - Other wireless data

$8.00 (tablet Flex Plan) ($40 for 5 GB plan)

$10 / GB for tablets $0.05 / MB for other plans

First 10 hours do not count against monthly data allotment. Mobile TV usage is tracked separately. No exemption from monthly data allotment.

23.As Figure 4 illustrates, the Bell companies' pricing for wireless data grants a substantial preference to their own Mobile TV service in comparison with the OTT offerings of competitors. The Bell companies do so by charging Bell Mobility customers a different rate for data depending on whether or not they subscribe to Mobile TV and depending on whether or not the content being consumed is from the Mobile TV service, and also by exempting Mobile TV subscribers from their monthly data caps for the first 5 GB of use (10 hours of Mobile TV viewing).

3. ISSUES 24. The central issue for determination is whether the Bell companies' practice of offering preferential rates to subscribers of its own OTT service compared to customers of OTT services offered by competitors constitutes an undue preference, and subjects the Bell companies' retail mobile wireless customers who wish to have access to competing OTT services and competing OTT service providers to an undue and unreasonable disadvantage, in violation of section 27(2) of the Telecommunications Act. 25.The Applicant has suggested that the requested relief is contingent upon a Commission finding that the Bell companies' practice of effectively discounting wireless mobile data rates for the use of one of its TV Anywhere services is an "application-specific economic ITMP" or a "data cap".15

Application at paras. 8-11.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 7 0113

26.CAC-COSCO-PIAC do not dispute that the Commission's Internet traffic management practices ("ITMP") policy framework (the "ITMP framework") set out in Telecom Regulatory Policy 2009-65716, and subsequently applied to the use of mobile wireless data services to provide Internet access17 could be a consideration in assessing pricing schemes for mobile wireless data were the pricing scheme in question to in fact be a traffic management measure. 27.However, in our view, the Commission need not satisfy itself that Bell's preferential billing treatment is an 1TMP in order for the prohibition against unjust discrimination in the Telecommunications Act to be triggered by the facts at hand. The prohibition exists regardless of what regulatory label the Bell companies' scheme is given. 28.The Applicant has also raised a range of other issues and concerns in the Application. These include transparency of data caps; wireless data metrics (hours versus megabits/second)18; alternative approaches to network capacity rnanagement19; and a range of issues arising from the convergence of telecommunications and broadcasting. 29. In CAC-COSCO-PIAC's view, the Commission should first address the undue preference and unjust discrimination the Bell companies (and as we argue in further applications we are filing concurrently, other large incumbents) are engaging in to the detriment of their customers, of other providers of TV services and, more generally to the detriment of competition in the OTT marketplace.

17 18 19

Telecom Regulatory Policy CRTC 2009-657 - Review of the Internet traffic management practices of Internet service providers (21 October 2009). Telecom Decision CRTC 2010-445 - Modifications to forbearance framework for mobile wireless data services (30 June 2010) at para. 11. Application at paras. 87-102. Application at paras. 103-15.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 8 of 13

4. ANALYSIS 30.The offering and provision by Canadian carriers of mobile wireless data services is subject to the Commission's powers and duties under section 24 and subsections 27(2), 27(3), and 27(4) of the Telecommunications Act.20 31. Section 24 of the Telecommunications Act states: 24. The offering and provision of any telecommunications service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission.

32. Section 27(2) Telecommunications Act prohibits unjust discrimination and undue preference. (2) 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.

33.The Commission's subsection 27(2) analysis is conducted in two phases21: The Commission has stated that "two essential elements must be present. The first is discrimination, preference, advantage, prejudice or disadvantage... and the second is the absence of justification... The burden of proof with respect to the first element rests with the Applicant, and the second with the respondent."

34.The initial burden is on the applicant to demonstrate that the conduct is preferential or disadvantages a person.22 Pursuant to subsection 27(4) of the Telecommunications Act, the respondent Canadian carrier then has the burden of proving that any preference or disadvantage is not undue or unreasonable." 20

Telecom Decision CRTC 2010-445 - Modifications to forbearance framework for mobile wireless data services (30 June 2010) at para. 8; see also Telecom Decision CRTC 2012-556 â&#x20AC;&#x201D; Decision on whether the conditions in the mobile wireless market have changed sufficiently to warrant Commission intervention with respect to mobile wireless services (11 October 2012).

The Commission's approach in relation to allegations that a Canadian carrier has breached what is now section 27(2) was set out in Telecom Decision CRTC 77-16 (Challenge Communications Ltd. v. Bell Canada). More recently, See e.g., Telecom Decision CRTC 2013-40 - Ice Wireless Inc. and Iristel Inc. â&#x20AC;&#x201D; Request for a cease and desist order in Northwestel Inc.'s serving territory (1 February 2013) at para. 14. Telecom Regulatory Policy CRTC 2009-657 - Review of the Internet traffic management practices of Internet service providers (21 October 2009) at para. 48. Telecommunications Act, s. 27(4).

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 9 of 13

35.1t is the view of CAC-COSCO-PlAC that the manner in which the Bell companies charge for Mobile TV constitutes unjust discrimination under subsection 27(2) of the Telecommunications Act. 36. Specifically, the Bell companies billing practice with respect to OTT services results in a situation in which Bell Mobility subscribers pay considerably more to use competitors' OTT services than they do to use Mobility TV. The difference in usage cost is primarily attributable to the Bell companies' decision to exempt Mobile TV subscribers from their monthly data caps when those customers are consuming the Bell companies' Mobile TV service but to apply data caps when subscribers want to watch a competitor's service and in charging Mobile TV viewers an effectively lower data consumption rate for the Bell companies' Mobile TV service than subscribers would incur to watch competitors' OTT services. 37.1n doing so, the Bell companies: unduly prefer their own mobile OTT service the mobile wireless data for which is subject to relatively lower data usage rates and which are also exempted from the application of data caps; (ii).

unduly or unreasonably disadvantage competing OTT services in relation to the Bell companies' own Mobile TV OTT service; and

(iii).

unduly or unreasonably disadvantage Bell Mobility subscribers who must face considerably higher usage costs to access competitors' OTT services.

38.As a result of the Bell companies' billing practices, Bell Mobility subscribers face an 800% price penalty if they wish to use a competitor's OTT service, and competitive OTT suppliers face an 800% price barrier when they attempt to market their OTT services to Bell Mobility's 6.7 million postpaid subscribers.24 39.A further consequence is that Bell Mobility customers, when presented with competitive choices for other OTT services, may avoid consuming those services, not on the basis of the content or of other attributes of these competitors' services, but on the basis that Bell has made consumption of competitive OTT services significantly more expensive than consumption of its own Mobile TV offering by exempting, for its own Mobile TV service, the 24

Price per GB for Mobile TV ($1/GB) versus $8/GB on the Tablet Flex Plan.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 10 of 13

first ten hours of data consumption from the customer's monthly data allotment and by making the effective rate of that data significantly lower than the rate for other data.

Canada's telecommunications policy objectives 40.As the Commission is aware, Parliament has in the Telecommunications Act directed the Commission to exercise its powers and perform its duties "with a view to implementing the Canadian telecommunications policy objectives"25. 41.The Bell companies' mobile wireless data practice which appears to be designed to favour its own Mobile TV OTT service to the detriment of its customers, its competitors and, more generally, of competition in the OTT marketplace. This is inconsistent with several of Canada's telecommunications policy objectives. 42.The Bell companies' practice harms consumer choice regarding OTT services and imposes unreasonable barriers on the development of competitive alternatives to the Bell companies' own OTT service. In doing so the Bell companies' policy does not promote the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada. Instead, the Bell companies' practice promotes their own economic interests and programming service choices, to the detriment of other voices. 43. By preferring their own content by its offering, the Bell companies' mobile wireless data rate scheme undermines the deployment of affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada. By preferring the usage and billing treatment of its own mobile OTT service data plans, the Bell companies shield their own service from competitive forces and undermine the affordability of all mobile OTT services for consumers. 44.Similarly, the Bell companies' practice does not enhance, and indeed undermines the efficiency and competitiveness of Canadian telecommunications services. For the Bell companies' OTT competitors, the substantial obstacles â&#x20AC;&#x201D; notably in the form of significantly higher data charges - if they want to obtain OTT services from competitors, result for the Bell 25

Telecommunications Act, section 47.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 11 of 13

companies' 6.7 million postpaid customers in reduced competitiveness and a less efficient marketplace. The harm to competitiveness of the marketplace of such price discrimination is multiplied if one also considers these price differences in light of the fact that substantial and increasing numbers of consumers are bound by long term contracts and bundling schemes imposed by service providers such as the Bell companies. 45.The Bell companies' practice of preferentially pricing their own Mobile TV service discriminates against users of competing OTT services. This does not foster increased reliance on market forces for the provision of telecommunications services and, if allowed to continue, would undermine the efficiency and effectiveness of regulation. While the Telecommunications Act directs the Commission to promote competitiveness in the marketplace for telecommunications services, the Bell companies' practice imposes a significant barrier on choice in relation to OTT services and produces precisely the opposite effect the Commission has been directed to pursue: less competition for the Bell companies' mobile wireless customers' OTT business and less choice for these consumers. This is not effective and efficient regulation. 46.As Bell companies mobile wireless service customers are disincented from considering competitive alternatives for OTT services by the rating barriers created by the Bell companies, we expect that such practices could stifle innovation in the growing smartphone sector. 47. Finally, it is clear in our view that mobile wireless practices such as that which is the subject of this application do not respond to the economic and social requirements of users of telecommunications services. The scheme at issue in this proceeding may advance the interests of the Bell companies, but it does so to the detriment of competitors in the OTT marketplace and, ultimately, to the detriment of consumers.

5. CONCLUSION 48.CAC-COSCO-PIAC support the outcome sought by the Applicant, namely, that the Commission immediately prohibit the Bell companies from employing the preferential data caps and billing used in conjunction with the Bell companies' TV Anywhere service offerings.26 26

Application, at para. 122.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 12 of 13

49. The Bell companies' preferential billing treatment of mobile wireless data for Mobile TV is, we contend, an undue preference by the Bell companies to themselves, and it unjustly discriminates against Bell's own customers. As a consequence of Bell's exemption for Mobile TV subscribers from monthly data allotments, and lower effective rate for data for Mobile TV, Bell Mobility's subscribers who choose to consume mobile OTT service have little practical choice in the market. 50. Because there is no reasonable basis or justification for this, CAC-COSCOPIAC contend that the Bell companies' preferential billing treatment for its own Mobile TV service is in violation of Section 27(2) of the Telecommunications Act. 51.Therefore, CAC-COSCO-PIAC request that the Commission: (i).

Declare that the Bell companies' practice of offering preferential rates to subscribers of its own mobile OTT service compared to customers of mobile OTT services offered by competitors constitutes an undue preference, and subjects the Bell companies' retail mobile wireless customers who wish to have access to competing OTT services and competing OTT service providers to an undue and unreasonable disadvantage, in violation of section 27(2) of the Telecommunications Act; and

(ii).

Direct the Bell companies to change their mobile wireless data billing rates to remove the discrimination and preference.

52.1n light of the fact that practices comparable to those identified in the application appear to have been engaged in by Rogers and Videotron, CACCOSCO-PIAC are also submitting concurrently with the filing of this submission, applications seeking relief against billing practices engaged in by Rogers and Videotron which also appear to unduly prefer those wireless service providers' own mobile OTT service, compounding the lack of competitive choice for Canadians. 53.We also repeat out previous request' for the Commission to consider initiating a notice of consultation proceeding. We recommend that all wireless service providers be made parties to such a public notice, to ensure that 27

PIAC procedural letter, 22 November 2013.

Intervention of CAC-COSCO-PIAC Application No. 2013-1664-6 Part 1 Application by Benjamin Klass 9 January 2014 Page 13 of 13

Canadian consumers can enjoy consistent rules regarding access to OTT services from mobile wireless service providers, regardless of the OTT service provider these consumers select. ***End of Document***

Tab D

Telecom - Commission letter addressed to various parties interested in the r...

Canada

Conseil de is radiodiffusion et des Radlo-television and I*In/ Canadian Telecommunications Commission telecommunications canadiennes

Home > Decisions, Notices and Orders

Letter Ottawa, 31 January 2014 Our references: 8622-B92-201316646, 8622-P8-201400142, 8622-P8-201400134 BY EMAIL To: Distribution List Re: Revised process regarding an application by Benjamin Klass requesting the fair treatment of Internet services by Bell Mobility (Klass application) and applications by CAC-COSCO-PIAC regarding Rogers' Anyplace TV service and Videotron's Illico.tv Service Dear Madams, Sirs: On 13 January 2014, the Commission received letters from Vaxination Informatique; the Consumers' Association of Canada (CAC), the Council of Senior Citizens' Organization of British Columbia (COSCO), and the Public Advocacy Centre (PIAC) (collectively, CAC-COSCO-PIAC); and Mr. Benjamin Klass requesting modifications to the procedure for the above-noted applications. On 16 January 2014, the three above-noted applications were suspended pending the disposition of these requests. Commission staff is of the view that because of the similarity of the issues raised in all three applications, it would be more appropriate to consider the three applications within a single proceeding. The three applications and associated documents will now be placed under the file number 8622-B92-201316646 for ease of reference. Commission staff notes that the issues raised in this proceeding may also require the Commission to make findings pursuant to the Broadcasting Act. Accordingly, this proceeding is to be conducted pursuant to both the Telecommunications Act and the Broadcasting Act. Parties may file interventions, or in the case of interventions already filed under the Klass application, supplementary interventions, by 5 March 2014. The Commission intends to issue requests for information in the form of interrogatories by 4 April 2014. Responses to such requests are to be filed by 25 April 2014. All parties may file reply comments by 12 May 2014. All documents filed with the Commission must be served on all parties. Documents must also be received, not merely sent, by the specified date and reference file number 8622-B92-201316646. This is Exhibit Warred to in the

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Telecom - Commission letter addressed to various parties interested in the r... Mario Bertrand Director, Dispute Resolution Telecommunications c.c.: Nora Froese, CRTC, nora.froese@crtc.gc.ca Julie Boisvert, CRTC, julie.boisvert@crtc.gc.ca Distribution List: Benjamin Klass (benjiklass@hotmail.com) Vaxination Informatique (jfmezei@vaxination.ca) Consumers' Association of Canada, the Council of Senior Citizens' Organization of British Columbia, and the Public Advocacy Centre (gwhite@piac.ca and jfleger@piac.ca) Bell (bell.regulatory@bell.ca) Bell Aliant (regulatory@bell.aliant.ca) Rogers (rci.regulatory@rci.rogers.com) TELUS (regulatory.affairs@telus.com) SaskTel (document.control@sasktel.com) MTS Allstream (iworkstation@mtsallstream.com) Eastlink (regulatory.matters@corp.eastlink.ca) Tbaytel (rob.olenick@tbaytel.com) Independent Telephone Providers Association (jonathan.holmes@itpa.ca) Videotron (dennis.beland@quebecor.com) Globalive Wireless Management Corp. (eantecol@windmobile.ca ) Public Mobile Inc. (Jamie.greenberg@publicmobile.ca ) Data & Audio Visual Enterprises Wireless Inc. (gary.wong@mobilicity.ca ) Canadian Network Operators Consortium (regulatory@cnoc.ca) Canadian Cable Systems Alliance (cedwards@ccsa.cable.ca ) Cogeco Cable (telecom. regulatory@cogeco.com) Shaw Cable (Regulatory@sjrb.ca) Fenwick McKelvey, Concordia University (fenwick.mckelvey@concordia.ca ) Steven James May, Ryerson University (steven.may@ryerson.ca ) Samuelson-Glushko Canadian Internet Policy & Public Interest Clinic (tisrael@cippic.ca and cippic@uottawa.ca ) Date Modified: 2014-01-31

Tab E

Benjamin Klass Box 22, Whiteshell Post Office West Hawk Lake, MB, RoE 2H0 Mobile 204-998-2983 Email benjiklass@hotmail,com • beuklass.wordpress.com

Submitted via GC-Key

This is Exhibit....

March 5, 2014 Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, ON KIA oN2

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Province of Ontario, for McCarthy Tetrault 11P, Barristers and Solicitors. Expires June 18, 2016.

Dear Mr. Traversy, Subject: Part 1 application by Benjamin Klass requesting the fair treatment of Internet services by Bell Mobility and Part 1 Applications by CAC-COSCO-PIAC regarding Rogers' Anyplace TV service and Videotron's Illico.tv Service (CRTC files 201316646, 8622PS-201400142 and 86-22-P8-20140013)

Pursuant to the Commission's procedural letter dated January 31, please find in this document my comments to the March 5 phase of this proceeding. I am in receipt of the interventions and answer posted on the Commission's website. Pursuant to subsection 39(1) of the Telecommunications Act, I am submitting in confidence a full copy of my Bell Mobility monthly wireless bill. An abridged version with relevant information visible is presented below. As an individual, I believe I have a reasonable expectation to privacy of information such as account details. This mobile plan does not include minutes, so release of the number listed in the bill may result in incoming calls that would incur unnecessary costs to myself. El

EXECUTIVE SUMMARY

El. The wireless operations of Bell, Rogers, and Videotron each offer a mobile TV service which is not currently subject to the data caps that apply to all other wireless data traffic. Of these three, at this time only Bell's comments are on the record, and so I will primarily address the issue of undue preference and unjust discrimination by focusing on Bell. However, general arguments may be applied, mutatis mutandis, to the other Canadian carriers where appropriate. The final reply phase should provide opportunity to respond to Rogers and Videotron. E2.I maintain that the vertically integrated companies confer an undue preference upon themselves by exempting the delivery of their broadcasting services from data caps. The situation of undue preference and unjust discrimination is in contravention of the Telecommunications Act and is contrary to the similar provision found in the Digital Media Exemption Order. E3.Bell's appeal to legislative or regulatory distinctions have no bearing on consumers' interaction with these services. Furthermore, evidence presented below demonstrates that Bell has thus far failed to meet the burden of establishing that the preference it gives itself viz. its Mobile TV service is not undue. E4.Digital Media Broadcasting Undertaking (DMBU) services are delivered by wireless carriers under substantially similar circumstances, whether those services originate from the Internet or not. All wireless services are delivered over the same respective telecommunications facilities, and therefore contribute to network costs and congestion proportionately. Given these similarities, the discriminatory practices of the wireless carriers are unjustified, as described in the Mass application, the two applications filed subsequently by PIAC, and this document. E5.Fair and equal treatment of DMBUs, regardless of whether they are delivered over the Internet or not, is consistent with the development of the Digital Media Exemption Order, in particular the phases between 2005 and 2012 in which mobile services figured prominently. E6.The Commission's approach to claims regarding unjust discrimination and undue preference have consistently involved consideration of the public interest, which includes not just society's interest in increased competition but the effect of discrimination on the fulfilment of statutory policy objectives. Additionally, in this particular case society's interest the freedom to use the Internet for various purposes, as elaborated in the ITMP framework, deserves consideration.

TABLE OF CONTENTS INTRODUCTION PARAGRAPHS 1-7 THE VIEW FROM THE WAITING ROOM PARAGRAPHS 8-23 MOBILE TV: AN OVER-THE-TOP SERVICE PARAGRAPHS 24-38 DISTRIBUTION UNDERTAIUNGS VS MOBILE BROADCASTING PARAGRAPHS 39-46 FAIR TREATMENT UNDER THE DMEO PARAGRAPHS 47 - 62 FAIR TREATMENT IS IN THE PUBLIC INTEREST PARAGRAPHS 62 - 77 CONCLUSION PARAGRAPHS 78- 83

Introduction 1. The Digital Media Exemption Order exempts from broadcasting regulation digital media broadcasting undertakings ("DMBUs") â&#x20AC;&#x201D; including services delivered over the public Internet and services delivered point-to-point to mobile devices. It does not exempt "Canadian carriers" from telecommunications regulation with respect to their common carrier activities. 2. When customers access Mobile TV using Bell Mobility's wireless telecommunications facility, the service is subject to one of two legal classifications: either it is a "broadcasting service" that is BOTH "accessed and delivered over the Internet" AND "delivered using point-to-point technology and received by way of mobile devices"; or it is "delivered using point-to-point technology and received by way of mobile devices" but is NOT "accessed and delivered over the Internet." 3. In plain English, either Mobile TV is delivered over the Internet, or it is not. 4. It is uncertain from the record of this proceeding which of these classifications is correct. Bell appears to argue that Mobile TV is of the latter variety when it compares its operation to the relationship between wireline carriers and their jointly owned BDUs. On the other hand, evidence submitted by Vaxination suggests that Mobile TV is delivered over the Internet. 5. In either case, however, Mobile TV is accessed and delivered over the same telecommunications facility that is used by Bell Mobility customers when accessing any other over-the-top ("OTT"), Internet or telecommunications service. Bell has not contradicted this in its statements on the record. 6. The issues in this proceeding may therefore be summarized as follows: â&#x20AC;˘ Under the Telecommunications Act: whether Bell Mobility's Mobile TV service is accessed and delivered under substantially similar terms and circumstances that apply to other DMBUs, Internet services and other telecommunications services using Bell Mobility's telecommunications facility. The Commission has the authority under the Act to examine complaints of prima facie preferential treatment by a Canadian carrier of any person, including itself or affiliates, and to determine whether any such preference is undue. â&#x20AC;˘ Under the Broadcasting Act: If Mobile TV is not delivered over the Internet, whether, under the Digital Media Exemption Order ("DMEO"), Bell Mobility has authority to allocate network capacity to its own Mobile TV DMBU without demonstrating to the Commission that this does not Page 1

contribute to network congestion that can degrade the experience of users of the Internet and other telecommunications services carried on its network. 7. Bell acknowledges price discrimination when it states: "practically speaking, the application of distinct and different Bell Mobility pricing of its broadcasting and Internet access services is no different from similar distinct pricing practices in the wireline world." This comparison does not stand up under scrutiny, as discussed below. As well, Bell does not dispute the very significant price and usage cap differences that apply to this service, as demonstrated on the record of this proceeding. I maintain that this differential treatment constitutes an unduly preferential practice. THE VIEW FROM THE WAITING ROOM 8. Mobile TV is a bandwidth-intensive service delivered to customers' mobile devices via Bell Mobility's wireless broadband transmission facility. Customers access this service by selecting a video from an application ("app") on their Internet-enabled tablet or smartphone. 9. The distinction between "delivery over the Internet" and "point-to-point delivery" does not exist for consumers who access content on their mobile devices. From this perspective, the Mobile TV application operates no differently than any other Internetenabled mobile application; there is no substantial difference between selecting a video from the Mobile TV app and selecting a video from any other app.

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10.A wide variety of similar apps is available from a large number of providers, including other BCE-owned â&#x20AC;˘ operations. Some apps, such as Netflix, rely on a stand alone subscription. Others are provided as a public service, such as those offered by the CBC and the National Film Board. Some are Hangouts FaceTtme Twitter supported by advertising (e.g. Youtube). Still others require a subscription to a terrestrial or satellite-based distribution service and/or specialty channels.

Page 2

11.Telus cautions that a service of the latter type, Bell's "TV Everywhere," should not be confused with Mobile TV, since it claims the two are in fact distinct services.' Consumers will perhaps be forgiven for making such a conflation, as both services are accessed using the very same app (pictured above, figure 1). Does the actual method of transmission differ substantially between apps and within single apps? 12.Bell provides a "Self Serve" tool to customers which is intended to "help you manage your data usage," since Bell Mobility rate plans are subject to monthly data caps and people have a reasonable expectation to be provided with information sufficient to assist in avoiding punitive overage fees. Figure 2 shows the meter as seen by a Bell customer during a current billing period: Phone number: {###)###-####

9111Ing period: December 19, 2013 10 Jarakey 10, 2014 ______=MMiiiiiMiNNIMM.===_____MMEMMINMINIdi

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13.Figure 2 shows my data usage during the billing period between December IS, 2013 and January 18, 2014. During this time, I downloaded the Mobile TV app, sent and received several iMessages, checked my email, and watched just less than 2 hours of Mobile TV programming. The lion's share of my data usage was caused by watching Mobile TV. This tool reveals that Bell bills by the MB, not by the hour as advertised. Additionally, viewing is not presented in a separate graphic usage meter from other data consumption.

1 Telus

submission of Jan 9, 2014, paragraph 26.

Page 3

Data

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unlimited = Close - Sante Zane (861A7 MB) Data 10MB -5GB Stepped Data Usage (10 MB) 1â&#x20AC;&#x201D; Data 10MB -5G13 Stepped Data Usage (5.53 MB)

14.Figure 3 shows what is displayed when the "view breakdown" option is selected, and demonstrates several things of note. First, I am operating under the assumption that "Service zone" is a description field placeholder meant to eventually be replaced with "Mobile TV" by Bell's billing department. (Other Bell customers who do not subscribe to Mobile TV have informed me that use of Bell's self serve app also contributes to "service zone" data.) Second, I have not subscribed to an "unlimited" plan, but rather a "stepped" plan, which incurs charges of $15 past loMB of usage, an additional $20 past 1GB, and $1o/GB after 5GB. Third, and perhaps most important, is that this figure demonstrates all data traffic, including Mobile TV, is measured together on Bell's network - the only difference between Mobile TV traffic and other Internet traffic appears to be in the billing, not in the network. 15.Usage is presented without substantial differentiation to the consumer, with Mobile TV data only being found (ambiguously) identified in a third-tier small print menu. This presentation runs counter to the standard practice of jointly owned broadcasting distribution undertakings ("BDUs") and ISPs; for example, Fibe TV viewing does not appear as "MB" intermixed with other data usage on Fibe Internet users' data usage reports because Fibe TV is delivered over a broadcast network, not the Internet. 16.When viewing the itemized monthly data usage tool provided by Bell Mobility, the customer is presented with more detailed information regarding data transfers, for example:

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22/01/2014

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22/0112014

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Page 4

17. Some of the data sessions shown in figure 4 (from the Bell self serve webpage) represent Mobile TV usage, and others represent other data usage. They are completely indistinguishable.

Generic Data Traffic Item Report

Mobile TV Data Traffic Item Report

All

Usage type : Data

Date: 17/01/2014 lime: 10:09 PM

Date: 17/01/2014 Time: 10:09 PM

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18.Figure 5 shows individual item reports provided by Bell's usage tracker (accessed by clicking the magnifying glass icon) for Internet traffic (on the left) and Mobile TV (on the right). Note that these data sessions are not differentiated according to whether the traffic results from Mobile TV viewing or other Internet use. 19.The monthly bill is presented in figures 6 and 7 for the public record. Note that Mobile TV usage is presented as "service zone" data under the "data usage" heading, and billed "@$.00/MB." As well, it is included in the FYI summary lumped together with other data usage. 20.Itemized reporting found in the monthly bill further confirms that Mobile TV traffic is identified as "Brwsr" type traffic, as is all other "packet data" traffic on Bell's network. 21.A full version of this bill is provided in confidence to the Commission, pursuant to section 39(1) of the Rules of Practice and Procedure. The bill contains account information that is not publicly available, as well as a private phone number. (Release of the latter would cause me financial harm and mental stress since answering the phone to hear "this is your captain speaking..." would incur by-the-minute airtime charges.)

Page 5

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billed to

FOR YOUR INFORMATION...

Feb 18, 2014 5.00

Tablet Flex 30 day (SIM only) Includes: Detail Biting Mobile TV Data 10MB -5GB Stepped

5.00 0.00

Other charges and credits Data 10MB -5GB Stepped Tablet Flex 30 day (SIM only) Mobile TV

Jan 16 to Jan 18 Jan 15 to Jan 18 Jan 16 to Jan 18

0.00 0.50 0.50

Event Summary Total Events Total this month

15 50.00

Packet Plan Usage Summary Total megabytes Total this month

878.0038 $15.00

Usage Data Service zone @$.00IMB Data 10MB -5GB Stepped Data Usage Rate Details: Up to 10 MB Up to 1 GB Up to 5 GB Over 5 GB ($10/GB) LEGEND

861.4726MB Data Used Exceeded 16.5312 MB

GB = Gigabyte

MB = Megabyte

0.00 15.00 Tier Charged 0.00 15.00 35.00

1 GB = 1024 MB

ITEMIZED CALLS Packet Data no. 1 2 3 4

date

Thu Jan 16 " ' Ft Jan 17

type

Brwst Bent Brwst Brwst

details Mobile Browser Mobile Browser Mobile Browser Mobile Browser

data volume 5.2656 0.9883 8.6289 1.6504

rate 0.00 0.00 0.00 0.00

laid by MB

MB MB

Total usage Subtotal

total 0.00 0.00 15.00 0.00

15.00 $15.00

ITEMIZED CALLS Packet Data no. 9 10 11 12 13 14

dare Thu Jan 16 ' ' ' FriJan 17 '

type

Malls

&Neu

Service zone Service acne service zone Service zone Service zone

Bnesr

Service zone

Brwst Ecorse Mar

data volume

billed by

0.00 0.00 0.00 0.00 0.00

Me MB MB MB MB

400.5820

0.00

Total usage Subtotal

Page 6

rate

0.0195 49.6406 0.0557 411.1719 0.0029

total 0.00 0.00 0.00 0.00 0.00 0.00

0.00 50.00

22. The fact that Bell advertises Mobile TV usage by one measure and bills by another strikes me as cause for concern; it creates uncertainty as to when overage fees will kick in. Also worrying is the practice of lumping Mobile TV and other data usage together in a meter intended to inform customers when they are near their data limit, given that only 2 hours of Mobile TV viewing consumes roughly 1GB and is advertised as not affecting your data allotment. Consumers who rely on this meter to avoid overage fees will likely curb their use of other Internet services (competing and otherwise) due to Mobile TV's inflation of the meter. 23. These issues are indicative of the underlying preferential and discriminatory practices under examination in this proceeding. Confusing or misleading billing practices are often symptoms of unjust discriminatory treatment of substantially similar services. The evidence presented above demonstrates that, from the perspective of consumers, Mobile TV is accessed and delivered under substantially similar conditions to other Internet-originated telecommunications services, despite being treated differently by Bell from a pricing perspective and regardless of statutory and/or regulatory classification. MOBILE TV: AS AN OVER-THE-TOP SERVICE 24. Bell states that "Mobile TV is the kind of innovative, consumer-oriented broadcast service that the Commission intended to encourage when it first created licence-exempt new media broadcasting undertakings in 1999."2 25. In Broadcasting Public Notice 1999-84/Telecom Public Notice 99-84, the Commission noted that "parties to the proceeding assumed new media to be services delivered over the Internet," and the Commission did not "consider it necessary to define the term further."3 26. If that definition applies to Mobile TV, the Commission should reasonably conclude that it is a broadcasting service delivered over the Internet. If Bell is correct in arguing that the Internet traffic management practices ("ITMP") framework does not apply to Mobile TV because it is a broadcasting service, then the same logic applies to all DMBUs on the Internet, where Bell's Mobile TV is just one DMBU among many â&#x20AC;&#x201D; Canadian and foreign. Bell's argument provides no justification to support preferential treatment of its own service. The record shows that there is a clear preference in the way it is offered vis-avis other DMBUs delivered over the Internet, including services of the CBC, the NFB, and other public and private broadcasters, which Bell has not disputed. 2

Bell answer of January 9, 2014, paragraph El.

Broadcasting/Telecom Public Notice CRTC 1999-84.

Page 7

27.Since 1999, the Commission has had cause to reexamine new media with unusual frequency.4 One thing that has remained constant throughout such deliberations is that new media services have always been defined, in part, in terms of the telecommunications service by which they are delivered. This is true whether that telecommunications service is an Internet service or whether it is a point-to-point data service received by way of mobile phones. 28.From a technical perspective, mobile devices are each assigned one IP address. When selecting a video, the request for a connection is initiated from the device and travels through Bell Mobility's telecommunications facility. The server responding to the IP request does so by streaming the video content back to the receiver, whether that server belongs to Bell Mobile TV or any other undertaking. 29.When accessed over Bell's wireless network, all digital media services are transmitted to customers' mobile devices using HSPA or LTE protocols over the shared wireless "last mile" of Bell's network. Similarly, when not using. Bell's facility, Internet-enabled apps (including the Mobile TV app) rely on wireless connectivity (i.e. "Wi-Fi" or other carriers' wireless networks) as part of the transmission path. 30.When a DMBU streams programming to a Bell Mobility customer, data are sent to an access point name ("APN") router within Bell's telecommunications facility. From there, data are routed to the appropriate tower and transmitted wirelessly for the last mile to the user's handset. This is true of every DMBU. To access the signals, the user's mobile device must connect to Bell's APN. When a customer watches Mobile TV, Bell's network identifies this traffic as "Browser" traffic, just as it does for all mobile Internet traffic. Bell provides the Mobile TV users with a separate app, but not a separate IP address, wireless distribution channel, nor even a separate usage meter for the traffic thus generated. Any OTT service would usually provide its subscribers with programming under similar circumstances. 31.When accessed over a Wi-Fi network, Bell Mobile TV is delivered over the Internet by a separate and distinct wireline or wireless telecommunications common carrier, using Internet Protocol ("IP"). Telecommunications common carriers providing this delivery, including Bell Canada's wireline ISP operation, are subject to the Telecommunications Act; such delivery is subject to the ITMP framework applies to all Internet traffic. 32.Similarly, when accessed over Bell Mobility's wireless telecommunications facility, Mobile TV is delivered over the shared facilities of a 4 For a handy overview, see: CRTC "New Media Regulatory Background" http:// www.crtc.gc.ca/eng/media/rnedia2.htm

Page 8

telecommunications common carrier, using precisely the same protocols as it does in the previous case. Bell, however, argues that this delivery of Mobile TV is ultra vires the Telecommunications Act. 33. Mobile TV programming such as "The Ellen Degeneres Show," "Criminal Minds," and "The Daily Show," is delivered to the end-user's mobile device and recorded on subscriber usage reports as wireless "packet data." BDU and VoD services delivered on jointly owned wireline networks, on the other hand, are not recorded on ISP usage meters. If the Mobile TV service is indeed delivered over the Internet, as it appears to be, then part of the $5 customers are charged for access to Mobile TV constitutes an ITMP that is substantially less than the ITMP which applies to other Internet traffic. 34. Given that it is also available in conjunction with other carriers' ISP services and Wi-Fi, Mobile TV appears to meet the definition of an over-the-top service, defined by the CRTC in 2011 as follows: 35. "The Commission considers that Internet access to programming independent of a facility or network dedicated to its delivery (via, for example, cable or satellite) is the defining feature of what have been termed "over-the-top" services."5 36. If Mobile TV is an OTT service, then exempting it from data caps creates an undue advantage. Moreover, the fact that it is cheaper to access certain broadcasting services via Mobile TV's "walled garden" than to access those same services on the open Internet suggests that Bell Mobility subscribers who choose not to take Mobile TV cross-subsidize those who do. This may explain why Mobile TV is generally bundled with wireless service. 37. Bell has provided no evidence on the record to suggest that such a preference is not undue; rather Bell argues that the ITMP rules do not apply because Mobile TV is a broadcasting service â&#x20AC;&#x201D; specifically, a DMBU. The fact that the service is a DMBU is no justification for preferential treatment vis-Ă -vis other DMBUs and other services delivered via the Internet. Absent any justification, the fact that Canadian carrier Bell Mobility grants this preferential treatment only to its own DMBU in a manner that is clearly disadvantageous to competitors delivered via the Internet is prima facie evidence of a preference that is undue. 38. "Access and delivery over the Internet" is a Canadian carrier service captured by the Telecommunications Act. For DMBUs such as the CBC app, the NFB app, and Netflix, the same is true of "point-to-point delivery received by way of mobile devices." It is by no means certain in the case of Bell Mobile TV that CRTC "Results of the fact-finding exercise on the over-the-top programming services", footnote 2, http_Wwww.crtc.gc.ca/eng/publications/reports/rp1110.htm

Page 9

Internet and point-to-point mobile delivery are mutually exclusive categories. If the Canadian carrier Bell Mobility delivers Mobile TV service via the Internet in combination with point-to-point to mobile devices, Bell has provided no justification for preferential treatment. DISTRIBUTION UNDERTAKINGS vs MOBILE BROADCASTING 39.In comparing its Mobile TV service operation to the relationship between land line carriers and their jointly owned BDUs, Bell suggests but does not state that Mobile TV is not delivered over the public Internet when accessed on its wireless telecommunications facility. Arguments presented by Bell in this proceeding are not clear on the matter. 40.Bell claims that Mobile TV is a "mobile distribution undertaking" by way of reference to section 3(1)(t) of the Broadcasting Act. In support of this argument, Bell compares the relationship between Mobile TV and its wireless Internet services to that of jointly owned wireline BDUs and carrier/ISPs. While Mobile TV may bear resemblance to a BDU, the comparison is otherwise inaccurate in two respects: first, in the "wireline world," BDUs are subject to regulatory requirements either by license or by conditions of exemption; and second they have dedicated facilities or network capacity which prevent broadcasting services from contributing to network congestion that can degrade the experience of Internet service users. In the context of this proceeding, these are significant differences. 41.As Vaxination notes, Bell's Fibe IPTV service was exempted from data caps because "the Commission accepted Bell Canada's arguments that Fibe TV used different capacity in the aggregation network." Vaxination states further that "According to Bell Canada, Fibe TV is not an Internet service, is not accessible from the Internet and its capacity is separate from that of the GAS [Gateway Access Service]/Bell Internet aggregation networks" (Paragraph 9). 42.Bell Fibe TV is received by way of a dedicated "set top box" which is not connected to the Internet. From end to end, delivery of the Fibe TV service over Bell's transmission facility is separated from Internet traffic. The Fibe TV set top box is assigned a separate IP address, to which content is transmitted over a virtual local area network ("VLAN") which segregates broadcasting from Internet traffic. As well, the "last mile" between neighbourhood nodes ("DSLAMs") and end-users' residences provides physically separated links between households, ensuring one subscriber's network usage does not affect capacity available to another home. 43.Cable-TV networks provide similarly separated capacity and access for broadcasting and telecommunications services, including Internet access.

Page 10

44. Conversely, mobile devices are used to access the Internet. Mobile TV itself is accessible from the Internet. Nothing on the record indicates that Bell Mobility has installed dedicated software or hardware components to segregate its Mobile TV service from Internet traffic. Users' mobile devices are not assigned more than one IP address for use with HSPA or LTE network protocols. As noted above, Bell's network itself identifies Mobile TV traffic as "Browser" traffic, just as it does for all Internet traffic. 45. Unlike the operations of incumbents' jointly owned wireline broadcaster/ carriers, there is no evidence to suggest that network capacity in Bell Mobility's wireless last mile is in any way separated between Mobile TV traffic and Internet traffic, on the one hand, or between distinct end-users on the other. 46. In fact, the notion that the delivery of Mobile TV content takes place using a Canadian carrier service has a parallel in the wired world not mentioned in Bell's answer. Vmedia, Acanac (Zazeen), and Colba.net are wireline ISPs which are also licensed broadcasting distribution undertakings. These BDUs have no managed facilities for distributing programming and do not treat their licensed broadcasting activities differently from Internet access services. Each delivers IPTV service over a shared facility, using wholesale high speed access services. Such delivery is subject to the ITMP framework. Furthermore, customers cannot subscribe to the unlimited IPTV service offered by these companies without also subscribing to an unlimited Internet access plan.6 In other words, in the wireline world, ISPs who offer broadcasting and Internet access services using the same facilities treat all traffic equally. Were any of these companies to offer a BDU-specific ITMP, section 27(2) of the Telecommunications Act would certainly be triggered. FAIR TREATMENT UNDER THE DMEO 47. By its nature, Mobile TV is a bandwidth-intensive service. To the extent that Bell's mobile network is susceptible to capacity constraints, it is reasonable to conclude that use of Mobile TV contributes to network costs and congestion in proportion to similar use of Internet services. The fact that Mobile TV is, like Internet access, priced to constrain usage â&#x20AC;&#x201D; albeit very favourably supports this argument. 48. In the Exemption Order for Mobile Television Broadcasting Undertakings (Broadcasting Public Notice CRTC 2007-13), the Commission recognized that:

Vmedia and Acanac only offer unlimited Internet plans. Colba.net offers capped plans, but the IPTV service is only available with unlimited plans. See: vmedia.ca, zazeen.com, and ttips://www.colba.netimain.plip?lang=en&cont=iptv 6

Page 11

"While point-to-point [as opposed to point-to-multipoint] delivery provides users with a greater degree of choice and interactive capabilities, the disadvantage of such networks is that each user requires a separate data stream, thereby potentially consuming considerable network bandwidth overall. As an increasing number of users try to access content, the point-to-point network becomes congested, which, in turn, can prevent new users from accessing content and detract from the experience of current users."7 49. In the case of Mobile TV, the point-to-point network subject to congestion with increasing use is shared by users of the Mobile TV service, Bell-affiliated telecommunications services, other non-affiliated Internet services, and customers of roaming and network sharing partners. 50. Bell states that it has made "wireless network enhancements [that are] necessary to accommodate this increased mobile traffic,"8 without indicating whether those enhancements are exclusively dedicated to Mobile TV traffic, on the one hand, or whether they also accommodate Internet traffic on the other. Although the record is unclear on this matter, unless the enhancements both a.) accommodate Mobile TV traffic exclusively, and b.) prevent Mobile TV traffic from causing network congestion (and thus degradation to the experience of Internet users), then it is clear that Bell's network does not constitute a facility for dedicated distribution of Mobile TV. Unless both of these conditions hold, price discrimination between the delivery of Mobile TV and Internet access services, by encouraging disproportionate use of shared network resources and potentially causing a degraded experience for mobile Internet users, unduly prefers Bell services, puts competing broadcasters at an unfair disadvantage, and unnecessarily harms customers and providers of other Internet-accessible services. 51. If the "network enhancements" to which Bell refers are not specifically dedicated to the delivery of Mobile TV content, then it may be the case that Bell's network capacity is significantly abundant that it can offer customers at least 5GB of network access for $5 (or $o as a "bonus") per month without fear of creating network congestion, as contemplated in the initial Klass application.9 In other words, in this case, network investment will have obviated the need for the data caps as currently applied - raising the question of how Bell justifies using economic ITMPs which are not related to the management of congestion. Paragraph 25, BPN 2007-13 "Exemption Order for Mobile Television Broadcasting Undertakings" http.://www.crtc.gc.ca/eng/archive/2007/pb2007-13.htm (emphasis added.)

Bell answer of January 9, 2014, paragraph 14.

Klass application of November 20, 2013. Paragraphs 31-44.

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52. As it stands, Bell reserves this preferential network access for Mobile TV subscribers. Unless Mobile TV is delivered over a separate network, the implication of the existing arrangement is that current data caps that apply to services which use that same network cannot be within the "legitimate interests of ISPs to manage traffic" on their networks - in other words, the existing data caps unjustly interfere with the freedom of Canadians to use the Internet for various purposes under the ITMP framework and section 7 of the Telecommunications Act. 53. A recent OECD report entitled "Connected Televisions: Convergence and Emerging Business Models"1째 notes that: "Some commentators have made a distinction between managed and over-the-top connected television services and this wording has featured in some regulatory decisions. The term "managed" refers to a service offered by the broadband network operator. This network operator manages the service by providing dedicated bandwidth for the service and creating a special QoS [quality of service] class, by using multicast or by having the facilities closer to the enduser."11 (emphasis added) 54. Bell's comments on the record of this proceeding thus far have provided no evidence to suggest that its Mobile TV is a managed service so defined. 55. With regard to discrimination against competing DMBUs, the relationship between a license-exempt broadcasting undertaking that provides service using the shared facilities of a jointly owned Canadian carrier, on the one hand, and the relationship between non-affiliated service providers and that same carrier, on the other, must be considered. In BPN CRTC 2006-47, the Commission was of the view that: "there may be compelling reasons why, in the future, mobile providers might seek alternatives to the Internet for the purpose of distributing these mobile television broadcasting services. [...] As a result, wireless 10

OECD, " Connected Televisions: Convergence and Emerging Business Models",

prepared by Rudolf van der Berg, available at http://www.oecd-ilibrary.org/science-andtechnology/connected-televisions 5jzb36wjqkvg-en 11 ibid, p28. Note that "having facilities closer to the end-user" is a trait that features in the delivery of Internet broadcasting services: Netflix and other OTT providers offer "content delivery networks" (CDNs) to improve customers' experiences. These CDNs may in some cases be integrated within carriers' networks; those same carriers also often "cache" Internet data in order to reduce load times for users' access to Internet content. Thus it may be more appropriate to view the defining features of a "managed service" as primarily the use of multicast or, alternatively, QoS and dedicated bandwidth. Page 13

carriers may wish to establish a managed network or dedicated link with MobiTV (or an alternative content provider) to deliver these services."12 56. It is not clear from the records of BPNs 2006-47, 2006-48, or the resulting 200743 whether the Commission considered "alternative content providers" to include affiliated or jointly owned license-exempt broadcasting undertakings. 57. However, there are two things that are clear: first, when the Commission revoked the exemption order for mobile television broadcasting services and amended the new media exemption order to include such services, its stated expectation was that "all mobile undertakings will be treated similarly, whether they rely on point-to-point or Internet technology." '3 Second, vertical integration in the Canadian communications industry has become a pronounced phenomenon that creates incentives for VI firms to pursue unduly preferential business practices. 58. A compelling reason for a vertically integrated communications conglomerate to use its Canadian carrier facilities to deliver affiliated broadcasting services is the potential to bestow a preference upon those services in order to "mitigate the risk" of "the increased adoption by customers of alternative TV services."14 The Commission registered concerns relating to this possibility in the 2009 Review of Broadcasting in New Media (BRP CRTC 2009-329): "A number of content providers argued that despite new media's promise of open access, there are gatekeepers in the new media environment with the power to give certain content providers preferred access to their platforms and customer base. During the Proceeding, this issue was most frequently discussed with respect to wireless carriers that offer walled garden mobile entertainment packages."15 59. In its determinations, the Commission stated the following:

"The Commission takes no position on whether situations of undue preference with respect to broadcasting content have or have not occurred to date in the new media environment. The Commission considers, however, that the ownership structure within Canada's wireless industry suggests that the potential for unduly preferential treatment needs to be addressed because the industry structure 12

Broadcasting Public Notice CRTC 2006-47, paragraph 47.

Broadcasting Regulatory Policy CRTC 2009-329, paragraph 33.

BCE, as quoted in Klass application of November 20, 2013, paragraphs 49 & 50.

BRP CRTC 2009-329, paragraph 56.

Page 14

comprises vertically integrated companies with ownership interests in content providers.16" 6o. Mobile TV is a service that generates revenues for Bell in competition with a growing range of private and public DMBU services delivered via the Internet. Moreover, the majority of programming offered by Mobile TV consists of channels owned by Canada's 4 largest vertically integrated communication companies. Bell has an ownership stake in the single largest proportion, with 15 of 44 channels, including the 4 channels that are "BCErelated."17 61.The evidence presented above demonstrates that Bell's comparison of its Mobile TV operation to those of jointly owned wireline broadcaster/carriers is seriously flawed. If, however, Bell has in fact dedicated network capacity to Mobile TV, then it has, at its sole discretion, assigned preferential use of Bell Mobility's shared telecommunications facility to its own broadcasting undertaking without having to demonstrate that this has not contributed to increased congestion or otherwise negatively affected the experience of users and providers of services that are delivered and accessed over the Internet or otherwise using that same shared facility. In effect, Bell is reallocating the use of a scarce, regulated public resource exclusively for its own license-exempt broadcasting service. As in the case of delivery via the Internet, this preferential treatment of network capacity is wholly unjustified by Bell's submission. 62.Bell's comparison of its Mobile TV service to wireline operations also falls short on the matter of regulatory status. In wireline operations, a carrier's jointly owned BDU and video-on-demand services not only have dedicated capacity and access arrangements; they are also subject to detailed regulatory requirements. Bell's argument, therefore, suggests that its exempt and unregulated DMBU service (which nonetheless benefits from its relation to Bell's licensed BDUs), should be allowed a level of preferential treatment by its jointly owned carrier that the CRTC has not granted to licensed or otherwise regulated broadcasting services. Again, Bell makes this argument with no justification other than its claim that the ITMP framework does not apply to DMBUs. FAIR TREATMENT IS IN THE PUBLIC INTEREST 63.Bell has stated that in order to justify a claim of undue preference or unjust discrimination, a "substantial lessening of competition" would have to be demonstrated. According to my understanding of subsection 27(4) of the 16

ibid, paragraph 59.

Bell answer of January 9, 2014, Table 1.

Page 15

Telecommunications Act, upon receipt of a credible complaint of prima facie preference and/or discrimination, the onus shifts to the respondent, who is required to demonstrate that the preference is not undue or the discrimination is not unjust. Rather than attempt to justify the preference Bell's comments in this proceeding have instead sought to avoid the issue by appeal to issues of legislative jurisdiction. 64. Bell does make the bald statement that "even if Bell Mobile TV was a telecommunications service and not a broadcasting service, it still would not constitute unjust discrimination."18 This assertion, however, is not supported by evidence. Bell points to Rogers' and Videotron's similar services, in support of the proposition that Mobile TV services are prevalent in the industry.19 Prevalence, in my view, is set by a low standard when only 3 carriers have been shown to give themselves a similar preference. It is interesting to note that, of the Canadian carriers who offer wireless services, only those who have financial interests in broadcast content have engaged in preferential practices related to Mobile TV services. In any case, Videotron and Rogers have subsequently been included as respondents in this proceeding as a result of several compelling applications brought forward by the Public Interest Advocacy Centre (PIAC). 65. Bell has provided some information regarding subscriber growth at Netflix and Youtube. No conclusions can be drawn, however, from that information. These services are not specific to mobile networks, and the information presented contains no data specific to the wireless market. In order to be informative, such information would have to consider the performance of competing OTT providers in the relevant market (mobile wireless data services) and in the absence of special treatment for Bell's service. In my view, were Bell (and Rogers and Videotron) to treat all data services on their network fairly by extending the benefits of capacious network enhancements to all users, it is likely that consumers would increase usage of not only competitive OTT services but also other activities available on the mobile Internet as well. As it stands, these companies have chosen instead to reap the benefits exclusively by preferring their own services. 66. Additionally, by limiting consideration to competitive effects, Bell ignores the Commission's longstanding approach to examining claims of undue preference in light of the public interest - including the interest not just of incumbents and competitors, but of Canadians in their role as consumers, creators, and citizens as wel1.2째

ibid, paragraph 37.

ibid, paragraph 38-40.

As noted in Klass application of November 20, 2013, paragraph 21.

Page 16

67. The Commission has historically made determinations regarding claims of undue preference or unjust discrimination in consideration of the public interest.21 In the case of the current proceeding, this approach is consistent with the policy objectives enumerated in section 7 of the Telecommunications Act, most notably: 7(b) to render reliable and affordable telecommunications services of high quality in all regions of Canada; 7(c) to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications; 7(f) to foster increased reliance on market forces for the provision of telecommunication services and to ensure that regulation, where required, is efficient and effective; and 7(h) to respond to the economic and social requirements of users of telecommunications services; 68. Briefly, charging many times more for delivery of Internet-originated services than substantially similar delivery of jointly-owned broadcast services does not render telecommunications services affordable. The possibility of increased congestion threatens the reliability and quality of telecommunications services. By conferring advantages upon themselves that are not available to competitors, Bell, Rogers, and Videotron distort market forces, constrain Canadians' use of the Internet and thus threaten the competitiveness of Canadian telecommunications. Last, and of the utmost importance, these practices stultify the social and economic demands of users. 69. In the ITMP framework, the Commission noted that "the outcome of this proceeding must be the establishment of an appropriate balance between society's interest in innovation in computer communications and its equally legitimate concern regarding the rights of carriers to manage the traffic thus generated."22 This sentiment is echoed in the Broadcasting Act, which states that "The Canadian broadcasting system should be regulated and supervised in a flexible manner that [...] does not inhibit the development of information

21 PIAC

comments to TNC CRTC 2013-685, "Wholesale mobile wireless roaming in Canada - unjust discrimination/undue preference," paragraph E7, 29 January, 2014. See also: Wind comments to the same, paragraph 40. See also: Klass, Benjamin, "Up for a Challenge," http://benklass.wordpress.com/2014/01/30/up-for-a-challenge/

TRP CRTC 2009-657, paragraph 9.

Page 17

technologies and their application or the delivery of resultant services to Canadians;"23 70. Exempting certain broadcast services from data caps causes discrimination between two classes of customers - those who subscribe to the Mobile TV service, and those who do not (note that the former always also subscribe to Canadian carrier services, but never vice versa). The class of users who subscribe to the Mobile TV service are given an economic incentive to act as heavy users by virtue of the fact that they enjoy access to network facilities at significantly discounted rates compared to users who make use of the same facilities for different purposes. These discounts are applied to access which is specific to Mobile TV, and by extension a preference is conferred upon Bell vis-Ă -vis its broadcast competitors. In an ironic twist of fate, Bell is today encouraging its own customers to act like "bandwidth hogs" - but only so long as they line up at Bell's own Mobile TV trough. 71. The foregoing is true regardless of whether the fee for Mobile TV is construed strictly as an ITMP or not. Further, an exemption from data caps that is reserved for Mobile TV flies in the face of the principle that data caps "match consumer usage with willingness to pay, thus putting users in control and allowing market forces to work."24 How can market forces work when Bell gives its own service an advantage unavailable to any competitor? If network investment has obviated the need for an ITMP on one service, has it not done the same for other services which use the same network? 72. Consider the following comparison. A mobile subscriber currently has two options for watching 10 hours of CBC programming on their tablet using a mobile network during a given month: they can a.) use the Mobile TV service at Bell's price of either $o or $5, orb.) use one of several CBC apps with their data plan at Bell's price of $40. Bell states that in the former case it acts solely as a broadcaster, whereas in the latter it acts solely as a Canadian carrier. Regardless of classification, however, the services are delivered under substantially similar circumstances (i.e. a broadcasting service is delivered to the customer that makes use of shared capacity of the same telecommunications facilities). Both services incur similar network costs and contribute the possibility of network congestion in proportion to use. 73. In the latter case, delivery of CBC content is a telecommunications service provided by Bell Mobility subject to the ITMP framework.

Broadcasting Act, Part II, section 5(2)(f)

ibid.

Page 18

74. In the case of Mobile TV, Bell states that "the $5 monthly charge for up to 10 hours of Bell Mobile TV is not an ITMP."25 The fact that pricing is sensitive to usage demonstrates that there is a data cap associated with the Mobile TV service, whether it is classified as an economic ITMP or not. Preferential pricing of the Mobile TV service encourages users to consume broadcasting content (and thus shared telecommunication facility resources), while the discriminatory pricing of economic ITMPs discourages users from consuming similar Internet-originated broadcasting content, including publicly funded content provided by the CBC, the National Film Board, and other independent Canadian creators, etc, delivered by Bell using the same wireless telecommunications facility and subject to the same or similar capacity constraints. Services that make use of shared network capacity must be treated equally with regard to the application of data caps; to do otherwise would be to unfairly privilege Bell's service at the expense of Internet users. Canadians should have the ability to choose the services they access; we should not have to depend on network owners' permission to use our devices as we see fit. 75. Indeed, in this context, Bell's Mobile TV, as delivered, is a "walled garden" in which Canadians can access the online services of the CBC and certain other broadcasters more cheaply than they can access those same services directly via the open Internet. Such price discrimination raises questions of preference and/or discrimination in light of the fact that customers' use of the Mobile TV service utilizes a shared telecommunications facility. Use of shared capacity by various services contributes to network costs and the potential for network congestion. Bell should be prohibited from giving itself this undue advantage. 76. Aside from passing mention, financial information regarding Mobile TV is absent from BCE's securities reporting. There is no publicly available information regarding the costs and revenues associated with content acquisition, network investment necessary for delivery, and administrative and incidental costs. That Bell charges only $5 (some of which is used to pay for rights clearances), or in some instances $o (when bundled as a "bonus add-on") for a service which requires significant network resources raises the question of how the necessary costs are recovered. If the rates for Mobile TV appear to be non-compensatory, then it may be the case that the Mobile TV service is being cross-subsidized by either ad revenue from affiliated programmers or from revenue generated by other telecommunications services, or both. Any assessment of such information in this context must take into account not just the marginal cost of carrying data, but must factor in the fixed costs associated with providing sufficient network capacity for concurrent users of network capacity.

Bell answer, Para 37.

Page 19

77. Any or all of the following would run counter to the public interest: â&#x20AC;˘ allowing affiliated programmers or users of Bell's other carrier services to subsidize Mobile TV; â&#x20AC;˘ allowing Mobile TV, via disproportionate data limits, to degrade other services by contributing to network congestion; â&#x20AC;˘ or imposing data caps (on Internet access services) that do not contribute to the management of congestion, remove control from users, and cause market forces to malfunction. CONCLUSION 78. Under close examination, Bell's argument that the ITMP framework does not apply to the delivery of Mobile TV content is shown to be an attempt to take advantage of the New Media Exemption Order to give undue preference to itself, and discriminate unfairly against other DMBUs to commercial advantage. As a vertically integrated carrier/ISP/BDU/broadcaster, Bell has incentives to attempt to leverage its control of local wireless network infrastructure to gain commercial advantage for its own DMBU over other DMBUs and services delivered via the Internet. This echoes the concernps expressed by the Commission in its 2009 Review of Broadcasting in New Media (BRP 2009-329) referenced above. 79. Moreover, accepting this argument would run counter to the regulatory policy in section 5 of the Broadcasting Act that: (2) The Canadian broadcasting system should be regulated and supervised in a flexible manner that (f) does not inhibit the development of information technologies and their application or the delivery of resultant services to Canadians;". 80. Bell argues that "Mobile TV is the kind of innovative, consumer-oriented broadcast service that the Commission intended to encourage when it first created licence-exempt new media broadcasting undertakings in 1999." However, its own comparison shows that the service is a wireless digital extension of its existing BDU services. While there may be some innovation in this, it pales in comparison to the level of innovation demonstrated by many of the wide range of DMBU, OTT and other online services that Canadians can access via the Internet. The CBC's innovative Sochi 2014 app - available to all Canadians, and the envy of international audiences26 - is a prime example of the type of innovative DBMU service that is being offered from providers at the edge of the network, without permission from network owners.

26 http://www.canada.com/olympics/news/cbc-changes-_way-canadians-watch-olympics

Page 20

8i. As for "consumer friendly", to the extent that Mobile TV is delivered in a manner that diminishes consumers' ability to fully enjoy more innovative online services, by constraining access to those services and favouring access to Bell's own service, Mobile TV also falls short in that regard. The Commission should not allow Bell to take advantage of its control of network infrastructure to impede Canadians' access to the kinds of innovative, consumer-oriented services that the Commission intended to encourage. 82. Finally, Bell argues that: "In order to justify such a claim [ of undue preference and/or unjust discrimination ] one would have to demonstrate that Bell mobility's practice results in a substantial lessening of competition". This concept stems from competition law in relation to matters of market dominance and/or predatory pricing. The matter at hand, however, goes to core principles of common carriage and the public interest. In this instance, the facilities-based common carrier component of a vertically-integrated carrier/ISP/BDU/broadcaster is conferring a preference on its own downstream content service which competes with other such services that rely on the carrier's network to reach end users. In this context, any preference conferred on the carrier's own service must be considered "undue" by definition because it is a competitive advantage unavailable to any competitor. Accordingly, such a preference constitutes anti-competitive behaviour. Further, the current arrangement does not only discriminate against competitors, but against individual Canadians as well. 83. It has been said that "Bell's objective, our duty, is to ensure that we are able to balance the demand of all our customers in order to deliver the best possible Internet experience for everyone."27 Today, that balance has been tilted. WSPs have invested in network capacity, but are reserving those improvements for themselves, and are reaping the benefit to the exclusion of competitors and Canadians. All Canadians deserve to harness the social and economic advantages that come with mobile Internet access. In order to make this possible, our Canadian carriers must treat all services and users fairly. They have the means to do so. Will they fulfil their duty to the public? I earnestly hope so. Thank you for considering my comments. Sincerely, Benjamin Klass ***END OF DOCUMENT*** 27 Bibic, Mirko. "Internet usage debate, Part 2: $8B to keep pace," FP Comment, Feb 7, 2011. http://opinion.financialpost.com/2011/02/07/internet-usage-debate-8b-to-keeppace/

Page 21

CC: Rogers (rci.regulatoryarci.rogers.com) Vaxination Informatique (jfmezei@vaxination.ca) Consumers' Association of Canada, the Council of Senior Citizens' Organization of British Columbia, and the Public Advocacy Centre (gwhite@piac.ca and jfleger@piac.ca) Bell (bell.regulatory@bell.ca) Bell Aliant (regulatory@bell.aliant.ca) TELUS (regulatory.affairs@telus.com) SaskTel (document.control@sasktel.com) MTS Allstream (iworkstation@mtsallstream.com) Eastlink (regulatory.matters@corp.eastlink.ca) Tbaytel (rob.olenick@tbaytel.com) Independent Telephone Providers Association (j onathan.holmes@itpa.ca) Videotron (dennis.beland@quebecor.com) Globalive Wireless Management Corp. (eantecol@windmobile.ca) Public Mobile Inc. (Jamie.greenberg@publicmobile.ca) Data & Audio Visual Enterprises Wireless Inc. (gary.wong@mobilicity.ca) Canadian Network Operators Consortium (regulatory@cnoc.ca) Canadian Cable Systems Alliance (cedwards@ccsa.cable.ca) Cogeco Cable (telecom.regulatory@cogeco.com) Shaw Cable (Regulatory@sjrb.ca) Fenwick McKelvey, Concordia University (fenwick.mckelvey@concordia.ca) Steven James May, Ryerson University (steven.may@ryerson.ca) Samuelson-Glushko Canadian Internet Policy & Public Interest Clinic (tisrael@cippic.ca and cippic@uottawa.ca) Chris Seidl Cchris.seidlacrtc.gc.ca) Nora Froese, CRTC, nora.froese@crtc.gc.ca Julie Boisvert, CRTC, julie.boisvertacrtc.gc.ca

Page 22

Tab F

referr d to In tht

This is Exhibit

W.ICJI•e

affidavit of sworn before me

01—

day of

ACOMMISSIONER

TAKING AFFIDAVITS

Janet

Jones, a Commissioner, et., Province of Ontario, for McCarthy Tetrad UP, Barristers and Solicitors. Expires June 18, 2016,

BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION IN THE MATTER OF UNDUE PREFERENCES FOR MOBILE TV UNDER THE TELECOMMUNICATIONS ACT AND THE BROADCASTING ACT COMMISSION FILE NO.: 8622-B92-201316646

Supplementary Intervention of the Canadian Association of Consumers, the Council of Senior Citizens' Organizations of British Columbia, and the Public Interest Advocacy Centre

5 March 2014 Geoffrey White Counsel to CAC-COSCO-PIAC (613) 562-4002 x24 pwhiteApiac.ca do Public Interest Advocacy Centre One Nicholas Street, Suite 1204 Ottawa, Ontario K1N 7B7

Jean-Frangois Leger Counsel to CAC-COSCO-PIAC (613) 562-4002 x28 glecieabiac.ca c/a Public Interest Advocacy Centre One Nicholas Street, Suite 1204 Ottawa, Ontario K1N 7B7

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Table of Contents

Table of Contents Executive Summary 1. Introduction Background Overview of the Positions

1 1 2

2. The Issue

3. Analysis Telecommunications Act Broadcasting Act Bell's argument 4. Conclusion

â&#x20AC;˘

5 6 7 10 12

Supplementary intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Executive Summary

EXECUTIVE SUMMARY ESI . The Consumers' Association of Canada ("CAC"), the Council of Senior Citizens' Organizations of British Columbia ("COSCO"), and the Public Interest Advocacy Centre ("PIAC", collectively with CAC and COSCO, "CAC-COSCO-PlAC") hereby file this supplementary intervention. ES2. At issue in this proceeding is whether the Telecommunications Act or the Broadcasting Act or rules made under either permit a Canadian carrier to offer unduly preferential terms and conditions for network capacity when the capacity is used for the delivery or consumption of its own or its affiliate's mobile OTT service. ES3. As a consequence of such a practice by certain vertically integrated wireless carriers, these vertically integrated wireless carriers' subscribers who choose to consume competing mobile OTT services face substantial penalties in the form of data caps and considerably higher rates which leaves these consumers little practical choice in the market. Competing mobile OTT services also face an undue or unreasonable disadvantage in offering their services to these subscribers. ES4. Preferential billing treatment of mobile wireless data for affiliated mobile TV offerings by vertically integrated mobile TV service providers is, CACCOSCO-PIAC continue to contend, an undue preference, and it unjustly discriminates against vertically integrated wireless carriers' own customers. This is contrary to undue preference prohibitions and rules made under the Telecommunications Act and the Broadcasting Actâ&#x20AC;&#x201D; rules that cannot be violated indirectly. ES5. CAC-COSCO-PIAC continue to recommend that the Commission prohibit this.

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

1. Introduction

1. The Consumers' Association of Canada ("CAC"), the Council of Senior Citizens' Organizations of British Columbia ("COSCO"), and the Public Interest Advocacy Centre ("PIAC", collectively with CAC and COSCO, "CACCOSCO-PIAC") hereby file our supplementary intervention in the revised process established pursuant to Commission staffs letter of 31 January 2014 (the "Revised Process"). 2. CAC-COSCO-PIAC wish to be considered as an intervener in this proceeding and to participate in any future public hearing on this and related matters. Background 3. This purpose of this proceeding is to deal with issues raised in the following three applications made under Part I of the the CRTC Rules of Practice and Procedure:

(i).

Application' â&#x20AC;˘by Benjamin Klass ("Klass", the "Klass Application"), dated 20 November 2013 against Bell Mobility Inc. ("Bell Mobility") and Bell Canada (collectively "the. Bell companies") regarding the wireless data used by their customers to consume the Bell companies' "TV Anywhere"2 mobile TV service;

(ii).

Application3 by CAC-COSCO-PIAC, dated 9 January 2014 regarding the billing practices of Rogers Communications Partnership ("Rogers"), in respect of access by Rogers' mobile wireless customers to Rogers' "TV Anywhere" mobile TV service compared to access to competing mobile over-the-top ("OTT") TV services such as TELUS's Optik TV or Netflix; and

(iii).

Application4 by CAC-COSCO-PIAC, dated 9 January 2014 regarding the billing practices of regarding the billing practices of Videotron G.P. ("Videotron"), in respect of access by Videotron's mobile wireless customers to Videotron's "Illico.tv" mobile TV service compared to access to competing mobile OTT services.

Application No. No. 2013-1664-6; Commission File No. 8622-B92-201316646.

http://tvanywhere.bell.ca/en/

Application No. 2013-1664-6. Application No. 2014-0014-4.

Page 1 of 12

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

4. In its letter of 31 January 2014, Commission staff noted its "view that because of the similarity of the issues raised in all three applications, it would be more appropriate to consider the three applications within a single proceeding." Commission staff further noted "that the issues raised in this proceeding may also require the Commission to make findings pursuant to the Broadcasting Act" and accordingly that "this proceeding is to be conducted pursuant to both the Telecommunications Act and the Broadcasting Act." Overview of the Positions 5. At issue is whether Bell, Rogers and Videotron (the "vertically integrated service providers") are in violation of prohibitions against undue preference when they offer a low effective mobile wireless data rate to their mobile wireless customers when those customers consume their own mobile TV service, and a considerably higher effective rate to view competing OTT services. 6. Klass alleges that the Bell companies' pricing for mobile use of TV Anywhere constitutes an application-specific economic Internet traffic management practice ("ITMP") and that "the proper frame of reference" for evaluating Mobile TV is the Commission's ITMP framework made under the Telecommunications Act.6 7. This particular line of arguments is echoed in the 09 January 2014 submissions made by the Samuelson-Glushko Canadian Internet Policy & Public Interest Clinic ("CIPPIC") and Open Media Engagement Network ("OpenMedia") (collectively "CIPPIC/OpenMedia"); Vaxination Informatique ("Vaxination"); and Fenwick McKelvey of Concordia. 8. TELUS disagreed, arguing that Klass's complaint "relates to a broadcasting service to which the Telecommunications Act and the ITMP rules do not apply", and that concerns regarding Bell's pricing of its Mobile TV service can be dealt with, if necessary, under the undue preference regime found in the Digital Media Exemption Order.' TELUS went on to express support for the concept of a bundled mobile TV offering which includes the programming charges and the network access charges in a single offering. TELUS also expressed the view that on a prima facie basis Bell is giving itself a 5

6 7

Telecom Regulatory Policy CRTC 2009-657 - Review of the Internet traffic management practices of Internet service providers (21 October 2009). Klass Application at para. 22. Intervention of TELUS Communications Company in response to Klass Application (09 January 2014) at para. 3 (emphasis added).

Page 2 of 12

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

preference. TELUS argued that the Commission needs more information in order to determine whether that preference is undue.8 9. In Bell's answer to the Klass Application, Bell argued that Klass has missed the mark â&#x20AC;&#x201D; that Klass misconstrued Bell's service offerings and the relevant rules that apply. Bell's argument is that Bell Mobility's Internet connectivity service is "separate and apart from the Bell Mobile TV broadcasting service."9 The former, as a telecommunications service, is governed by the Telecommunications Act and rules thereunder including the ITMP framework which Bell argues permits the use of economic ITMPs (Le., data caps) for customers viewing unaffiliated OTT services; the latter, as a broadcasting service, is governed by the Broadcasting Act, and regulations and exemptions (notably the Digital Media Exemption Order) under it. Furthermore, Bell argued that Bell Mobility's distinct pricing of broadcasting versus Internet services is no different from the way cable companies or ILECs apply different pricing principles to their broadcasting and Internet services. 10.CAC-COSCO-PIAC supported, and continue to support, the relief sought by Klass. CAC-COSCO-PIAC differed from Klass, however, in the manner in which the issues for determination should be framed. 11. In our view the manner in which Bell, Rogers and Videotron (the "vertically integrated service providers" or the "respondents") charge for the usage of data by their wireless customers for their affiliated mobile TV service in comparison with the manner in which these same customers would pay for data use to watch competing mobile TV services constitutes unjust discrimination under subsection 27(2) of the Telecommunications Act. In response to Bell's argument that Bell Mobile TV is a broadcasting service and legally and jurisdictionally beyond the reach of the Telecommunications Act, we note that no matter which way Bell and other vertically integrated service providers turn â&#x20AC;&#x201D; be it the Telecommunications Act or Broadcasting Act or forbearance orders or exemption orders made respectively under each, these service providers are giving their own services an undue preference to the detriment of their customers and competition in the marketplace for OTT services. 12.Specifically, the respondents' billing practices with respect to OTT services result in a situation in which competing mobile TV service providers' respective subscribers pay considerably more to use competitors' OTT 8 9

lbid. at pares. 21-22. Bell Answer to Klass Application (09 January 2014) at para. 4. Page 3 of 12

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

services on the respondents' networks than the vertically integrated service providers' own respective mobile TV services. As we demonstrated in our applications, the difference in usage cost is substantial and is primarily attributable to the vertically integrated mobile TV providers' exemption or alleviation of mobile TV subscribers from their monthly data caps when those customers are consuming the specific company's own mobile TV service. The respondents apply data caps when their wireless subscribers want to watch a competitor's OTT service.

2. The Issue 13.There are various ways the alleged undue preference / undue disadvantage at the heart of this proceeding can be construed. 14.1n the Klass Application, the applicant alleged that Bell Mobility was unduly preferring its own mobile TV service and unjustly discriminating against other OTT services; and that Bell Mobile TV was unduly preferring Bell Media. 15.1n the CAC-COSCO-PIAC applications, the allegations were that (i) the service providers in question are unduly preferring their own respective mobile OTT services by exempting users of their own mobile TV services from the application of the data caps which they apply to competing mobile TV services; (ii) in doing so these companies are unduly or unreasonably disadvantaging competing OTT services in relation to their own mobile TV services; (iii) the result is that the respondents are unduly or unreasonably disadvantaging their own wireless subscribers who must face considerably higher usage costs to access competitors' OTT services, as well as competing OTT service providers by imposing on them a considerable price barrier. A result of all this is that competition in the marketplace for OTT services is being harmed to the sole benefit of each of the vertically integrated service providers. We further note in this respect that as the Commission considers the harm to competition in the marketplace for OTT services Bell, Rogers and Videotron are inflicting, the Commission should not lose sight of the fact that consumers already face significant barriers to movement between service providers as a result of restrictive bundling arrangements.

Page 4 of 12

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

16.Without prejudice though to our right of reply, CAC-COSCO-PIAC submit that the issue for determination, in light of the Bell Answer to the Klass Application, is as follows:

Do the Telecommunications Act or the Broadcasting Act or rules made under either permit a Canadian carrier to offer unduly preferential terms and conditions for network capacity when the capacity is used for the delivery or consumption of its own or its affiliate's mobile OTT service? 17. The answer to this question is, we submit, No. 18. In our view, and as a result of the Bell companies' response to the Klass application a related question arises: whether affiliates or business units of a vertically integrated service provider operating in different capacities under the respective Acts can structure their service offerings so as to do indirectly what cannot be done directly under either of the Acts.

3. Analysis 19. By way of background, it is important to bear in mind that the Supreme Court of Canada has recognized that the Broadcasting Act is part of a broader, interrelated statutory scheme that includes the Copyright Act, the Telecommunications Act, and the Radiocommunications Act.1Â° This is important to note because both the Telecommunications Act and rules adopted under the Broadcasting Act prohibit unjust discrimination and undue preferences. 20.We submit that there is no question that Bell, Rogers and Videotron are penalizing customers who might prefer to view the OTT services of competitors over their own offerings. We also submit that there is no question, that in so doing, Bell, Rogers and Videotron are making access to these consumers considerably more difficult for providers of competing OTT services. This harms competition. 21. In the submission of CAC-COSCO-PIAC, there is no basis in communications law â&#x20AC;&#x201D; under either the Telecommunications Act or the Broadcasting Act or rules adopted under either - for distinct and differential pricing for mobile TV 10

Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-166, 2012 SCC 68, [2012] 3 S.C.R. 489 at para. 34.

Page 5 of 12

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

services which significantly disadvantages competing services offered by entities that are unaffiliated. 22. Undue preference provisions exist in both telecommunications law and policy, and broadcasting law and policy. It is a fundamental principle that exists to discourage discrimination, and encourage competition, each in support of a range of Act-specific policy objectives. Undue preference provisions exist in the Telecommunications Act, and the ITMP framework, in the Broadcasting Distibution Regulations, and in the Commission's exemption order for what were originally called "new media broadcasting undertakings" (hereinafter the "Digital Media Exemption Order"), and in the Commission's regulatory framework relating to vertical integration. Indeed, in Broadcasting Order 2009660, the Commission stated its expectation "that it will apply the proposed undue preference provision in a manner consistent with similar provisions elsewhere in the broadcasting system."11 Telecommunications Act

23.The offering and provision by Canadian carriers of mobile wireless data services is subject to the Commission's powers and duties under section 24 and subsections 27(2), 27(3), and 27(4) of the Telecommunications Act.12 24. Section 24 of the Telecommunications Act states: 24. The offering and provision of any telecommunications service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission.

25.Section 27(2) Telecommunications Act prohibits unjust discrimination and undue preference. (2) 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.

11 12

At para. 15. Telecom Decision CRTC 2010-445 - Modifications to forbearance framework for mobile wireless data services (30 June 2010) at para. 8; see also Telecom Decision CRTC 2012-556 â&#x20AC;&#x201D; Decision on whether the conditions in the mobile wireless market have changed sufficiently to warrant Commission intervention with respect to mobile wireless services (11 October 2012).

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Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

26. Preferential billing treatment of mobile wireless data for mobile TV offerings by vertically integrated mobile TV service providers is, CAC-COSCO-PIAC continue to contend, an undue preference, and it unjustly discriminates against vertically integrated wireless carriers' own customers. As a consequence of certain vertically integrated wireless carriers' exemption for mobile TV subscribers from monthly data allotments, and lower effective rate for data for their mobile TV offering, these vertically integrated wireless carriers' subscribers who choose to consume competing mobile OTT services face a substantial penalties in the form of data caps and considerably higher rates which leaves these consumers little practical choice in the market. Competing mobile OTT services face an undue or unreasonable disadvantage in offering their services to these subscribers. 27. Because there is no reasonable basis or justification for this, CAC-COSCOPIAC contend that vertically integrated wireless carriers' preferential billing treatment for their affiliated mobile TV service is in violation of Section 27(2) of the Telecommunications Act.

Broadcasting Act 28.With reference to the Broadcasting Act, the Digital Media Exemption Order, like the Telecommunications Act and like the Broadcasting Distribution Regulations' 3, contains a prohibition against undue preference. Section 3 of Appendix 1 to the Exemption Order reads: 3. The undertaking does not give an undue preference to any person, including itself, or subject any person to an undue disadvantage. In any proceeding before the Commission, the burden of establishing that any preference or disadvantage is not undue is on the party that gives the preference or subjects the person to the disadvantage.

29.The origin of the exemption order is Public Notice CRTC 1999-197 Exemption order for new media broadcasting.14 In Broadcasting Regulatory Policy CRTC 2009-329, the Commission decided to impose an undue preference provision on exempt new media broadcasting undertakings15, leading to Broadcasting Order CRTC 2009-660 in which the Commission

13 14

(SOR/97-555), S. 9. Public Notice CRTC 1999-197, Exemption order for new media broadcasting undertakings (17 December 1999). Broadcasting Regulatory Policy CRTC 2009-329 â&#x20AC;&#x201D; Review of broadcasting in new media (4 June 2009) at paras. 50-59.

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Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-692-201316646 5 March 2014 Intervention

imposed the following condition on exempt new media broadcasting undertakings. 2. The undertaking does not give an undue preference to any person, including itself, or subject any person to an undue disadvantage. In any proceeding before the Commission, the burden of establishing that any preference or disadvantage is not undue is on the party that gives the preference or subjects the person to the disadvantage."

30.Then, in Broadcasting Order CRTC 2012-40917, the Commission further amended the exemption order to implement determinations made by the Commission in its regulatory framework18 relating to vertical integration, changing the descriptor "new media broadcasting undertaking" to "digital media broadcasting undertaking", but retaining the undue preference provision as originally worded.19 31.In imposing this undue preference provision on new media broadcasters in Broadcasting Regulatory Policy CRTC 2009-329, the Commission explicitly recognized the risk of preferential treatment by vertically integrated wireless carriers. The Commission takes no position on whether situations of undue preference with respect to broadcasting content have or have not occurred to date in the new media environment. The Commission considers, however, that the

ownership structure within Canada's wireless industry suggests that the potential for unduly preferential treatment needs to be addressed because the industry structure comprises vertically integrated companies with ownership interests in content providers. Despite assurances from the wireless industry that walled gardens are being replaced with open Internet access, the Commission notes that closed services are the norm in advance of greater mainstream adoption of more sophisticated devices. As such, the process of selecting content for those services must not subject unaffiliated programming undertakings to undue disadvantage with

respect to mobile audiences.2Â°

18 19 20

Broadcasting Order CRTC 2009-660 - Amendments to the Exemption order for new media broadcasting undertakings (Appendix A to Public Notice CRTC 1999-197); Revocation of the Exemption order for mobile television broadcasting undertakings (22 October 2009), Appendix, S. 2. Broadcasting Order CRTC 2012-409 - Amendments to the Exemption order for new media broadcasting undertakings (now known as the Exemption order for digital media broadcasting undertakings) (26 July 2012). Broadcasting Regulatory Policy CRTC 2011-601 - Regulatory framework relating to vertical integration (21 September 2011). Appendix to Broadcasting Regulatory Policy CRTC 2012-409 (supra), S. 3. Broadcasting Regulatory Policy 2009-329 â&#x20AC;&#x201D; Review of broadcasting in new media (4 June 2009) at paras. 59-60 (emphasis added).

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Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

32.The Commission went on to give one example "of the type of situation that could give rise to an undue preference in the new media environment" and offered the example of "a new media broadcasting undertaking engaged in programming distribution that acquires content from an affiliated programming undertaking either to the exclusion of non-affiliated programming undertakings or on more favourable terms or conditions that those applicable to non-affiliated programming undertakings."21 33.In our view, this is no different from the situation where a new media broadcasting undertaking (e.g., Bell Mobile TV) engaged in programming distribution acquires network capacity or marketing support in the form of lower distribution rates from an affiliated distributor (e.g., Bell Mobility.) 34.The Commission clearly contemplated the wireless carrier affiliates of new media broadcasting undertakings (as they were then called) could be in a position to engage in anti-competitive conduct. To suggest that somehow the new media exemption order was crafted in such a way as to allow wireless service providers and their digital media affiliates to skirt the undue preference rules amounts to suggesting that the drafters of the exemption order either committed a substantial oversight or attempted to alter their empowering legislation and regulations. It is important to note in this respect that when the Commission adopted the exemption order and as it has reexamined it over the years, the Commission has consistently recognized that one of the objectives it was pursuing with the exemption was to "... enable continued growth and development of the new media industries in Canada, thereby contributing to the achievement of the broadcasting policy objectives, including access to those services by Canadians.22 35.We question how imposing price barriers on OTT services which compete with those of the large vertically integrated service providers promotes the growth and development of new media. Such barriers solely promote the growth and development of the vertically integrated service providers and their subsidiaries. 36.CAC-COSCO-PIAC submit that in addition to engaging in unduly preferential behaviour contrary to the Telecommunications Act, Bell, Rogers and Videotron are also engaging in unduly preferential behaviour contrary to the 21

Ibid., at para. 63 (emphasis added).

For example, in Broadcasting Regulatory Policy CRTC 2009-329, para. 23.

Page 9 of 12

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

regulations adopted under the Broadcasting Act and the Digital Media Exemption Order. Bell's argument 37.ln Bell's view, the offering of distinct (lower) rates for its own mobile TV service is legitimate. First, Bell argues that the undue preference prohibition under the Digital Media Exemption Order does not apply to Bell Mobility which is acting in the capacity of an ISP governed by the Telecommunications Act, and that the undue preference prohibition under the Telecommunications Act does not apply to Bell Mobile TV because Mobile TV is subject to the Broadcasting Act and the Digital Media Exemption Order made under it. 38.Second, Bell argues that its mobile TV service is offered in a manner that is practically, and legally, analogous to the wireline environment in which a customer of a vertically integrated (content and distribution) ILEC or cable company may pay two different effective rates to view a particular TV program depending on whether the program was consumed OTT or via the service provider's BDU network. (We note at this stage of the proceeding that this analogy raises factual questions about how Bell and others mobile TV service are actually delivered in terms of use of the public Internet and dedicated network capacity. The record, at this stage in the proceeding remains unclear.) 39.1n sum, Bell says mobile TV service draws on two services, dealt with by two separate and mutually exclusive Acts, and that neither Act prohibits differential billing for mobile wireless data used to consume the service. Even if there is a preference, which Bell denies, Bell argues it is not undue on the basis that other carriers (Rogers and Videotron) are engaged in the practice, and because Klass failed to establish a "substantial lessening of competition."23 40.ln Bell's construction of the Telecommunications Act and the Broadcasting Act regulations, differential ("distinct" and "different", in Bell's words24) billing practices and effective rates for mobile TV services are legitimate so long as the mobile TV service in question qualifies as a broadcasting undertaking. Bell cites the Supreme Court of Canada's decision in Reference re

23 24

Bell Answer to Klass Application at para. 40. Bell Answer to Klass Application at pares. Ell, 32, and 40.

Page 10 of 12

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

Broadcasting Act25 as authority for its conclusion that Bell's differential billing treatment for its Mobile TV service offering is not only exempt from the Telecommunications Act prohibition against undue preferences, but also entirely legitimate under the Broadcasting Act. 41.The issue, however, is whether affiliates or business units of one vertically integrated service provider operating in different capacities under the respective Acts can structure their services so as to do indirectly what cannot be done directly under either Telecommunications Act or the regulations adopted pursuant to the Broadcasting Act. As we submitted in the previous section, they cannot. 42. In our view, the undue preference provisions under the Telecommunications Act, Broadcasting Act regulations and Digital Media Exemption Order prohibit one affiliate from entering into unduly preferential arrangements with another affiliate that create price barriers to protect such affiliate from competition or that unjustly discriminate against that affiliate's own customers. 43.The Commission clearly had vertically integrated wireless carriers in mind when it added the undue preference prohibition to the new media exemption order in Broadcasting Regulatory Policy 2009-329. Furthermore, the Digital Media Exemption Order does not exempt a "Canadian carrier" from regulation under the Telecommunications Act. Bell, Rogers and Videotron are Canadian carriers. Moreover, they offer their mobile TV offerings to their mobile wireless telecommunications service customers, typically as a feature provided in conjunction with mobile voice/data service. 44. The fact that Rogers and Videotron are also engaged in the practice as issue is not a valid defence or justification for it. 45. Furthermore, the onus on undue preference cases, once the applicant has demonstrated that the conduct is preferential or disadvantages a person, shifts to the respondent to prove that the preference is not undue. The record of the Klass application and CAC-COSCO-PIAC applications constituting this consolidated proceeding contain ample support for how customers are disadvantaged (and competition may be impaired) when customers have to pay higher data rates for competing OTT services. Bell's attempt to interpose

2012 SCC 4, [2012] 1 S.C.R. 142. (the 1SP Reference). Page 11 of 12

Supplementary Intervention of CAC-COSCO-PIAC Commission File No. 8622-B92-201316646 5 March 2014 Intervention

a "substantial lessening of competition" test onto applicants should therefore be rejected. 4. Conclusion 46.The offering by vertically integrated wireless carriers of their affiliate's mobile TV service at rates lower than rates for other wireless data is clearly an undue preference between affiliates, and thus contrary to undue preference prohibitions and rules under both the Telecommunications Act and the Broadcasting Act. 47.CAC-COSCO-PIAC continue to recommend that the Commission immediately prohibit this. ***End of Document***

Page 12 of 12

TAB G

File No. 8622-B92-201316646 2014 04 25 This is Exhibit.1

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A ON2

To:

referred to in theme

affidavit of sworn before me this day of

411, ,Etc. Yr,/-1.- -Wew.as Pr nce o I am,

.............

Barristers and SolicitOTS.

Subject:

Application by Benjamin Klass requesting the igir 'i&a riait -ofâ&#x20AC;&#x201D;Internet services by Bell Mobility (Klass application) and applications by CAC-COSCO7 PIAC regarding. Rogers' Anyplace TV service and Videotron's Illico.tv Service â&#x20AC;&#x201D; Responses to Request for Information

Dear Mr. Traversy, 1. Pursuant to the procedures set out in a Commission staff letter dated 4 April 2014, attached are Bell Mobility's responses to request for information. 1. Certain information contained in the responses to request for information is being provided in confidence to the Commission pursuant to section 39 of the Telecommunications Act and the directions provided by the Commission in the Appendix to Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, dated 23 December 2010, as amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1, dated 26 October 2012. This information consists of disaggregated network traffic information and commercial information consistently treated as confidential, the disclosure of which may result in material financial harm to us. Abridged versions are being provided for the public record. Yours truly, f Original signed by P. Gauvin Philippe Gauvin Senior Counsel - Regulatory Law & Policy Attachments C. C.:

Distribution List as per CRTC letter dated 4 April 2014 Nora Froese, CRTC Julie Boisvert, CRTC Mario Bertrand, CRTC *** End of Document ***

Bell Canada Philippe Gauvin Floor 19 160 Elgin Street Ottawa, Ontario K2P 2C4 Facsimile: (613) 560-0472 belI.reoulatoiv(a!bell.ca

Bell Mobility Inc. 25 April 2014 Page 1 of 3

Response to Request Bell Mobility(CRTC)4Apr14-1 Klass

Explain if and how the content available (e.g. channels, VOD, other) on the Bell Mobile TV app is different for (i) a customer who only subscribes to Bell TV, (ii) a customer who only subscribes to Bell Mobility, and (iii) a customer who only subscribes to Virgin Mobile.

A Bell Mobility customer that is not a Bell TV customer can watch TV over mobile using Bell Mobile TV, but that customer can only watch channels which Bell Mobility offers as part of its Bell Mobile TV service. As a wholly owned affiliate of Bell Mobility, Virgin Mobile customers currently have access to the same mobile TV service as Bell Mobility customers. These customers have access to the following channels.

Bell Mobility customer subscribing to Bell Mobile TV On demand Live 1. Accuweather 20. Leafs TV 1. B4U Music (ATN) 2. CBC News Network 21. MW 2. CBN (ATN) 3. City 22. NBA League Pass 3. Cricket Plus (ATN) 4. Comedy Network 23. NBA TV Canada 4. MH1 (ATN) 5. Comedy Time 24. RDI 5. NDTV (ATN) 6. CTV 25. RDS 6. Times Now (ATN) 7. CTV Two 26. RDS2 7. Zoom (ATN) 8. CTV News Network 27. Radio Canada 8. BBC World News 9. Raptors (post game highlights) 28. Sportsnet One 9. Bloomberg 10. RDI 29. Sportsnet Ontario 10. BNN 11. Radio Canada 30. Sportsnet Pacific 11. CBC 12. TVO Kids 31. Sportsnet East 12. CBC News Network 13. Whitecaps 32. Sportsnet West 13. City 33. Treehouse 14. Comedy Time 34. TSN 15. CTV 35. TSN2 16. CTV Two 36. TVA 17. CTV News Network 37. TVO Kids 18. Juicebox 38. V Montreal 19. Leafs TV 39. YTV A Bell TV customer that only subscribes to Bell TV would not have access to Bell Mobile TV content. However, that customer could still view a subset of Bell TV content over the Internet (whether wireline or WiFi) for which OTT carriage rights have been negotiated. For clarity, content owners negotiate separate distribution rights for mobile broadcast distribution and these are not captured under OTT rights.

Response to Request Bell Mobility(CRTC)4Apr14-1 Klass

Bell Mobility Inc. 25 April 2014 Page 2 of 3

A customer that subscribes to Bell Mobility who happens to be a Bell TV customer can get access to a subset of channels to which they subscribe through the Bell TV app. The actual content the customer will have access to will depend on whether the customer has subscribed to a channel and whether we have secured rights for mobile distribution of that content. The following channels are available to Bell Mobility customers who happen to be a Bell TV subscriber assuming they have subscribed to these channels. Bell Mobility subscriber who happens to be a Bell TV subscriber* On demand Live

ABC East (Buffalo) 2. Argent 3. CBN (ATN) 4. Cricket Plus (ATN) 5. Zoom (ATN) 6. BBC World News 7. BNN 8. Canal D 9. Canal Vie 10. Cartoon Network 11. CBC 12. CBC News Network 13. CBS East (Buffalo) 14. CHCH 15. CP24 16. CTV 17. CTV Two 18. CTV News Network 19. Disney Junior French 20. Disney Junior 21. Disney XD 22. Evasion 23. Explora 24. Family 25. FOX East (Buffalo) 26. Global 27. Historia 28. Investigation 29. LCN 30. Leafs TV 1.

31. Meteomedia 32. MN 33. MusiMax 34. MusiquePlus 35. NBA TV Canada 36. NBC East (Buffalo) 37. PBS East (Buffalo) 38. RDI 39. RDS 40. RDS2 41. Radio Canada 42. Series+ 43. Sportsnet One 44. Sportsnet Ontario 45. Sportsnet Pacific 46. Sportsnet East 47. Sportsnet West 48. Teletoon 49. Teletoon (FRE) 50. Treehouse 51. TSN 52. TSN2 53. NA Sports 54. V Montreal 55. VRAK 56. Weather Network 57. Yoopa 58. YTV 59. Zeste 60. Ztele

1. 24CH 2. A&E 3. ABC Spark 4. Addik 5. Adult Swim 6. AMC 7. American Heroes 8. ARTV 9. Bell Local 10. Canal D 11. Canal Vie 12. Cartoon Network 13. Casa 14. CBC 15. CBC News Network 16. Cinepop 17. Club Junior 18. Cottage Life 19. CTV 20. CTV Two 21. CTV News Network 22. Disney Junior French 23. Disney Junior 24. Disney XD 25. Documentary 26. Encore Avenue 27. Evasion 28. Explora 29. Family 30. Food Network 31. Galaxie Music Videos 32. Global 33. Gusto 34. H2 35. Historia 36. History 37. HGTV 38. Hollywood Suite (AXN)

39. Hollywood Suite (Sony) 40. Hollywood Suite (MGM) 41. Hollywood Suite (Warner) 42. Investigation 43. Kids Suite 44. Lifetime 45. MOl&cie 46. Movie Central/HBO 47. MusiMax 48. MusiquePlus 49. Nickelodeon 50. OWN 51. Prise 2 52. RDI 53. Radio Canada 54. Series+ 55. Showcase 56. Slice 57. Super Channel 58. SuperEcran 59. Teletoon (FRE) 60. Teletoon Junior 61. TFO 62. TMN/HBO 63. TMN Encore 64. Travel + Escape 65. Treehouse 66. TSN 67. TSN2 68. V Montreal 69. VRAK 70. W Network 71. Yoopa 72. YTV 73. Zeste 74. Ztele

* Actual content available to the customer will depend on whether the customer has subscribed to the channel or not.

Response to Request Bell Mobility(CRTC)4Apr14-1 Klass

Bell Mobility Inc. 25 April 2014 Page 3 of 3

In all cases we must obtain mobile distribution rights from the content owner in order to distribute the content over our mobile broadcasting distribution undertaking.

*** End of Document***

Response to Request Bell Mobility(CRTC)4Apr14-2 Klass

Bell Mobility Inc. 25 April 2014 Page 1 of 1 Q.

Describe the specific costs (e.g. content rights and/or data usage) that are being recovered by (i) the $5 fee being charged for the first 10 hours of usage of the Bell Mobile TV app and (ii) the $3 per hour fee being charged for usage beyond the first 10 hours.

BDU rates, including those of exempt Digital Media Broadcast Undertakings (DMBUs) like Bell Mobile TV, are not regulated by the CRTC and certainly not based on Phase II costs as this question seems to imply. As such, no particular costs are assigned to particular fees. Nevertheless, the following list provides high level cost components of Bell Mobile TV:

(I)

Distribution Wireless connectivity Backhaul from cell towers Transport costs: From broadcaster source feed; to 1. Bell head-end; to 2. 3. Mobile TV servers; to Content Distribution Network (CDN); to 4. Cell towers; and finally, to 5. The end-user device. 6.

(ii)

Platform Bell head-end Digital Rights Management (DRM) Mobile TV servers Transcoding

(iii)

Content acquisition costs Cost of clearing rights for mobile broadcast distribution of content

(iv)

Product development and operating costs New development, enhancement and product maintenance costs Programming and operations costs *** End of Document ***

Response to Request Bell Mobility(CRTC)4Apr14-3 Klass

Bell Mobility Inc. 25 April 2014 Page 1 of 1

Describe the impact on the wireless data plan when a Bell Mobile TV app subscriber watches a) 5 hours of Bell Mobile TV content and b) 15 hours of Bell Mobile TV content in the following situations: (i) on Bell Mobility's wireless network; (ii) on a competitor's wireless network; (iii) on a Wi-Fi network at home; and (iv) on a free Wi-Fi network in a public space.

Regardless of whether Bell Mobile TV is accessed via Wi-Fi or Bell Mobility's 3G or 4G networks, a subscriber of Bell Mobile TV does not require a wireless data plan and in no case will Bell Mobile TV viewing impact a customer's wireless data plan. The subscriber pays $5 for the first 10 hours of viewing and $3 for each additional hour thereafter. Accordingly, Bell Mobility's data plans are irrelevant to subscribers of Bell Mobile TV.

*** End of Document***

Bell Mobility Inc. 25 April 2014 Page 1 of 2

Response to Request Bell Mobility(CRTC)4Apr14-4 Klass Abridged

Explain how Bell Mobility differentiates on the customer's invoice the data consumption associated with the viewing of Bell Mobile TV app content from the data consumption associated with access to other Internet services.

Mobile TV usage is presented in a data section called "service zone". Much like a wireline customer can continue to reach Bell by dialing 6-1-1 even if their service is suspended or is otherwise experiencing troubles, the "service zone" billing category was created to show customers the amount of data consumed but for which they are not billed in order to access select servicing tools like Bell's self-serve tool. The self-serve tool allows Bell customers to contact Bell should they be experiencing service troubles or desire to add data to their service even if they've reached their cap or if they do not currently subscribe to a data service.

When Bell Mobility first introduced Mobile TV we chose to leverage the existing "service zone" billing exemption for our Mobile TV service in order to ensure that Mobile TV users see the value of the data used and do not incur charges for the first 10 hours of viewing of their Mobile broadcast service. As such, the "service zone" category currently includes usage from the 10-hour Mobile TV allocation and clearly shows that that transmission is not resulting in data charges to the customer. Viewing that exceeds 10 hours of Mobile TV in a month is displayed on the bill as a Mobile TV "event" in $3 increments per extra hour of viewing.

In addition to the invoice, Bell Mobility also offers the following methods for customers to manage their Mobile TV video use:

A text alert to end-users when they reach 95% of their 10-hour allocation (see example below): "Free Bell Msg: You have XX minutes left in your Mobile TV package until DDIMM!YY. Additional usage is $XX per hour. bell.ca/nnobiletv"

The ability to inquire about Mobile TV usage through Customer Care (who has a tool illustrating how many hours of viewing the customer has used)

Bell Mobility Inc. 25 April 2014 Page 2 of 2

Response to Request Bell Mobility(CRTC)4Apr14-4 Klass Abridged

In addition to this, #

# Filed in confidence with the CRTCJ,

*** End of Document

Bell Mobility Inc. 25 April 2014 Page 1 of 1

Response to Request Bell Mobility(CRTC)4Apr14-5 Klass

At paragraph 13 of his application, Mr. Klass quoted a news release from Bell Canada in which the Bell Mobile TV app was described as a "breakthrough wireless data service that offers on-the-go access to more than 40 channels of live and on-demand sports, news, entertainment and children's TV programming". At paragraph 5 of its 9 January 2014 answer, Bell Mobility stated that "Bell Mobility's Mobile TV service is a broadcasting undertaking which provides a broadcasting service not a telecommunication service". Clarify Bell Mobility's position. Explain the inconsistency in these statements and how a data service that uses the Internet is not a telecommunications service.

In the press release, the use of the phrase "wireless data service" was not meant to convey a legal definition but simply meant to provide a colloquial understanding for a press release. Legally, Mobile TV is a broadcast service for the reasons explained at paragraphs 19 and 20 of our 9 January 2014 Answer, and this is also clear from the quoted news release which clearly states that it provides access to live and on-demand programming. As noted in Bell Mobility(CRTC)4Apr14-1 Klass we negotiate separate broadcast rights with programmers for our mobile broadcast distribution undertaking in order to provide Mobile TV to our customers.

Nevertheless, the fact that a service is delivered by means of telecommunications, or over a data service which can be counted in megabits, gigabits or megabytes, is not determinative as to whether that service is a telecommunications service. For example, the Society of Motion Picture and Television Engineers (SMPTE) has established in its SMPTE 292 standard for transport of uncompressed digital video and audio a standard bitrate of 1.485 Gbps. Broadcast signals are measured in bits and bytes (or in the same measures used to quantify "data"). Rather than focus on the use of "data" to determine whether a service is a telecommunications or a broadcasting service the Commission must instead look at whether the service in question meets the definitions set out in the Broadcasting Act. As described in detail in section 4 of our 9 January 2014 Answer to Mr. Klass' application, Mobile TV clearly meets the definitions of a broadcast service. Accordingly, it is subject to regulation and the Commission's policies and rulings under the Broadcasting Act and not the Telecommunications Act.

*** End of Document ***

Bell Mobility Inc. 25 April 2014 Page 1 of 1

Response to Request Bell Mobility(CRTC)4Apr14-6 Klass

Is the content of Bell Mobile TV app downloaded, streamed, or progressively downloaded?

Mobile content is currently streamed to Mobile TV users.

*** End of Document ***

Response to Request Bell Mobility(CRTC)4Apr14-7 Klass

Bell Mobility Inc. 5 March 2014 Page 1 of 5

Network architecture a)

b) c)

Provide two diagrams: the first one describing how content (e.g. a TV show) is delivered to a Bell Fibe TV subscriber and the second one describing how content (e.g. a TV show) is delivered to a Bell Mobility subscriber. The diagrams should detail all similarities and differences between these two services. Please describe the overall network architecture from video source ingestion (live or recorded) to display on smartphone/tablet. Is the Bell Mobile TV app content differentiated from any other Internet traffic on Bell's wireless network? If so, where on the network is it differentiated and separated? Does Bell Mobile TV app content watched on a smartphoneltablet get a higher priority than other Internet content on Bell Mobility's wireless network? Are there any optimization or overload mechanisms in place to ensure a better quality of service? if so, please describe

a) and b) In order to provide Fibe TV, Bell Canada acquires content through various means including through live broadcast feeds, from satellite and from Over the Air (OTA) broadcast antennas all directly from the content providers. In some cases, the content owner will deliver video files directly to Bell by various means for services such as for On Demand services.

These various sources of content are aggregated, encrypted and sent to the Video Hub Office (i.e. the Fibe TV servers) which provide the intelligence of the Fibe TV service needed to, among other things, deliver the right channels to the right customers. Bell Canada currently leverages Ericsson Mediaroom as a platform for this intelligence. Content is then distributed to Central Offices (COs) at the edge of the network to network switches which can then multicast the content to users as needed (i.e. the Video Serving Office or VSO).

Response to Request Bell Mobility(CRTC)4Apr14-7 Klass

Bell Mobility Inc. 5 March 2014 Page 2 of 5

Fibe TV

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When a customer watches TV, that content is then sent through the access network, typically Fibre-to-the-Node or Fibre-to-the-Home infrastructure, from the CO to his or her set-top box.

For its part, Bell Mobility also acquires content for its Mobile TV service. Content is aggregated, encoded, encrypted and then sent to Bell Mobility's Mobile TV servers. Like the Fibe TV servers these provide the intelligence necessary to provide the right services to the right end-users however Bell Mobility leverages the QuickPlay Media platform, a Toronto-based company, rather than Ericsson MediaRoom. Up to this point, the services are nearly identical. After this, due to the nature of mobile wireless services, the delivery differs somewhat.

Response to Request Bell Mobility(CRTC)4Apr14-7 Klass

Bell Mobility Inc. 5 March 2014 Page 3 of 5

Mobile TV

*Cuickplay Media application functions In RFD

Video Hub Office (Mobile TV Servers)

Video Head End (VHE)

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Rather than sending content to Bell Canada's COs, which may not necessarily be near the many towers and radio apparatus of Bell Mobility's network, the Mobile TV servers instead send the content to a content distribution network (CDN) which hosts the content as broadly as possible within the Bell Mobility core network. When a Mobile TV user chooses to watch a channel, that content is then distributed in a point-to-point connection between the CDN servers through the access network, which in this case would be a tower and wireless spectrum, up to the end-user device. The exemption order for digital media broadcasting undertakings (DMBUs) set out in the appendix to Broadcasting Order CRTC 2012-409 states that, for the purposes of the exemption order: The undertaking provides broadcasting services, in accordance with the interpretation of "broadcasting" set out in New Media, Broadcasting Public Notice CRTC .1999-84/Telecom Public Notice CRTC 99-14, 17 May 1999, that are:

Response to Request Bell Mobility(CRTC)4Apr14-7 Klass

Bell Mobility Inc. 5 March 2014 Page 4 of 5

a) b)

delivered and accessed over the Internet; or delivered using point-to-point technology and received by way of mobile devices. [Emphasis added]

Accordingly the differentiating feature between a digital media broadcasting service that provides programming available via the Internet (e.g., an OTT service) and a mobile BDU service is the means of distribution.

OTT providers such as YouTube, Netflix or Bell-owned providers such as www.ctv.ca or www.tsn.ca are DMBUs and fall under the first means of distribution (broadcasting services delivered and accessed over the Internet). These OTT DMBU programmers do not arrange for the delivery to an end-user through a distribution undertaking but rather make their content available over the Internet. These programmers negotiate OTT distribution rights from content owners which reflect the delivery of the content over the Internet.

On the other hand, Bell Mobile TV is a mobile BDU which is also a DMBU but it falls under the second means of distribution (broadcast services delivered using point-to-point technology and received by way of mobile devices). Unlike an OTT provider Bell Mobile TV is a BDU which provides end-to-end service including through an access network just as a satellite relay distribution undertaking will make use of its satellite signals as its access network to deliver broadcast signals to an end-user and a terrestrial distribution undertaking will make use of its wireline access network to deliver broadcast signals to an end-user. Bell accordingly negotiates, as noted in Bell Mobility(CRTC)4Apr14-1 Klass separate distribution rights for mobile distribution of content with content owners.

In this regard we also note that there are Bell Mobility customers who do not subscribe to the Internet through a data package but do subscribe to Bell Mobile TV and make use of their TV service.

Bell Mobility Inc. 5 March 2014 Page 5 of 5

Response to Request Bell Mobility(CRTC)4Apr14-7 Klass

c) and d) Unlike Fibe TV traffic which is currently prioritized in the network to ensure a better quality of service, Bell Mobile TV traffic is currently treated the same as other traffic in Bell Mobility's core and access networks. As a broadcast service the source of traffic is also different in that a customer that subscribes to Bell Mobile TV without a data package would not have access to the Internet but they could still have access to their TV just like a terrestrial BDU's TV customer that does not subscribe to an Internet service would have access to TV content but no Internet access.

*** End of Document ***

Response to Request Bell Mobility(CRTC)4Apr14-8 Klass

Bell Mobility Inc. 25 April 2014 Page 1 of 1 Q.

Is the Bell Mobile TV app content sent from the server to each subscriber or is it sent to a group of subscribers?

Our Mobile TV service provides a means for the mobile reception (i.e. over regulated spectrum) of broadcasting to more than one subscriber but using point-to-point technology. As described in Bell Mobility(CRTC)4Apr14-7 Klass, content is currently sent to a CDN to broadly distribute the content within Bell Mobility's network. The content is then sent to each Mobile TV subscriber on an individual basis if and when they choose to watch TV.

' End of Document ***

Bell Mobility Inc. 5 March 2014 Page 1 of 2

Response to Request Bell Mobility(CRTC)4Apr14-9 Klass

Given that the first 10 hours of Bell Mobile TV app usage does not count toward the Bell Mobility subscriber's wireless data plan and costs $5, the offer seems more advantageous for the Bell Mobile TV app compared to other third party apps. a)

Explain how Bell Mobility subscribers are not subject to an undue preference in regard to their data usage when they access the Bell Mobile TV app. Explain how competing content providers (e.g. the National Film Board or the Canadian Broadcasting Corporation) are not unjustly discriminated against or subject to an undue disadvantage. As further described in section 4.1 of our 9 January 2014 Answer to Mr. Klass' Application and our response to Bell Mobility(CRTC)4Apr14-7 Klass, Mobile TV is a broadcasting service whereas other apps such as Netflix, YouTube or CTV News Go are over-the-top (OTT) services which rely on the Internet for the distribution of their services. In other words, the fact that the service is accessed through an "app" does not alter the fact that a broadcast service is a broadcast service or an Internet service is an Internet service. In fact, some "apps", such as games or productivity apps without Internet connectivity, are neither. Bell Mobility subscribers are treated equally with regards to their respective use of these broadcast and telecommunications services. Moreover, as we have indicated in our response to Bell Mobility(CRTC)4Apr14-3 Klass, a subscriber of Bell Mobile TV does not require a wireless data plan regardless of whether Bell Mobile TV is accessed via Wi-Fi or Bell Mobility's 3G or 4G networks, and in no case will TV viewing impact a customer's wireless data plan. A customer pays $5 for the first 10 hours of viewing and $3 for each additional hour thereafter, and hours which exceed 10 hours of viewing will not count towards a customer's wireless data plan. Accordingly, Bell Mobility's data plans are irrelevant to subscribers of Mobile TV.

Bell Mobility does not discriminate against any competing content providers. A Bell Mobility user wishing to access online content via their mobile device incurs exactly the same data charges regardless of whether they access content from the National Film Board, the CBC, at ctv.ca, tsn.ca or from YouTube or Netflix.

Response to Request Bell Mobility(CRTC)4Apr14-9 Klass

Bell Mobility Inc. 5 March 2014 Page 2 of 2

By paying $5 for Mobile TV, a subscriber obtains access solely to Mobile TV whereas an Internet data user has access to the entire public Internet. Content owners can choose whether to distribute their content over the public Internet and/or through broadcasting undertakings, and in fact negotiate different distribution rights depending on whether the content is distributed over the Internet or through a BDU (including for mobile BDUs such as Mobile TV).

CBC is a broadcaster whose content is available linearly through the public Internet and over mobile BDUs. As such, the CBC is carried by our Mobile TV product. There is no unjust discrimination. The National Film Board's (NFB) content is or will be carried, from time to time, by broadcasters wishing to broadcast Canadian content owned by the NFB should the NFB be willing to negotiate distribution rights with these broadcasters.

Bell Mobility currently treats all OTT content equally. Just like Bell customers will incur data charges if they access Bell-affiliated sites over the Internet, such as www.ctv.ca or the CTV News Go app, Bell Mobility customers will also incur the very same data usage charges if they choose to access www.cbc.ca or NFB content over their phones' Internet connections.

*** End of Document ***

Bell Mobility Inc. 25 April 2014 Page 1 of 1

Response to Request Bell Mobility(CRTC)4Apr14-10 Klass Abridged

At paragraphs 40-42 of its 9 January 2014 answer, Bell Mobility quotes statistics about the growing popularity of Netflix and YouTube subscribers in order to demonstrate that the pricing for Bell Mobile TV app has not lessened competition. Since these statistics are not specific to the content watched on a wireless phone, explain how the company could conclude from these statistics that the pricing of the Bell Mobile TV app is not affecting competition in the provision of content on wireless phones. Please provide any available statistics that are specific to the mobile TV market.

Given that there was no mobile TV market before we introduced Bell Mobile TV, it is difficult to see how Bell Mobile TV could have adversely affected the Mobile TV market. In fact, it appears that many of our competitors have introduced similarly priced Mobile TV services since the introduction of Bell Mobile TV. To rule otherwise would constitute a clear indictment against innovation.

The statistics we provided at paragraphs 40 to 42 of our 9 January 2014 Answer were in response to Mr. Klass' assertion that Bell Mobility's Mobile TV service is anti-competitive towards over-the-top (OTT) content such as YouTube or Netflix. We reiterate that in order to justify such a claim one would have to demonstrate that Bell Mobility's practice results in a substantial lessening of competition. This is clearly not the case based on the information we provided in paragraphs 40 to 42 of our 9 January 2014 Answer. Since the introduction of Mobile TV both Netflix and YouTube have increased market share and viewership. In fact, YouTube and Netflix's usage proportion of traffic on our HSPA/LTE networks in 2013 ( 717 77_1 =:---#) continues to significantly overshadow Bell Mobile TV usage (I,

# Filed in confidence with the CRTC.

*** End of Document '

These statistics are estimates based on 2013 probe data in the network which accuracy cannot be guaranteed with 100% certainty. We do not have comparable historical data from prior to 2013. Total 2013 OTT Video traffic (which would not include Mobile TV traffic) is estimated to be at #.

TAB H

Bell Mobility Inc. Klass Application

Abridged

referred to in the

This is Exhibit affidavit of sworn before ma, this

(-7411-20,

day of

Janet Lynn Jones, a Commissioner, etc., Province of Ontario, for McCarthy Tetonit LIP, Barristers and Solicitors. Expires June 18, 2016.

COMMISSIO

R TAKING AFFIDAVITS

Applications by Benjamin Klass requesting the fair treatment of Internet services by Bell Mobility and applications by CAC-COSCO-PIAC regarding Rogers' Anyplace TV service and Videotron's Illico.tv Service

Reply Comments of Bell Mobility Inc.

12 May 2014

Bell Mobility Inc. Klass Application

Abridged

Table of Contents Page

1.0 EXECUTIVE SUMMARY 1 5 2.0 FACTS 2.1 Netflix, Youtube and the other DMBUs that Interveners have tried to compare with Mobile TV are on-line programmers 5 2.2 In providing the Mobile TV service we are a mobile broadcast distributor 6 2.3 The need to obtain copyright licences to distribute content confirms Mobile TV is a BDU and differentiates us from a TCC 7 3.0 WE ARE A BU PROVIDING BROADCASTING SERVICE WHEN OFFERING MOBILE TV WHEREAS WE ARE A TCC OFFERING A TELECOMMUNICATIONS SERVICE WHEN WE PROVIDE WIRELESS CONNECTIVITY TO ENABLE OUR SUBSCRIBERS 7 TO VIEW OTT SERVICES 7 3.1 Bell Mobility has the status of a BDU 3.2 Bell Mobility is a carrier providing a telecommunications service when our subscribers access Internet programming services 9 3.3 Undue preference comparisons between broadcasting and Internet services are factually inappropriate and both legally and jurisdictionally impermissible 10 3.4 Calls to conflate the two statutes are also improper and contrary to clear Parliamentary intent and well established principles of statutory interpretation 12 3.5 Attempts to avoid the application of the Broadcasting and Telecommunications Acts by attempting to generalize the issue as differential allocation of network capacity or treatment of apps are improper and should be rejected 14 4.0 THERE IS NO PREFERENCE OR DISCRIMINATION NOR IF THERE IS, WHICH IS 16 DENIED, IS THERE UNDUENESS 4.1 Our Mobile TV and wireless data pricing is *wally in line with that of the 16 industry Far from there being evidence of material adverse harm to OTT providers' 4.2 17 wireless access to these services is growing No preference in favour of Bell Media content as part of the Mobile TV service 18 4.3 19 5.0 CONCLUSION

Bell Mobility Inc. Klass Application

Abridged

1.0 EXECUTIVE SUMMARY 1.

We are pleased to file these reply comments in accordance with the Commission's

31 January 2014 process letter.

Certain information contained in this reply is provided in confidence to the Commission

pursuant to section 39 of the Telecommunications Act, sections 31 and 32 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (Rules) and the Broadcasting and Telecom Information Bulletin CRTC 2010-961 as amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1. This information consists of disaggregated network traffic information and commercial information that is consistently rerated as confidential, the disclosure of which may result in material financial harm to us. An abridged version is provided for the public record.

The central issue in the Klass Application remains whether the pricing of our licence-

exempt wireless Digital Media Broadcasting Undertaking (DMBU) Mobile television service, known as Mobile TV, gives rise to undue preference or unjust discrimination.

Mr. Klass, CAC-COSCO-PIAC, CIPPIC, Theresa Murphy, CNOC and Vaxination all

maintain there is undue preference and unjust discrimination. They claim it results from the pricing of the Mobile TV service compared with the rates applicable when our subscribers consume wireless data under their Bell Mobility data plans to view content made available over the Internet by DMBUs, such as: the National Film Board (NFB);1 the Canadian Broadcasting Corporation (CBC/Radio Canada); Netflix;3 and YouTube.4 Mr. Klass also alleges the pricing of Mobile TV violates the Commission's policies regarding Internet Traffic Management Practices (ITMPs). To remedy these allegations these Interveners are requesting two Commission orders, the first finding the existence of undue preference and a second ordering us to cease the pricing practice. 5.

Unlike their earlier pleadings (e.g., Mr. Klass' 30 November 2013 Applications and the

9 January 2014 Intervention of CAC-COSCO-PIAC6), where these differential pricing claims

2 3 4 5 6

See: hftps://www.nfb.ca/channels/ See: htto://www.cbc.caltelevision/shows/ See: httos://www.netflix.comnlocale=en-CA See: http://www.voutube.com/?g1=CA See for example, paragraphs 58 to 60. CAC-COSCO-PIAC 9 January 2014 Intervention, paragraphs 24 and 35 to 47.

Bell Mobility Inc. Klass Application

Abridged Page 2 of 19

were said to violate the Telecommunications Act's undue preference prohibition in sub-section 27(2) (and the Commission's ITMP framework â&#x20AC;&#x201D; also grounded in the Telecommunications Act), in their 5 March 2014 comments Interveners have attempted to re-frame their arguments. They now claim the alleged undue preference violations arise either under the Telecommunications Act or section 3 of the Exemption Order (EO) for DMBUs, or, as CAC-COSCO-PIAC now asserts, both.' As part of this, the undue preference is now framed using one of the following two new characterizations:

(i)

Differential pricing of "network capacity"8 or

(ii)

Differential pricing of different "app" usage.9

Our position is that each of these attempted new characterizations is without merit in fact

and improper in law, and should be dismissed entirely for the following reasons:

The comparisons are legally inappropriate.

The comparison between Mobile TV

rates and data rates continues to be legally inappropriate. When we offer Mobile TV, Bell Mobility is a Broadcasting Undertaking (BU) providing a broadcasting service. In contrast, when making available wireless data connectivity used by subscribers to view programming services, like Netflix and YouTube, wirelessly, we are a telecommunications common carrier (TCC) providing a telecommunications service. The Broadcasting Act and the Telecommunications Act are both explicit that each statute respectively applies to the services provided by undertakings falling within its home statute and not to others beyond it. In other words, the Telecommunications Act applies only to TCCs in their provision of telecommunications services whereas the Broadcasting Act applies solely to BUs in the provision of broadcasting services. The corollary is that the Telecommunications Act cannot be applied to BUs providing a broadcasting service and the Broadcasting Act similarly cannot be applied to TCCs engaged in the provision of telecommunications services â&#x20AC;&#x201D; such as wireless Internet connectivity.

7 8 9

CAC-COSCO-PIAC 5 March 2014 Intervention, paragraph 11. CAC-COSCO-PIAC 5 March 2014 Intervention, paragraph 16. Benjamin Klass 5 March 2014 Intervention, paragraph 29. See also, for example, Response to Request for Information Bell Mobility(CRTC)4Apr-9 where the question stated in part: " ... the offer seems more advantageous for the Bell Mobile TV app compared to other third party apps."

Abridged Page 3 of 19

Bell Mobility Inc. Klass Application

Attempts to circumvent these statutory limits with generalized comparisons are similarly incorrect. The Interveners' recent attempts to side step these jurisdictional limits by attempting to characterize the issue as either: differential "network capacity" pricing; or differential "apps" pricing is also incorrect. Each generalization avoids the necessary analysis required by law to categorize the "undertaking" responsible for providing the service as either a BU versus a TCC and to classify the relevant service as either a "broadcasting service" versus a "telecommunications service". Moreover, attempts to conflate the Broadcasting Act and the Telecommunications Act, as implied by CAC-COSCO-PIAC, to in-effect read the two statues together as one directly violates the clear language of Parliament in both Acts that each is expressly limited to its own respective industries. There is similarly no undue preference arising pursuant to section 3 of the Exemption Order (EO) for DMBUs. In our capacity as a provider of Mobile TV Bell Mobility falls within the EO under section 3(b) as a DMBU delivered using point-topoint technology and received by way of mobile devices. In effect, we are a wireless BDU. In sharp contrast, the DMBUs access to whose services Interveners consider are being priced too high by Bell Mobility relative to Mobile TV (like NFB, CBC/Radio Canada, Netflix and YouTube), are exempt under section 3(a) of the EO because they are delivered and accessed over the Internet. They are licence-exempt programming undertakings not BDUs. Comparisons between these two very different categories of services are inappropriate because this too is an "apples" to "oranges" comparison. Mobile TV is in effect, a wireless broadcast distributor, whereas NFB, CBC/Radio Canada, Netflix and the others are Internet-based new media programmers.

There is no preference or discrimination, nor, to the extent there is, is it undue. Beyond the above factual and legal errors, there is no preference or discrimination, and even if there was, which is denied, there is no undueness. The claim that our pricing of Mobile TV is "too low" is incorrect. It ignores the fact Mobile TV is an experimental new broadcast distribution service in a nascent new digital media market. It also ignores the fact that Bell's Mobile TV subscription rates are in line with those charged by similar new distribution services recently launched by Rogers and Quebecor. The Interveners' claim that our mobile Internet data rates for the viewing of Internet content (including OTT DMBU services) are "too high" is also incorrect.

The retail wireless data

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telecommunications market has long been forborne from price regulation.1째 Barely 18 months ago, in the proceeding that culminated in the Wireless Code proceeding and ultimately in the Wireless Code decision,11 the Commission once again concluded that this market continues to be sufficiently competitive to protect users such that there is no need for the Commission to unforbear and resume regulating wireless data rates. There is no evidence that circumstances have changed. To the contrary, our customers are not being disadvantaged or harmed in the mobile data rates applicable to their viewing of Internet-based DMBU programming services, like nfb.ca, cbc.ca and Netflix. There is similarly no disadvantage or harm to competing Internet-based programming DMBUs, such as nfb.ca, cbc.ca, YouTube and Netflix, as has been suggested by certain Interveners. The very same Bell wireless data rates apply to the viewing of these unaffiliated programming DMBU services as Bell charges subscribers for the wireless viewing of our affiliated Internet-based programming DMBUs, such as CTV.ca12 , TSN.ca13 and the comedynetwork.ca.14 As such, there is no vertical integration issue. There is likewise no evidence the pricing of Mobile TV is harming unaffiliated programming services. Quite to the contrary, as we explained in response to Commission Interrogatories, mobile viewership of Netflix and YouTube is growing, not declining since the launch of Mobile TV. For all of these reasons there is no factual, legal or jurisdictional basis for the Commission to issue the orders sought.

We have structured these reply comments as follows. To correct attempts to

mischaracterize our Mobile TV and our wireless data services as both being broadcasting services or both being telecommunications services, in Section 2 we briefly review the business relationships, network architecture and sequence of steps respectively required to: (a) deliver the Mobile TV distribution service to a subscriber; and (b) enable a Bell Mobility subscriber to

io The Commission's forbearance framework for retail mobile wireless services was first established in Telecom Decision 94-15, and was refined in Telecom Decision 96-14. In a number of follow-up company-specific decisions and orders, such as Telecom Decision 98-19, Telecom Order 99-991, Order 2001-501, and Telecom Decision 2004-84, the framework was extended to the mobile wireless services provided by Canadian carriers that were not captured by Telecom Decisions 94-15 and 96-14. The Commission retained its regulatory powers under section 24 and subsections 27(2) and 27(4) of the Act for mobile voice services. In Telecom Decision 2010-445, the Commission amended the forbearance framework for mobile wireless data services to be consistent with the forbearance framework for mobile voice services. 17 See: Telecom Decision 2012-556, Decision on whether the conditions in the mobile wireless market have changed sufficiently to warrant Commission intervention with respect to mobile wireless services, paragraph 21 at: hffp://www.crtc.gc.ca/eno/archive/2012/2012-556.htm 12 See: http://www.ctv.ca/ 13 See: http:/Iwww.tsn.cal 14 See: http://www.thecomedvnetwork.ca/

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access the Internet to view the programming from an OTT DMBU via their smart phone or tablet.

Then, in Section 3 we apply these descriptions to the Broadcasting Act and

Telecommunications Act, respectively to demonstrate once again15 that in our provision of Mobile TV service we are an exempt BDU whereas when making available wireless data connectivity used by subscribers to view services like Netflix and YouTube wirelessly Bell Mobility is a TCC providing a telecommunications service. We then go on to demonstrate that each of the purported network access and app characterizations advanced by the Interveners is incorrect in law. Finally in Section 4 we summarize the facts demonstrating there is neither preference nor discrimination nor undueness.

2.0 FACTS There are two critical facts that require clarification before moving forward with the legal

analysis. These are:

(i)

The Netflix, YouTube, cbc.ca, NFB and other programming services which Interveners have tried to paint as being the same as Mobile TV are not the same and are instead on-line programmers; and

(ii)

In contrast, the Mobile TV service is a wireless television program distributor sharing many of the same characteristics as our licensed terrestrial Fibe TV BDU service. For example, just like for Fibe TV, for Mobile TV Bell must acquire licences to distribute certain programming services to our subscribers. .Far from providing only the mode of transportation, as is the case with an ISP, Mobile TV has control over the selection, origination and packaging of these content services.16

2.1

Netflix, Youtube and the other DMBUs that Interveners have tried to compare with Mobile TV are on-line programmers

10.

The first important fact is that services like Netflix, Youtube and the other DMBUs cited

by Interveners, are not distribution services like Mobile TV. These services do not arrange for

See Bell Mobility 9 January 2014 Answer, paragraphs 19 to 31. See for example, ISP Reference paragraphs 2 to 4.

15. 16

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the delivery of their content to an end-user. Rather, they make their content available over the Internet. Internet users access this content through a connection purchased from their ISP, whether it be a mobile ISP or a terrestrial ISP. 11.

As explained in Section 3, in the parlance of the EO for DMBUs, this programming

content is delivered and accessed over the Internet. 2.2

In providing the Mobile TV service we are a mobile broadcast distributor

12.

As explained in Bell Mobility(CRTC)4Apr14-7, our Mobile TV service is very, different

from the services of on-line programmers. Whereas these online content providers only acquire content and make it available for users to download via the end-users' own Internet connection, Mobile TV also supplies the network by which we distribute this content to our subscribers. 13.

Mobile TV aggregates, encodes, encrypts and sends streamed programming content to

our Video Hub Office (servers). Mobile TV uses the QuickPlay Media platform, where content is placed on special Mobile TV servers available for live streaming. From there the content gets delivered to our wireless access network to content distribution network (CDN) servers, to towers and on to customers' mobile devices. 14.

Rather than sending content to Bell Canada's Central Offices (as is the case with

terrestrial Fibe TV), which may not necessarily be near enough to the many towers and radio apparatus of Bell Mobility's network, the Mobile TV servers instead send the content to a CDN which hosts the content as broadly as possible within the Bell Mobility core network. 15.

When a Mobile TV user chooses to watch a channel, that content is then distributed in a

point-to-point connection that is established between the CDN servers through the access network, which in this case would be a tower and wireless spectrum, up to the end-user device (e.g., a tablet or smart phone). 16.

It can be seen from this description that the transmission and encoding steps for Mobile

TV are similar to traditional BDUs.

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2.3

The need to obtain copyright licences to distribute content confirms Mobile TV is a BDU and differentiates us from a TCC

17.

The final critical fact that requires emphasis is that our business operations are very

different , when providing the Mobile TV distribution service as distinct from when we provide wireless Internet connectivity as a TCC. In order to provide the Mobile TV service, we must first acquire the necessary programming distribution rights from the relevant copyright owners in order to distribute it wirelessly via our 3G and 4G networks. Absent such rights, we cannot distribute this content. It bears emphasizing that it is precisely this type of selection and packaging of programming content which the Supreme Court of Canada held to be among the hallmarks of a BU in Reference re Broadcasting Act.17

18.

In much the same way that we negotiate affiliation agreements to secure distribution

rights for our licensed Fibe TV and Bell satellite TV BDUs, we acquire distribution rights for our Mobile TV service. A list of the programming services in respect of which we have secured these 3G and 4G streaming distribution rights was included with our response to Bell Mobility(CRTC)4Apr14-1. In contrast, as a provider of wireless Internet connectivity Bell Mobility is not involved in the business of copyright clearances.

19.

With the benefit of these factual clarifications we next turn to the analysis that shows Bell

Mobility has the status of a BDU when providing the Mobile TV service. In contrast, when providing wireless Internet connectivity we have the status of a TCC providing a telecommunications service. 3.0 WE ARE A BU PROVIDING BROADCASTING SERVICE WHEN OFFERING MOBILE TV WHEREAS WE ARE A TCC OFFERING A TELECOMMUNICATIONS SERVICE WHEN WE PROVIDE WIRELESS CONNECTIVITY TO ENABLE OUR SUBSCRIBERS TO VIEW OTT SERVICES 3.1

Bell Mobility has the status of a BDU

20.

In providing Mobile TV we clearly fall within the ambit of the definition of a "broadcasting

undertaking." The CRTC has properly defined DMBUs in its ED as a new class of BU. As a provider of Mobile TV we clearly fit within this new class of BU because we deliver broadcasting

2012 SCC 4; [2012] 1 SCR 142 (the ISP Reference) at paragraph 5.

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using point-to-point technology received by way of mobile devices. These points are briefly explained.

21.

First, in order to fit within the Section 2 definition of the EO an undertaking must meet

the following two requirements:

First, it must provide broadcasting services as per the Commission's interpretation of "broadcasting" in BPN 1999-84/TPN 99-14; and Second, that DMBU's services must either: â&#x20AC;˘

be delivered and accessed over the Internet; or

â&#x20AC;˘

be delivered using point-to-point technology and received by way of mobile devices.

22.

Bell Mobility fits within section 2(b) of the DMBU definition when providing Mobile TV on

the basis of the following:

the Commission's interpretation of broadcasting in BPN 1999-84/TPN 99-14 adopts a "technologically neutral" view, holding that the delivery of programming from an originating point to a termination point to a device capable of receiving the programs is a transmission that falls within the scope of broadcasting; We transmit and distribute programs by way of radio waves from a point of origination for reception by members of the public who subscribe to the service and receive the programs using their wireless devices; and These programming services are delivered to subscribers by way of point-to-point connection between the CDN servers through our access network, which in this case would be a tower and wireless spectrum, up to the end-user device.

23.

It is also apparent that Mobile TV service meets each of the three requirements in the

definition of "broadcasting" to constitute broadcasting:

the essence of the service is the transmission of "programs"; these transmissions occur via radio spectrum for reception by those members of the public who subscribe to the service; and -

the transmissions are not solely for performance or display in a public place.

Bell Mobility Inc. Klass Application

24.

Abridged Page 9 of 19

That the wireless delivery of broadcast programs (including that by Mobile TV)

constitutes "broadcasting" is hardly controversial. The Commission settled the matter in light of the following recent observation in BPN 2014-190, Let's Talk TV (at paragraph 22): Broadcasting services delivered over the Internet or on mobile devices are other examples of exempt services that form part of the television system. 25.

It follows from the foregoing that the Mobile TV service is quite different from an online

DMBU programming service, like Netflix or TSN.ca. The Mobile TV service is a BDU, though it is actually a licence-exempt wireless distributor whose content is distributed point-to-point and received by wireless devices. In contrast, Netflix and TSN.ca are licence-exempt Internet-based programming services that are delivered and accessed over the Internet.

3.2

Bell Mobility is a carrier providing a telecommunications service when our subscribers access Internet programming services

26.

A detailed analysis of the various interrelated definitions: "telecommunications common

carrier", "telecommunications service", and "transmission facility" in the Telecommunications Act is not necessary to demonstrate our status as a TCC and that our mobile data service is a telecommunications service. These too are settled points, based on the following:

It is well established (and no one is disputing) that Bell Mobility is a TCC based on the fact it operates licensed radio-frequency spectrum (a transmission facility) which we use to provide wireless services, such as voice, data and SMS text messaging, to the public for compensation. The Supreme Court of Canada in the 1SP Reference found that retail Internet service providers (ISPs) do not carry on, in whole or in part, "broadcasting undertakings" subject to the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to "broadcasting" requested by end-users. This conclusion was based largely on the court's finding that ISPs provide only the mode of transportation and engage in none of the Broadcasting Act's cultural objectives relating to 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."

See: ISP Reference, paragraph 4.

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3.3

Undue preference comparisons between broadcasting and Internet services are factually inappropriate and both legally and jurisdictionally impermissible

27.

Having demonstrated that we are an exempt BDU providing a broadcasting service

when providing the Mobile TV service and a TCC providing a telecommunications service when providing wireless data connectivity, there are at least two reasons why the pricing of the first cannot be compared with the second for undue preference purposes. First, by the Commission's own prior rulings there can be no undue preference finding where the alleged difference or discrimination relates to not one, but two different services. Second, the jurisdictional limits of each statute prohibit it.

28.

Turning to the first point, there can be no discrimination for undue preference purposes

where, as here, the comparison sought to be made is between two different services. This was the case in Telecom Decision 2012-210,1째 where the Commission dismissed a complaint of undue preference filed by Wind Mobile and PIAC against Rogers for Rogers' treatment of and advertising about dropped calls when Wind subscribers transitioned on and off Rogers' home network for roaming purposes. The Commission's conclusion that there was no undue preference was based on its finding that it could not compare dropped calls when Wind's roaming customers moved on and off the Rogers network to the movement of Chatr customers moving in and out of Chatr zones because the former was a roaming service whereas the latter was not. This reasoning is directly applicable here, where the first service, Mobile TV, is a broadcasting service whose pricing cannot be compared with the second, wireless data, a telecommunications service. (This is a sufficient basis to reject comparisons between Mobile TV's BDU service and the programming services of Netflix and Youtube, since these also involve an apples to oranges comparison.)

29.

The second problem is jurisdictional. Interveners calling for the Commission to compare

for undue preference purposes the pricing of our Mobile TV BDU service to the pricing of our mobile data plans when these are used to consume programming from DMBUs runs afoul of not one but three legal prohibitions. These are found in sections 4 of the Telecommunications Act and the Broadcasting Act, respectively and section 27(2) of the Telecommunications Act.

Globelive Wireless Management Corp., operating as WIND Mobile, and the Public Interest Advocacy Centre Applications to review and vary Telecom Decision 2011-360 regarding roaming on Rogers Communications Partnership's wireless network at paragraph 19.

Bell Mobility Inc. Klass Application

30.

Abridged Page 11 of 19

Section 4 of the Telecommunications Act expressly excludes broadcasting from the

ambit of telecommunications law and regulation. It states as follows: 4. This Act does not apply in respect of broadcasting by a broadcasting undertaking. 31.

Section 4 of the Broadcasting Act similarly excludes telecommunications from the ambit

of broadcasting law and regulation as follows: 4(4) For greater certainty, this Act does not apply to any telecommunications common carrier as defined in the Telecommunications Act, when acting solely in that capacity. 32.

Beyond these two jurisdiction-limiting clauses, because Mobile TV is a BDU service, the

section 27(2) Telecommunications Act prohibition against undue preference cannot apply to the Mobile TV service. Calls by Mr. Klass and others for the application of the 1TMP framework to Mobile TV's pricing practices must similarly fail since these too are grounded in the Commission's jurisdiction under the Telecommunications Act.

33.

The plain language of section 27(2) of the Telecommunications Act itself precludes the

Commission from applying it to Mobile TV for two reasons:

The proper subject of a section 27(2) complaint is a Canadian carrier. When we offer Mobile TV, we are not a Canadian carrier, but a BDU. The proper activity of a section 27(2) complaint is either the "provision of a telecommunications service" or "the charging of a rate for it". Once again, Mobile TV is not a telecommunications service. Accordingly, attempts to invoke section 27(2) against our pricing practices in respect of the Mobile TV service is improper on the plain words of section 27(2) itself.

34.

Similarly, because we have the status of a TCC providing a telecommunications service

when subscribers use their wireless data services to access programs from DMBUs, the undue preference prohibition found in Section 3 of the EO for DMBUs similarly cannot be made applicable since the legislative basis for the EO for DMBUs is section 9(4) of the Broadcasting Act.

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3.4

Calls to conflate the two statutes are also improper and contrary to clear Parliamentary intent and well established principles of statutory interpretation

35.

CAC-COSCO-PIAC2° have pointed to the Supreme Court of Canada's decision in

Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-16821 (the "Value for Signal Reference") and argued the Broadcasting Act, Copyright Act, Telecommunications and Radiocommunication Acts are part of an interrelated statutory scheme. They go on to state that "there is no basis in communications law — under either the Telecommunications Act or the Broadcasting Act or rules adopted under either — for distinct and differential pricing for mobile TV services which significantly disadvantages competing services offered by entities that are unaffiliated."22 In so doing, they seem to suggest that the Commission should be able to conflate Section 3 of E0 with s. 27(2) of the Telecommunications Act and find improper undue preference under both statutes.

36.

There is no basis in law to adopt such an interpretation. It is tantamount to reading the

Broadcasting Act and Telecommunications Act as part of one consolidated statute when they are not and were not intended by Parliament to be read in such a consolidated manner.

37.

The well-established starting point for determining the jurisdictional limits of any statute

is the "modern approach to statutory interpretation" as enunciated by the leading Canadian authority on the statutory interpretation, Elmer Driedger. In the Value for Signal Reference, this approach was described as follows: The words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the 23 Act, and the intention of Parliament. 38.

Parliament has inserted numerous express provisions in each statute which plainly

indicate that broadcasting is to be governed exclusively by the Broadcasting Act and telecommunications by the Telecommunications Act. The consolidated interpretation advanced by CAC-COSCO-PIAC clearly contravenes sections 4 of both Acts, referenced above.

See CAC-COSCO-PIAC 5 March 2014 Supplementary Intervention, paragraph 19. 2012 SCC 68, [2012] 3 S.C.R. 489 at paragraph 34. 22 See CAC-COSCO-PIAC 5 March 2014 Intervention, paragraph 21. 23 VFS Reference, at paragraph 11. 21

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39. Moreover, to subject the activities of a TCC to the Broadcasting Act would directly contravene the following conclusions of the Supreme Court of Canada in the ISP Reference about the objectives of the Broadcasting Act being purely cultural (a point which was recently reaffirmed by the Court in the VFS Reference at paragraph. 32): We agree with Noel JA for the reasons he gave, that the terms "broadcasting" and "broadcasting undertaking", interpreted in the context of the language and purposes of the Broadcasting Act, are not meant to capture entities which merely provide the mode of transmission. Section 2(1) of the Broadcasting Act defines "broadcasting" as "any transmission of programs . . . by radio waves or other means of telecommunication for reception by the public". The Act makes it clear that "broadcasting undertakings" are assumed to have some measure of control over programming. Section 2(3) states that the Act "shall be construed and applied in a manner that is consistent with the freedom of expression and journalistic, creative and programming independence enjoyed by broadcasting undertakings". Further, the policy objectives listed under s. 3(1) of the 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. An ISP does not engage with these policy objectives when it is merely providing the mode of transmission. ISPs provide Internet access to end-users. When providing access to the Internet, which is the only function of ISPs placed in issue by the reference question, they take no part in the selection, origination, or packaging of content. We agree with Noel J.A. that the term "broadcasting undertakinq" does not contemplate an entity with no role to play in contributing to the Broadcasting Act's policy objectives.' [Emphasis added] 40.

In other words, Parliament never intended ISPs to be regulated under the Broadcasting

Act, because they have no role to play over the selection, control and packaging of content, and therefore do not contribute to the cultural objectives under the Broadcasting Act. 41.

Finally, CAC-COSCO-PIAC argue25 that we cannot "structure [our] services so as to do

indirectly what cannot be done directly under either Telecommunications Act [sic] or the regulations adopted pursuant to the Broadcasting Act."

The Commission should reject this

inference that we have intentionally and deliberately structured our operations with a view to circumventing the law. The reality is that the jurisdictional limits arise by virtue of statute, not some business strategy.

24 25

ISP Reference, paragraphs 3 to 5. CAC-COSCO-PIAC, paragraph 41.

Bell Mobility Inc. Klass Application 42.

Abridged Page 14 of 19

As we pointed out in our 9 January 2014 Comments,26 the situation at issue here is no

different from the wireline world in the mid to late 1990s. The dual status of a terrestrial BDU's cable television broadcasting undertaking and telecommunications Internet undertaking was first accepted by the Commission close to 20 years ago in Telecom Decision 96-1. Their dual and separate regulatory status arose by virtue of the distinct statutory limits of the Broadcasting Act and Telecommunications Act.

The very same principles are at work here. No one would

seriously suggest that Fibe TV is engaged in undue preference notwithstanding that subscribers of this service effectively obtain unlimited program viewing with each month's subscription payment whereas subscribers of our wireline Fibe Internet service are subject to data caps, including when viewing programming streamed over the Internet from online programmers.

43.

Just as it is acceptable for a traditional BDU to price its distribution service differently

from its TCC's Internet service in the wireline world, so too is this permissible in the wireless environment at issue here. The different and distinct statutory analyses applicable to both flow not from the structure of the business operations, but rather from the different statutory regimes.

3.5

Attempts to avoid the application of the Broadcasting and Telecommunications Acts by attempting to generalize the issue as differential allocation of network capacity or treatment of apps are improper and should be rejected

44.

The Commission should also reject attempts by the Interveners to attempt to sidestep

the analysis called for under both the Broadcasting Act and Telecommunications Act requiring the identification of the relevant undertaking(s) (e.g., BU versus TCC) and the true nature of the services in question (e.g., broadcasting versus telecommunications) by painting the issue as a comparison of differential network capacity pricing and differential pricing treatment of apps. We briefly consider and demonstrate the inapplicability of these characterizations below.

45.

It is said that we have dedicated our wireless network capacity preferentially to our own

BDU at the expense of our shared telecommunications undertaking.째 There are at least two errors associated with this characterization. First, it improperly labels the Mobile TV service, already demonstrated above to be a broadcasting service with the nomenclature of a "telecommunications service."

26 27

See page 32 to 36 et seq. Klass, paragraph 61..

Bell Mobility Inc. Klass Application 46.

Abridged Page 15 of 19

The inapplicability of this type of telecommunications service characterization is clear

from the fact that Mobile TV must select, originate and package content after having secured distribution rights from content owners.

47.

In contrast, a TCC does not need to acquire any rights to what it carries (it is, in fact,

agnostic to what it carries, as the Supreme Court noted in the ISP Reference, referred to above). For Mobile TV, we also solicit subscribers to receive the programming services which we retransmit. We are activating and deactivating subscribers by selling the Mobile TV service, independent of a wireless data plan. In so doing, we have the attributes the Commission ascribed to a BDU more than 20 years ago in PN 1993-74.

48.

The "network capacity characterization" is also fundamentally out of step with the

Supreme Court of Canada's conclusions in the ISP Reference discussed above. The Supreme Court accepted in that case that BUs are assumed to have some measure of control over programming. Mr. Klass' attempt to paint Mobile TV with what is in effect a telecommunications brush runs completely contrary to the Court's finding and our actual undertaking as a clearer of rights to wirelessly retransmit programs and programming services. This characterization must be rejected on these bases.

49.

Interveners have also tried to generalize the nature of the undue preference allegations

as one of differential pricing apps. Analyzing the question as one of apps is superficial. Some apps are games, some apps launch OTT broadcasting services and others do not even trigger connectivity to the Internet (e.g., the popular flashlight app).

50.

A far more detailed analysis is required. As noted above, some apps, including the TSN

app, launch connectivity to Internet-based OTT programming services, such as those captured in paragraph 2(b) of the EO. In the case of the Mobile TV app, however, it launches a BDU delivered using point-to-point technology and received by way of mobile devices. Since these are two very different types of services, captured by two different groups of DMBUs, they too are not appropriate comparators.

51.

For all of these reasons the Commission must reject the Interveners' attempts to ignore

the factual realities and the distinct legal regimes that apply to both. We are a BDU when offering Mobile TV. We are a TCC offering a telecommunications service when providing

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wireless connectivity enabling our subscribers to view programming wirelessly.

Each

undertaking is different and each activity is governed by separate and distinct statutory regimes. Attempts to generalize them to compare the two are inappropriate and legally improper and must therefore be rejected by the Commission.

4.0 THERE IS NO PREFERENCE OR DISCRIMINATION NOR IF THERE IS, WHICH IS DENIED, IS THERE UNDUENESS 52.

Beyond the factual, regulatory and jurisdictional errors noted above, the following four

critical facts refute the claims of preference and discrimination:

(i)

Mobile TV pricing is not "too low";

(ii)

Bell's wireless data rates are not "too high" â&#x20AC;&#x201D; indeed because both our Mobile TV pricing and Internet data rates are in line with current industry practice; it follows that Bell subscribers are not being harmed or subject to discrimination;

(iii)

Far from there being evidence of material adverse harm being caused by Mobile TV pricing to online programmers, such as Netflix and YouTube, their wireless viewing has grown since the launch of Mobile TV; and

(iv)

There is a strong representation of non-affiliated programming services on the Mobile TV service, which is growing. Accordingly, there is no Vertical Integration problem. Each of these points is briefly explained in the following paragraphs.

4.1

Our Mobile TV and wireless data pricing is generally in line with that of the industry

53.

The crux of the complaint is that Bell Mobility subscribers pay too little for Mobile TV

pricing in comparison to the rates for wireless data connectivity when the consumption of programming under both is compared on a per MB basis. The facts are otherwise.

54.

The following table illustrates that Bell Mobility's pricing of Mobile TV is very much in line

with the pricing of Rogers' and Videotron's mobile TV services:

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Bell Mobility's Mobile TV Rogers Anyplace TV Videotron Illico mobile

55.

Monthly cost to view initial hours of mobile TV $5/10 hours $5110 hours Free/5 hours (with at least a 2 GB data plan); $10/15 hours; $15/30 hours

Monthly cost to view additional hours of mobile TV $3/hour $1/hour $1.5/hour

It once again bears emphasizing that this is a nascent, experimental service in the

exempt digital media broadcasting market. As we pointed out in our 9 January 2014 Answer, Mobile TV is precisely the kind of innovative, consumer-oriented service the Commission intended to foster when it first forbore from licensing these undertakings approximately 15 years ago.28

56.

The other aspect of the Interveners' undue preference allegation is that Bell Mobility's

data rates applicable to the consumption of programming wirelessly are said to be too high. This too is false. The fact that our pricing of Mobile TV and wireless data connectivity is generally consistent with that of the Canadian industry is sufficient to refute the Interveners' claims that our customers are being harmed by excessive wireless data rates.

4.2

Far from there being evidence of material adverse harm to OTT providers' wireless access to these services is growing

57.

The second element of the Interveners' undue preference claims is their unsubstantiated

assertion that "competition in the marketplace for OTT services is being harmed to the sole benefit of each of the vertically integrated service providers."29 The evidence shows otherwise.

58.

As we pointed out in our response to Bell Mobility(CRTC)4Apr14-10, there has been no

substantial lessening of competition in the wake of the launch of Mobile TV. Since the introduction of Mobile TV both Netflix and YouTube have increased market share and viewership. On our HSPA/LTE networks alone their combined traffic dwarfs that represented by Mobile TV, with YouTube and Netflix traffic accounting for", just

# compared with

# of Mobile TV traffic, a ratio of almost

itFiled in_confidence with the CRTC.:

28 29

Bell Mobility 9 January 2014 Answer, paragraphs 7 to 15. See, for example CAC-COSCO-PIAC 5 March 2014 Supplementary Intervention, paragraph 15.

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Abridged Page 18 of 19

Moreover, as we have previously noted, the very same Bell Mobility wireless data rates

applicable to our subscribers' consumption of online DMBU programming services applies to that of Bell-related programmers like TSN, CTV and the Comedy Network. Absent evidence of harm, beyond the legal and jurisdictional flaws there is no basis for a finding of preference or discrimination.

60.

Because there is neither differential treatment nor harm to competing online DMBU

programming services, these claims of undue preference should be rejected.

4.3

No preference in favour of Bell Media content as Dart of the Mobile TV service

61.

CAC-COSCO-PIAC claims that the Commission "clearly had vertically integrated

wireless carriers in mind when it added the undue preference prohibition to the new media exemption order in Broadcasting Regulatory Policy 2009-329."3째 They seem to imply that we are engaged in improper conduct leveraging our related Bell Media programming services to somehow make them available exclusively or preferentially on the Mobile TV service. We do not.

62.

As we demonstrated in our 9 January 2014 Answer, approximately two-thirds of the

content available on Mobile TV is content of unaffiliated broadcasters. Approximately 30% is content from independent programmers. This is a remarkable degree of programming diversity for such a new and experimental service.

63.

None of the programming we acquire for distribution on Mobile TV is licensed on an

exclusive or preferential basis. Our conduct is entirely consistent with the EO for DMBU prohibitions against exclusivity.

64.

Finally all of the programming for which we negotiate rights on Mobile TV is licensed in a

manner fully respectful of the Vertical Integration Code. There is no suggestion that we are requiring our programming partners to accept terms or conditions that are commercially unreasonable.

3째 5 March 2014 Intervention, paragraph 43.

Abridged Page 19 of 19

Bell Mobility Inc. Klass Application 65.

For all of these reasons, suggestions and innuendo that Mobile TV is acting improperly

or in a manner inconsistent with the objectives of the EO for DMBUs, or the Vertical Integration Code are wrong and should be rejected.

5.0 CONCLUSION 66.

Based on the foregoing, none of the earlier claims or any of these new allegations of

undue preference has any merit.

67.

Interveners' attempts to generalize these allegations with vague references to generic

concepts like differential "network capacity" pricing or differential app pricing should be rejected by the Commission as analytically improper. The jurisdictional requirements and limitations of the Broadcasting Act and the Telecommunications Act cannot be avoided.

68.

Once the relevant services are considered and analyzed under the relevant statutes it is

clear that in our provision of Mobile TV we are BDU subject to the Broadcasting Act, whereas in our provision of wireless data connectivity we are a TCC providing a telecommunications service that is subject to the Telecommunications Act. The services are different, they are not comparable for undue preference purposes, each is subject to its own statute and ultimately, there is nothing preferential about their respective rates.

69.

For all of these reasons, the application should be dismissed in its entirety.

*** End of Document ***

TAB I

This is Exhibit...

............. .Verred to in the

affidavit of sworn before me, this day

.....

111

rtir) .......................

Ts 114F116PtraultP, 4* 0rttarlo,(f2ro; Isill9cCarthy e of911178 jP16iric 7 " Barristers and Solicitors.

BEFORE THE CANADIAN RADIO-YLEVii째110N AND TELECOMMUNICATIONS COMMISSION IN THE MATTER OF UNDUE PREFERENCES FOR MOBILE TV UNDER THE TELECOMMUNICATIONS ACT AND THE BROADCASTING ACT

COMMISSION FILE NO.: 8622-B92-201316646

REPLY COMMENTS Canadian Association of Consumers, the Council of Senior Citizens' Organizations of British Columbia, and the Public Interest Advocacy Centre

12 May 2014 Geoffrey White Counsel to CAC-COSCO-PIAC (613) 562-4002 x24

Jean-Francois Leger Counsel to CAC-COSCO-PIAC (613) 562-4002 x28

ciwhitepiac.ca

ifleder@piac.ca

do Public Interest Advocacy Centre One Nicholas Street, Suite 1204 Ottawa, Ontario KIN 7B7

do Public Interest Advocacy Centre One Nicholas Street, Suite 1204 Ottawa, Ontario K1N 7B7

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Table of Contents

Table of Contents Executive Summary

1. Introduction

2. Evidence of a Preference

3. Obfuscating the Obvious Discrimination

4. Weak Justification for Differential, Preferential Rates

5. Assertions with no support

6. Conclusion

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Executive Summary

Executive Summary ES1. The Consumers' Association of Canada ("CAC"), the Council of Senior Citizens' Organizations of British Columbia ("COSCO"), and the Public Interest Advocacy Centre ("PIAC", collectively with CAC and COSCO, "PIAC et al.") hereby file these reply comments, further to our supplementary intervention filed 5 March 2014. ES2. At issue in this proceeding is whether, under the Telecommunications Act or the Broadcasting Act or rules made under either one, the respondents Bell, Rogers and Videotron — who are Canadian carriers — are imposing unduly preferential terms and conditions for the usage by retail customers of network capacity when the capacity is used for the delivery or consumption of their own or their affiliates' mobile OTT services. ES3. PIAC et al. have argued that as a consequence of such a practice by certain vertically integrated wireless carriers, these vertically integrated wireless carriers' subscribers who choose to consume competing mobile OTT services face substantial penalties in the form of data caps and considerably higher rates which leave these consumers little practical choice in the market. This results in an undue preference by the carriers to themselves vis-à-vis their own customers. Competing mobile OTT services also face an undue or unreasonable disadvantage in offering their services to these subscribers. ES4. In the responses to Commission requests for information, the respondents have argued that their respective mobile TV services are broadcasting services exempt from regulation under the Broadcasting Act by virtue of the Digital Media Exemption Order, and that any preference or discrimination is justified by the fragile nascency of the online video market, and the need to compete with foreign providers. ES5. In reply, PIAC et al. make the following comments: The evidence indicates there is a preference taking place; Respondents' customers incur greater data usage charges to view video content from non-affiliated sources than they do from sources affiliated with the Respondent wireless service provider; See Quebecor Media(CRTC)4avr2014-13 illico mobile; Rogers All at 14; and Bell Mobility(CRTC)4Apr14-5 and Bell Mobility(CRTC)4Apr14-9.

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Executive Summary

(ii).

The Respondents are obfuscating the obvious preference to their affiliated mobile TV service;

(iii).

The behaviour in question (preferential pricing of services offered by an affiliate) puts consumers who want to view a non-affiliate's content, and competitors who provide alternative services, at a disadvantage;

(iv).

The Respondents' justification for engaging in the preferential pricing and data treatment in question is weak; and

(v).

The Respondents are, wrongly, placing an onus on the applicants to demonstrate negative competitive effects.

ES6. In addition we note that: (i).

Bell has, wrongly, posited a test for undue preference that ignores the broader public interest considerations required of the undueness analysis under the applicable statutes and Commission policies; and

(ii).

Rogers has, wrongly and irrelevantly, invited the Commission to find that the lack of any interventions in this proceeding from any Canadian or foreign content provider should be taken as support for the billing practices at issue.

ES7. Preferential billing treatment of mobile wireless data for affiliated mobile TV offerings by vertically integrated mobile TV service providers is, PIAC et al. contend, an undue preference, and it unjustly discriminates against vertically integrated wireless carriers' own customers. This is contrary to undue preference prohibitions and rules made under the Telecommunications Act and the Broadcasting Act. ES8. The argument that the practice is necessary, justified, or in compliance with Commission rules is not persuasive. The Commission should therefore prohibit such practices.

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

I. Introduction 1. The Consumers' Association of Canada ("CAC"), the Council of Senior Citizens' Organizations of British Columbia ("COSCO"), and the Public Interest Advocacy Centre ("PIAC", collectively "PIAC et al.") hereby file our reply comments in the revised process established pursuant to Commission staff's letter of 31 January 2014 (the "Revised Process"). 2. The purpose of this proceeding is to deal with issues raised in three applications2 made under Part I of the the CRTC Rules of Practice and Procedure. 3. At issue is whether Bell, Rogers and Videotron (collectively, the "vertically integrated service providers" or "Respondents") are in violation of prohibitions against undue preference when they offer a low effective mobile wireless data rate to their mobile wireless customers when those customers consume their own mobile TV service, and a considerably higher effective rate to view competing OTT services. 4. In our view the manner in which the Respondents charge for the usage of data by their wireless customers for their affiliated mobile TV service in comparison with the manner in which these same customers would pay for data use to watch competing mobile TV services constitutes unjust discrimination against their customers under subsection 27(2) of the Telecommunications Act.

Application No. No. 2013-1664-6; Commission File No. : Application2 by Benjamin Klass ("Klass", the "Klass Application"), dated 20 November 2013 against Bell Mobility Inc. ("Bell Mobility") and Bell Canada (collectively "the Bell companies") regarding the wireless data used by their customers to consume the Bell companies' "TV Anywhere" 2 mobile TV service. Application No. 2013-1664-6: Application2 by CAC-COSCO-PIAC, dated 9 January 2014 regarding the billing practices of Rogers Communications Partnership ("Rogers"), in respect of access by Rogers' mobile wireless customers to Rogers' "TV Anywhere" mobile TV service compared to access to competing mobile over-the-top ("OTT") TV services such as TELUS's Optik TV or Netflix. Application No. 2014-0014-4: Application2 by CAC-COSCO-PIAC, dated 9 January 2014 regarding the billing practices of regarding the billing practices of Videotron G.P. ("Videotron"), in respect of access by Videotron's mobile wireless customers to Videotron's "Illico.tv" mobile TV service compared to access to competing mobile OTT services.

Page 1 of 14

Reply Comments of RAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

5. In their various filings in response to the applications, the Respondents have argued that their mobile TV service offerings are broadcasting services that are exempt from the Broadcasting Act pursuant to the Digital Media Exemption Order. 6. The problem with this positioning, however, is that no matter which way any of the vertically integrated service providers turn, they each inevitably run into a prohibition against undue preference and unjust discrimination. 7. In its interrogatory responses, Rogers compares the viewing of 5 hours of its mobile TV service on Rogers' wireless network, against viewing of that content on a competitor's wireless network.3 The problem with that comparison, though, is that it does not reveal the price discrimination that is in issue in this proceeding â&#x20AC;&#x201D; the differential pricing of data depending on the source â&#x20AC;&#x201D; not the network operator. 8. The record of this proceeding indicates that a customer of one of the vertically integrated service providers pays a substantially higher rate for mobile wireless data when consuming competitive OTT services than they do when they consume the mobile TV service offering of their wireless provider (or its affiliate).

2. Evidence of a Preference 9. The evidence supports a finding that the respondents are granting a preference. 10.Videotron notes that for Android and Blackberry users, their use of 15 hours of illico mobile TV service does not count against the user's data cap, but that for iPhone users the applicability of a data cap depends on the deal a customer has with his/her wireless service provider, and whether or not the consumption occurs on WiFi.4 11. Rogers states "the data consumption associated with the viewing of RAP-TV mobile service content is not included as part of the data consumption associated with accessing other Internet services."5

3 4 5

Rogers, A4. Quebecor Media(CRTC)4avr2014-7. Rogers, A5 at 6.

Page 2 of 14

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

12.Bell gets right to the heart of the matter: "Bell Mobility's data plans are irrelevant to subscribers of Bell Mobile TV."6 13. Rogers states that while it "understands why some might argue that the RAPTV mobile service is being offered to wireless subscribers in a manner that constitutes a preference, it is clear that even if there is such a preference, it does not reach the level of being undue."' Rogers then goes on to claim how "it is difficult to see" how the terms under which it delivers its mobile TV service to its customers could give rise to an undue preference, given that Bell offers a "similar service" and given Rogers' incomplete characterization of TELUS's intervention. (Here we note that Rogers has incompletely characterized TELUS' submission. Rogers notes that TELUS "is considering offering a similar service"8, but neglects to note how TELUS also submitted that it appears Bell has engaged in a preference, and that Bell must be put to the test of showing its wholesale costing to reveal whether the preference is undue.9) 14. Bell and Rogers each assert that their mobile TV service content is not differentiated from any other Internet traffic on their network, but their interrogatory responses clearly show how, when the data in question pertains to an affiliated service, then effective data rates are substantially lower (and data allotments higher) than they would be for the consumer to consume OTT content from a competitor.16

6 7 8

Bell Mobility(CRTC)4Apr-3. Rogers, A10 at 11. Rogers, Al 0 at 13. Intervention of TELUS (9 January 2014) regarding Part 1 Application filed by Benjamin Klass titled "Application requesting fair treatment of Internet services by Bell Mobility, Inc., pursuant to CRTC 2010-445 and CRTC 2009-657, and the Telecommunications Act, s.24 & subsection 27(2)" â&#x20AC;&#x201D; File No. 8622-692-201316646 at para. 24 et seq.: Accordingly, it the Commission agrees that a preference has been given to Bell, then it should require Bell to demonstrate that the preference it has given itself with respect to its Mobile TV add-on is not undue. Only Bell can provide the necessary information, namely the wholesale costs of the components of the service bundle, to demonstrate that it has not subjected its competitors to an undue disadvantage.

Rogers, A8 at p. 11; Bell Mobility(CRTC)4Apr14-7

Page 3 of 14

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

3. Obfuscating the Obvious Discrimination 15.To justify preferring an affiliated service's content by subjecting it to differential billing, and to escape the application of the Telecommunications Act and rules made thereunder, the Respondents argue that their respective mobile TV services are broadcasting services that operate under the Digital Media Exemption Order. PIAC et al.'s views on this matter are on the record, and we continue to maintain our position that the behaviour in question constitutes an undue preference prohibited by both acts. 16.Bell takes the campaign one step further by obfuscating regulatory labels for what it is actually doing â&#x20AC;&#x201D; favouring its own service at the expense of consumers who wish to view competing OTT services and, in turn, in a manner which sets price barriers against OTT competitors. 17.Bell exemplifies this in its strained response to a Commission interrogatory to explain away why marketing materials for Bell's mobile TV used the descriptor "wireless data service" by claiming that such a descriptor was "not meant to convey a legal definition but simply meant to provide a colloquial understanding".11 18.Then, in response to the Commission's interrogatory about network architecture, Bell argues that "the differentiating feature between a digital media broadcasting service that provides programming available via the Internet (e.g. an OTT service) and a mobile BDU service is the means of distribution". It then goes on to weave the following explanation for what is happening to allow Bell to treat customers differently depending on the source of the video content they consume: "On the other hand, Bell Mobile TV is a mobile BDU which is also a DMBU but it falls under the second means of distribution (broadcast services delivered using point-to-point technology and received by way of mobile devices)."12 19. The effect of this obfuscation is the very same outcome that Shaw, another vertically-integrated company, warned against in the Reference re Broadcasting Act case, in which the Supreme Court of Canada ruled that ISPs are not "broadcasting undertakings" when, in their role as ISPs, they

11 12

Bell Mobility(CRTC)4Apr14-5. Bell Mobility(CRTC)4Apr14-7.

Page 4 of 14

Reply Comments of MAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

provide access through the Internet to "broadcasting" requested by endusers. 13 20.In arguing against a finding that ISPs, in their conduit role, were not broadcasting undertakings, Shaw argued thus: Parliament cannot have intended a legislative scheme where the regulatory regime applicable to an ISP flickers back and forth between two statutes millions of times per second, with the ISP having no knowledge which regime applies to any given packet.'"

21.Shaw went on to argue that "[c]ertain companies that offer ISP services, including Shaw, may also offer online content services, either in the form of original programming or content aggregation. However, such services are separate and apart from "their role as ISPs", to use the Commission's phrase, which is solely to offer end-users access to the Internet."15 22.In Bell's construction of the rules and regulatory labels, the effect is the one Shaw warned against: The flickering back and forth between two statutes millions of times per second â&#x20AC;&#x201D; but in this case, with the ISP flagging content from its own service and treating it differently, for wireless data billing purposes, than content from competitors. 23.Whichever label Bell wishes to ascribe to the content from its affiliated service, the billing treatment of it is, as evidenced on the record, different and therefore we say preferential.16 24.To a lesser, but still concerning extent, Videotron also paints a baffling picture of how (but not why) it provides different pricing for its illico mobile TV service.17 It is not clear from Videotron's responses why, for example, iPhone 13 14 15 16 17

Reference re Broadcasting Act, 2012 SCC 4, [2012] 1 S.C.R. Factum of the Respondent, Shaw Communications Inc. in Reference re Broadcasting Act, at para. 8. Ibid., at para. 37. See Rogers A5; Bell Mobility(CRTC)4Apr14-4. In Quebecor Media(CRTC)4avr2014-1, Videotron states that for Android and Blackberry, you have to subscribe to both illico TV customer as well as their wireless service. If you have an iPhone, you can subscribe to just their illico TV service without also being a Videotron mobile subscriber. (The interrogatory, references this and cites Videotron's statement that they are considering changing this for Android and Blackberry users.) In Quebecor Media(CRTC)4avr2014-2, Videotron also points out that Android and Blackberry customers cannot access the illico mobile TV application over WiFi whereas iPhone users can. Videotron also did not answer the request that they explain how they bill data consumption in Quebecor Media(CRTC)4avr2014-3 even though Videotron says Page 5 of 14

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

owners and Android and Blackberry owners also are treated differently in terms of the effect of consuming illico mobile TV, and in terms of whether or not the illico mobile TV traffic is prioritized or not. In any case, the explanations are not helpful in justifying why it generally costs less to view data when it comes from Videotron than when it originates from competing OTT service providers.

4. Weak Justification for Differential, Preferential Rates 25.The Respondents have not met the onus of demonstrating that their actions of charging differential effective rates, and applying wireless data caps differently depending on whether video content consumed derives from an affiliated service or not, are not an undue preference or unjustly discriminatory. 26.1t appears, on the basis of the interrogatory responses, that the actual justification for the preferential billing is the competitive threat of foreign OTT providers of video content.18 Rogers for example argues it is at a competitive disadvantage versus Google, Apple and Netflix because subscribers to those services can use the service on a TV in the home, whereas Rogers' subscribers cannot.19 We question the relevance of this assertion, and we question the Respondent's "necessity" argument as a basis for justifying its practice.

that the assumption PIAC et al. made was based on a "promotional" offer which has now expired. Videotron did the same thing in response to Quebecor Media(CRTC)4avr2014-4 except that in Quebecor Media(CRTC)4avr2014-4 (they repeat this in Quebecor Media(CRTC)4avr2014-7 in a more detailed manner), Videotron points out that for Android and Blackberry users, the 15 hours consumption which they provide as a part of the deal for illico mobile TV does not count against the user's data cap (for iPhone users, they say that whether the consumption is or is not subject to a data cap depends upon the deal the customer has with his/her wireless service providers and whether or not the consumption occurs via WiFi). In Quebecor Media(CRTC)4avr2014-10(c), VidOotron points out that illico mobile TV data is not treated differently on Videotron's wireless network from "other Internet traffic" (my translation). However, in QuObecor Media(CRTC)4avr2014-10(d) Videotron states that the illico mobile TV traffic is prioritized in their network for Android and Blackberry users but not for iPhone users. 18

Rogers, Al2 at 15: "...foreign OTT providers of video content are dominating the online video marketplace." Rogers Al2 at 16.

Page 6 of 14

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

27.Videotron argues that the market for OTT services is emerging, and characterized by experimentation by service providers with a view to getting Canadians accustomed to consuming video on their mobile devices.20 As part of this experimentation, Videotron, like Bell and Rogers, offers its mobile TV service at rates below, or unlinked to, cost.21 28. Rogers, as does Bell, states that the price it charges for its mobile TV service are not reflective of the cost â&#x20AC;&#x201D; that these Respondents are in effect discounting their service so that more customers will use it. 29. Rogers, in direct contradiction to its later statement that "Canadians are increasingly accessing video content online"22, argues that "Mobile TV is at a nascent stage in its development. Today, very few consumers actually use their mobile devices to watch significant amounts of full-length video content. The price point that we have established for the RAP-TV mobile service simply reflects the low consumer demand that currently exists for the service."23 Rogers then characterizes its billing approach as part of an industry effort to stimulate more demand for online video "given the billions of dollars that have been spent on wireless networks, Rogers and other WSPs are trying to find ways to encourage our customers to use these networks in new and innovative ways. Consuming video content is one such way."24 Rogers then goes on to implicitly admit that in time, once it has built a sufficient level of demand for mobile video, it will then raise prices. "Once a sizeable number of customers regularly use mobile devices to access and watch video content, the fees we charge for a service like the RAP-TV mobile service will match that growing demand. That is the only way we will be able 20

See Quebecor Media(CRTC)4avr-12: Le marche des services de programmation par contournement, dont fait partie le service de tele mobile de Videotron, est un marche emergent caracterise par de ('experimentation en termes de disponibilite de contenus, d'assemblage de contenus, de techniques de marketing, ainsi que de politiques de prix et de facturation. Cette experimentation permet a l'ensemble des foumisseurs de mieux connaitre le marche, trouvant de nouvelles fawns de rendre Ieurs offres attrayantes aux yeux des consommateurs. Que les canadiens at canadiennes s'habituent a consommer du contenu televisuel sur leur appareils mobiles ne peut qu'ultimement avoir un impact positif sur ['ensemble des fournisseurs de tels contenus. Pour cette raison, nous sommes d'avis que toute preference qui puisse exister a cause de nos methodes de facturation actuelles ne peut etre consideree comme &ant indue.

21 22 23 24

Quebecor Media(CRTC)4avr-5; Rogers Al 0 at 12; Bel! Mobility(CRTC)4Apr14-2. Rogers, Al 0 at 13. Rogers, A10. Rogers, A10.

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Reply Comments of RAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

to recoup the enormous cost we have incurred to build and operate the network."25 30.As a final justification akin to saying the practice is legitimate simply because others are engaging in it (two or more "wrongs" making a "right"), Rogers says that "each Canadian WSP has the ability to offer its subscribers a mobile television service like the RAP-TV mobile service" and that "[i]n view of the ability of all Canadian WSPs to offer a comparable mobile television service, it is difficult to see how the RAP-TV mobile service could even be considered a preference for Rogers' wireless subscribers, let alone a preference that is undue." 26 31 We do not challenge the assertion that vertically integrated wireless service providers have the ability to make mobile TV services available to their subscribers but this is not the issue nor is this even relevant to Rogers' apparent central argument â&#x20AC;&#x201D; that at this stage of the development of the marketplace the Respondents should be allowed, indeed encouraged, to discriminate in favour of their affiliated OTT services. Rogers' claim regarding the nascent character of the marketplace, however, does not square with many statements made by the Respondents to the effect that mobile video has already exploded, as illustrated by materials from two of the respondents excerpted below.

25 26

Rogers, A10. Rogers, A10.

Page 8 of 14

Reply Comments of PAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

Rogers, Press Release, 17 April 201427

Rogers flips the switch on 700 MHz spectrum to deliver the ultimate video experience to customers April 17. 2014

VANCOUVER, CALGARY, TORONTO, April 17, 2014 /CNW/ - Rogers customers can now access the Internet and stream video deep Into buildings, basements and elevators thanks to the launch of 700 MHz spectrum in select Vancouver, Calgary and Toronto communities earlier today. Consumer demand for mobile video is exploding with video consumption on smartphones and tablets growing by more than 700 per cent In the past three years., A recent study shows three out of four Canadians stream a video on their smartphnne or tablet and almost one in five do it daily.2 While sports represent a significant share, Canadians also love their YouTube videos. Topping the YouTube list of most popular videos In 2013 was Ylvis -The Fox reaching 395 million views?

Bell Press Release, 6 May 201428

BCE News releases

About BCE

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Investors 3 News & media

In the news S Bel insuel !Crary

Responsibility

Governance

Erred alerts sign-up

Henn • Hews IS med.. Heys ukases

News releases BCE reports First quarter 2014 results 17riS news release contains fonvollsofung statement,. Fore descriolton et" the re'ated &doctors end assuraetions pram see the smear' enhfleti "Catlion Contently Fonvantleolting Sbitemonts" later m Hes release. • BCE Q1 net earnings attributable to contemn shareholders grow 8.7% to 3615 million; Adjusted net earnings per share of S0.81, up 5.2% • Free cash flew up 6.1% to 3262 mance on 4.1% higher Bell EMMA • grasp Belt Wireless service revenue growth 014.7% Supported by 3.5% increase in blended AWL). Wives 7A% higher EMMA n ada's Mobile TV leader with 1.335,000 subscribers, up 6/% year over yea r

32. Later on in the Bell press release, Bell gave more details: "Industry-leading Bell Mobile TV reached 1,335,000 subscribers in Q1 2014, up from approximately 800,000 at the same time last year. Mobile TV video streams 27

Rogers, "Rogers flips the switch on 700 MHz spectrum to deliver the ultimate video online: 2014), April (17 customers" to experience http://about.rooers.com/About/Media Relations/News/14-0417/Rogers flips the switch on 700 MHz spectrum to deliver the ultimate video exp erience to customers.aspx (emphasis added).

"BCE reports first quarter 2014 results" (6 May 2014), online: http://www.bce.ca/newsand-media/releases/show/bce-reports-first-ouarter-2014results?paoe=1&perpaqe=10&year=&month=&kevword=, (emphasis added).

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Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

grew 22.5% in Q1 to more than 10.6 million, which included major events like the Super Bowl and Sochi 2014."29 33. Clearly the vertically integrated companies are doing very well in attracting customers to their affiliates' OTT services â&#x20AC;&#x201D; but even if they were not they would not be justified in preferential treatment. The ends (competing with foreign providers) do not justify the means (undue preference and unjust discrimination). It is also irrelevant that some or all of the vertically integrated companies are unduly preferring their own affiliate's service or unjustly discriminating against customers who wish to consume competing OTT content. 5. Assertions with no support 34. Rogers invites the Commission to find that the lack of any interventions in this proceeding from any Canadian or foreign content provider, such as the CBC or National Film Board, should be taken as support for the billing practices at issue. 35.Rogers states: "Clearly, the reason for their absence from this public proceeding is that they do not view a mobile television service like RAP-TV as a threat to their business models and have concluded that these mobile services are not having any adverse impact on them." 30 36.This is an objectionable assertion, and the Commission should reject it as being pure conjecture. The assertion is also irrelevant. The Commission should not accept lack of intervention in a proceeding such as this one as anything other than that fact â&#x20AC;&#x201D; it should not be taken as support for the behaviour at issue. 37. Rogers also states that "[t]here is certainly no evidence that competing content providers have been materially harmed by the data usage charges for the RAP-TV mobile service."31 Similarly, Bell claims that "in order to justify such a claim [that Bell's Mobile TV service is anti-competitive towards OTT

30 31

"BCE reports first quarter 2014 results" (6 May 2014), online: htto://vvww.bce.ca/newsan d-me dia/releasests howThce-repo rts-first-a ua rter-2014results?pacie=l&perpaqe=10&vear=&month=8,kemord=. Rogers, Al 0 at 14. Rogers, Al 0 at 14.

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Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

content] one would have to demonstrate the Bell Mobility's practice results in a substantial lessening of competition ."32 38.1n response, we note that the very evidence Rogers and Bell suggest is lacking on the record exists in their interrogatory responses. As illustrated by the interrogatory responses, the Respondents' customers incur significantly greater data usage charges to consume video content from non-affiliated services than they do from the service affiliated with the wireless service provider. 39.1n addition, we note how the Canadian Network Operators Consortium Inc. ("CNOC"), in both of its interventions, registered specific concerns. In its supplementary intervention, CNOC stated: In CNOC's first submission to this proceeding, it noted that the threat of selective data caps may not be limited to conduct by Bell Mobility or to carrier practices within the wireless realm. Indeed, the CAC-COSCOPIAC Applications identify two further instances of this conduct from major carriers: Rogers' assigns favorable wireless data caps to its Anyplace TV service while Videotron does the same for its illico.tv service. This constitutes compelling evidence of an emerging trend among incumbents to adopt these types of practices.

An incumbent's practice of applying separate and more attractive bandwidth caps to services which primarily deliver content from its vertically integrated broadcasting affiliates clearly places competitors in the relevant markets at an undue disadvantage. This creates a situation whereby incumbents profit from an economic advantage associated with preferential bundling of Internet, video (and telephony) services that cannot be replicated by competitors.33

40. Bell, Rogers and Videotron are penalizing customers who might prefer to view the OTT services of competitors over their own offerings. We also submit that in so doing, Bell, Rogers and Videotron are making access to these consumers considerably more difficult for providers of competing OTT services. This harms competition. 41.1n any case, Bell has, wrongly (and for a second time in this proceeding), posited a test for undue preference that looks to a "substantial lessening of competition", and fails to consider, as required, the broader public interest.

32 33

Bell Mobility(CRTC)4Apr14-10 Klass. Intervention of CNOC, 5 March 2014 at paras. 4-5.

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Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

42. It is not clear from where Bell has pulled this test, whether it is the abuse of dominance provisions under Section 79 of the Competition Act34, or the Commission's Essential Services Framework35 or a prior attempt to introduce this test elsewhere. In any event, Bell's approach would impose an additional requirement in relation to findings of undue preference or unjust discrimination in Commission proceedings. 43.We note though that the Commission has consistently taken a case-by-case, contextual approach to the construction of the undue preference prohibition. As the Commission noted in Broadcasting Decision 2002-299, "The Commission's assessment of whether or not a preference is undue or a discrimination unjust has always been made in the public interest." 36 In our view, the Respondents have not shown that their practice of preferring their respective affiliates to the detriment of their customers and competitors is in the public interest. 44. Bell's attempt to interpose a "substantial lessening of competition" test onto applicants should be rejected. 45. Recent articulations of the undue preference prohibition, under each of the Telecommunications Ace' and the Broadcasting Act / Digital Media Exemption Order illustrate that the onus to demonstrate that discrimination is 34 35

36 37

Competition Act (R.S.C., 1985, c. C-34). Telecom Decision CRTC 2008-17 - Revised regulatory framework for wholesale services and definition of essential service (3 March 2008) at para. 31. Videotron !tee, CF Cable TV Inc., Videotron (Regional) Ltd., Videotron (RDL) Itee, TeleCable Charlevoix (1977) inc. (9 October 2002) (emphasis added). Telecom Decision CRTC 2013-99 - Al!stream Inc. â&#x20AC;&#x201D; Application regarding Bell Canada's

and Bell Aliant Regional Communications, Limited Partnership's Competitor Digital Network services (28 February 2013) at para. 15: 15. The Commission notes that pursuant to subsections 27(2) and 27(4) of the Act, it has the authority to address circumstances of unjust discrimination and undue or unreasonable preference or disadvantage in relation to the provision of telecommunications services by Canadian carriers. The burden of proof is on the respondent to an application to establish that any discrimination is not unjust or that any preference or disadvantage is not undue or unreasonable. 38

Broadcasting Decision CRTC 2012-442 - Complaint by Stingray Digital Group Inc. against the Canadian Broadcasting Corporation alleging undue preference and disadvantage, contrary to the provisions of the New Media Exemption Order (17 April 2012) at paras. 23-25: 23. When examining a complaint alleging undue preference or disadvantage, the Commission must first determine whether an undertaking has given a preference or subjected another person to a disadvantage. If the Commission

Page 12 of 14

Reply Comments of PIAC et al. Commission File No. 8622-692-201316646 12 May 2014 Intervention

not unjust rests squarely with the respondent. Thus, the burden rests with the respondents Bell, Rogers and Videotron. As described above, PIAC et al. submit that the respondents' justification for differential billing practices is weak and that they have not met this burden. 46.1n Rogers' interrogatory responses, Rogers points to Section 3(1)(t)(ii) of the Broadcasting Act, which sets out the policy objective of encouraging efficient delivery of programming at affordable rates. Yet neither Rogers, nor the other respondents, acknowledge that differential pricing and treatment of OTT content discourages consumers from choosing competing services, thus impairing competition in mobile TV. 47. In the final submission of PIAC et al., there is no basis in communications law â&#x20AC;&#x201D; under either the Telecommunications Act or the Broadcasting Act or rules adopted under either - for distinct and differential pricing for mobile TV services which significantly disadvantages competing services offered by entities that are unaffiliated, and the Respondents have not met their burden of demonstrating that their practices are not undue or unjust.

6. Conclusion 48.1n our view, as stated in our Supplementary Intervention, the undue preference provisions under the Telecommunications Act, Broadcasting Act regulations and Digital Media Exemption Order prohibit a service provider from entering into preferential arrangements with an affiliate that create price barriers to protect such affiliate from competition or that subject the service provider's own customers to a disadvantage when they attempt to consume a competitors services. finds that a preference has been granted or a person has been subjected to a disadvantage, it must then determine whether, under the circumstances, that preference or disadvantage is undue. 24. In order to determine whether a preference or disadvantage is undue, the Commission examines whether the preference or disadvantage had, or could have, a significant adverse effect on the applicant or any other person and the effect that the preference or disadvantage had, or will have, on the achievement of the Canadian broadcasting policy objectives set out in the Act. Under the New Media Exemption Order, once an applicant has 25. demonstrated that a preference has been granted or that a person has been subjected to a disadvantage, the burden of demonstrating that such preference or disadvantage was not undue rests with the undertaking having granted the preference or having subjected another person to a disadvantage.

Page 13 of 14

Reply Comments of PIAC et al. Commission File No. 8622-B92-201316646 12 May 2014 Intervention

49.The Respondents' evidence demonstrates that they are engaged in preferential treatment and pricing of data for their affiliated mobile TV services. Their justifications for this preference and discrimination competitive necessity and the goal of promoting mobile video consumption belie the great interest in consuming mobile TV that Canadians have been showing. 50. PIAC et al. therefore continue to recommend that the Commission immediately prohibit the differential treatment of mobile TV services for billing purposes, on the basis that this constitute an undue preference and unjust discrimination. ***END OF DOCUMENT***

Page 14 of 14

Tab J

Benjamin Klass Box 22, Whiteshell Post Office West Hawk Lake, MB, ROE 2H0 Mobile 204-998-2983 Email benjiklass@hotmaiLcom benklass.wordpress.com

Submitted via GC-Key

This is Exhibit

May 12, 2014 Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, ON KIA oN2 Dear Mr. Traversy,

,~. jeferrEd

ka'b

affidavit of sworn before me, this day of AS

Jane .r, ,,,A9higb ri. , meIDAwri Province of Ontario, for McCarthy 'Matt LIP, Barristers and Solicitors. Expires June 18, 2016.

Re: Part 1 Application by Benjamin Klass requesting the fair treatment of Internet Services by Bell Mobility and Part 1 Applications by CAC-COSCO-PIAC regarding Rogers' Anyplace TV service and Videotron's Illico.tv Service CRTC File #8622-B92-201316646 Pursuant to the Commission's procedural letter dated January 31, 2014, please find in this document my final reply comments to the above-noted proceeding. I am in receipt of the supplementary interventions from the March 5 phase of this proceeding, as well as the interrogatory responses from Bell, Rogers, and Videotron.

Page 1 of 11

Table of Contents Introduction

Page 3-5

Summary of Arguments

Page 6-7

Bell Mobile TV

Page 7-8

Rogers Anyplace TV

Page 8-10

Conclusion

Page 10-11

Page 2 of 11

Introduction 1. I am writing to you today to discuss a problem. It is a problem which affects the millions of Canadians who subscribe to services from Bell Mobility, Rogers, and Videotron, if not more.' It is a problem that, over the course of this proceeding, the respondents have chosen to ignore, deny, and deflect, rather than attempt to explain or justify. This problem requires consideration of the broadcasting system,2 but it is not in essence about broadcasting. It is about the Internet. This is a problem that affects the public in general, as the respondents control infrastructure3 widely relied upon for mobile access to the Internet, and therefore the manner in which they carry on business is affected with the public interest.4 In fact, I brought this problem to the Commission's attention in part because Bell, a company whose works are supposed to be "for the general advantage of Canada",5 is not only part of the problem, but declared its contribution seemingly with pride to the media this past summer.6 2. The problem at issue is that the vertically integrated wireless carriers are unduly and disproportionately restricting Canadians' freedom to use the Internet, despite having no legitimate reason to do so. In 2009, the Commission stated that "[alt the core of the debate over "net neutrality" is whether innovation will continue to come from the edges of networks, without permission." It asked "Will there continue to be rapid and uncontrolled innovation in computer communications? Will citizens have full access to that

have recently learned that a company called Sogetel Wireless is also offering a mobile TV product similar to the one offered by Bell et al. See: hty://www.sogetel.com/mobilite/options "Tele Mobile".

Pursuant to section 28 of the Telecommunications Act, "The Commission shall have regard to the broadcasting policy for Canada set out in subsection 3(1) of the Broadcasting Act in determining whether any discrimination is unjust or any preference or disadvantage is undue or unreasonable in relation to any transmission of programs, [...) through the 2

terrestrial distribution facilities of a Canadian carrier..." 3

Although licenses are issued for the exclusive use of particular bands of radio frequencies ("spectrum"), these

frequencies constitute a resource which remains public property.The carriers acknowledged this last summer when they ran an ad campaign arguing that "like water, Canada's airwaves are a limited, precious natural resource." See also: Taylor, Gregory, "Oil in the Ether: A Critical History of Spectrum Auctions in Canada," Canadian Journal of Communication, Vol 38(1). 2013. " Denton, Timothy, "Opinion of Commissioner Timothy Denton, Dissenting in Part", Appendix to Telecom Decision CRTC 2010-632, "Wholesale high-speed access services proceeding", Ottawa, 30 August 2010. 5

Bell Canada Act, S.C. 1987, c.19, section 5.

See: Klass application of November 20, 2013, paragraph 13.

Page 3 of 11

innovation?"7 The present proceeding concerns whether the wireless carriers should, at their sole prerogative and by virtue of their gatekeeper status, be allowed to pick winners and create losers in the evolving sphere of mobile broadband content and applications. I argue that they should not. 3. The Commission went on to note in the ITMP framework that "due to the limited capacity of their networks, carriers have legitimate interests in the management of these networks."8 The wireless carriers are permitted to apply economic Internet traffic management practices (otherwise known as "usagebased billing" or "data caps") to curtail Canadians' use of an otherwise unlimited information resource only because it is believed that such an interest is legitimate, i.e. that traffic management is necessary and proportionate to the task. The record of this proceeding shows that, as I argued in my application of November 20, 2013, this may no longer be the case, or at least that the measures used to restrict Internet use are not proportionate to available capacity.9 4. The carriers have indeed developed "networks that can bear the traffic generated by this innovation",'0 and they, in turn, have been "empowered to innovate", as is shown by the rapid deployment of LTE networks and the availability of cutting-edge mobile devices. The fact that the respondents now have the capacity to offer discounted access to the very same networks that provide access to the rest of the public Internet" when used to view their own over-the-top services demonstrates that this is true, regardless of how the mobile TV services are legally classified. However, if capacity is sufficiently abundant to support the common carriage of, among other things, carriercontrolled mobile TV services, then by definition so too can all Internet traffic be borne without fear or worry. This shows that differential economic treatment of data traffic based on its source cannot be within the legitimate interests of carriers to manage network traffic. Therefore, by reserving this discounted access exclusively for their own walled gardens, the carriers are unjustly discriminating against their competitors and unduly favouring themselves and customers of their mobile TV services. 5. The fact that the carriers' mobile TV services are subject to favourable application-specific ITMPs is not justified by any argument on the record. It has been shown that Bell's Mobile TV, Rogers' mobile Anyplace TV, and Videotron's illico are OTT services just like any other; they are accessed over 7

CRTC, TRP CRTC 2009-657, "Review of the Internet traffic management practices of Internet service providers",

October 21, 2009. Also, TD CRTC 2010-445. 8

ibid.

Klass application paragraph 44. See also: Vaxination comments of Jan 9, paragraph 9.

Klass application, paragraphs 37-41; Rogers response to interrogatory question 3; Bell answer, paragraph 14,

section 3(1 }(d)(iv). 11 Bell

interrogatory response #7(c&d}, Rogers interrogatory response #8(c&d), Videotron interrogatory response

#10(c&d)

Page 4 of 11

the Internet on mobile devices, just like competitors' services;12 they are interconnected to the public Internet;13 and they do not employ managed delivery or dedicated capacity.14 Refusal by Bell to acknowledge that there is a preference in the first place,15 or arguments by Rogers that the preference which they confer upon themselves is not undue,16 do not constitute a reasonable excuses for these practices. Further, the ITMP framework provides that: 6. "When an ISP is responding to a complaint regarding an ITMP it has implemented, it will use the ITMP framework. In doing so, the ISP shall: 7. Describe the ITMP being employed, as well as the need for it and its purpose and effect, and identify whether or not the ITMP results in discrimination or preference. 8. In the case of an ITMP that results in any degree of discrimination or preference: 9.

demonstrate that the ITMP is designed to address the need and achieve the purpose and effect in question, and nothing else;

establish that the ITMP results in discrimination or preference as little as 10. reasonably possible; demonstrate that any harm to a secondary ISP, end-user, or any other person is 11. as little as reasonably possible; and explain why, in the case of a technical ITMP, network investment or economic 12. approaches alone would not reasonably address the need and effectively achieve the same purpose as the ITMP."17

13.I submit that none of the respondents have satisfied these criteria. Additionally, no respondent has satisfied the reverse onus provisions of subsection 27(4) of the Telecommunications Act, nor the similar provision found in the Digital Media Exemption Order. 14.In light of the evidence on the record, including arguments put forward by myself, CAC-COSCO-PIAC, CIPPIC, CNOC, Bragg Communications, Vaxination Informatique, Dr. David Ellis, Steven May, Dr. Fenwick McKelvey, and Theresa Murphy, I reiterate my request for the Commission to prohibit the use of application-specific ITMPs for the purpose of providing unduly preferential access to mobile TV services, or more generally to prohibit differential pricing based on application when those applications make use of undifferentiated/common facilities. 12

Rogers interrogatory response #11, Videotron interrogatory response #13

As demonstrated by the fact that these services are accessible over Wi-Fi enabled wired internet connections

provided by competing 1513s. 14

supra note 11.

Bell answer paragraph 2.

Rogers comments, paragraph 4.

CRTC, TRP CRTC 2009-657, paragraph 43.

Pag e 5 of 11

Summary of Arguments

15.During the course of this proceeding, two main lines of argument have been put forward by the respondents Bell and Rogers, respectively, while Videotron appears to have reconsidered its approach: 16.A.) Bell argues that it "operates two separate "undertakings" and has two separate legal statuses in this case. When providing its Bell Mobile TV service, it is a license-exempt "broadcasting undertaking" providing a broadcasting service. Whereas, when providing wireless Internet access services through which consumers access data including OTT programming services, it is a TCC providing a telecommunications service"18 Therefore, Bell argues, "allegations of undue preference under section 27(2) of the Telecommunications Act are legally and jurisdictionally inapplicable to the Bell Mobile TV broadcasting service" and "the Commission's ITMP Framework [...] cannot be applied to Bell Mobile TV."19 17.B.) Rogers argues that "any preference or disadvantage that may result from Rogers' billing practices for the RAP-TV mobile service is not undue"2째 based on the assertions that "the emerging market for online video content is characterized by rivalrous behaviour and is robustly competitive" and that "Rogers' billing practice for the RAP-TV mobile service actually contribute to the achievement of the broadcasting policy objectives set out in the Broadcasting Act by ensuring that more Canadian programming is accessible to Canadian consumers online and through their mobile devices."21 18.C.) Videotron, for its part, appears to have partially changed course with regard to its treatment of the illico service. For the iPhone version of its service, Videotron claims to have removed the application-specific data cap and has additionally made the service available to customers of other WSPs. It states: "Application illico mobile pour iPhone : Les depenses du client dependent des modalites de son forfait avec son fournisseur de services mobiles et de son choix de visionner ou non ces contenus en mode WiFi."22 and "Application illico mobile pour iPhone : Un client abonne seulement au service illico tele (c'est-a-dire qui n'est pas abonne au service de telephonie mobile de Videotron) pent neanmoins acceder a l'application illico mobile sans egard a son fournisseur de services mobiles."23

Bell answer, paragraph 23.

Bell answer, paragraph 29.

Rogers comments, paragraph 4. Also: The nineties called, they want the name RAP-TV back.

ibid.

Videotron interrogatory response #4

23 Videotron

interrogatory response #2

Page 6 of 11

19. Videotron additionally notes that it is seriously considering similarly altering the mode of service for its Android and Blackberry users when it states: "Nous soulignons egalement que Videotron &value serieusement la possibilite de modifier son application illico mobile pour Android et Blackberry de fawn a ce qu'elle fonctionne de la meme maniere que son application illico mobile pour iPhone."24 This situation should be monitored closely to ensure compliance with any future Commission decision on the matter. Bell Mobile TV

2o.In its response to the Commission's interrogatory questions, Bell classifies its mobile TV services as a "mobile BDU" in an attempt to create a false dichotomy between its own service and the OTT services of its competitors. It states "OTT providers such as YouTube, Netflix, or Bell-owned providers such as www.ctv.ca or www.tsn.ca are DMBUs and fall under the first means of distribution (broadcasting services delivered and accessed over the Internet). [...] On the other hand, Bell Mobile TV is a mobile BDU which is also a DMBU but it falls under the second means of distribution (broadcast services delivered using point-to-point technology and received by way of mobile devices)."25 21.I am not aware of any statutory definition of "mobile BDU." According to the Broadcasting Act, a distribution undertaking "means an undertaking for the reception of broadcasting and the retransmission thereof by radio waves or other means of telecommunication to more than one permanent or temporary residence or dwelling unit or another such undertaking".26 This definition does not appear to contemplate an undertaking which delivers services to mobile devices. If there is such a category as "mobile BDU," it has been created by Bell has created at its sole discretion and it has no official legal standing. 22.Bell goes on to state that "Mobile TV is a broadcasting service whereas other apps such as Netflix, YouTube, or CTV News Go are over-the-top (OTT) services which rely on the Internet for the distribution of their services. In other words, the fact that the service is accessed through an "app" does not alter the fact that a broadcast service is a broadcast service or an Internet service is an Internet service."27 This convoluted statement does not constitute an answer to the Commission's interrogatory requiring Bell to "[e]xplain how Bell Mobility subscribers are not subject to an undue preference in regard to their data usage when they access the Bell Mobile TV app."28

Videotron interrogatory response #1

Bell interrogatory response #7

Broadcasting Act, subsection 2(1). Emphasis added.

27 Bell interrogatory response #9 28

CRTC Interrogatory to Bell, question 9a.

Page 7 of 11

23.Bell's response appears to be disingenuous insofar as it neglects to mention that the categories of "broadcasting service" and "Internet service" are not mutually exclusive. Bell Mobile TV is a broadcasting service, as acknowledged in my initial application,29 and like other broadcasting services it is delivered over the Internet. Similarly, the competing services which Bell mentions are also broadcast services delivered over the Internet. As described in my supplementary intervention of March 5, the distinction which Bell attempts to conjure does not exist from the consumer's perspective,3째 nor from any other perspective other than that of Bell. Consistent with the Reference re:Broadcasting, an ISP which provides access to broadcasting services over the Internet is not itself a broadcaster, but acts solely in the capacity of a common carrier. Therefore the means by which Bell Mobile TV is delivered to customers is a telecommunications service subject to the Telecommunications Act and rules and regulations thereunder, and the preferential terms under which the service is delivered are clearly undue. 24.Even Rogers and Videotron acknowledge that the mobile TV services in question are delivered over the Internet.31 This is significant, particularly in the case of Rogers, since Bell and Rogers both utilize the same solution provider ("Quickplay Virtual Set Top Box")32 for their mobile TV content services. It strains credibility to believe that differently branded services which utilize the same underlying technical solutions could be considered an Internet service when delivered by one provider and not an Internet service when delivered by another. In fact, the use of CDNs by both services lend further credence to the similarities between carrier-branded and competitors' OTT services, as it is well known that companies such as Netflix and YouTube make liberal use of such technologies. Rogers Anyplace TV 25. Unlike Bell, Rogers acknowledges that its mobile TV service is delivered over the Internet, and that it is treated with a preference, although it contests that this preference is undue.33 In so doing, it deploys a number of rhetorical arguments, but on the measure of factual evidence its claims fall short. 26.First, as a matter of precision, Rogers deploys an argument in its comments of March 5 which insinuates that under subsection 27(2) of the Telecommunications Act the burden for establishing whether a preference is undue or a discrimination unjust is that a competitor must be placed at a "substantial disadvantage in the marketplace".34 Rogers cites Telecom 29

Klass application, paragraphs 14-20.

3째

Klass supplementary intervention, paragraphs 8-11.

31 supra

note 12.

Rogers interrogatory response #8, Bell interrogatory response #7

supra note 21.

Rogers Comments, paragraph 21.

Page 8 of 11

Decision CRTC 92-5, dated April 3, 1992, as support for this position. I feel obliged to point out that, not only is Rogers' interpretation of 27(2) incorrect in this instance, but the quoted phrase does not appear in that decision, nor does that decision refer to subsection 27(2), as the Telecommunications Act did not exist in 1992. As such, any argument which relies on this logic should be considered spurious and dismissed by the Commission. 27. More to the point, Rogers argues that its "wireless subscribers are not granted an undue preference in regard to their data usage when they access the RAP TV app using the Rogers wireless network. While Rogers understands why some might argue that the RAP-TV mobile service is being offered to wireless subscribers in a manner that constitutes a preference, it is clear that even if there is such a preference, it does not reach the level of being undue.35" 28.In support of this argument, Rogers claims that "Mobile television is at a nascent stage in its development" and that "Today, very few consumers actually use their mobile devices to watch significant amounts of full-length video content."36 This statement stands in stark contrast to the press release issued by Bell last summer announcing Bell Mobile TV's millionth customer. Additionally, it was nearly :to years ago that Rogers and Bell began offering mobile TV services using a solution provided by the Reston, Virginia firm MobiTV.37 It is clear that, at that time, mobile TV services were in a nascent state. The same cannot be accurately said today. It appears rather that Rogers is using an advantage not available to its competitors in order to direct customers toward its own mobile video service, so that "[o]nce a sizeable number of customers regularly use mobile devices to access and watch video content, the fees [Rogers] charge for a service like the RAP-TV mobile service will match that growing demand."38 29.Further, Rogers argues that le]ncouraging Canadian consumers to access video content from Canadian WSPs is entirely consistent with the policy objectives underlying the Broadcasting Act (the Act). In our view, the objectives of the Act are, in fact, furthered by this strategy because mobile TV services provide Canadian consumers with the ability to access a broad variety of Canadian programs that are not widely available through other on' service providers, like Netflix and Google TV."39 "As such", Rogers claims, "our offering would not constitute an undue preference or disadvantage under the Act."4Â° This argument ignores the preference vis-Ă -vis the ITMP framework,

Rogers interrogatory response #10

ibid.

BPN CRTC 2005-82.

Rogers interrogatory response #10.

ibid. To my knowledge, Google TV is not available in Canada.

ibid.

Page 9 of 11

instead favouring an approach which is clearly intended to be considered pursuant to section 28 of the Telecommunications Act. 3o.There are two relevant factors which cast doubt on this argument. First, although Rogers touts the purported benefits of its service in relation to the broadcasting policy objectives, it offers no quantifiable evidence to demonstrate the magnitude of these benefits. When asked to "describe the specific costs (e.g. content rights and/or data usage) that are being recovered" by the RAP-TV fees, Rogers deflects by responding that "[t]he fees we charge for the RAP-TV mobile service were not established to recover the specific costs associated with delivering this content, such as those related to the underlying content rights or the significant fixed costs we have incurred to provision our wireless network in the first place."41 Without information on the financial contribution Rogers makes to the programming sector through RAP-TV, how is the purported benefit of providing this content to be weighed against the downside of the continued imposition of restrictive data caps on all other Internet use? 31. Secondly, it strikes me that Rogers provides no good reason as to why it doesn't extend the benefit of more generous data caps to all Canadian content, or all Internet use for that matter, rather than just its own mobile TV service. Such an approach, described in my initial application,42 would have the dual benefit of allowing Canadians more liberal access to the Internet using available resources, and at the same time Rogers could benefit by reaching a broad audience by competing on a level playing field. There is simply no good reason to reserve the benefit of available network capacity exclusively for one particular application, to the exclusion of all others. Conclusion

32.As Dr. Ellis points out, "In the ITMP framework, the Commission recognized that "[g]overnments around the world are taking actions intended to establish the Internet as a fundamental part of society and a preferred means by which citizens engage with one another".43 33.Today, the boundaries of a neutral Internet are being tested in the United States, in Europe, around the globe. Although different locales face unique challenges and the outcomes of disputes such as that which is occurring between Netflix and Comcast in the States are uncertain, citizens around the world remain united in their commitment to an open, global Internet for the benefit of all. Rogers interrogatory response #3 Emphasis added. This argument also fails to consider that there is no shortage of Canadian content available on the Internet already. 41

Klass application, paragraph 103-115.

Ellis comments, paragraph 17.

Page 10 of 11

34. Canada's own ITMP framework is being tested in this proceeding. In that framework, the Commission was of the view that "the outcome of this proceeding must be the establishment of an appropriate balance between society's interest in innovation in computer communications and its equally legitimate concern regarding the rights of carriers to manage the traffic thus generated."44 I hope that the record of this proceeding has provided the Commission with the information it needs to maintain that balance. All of which is respectfully submitted, Benjamin Klass

***END OF DOCUMENT***

CC: CRTC Distribution List, April 4, 2014 Nora Froese (via email) Chris Seidl (via email) Julie Boisvert (via email) Mario Bertrand (via email)

CRTC 2009-657, paragraph 9

Page 11 of 11

Tab K

Bel File No. 8622-B92-201316646 2014 08 21

To:

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario KlA ON2

Subject:

Application by Benjamin Klass requesting the fair treatment of Internet services by Bell Mobility (Klass application) and applications by CAC-COSCOPIAC regarding Rogers' Anyplace TV service and Videotron's Illico.tv Service — Responses to Request for Information

Dear Mr. Traversy, Pursuant to the procedures set out in a Commission staff letter dated 5 August 2014, 1. attached are Bell Mobility's responses to requests for information. Certain information contained in the responses to request for information is being 1. provided in confidence to the Commission pursuant to section 39 of the Telecommunications Act and the directions provided by the Commission in the Appendix to Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, dated 23 December 2010, as amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1, dated 26 October 2012. This information consists of network and commercial information consistently treated as confidential, the disclosure of which may result in material financial harm to us. Abridged versions are being provided for the public record. This is Exhibit

Yours truly,

affidavit of

f Original signed by P. Gauvin

t zeferred

41(\cv

to inthe

---je

sworn beforee, this

Philippe Gauvin Senior Counsel - Regulatory Law & Policy

day of

611.1111.0-11210011111

...........1001.1•••

Attachments ZWER

c. c.:

Distribution List as per CRTC letter dated 5 August 2014 Nora Froese, CRTC Julie Boisvert, CRTC Mario Bertrand, CRTC *** End of Document ***

Bell Canada Philippe Gauvin Floor 19 160 Elgin Street Ottawa, Ontario K2P 2C4 Facsimile: (613) 560-0472 bell.regulatorvbell.ca

awe,

Province of Ontario, for McCarthy T6trault LLP, Barristers and Solicitors. Expires June 18, 2016.

Bell Mobility Inc. 21 August 2014 Page 1 of 1

Response to Request Bell Mobility(CRTC)5Aug14-1 Klass

Given that you have indicated in your submissions that the Mobile TV App operates under the terms of the Digital Media Broadcasting Undertaking Exemption Order, it would appear that you would be unable to make use of the retransmission regime set out in the Copyright Act. In light of this, please describe in detail the following: a.

Which rights you obtain to broadcast live television channels on Mobile TV App; and

Whether subscribers to Mobile TV App receive any local, regional or distant channels, and if so how you determine what constitutes local, regional or distant for that subscriber.

We confirm that Bell Mobile TV operates under the terms of the Digital Media Exemption Order and as such, we do not use the retransmission regime set out in section 31 of the Copyright Act. Consequently, Bell Mobility negotiates the non-exclusive, non-transferable distribution rights for its mobile broadcasting distribution undertaking service with each content rightsholder in order to broadcast television channels to mobile devices. Specifically, we negotiate for the right to distribute the content to our end-users and to authorize our end-users to access and use the content on their Mobile Device(s). In some cases where the programming undertaking does not itself have the mobile distribution rights for a given program, "blackouts" are performed for that program and no content is shown.

The channels distributed on Bell Mobile TV are not classified as local, regional or distant given that Bell Mobility is operating under the Digital Media Exemption Order.

We negotiate directly with the content owner to determine which

television channels and programs will be offered to subscribers of Bell Mobile TV as described above in response to part a). However, programming may change slightly based on the location of the subscriber as further described in Bell Mobility(CRTC)5Augl 4-4 Klass.

*** End of Document ***

Bell Mobility Inc. 21 August 2014 Page 1 of 5

Response to Request Bell Mobility(CRTC)5Aug14-2 Klass

Please provide a list of each programming service offered as part of the Mobile TV App, listing for each service: 1) the owner of the service; 2) whether the service is available only if the user of the Mobile TV App is also a subscriber of the BDU and to the particular programming service; and 3) whether i) the linear feed is distributed directly to users; ii) the linear feed is cached and streamed in near real time to users; iii) the service offered is video on demand; or iv) the programming is of a different nature than the above (specify).

In our response to Bell Mobility(CRTC)4Apr14-1 Klass we referred to a certain subset of channels as being "Live" channels and other channels as being "On Demand". As likely hinted at by Commission Staff through this question, where we referred to programming as "live" we actually meant that it was "linear" programming and not necessarily "live" as in a live news broadcast. We apologize for this inadvertent error and have corrected our tables below.

With regards to the means of distribution, it is not clear to us what the Commission would consider a "linear feed distributed directly to users" versus a "linear feed that is cached and streamed in near real time to users". Just like Fibe TV may rely on microcaching in various network components for the distribution of a linear feed, so may Bell Mobile TV. Some caching may also occur on the user's mobile device as it creates a "buffer" to avoid any "hiccups" in the transmission. For clarity, linear feeds are in real time or near real time and any delay between a linear feed on Bell Mobile TV and the equivalent feed on Fibe TV or another broadcasting distribution undertaking's (BDU's) TV service would be measured in seconds. We do not currently offer programming of a different nature than linear feeds or video on demand over Bell Mobile TV.

As we had indicated in our response to Bell Mobility(CRTC)4Apr14-1 Klass, a Bell Mobility customer that is not a Bell Fibe TV or Bell Satellite TV (collectively, "Bell Licensed BDU") customer can subscribe to Bell Mobile TV but by doing so can only watch channels which are available as part of the Bell Mobile TV service. These customers have access to the following channels:

Bell Mobility Inc. 21 August 2014 Page 2 of 5

Response to Request Bell Mobility(CRTC)5Aug14-2 Klass

Note: New content was updated since the last submission (indicated in blue font). Bell Mobility customer subscribing to Bell Mobile TV On demand Linear Programming 24. MTV 1. Accuweather 1. B4U Music (ATN) 25. NBA League Pass 2. CBC News Network 2. CBN (ATN) 3. City 26. NBA TV Canada 3. Cricket Plus (ATN) 27. RDI 4. Comedy Network 4. MH1 (ATN) 28. RDS 5. CTV 5. NDTV (ATN) 6. CTV Two 29. RDS2 6. Times Now (ATN) 7. CTV News Network 30. Sportsnet One 7. Zoom (ATN) 31. Sportsnet Ontario 8. ICI (formerly SRC) 8. Masti (ATN) 9. NBA TV Canada 32. Sportsnet Pacific 9. Food Food (ATN) 10. NBA highlights (seasonal) 33. Sportsnet East 10. Good Times (ATN) 11. V Montreal 34. Sportsnet West 11. BBC World News 12. TVO Kids 35. Treehouse 12. Bloomberg 13. Whitecaps highlights (seasonal) 36. TSN 13. BNN 14. CBC (Vancouver/Toronto) 37. TSN2 15. CBC News Network 38. TVA 16. City (Vancouver/Toronto) 39. TVO Kids 40. V Montreal 17. Comedy Time 18. CTV (Vancouver/Toronto) 41. YTV 19. CTV Two 20. CTV News Network 21. ICI (formerly SRC) 22. Juicebox 23. Leafs TV

A customer that subscribes to Bell Mobile TV that is also a Bell Licensed BDU customer can also access an additional subset of channels provided they subscribe to those channels via the Bell Licensed BDU and provided we have secured mobile distribution rights for that content. The following channels are available to such customers:

Bell Mobility Inc. 21 August 2014 Page 3 of 5

Response to Request Bell Mobility(CRTC)5Aug14-2 Klass

Bell Mobile TV subscriber who is also a Bell TV subscriber* On demand Linear Programming 1. 24CH 45. Hollywood Suite (Sony) 1. ABC East (Buffalo) 46. Meteomedia 2. A&E 46. Hollywood Suite (MGM) 2. ABC Spark 47. MTV 47. Hollywood Suite (Warner) 3. ABC Spark 3. Argent 48. MusiMax 4. Accuweather 48. ICI (formerly SRC) 49. MusiquePlus 4. CBN (ATN) 49. Investigation 50. NBA TV Canada 5. Addik 5. Cricket Plus (ATN) 6. Adult Swim 50. Kids Suite 51. NBA League Pass 6. Zoom (ATN) 7. AMC 51. Lifetime 52. NBC East (Buffalo) 7. B4U Music (ATN) 52. MOl&cie 53. Nickelodeon 8. American Heroes 8. MH1 (ATN) 9. ARTV 53. Movie Central/HBO 54. OWN 9. NDTV (ATN) 10. Bell Local 54. MusiMax 55. PBS East (Buffalo) 10. Times Now (ATN) 55. MusiquePlus 11. Bell Presents 56. radX 11. Masti (ATN) 12. Canal D 56. Nickelodeon 57. RDI 12. Food Food (ATN) 57. Oasis HD 13. Canal Vie 58. RDS 13. Good Times (ATN) 14. Cartoon Network 58. OWN 14. BBC World News 59. RDS2 59. Prise 2 15. Casa 60. Series+ 15. belN Sports 60. RDI 61. Sportsnet One 16. CBC 16. Bloomberg 61. Series+ 17. CBC News Network 17. BNN 62. Sportsnet Ontario 18. Cinepop 62. Showcase 63. Sportsnet Pacific 18. Canal D 63. Slice 64. Sportsnet East 19. City 19. Canal Vie 20. Club Junior 64. Super Channel 65. Sportsnet West 20. Cartoon Network 65. SuperEcran 21. Comedy Network 66. Teletoon 21. CBC 66. Teletoon 22. Comedy Time 22. CBC News Network 67. Teletoon (FRE) 23. Cottage Life 67. Teletoon (FRE) 23. CBS East (Buffalo) 68. Treehouse 24. CP24 68. Teletoon Junior 69. TSN 24. CHCH 25. CTV 69. TFO 70. TSN2 25. City (TOIVAN) 70. TLC 71. WA Sports 26. CTV Two 26. Comedy Time 27. CTV News Network 71. TMN/HBO 72. V Montreal 27. CP24 28. Disney Junior French 72. TMN Encore 28. CTV (VATTO) 73. VRAK 73. Travel + Escape 29. Disney Junior 74. W Network 29. CTV Two 30. Disney XD 74. Treehouse 30. CTV News Network 75. Weather Network 75. TVA Sports 31. Documentary 76. Wild TV 31. Disney Junior 76. TVO Kids 32. Encore Avenue 77. World Fishing French 77. V Montreal 33. Evasion Network '32. Disney Junior 34. Explora 78. Vision TV 78. Yoopa 33. Disney XD 79. VRAK 35. Family 79. YTV 34. Evasion 80. W Network 36. Food Network 35. Explora 80. WA 81. Wild TV 37. Galaxie Music 81. TVO Kids 36. Family Videos 82. Yoopa 82. Zeste 37. Fight Network 83. YTV 38. Global 83. Ztele 38. FOX East (Buffalo) 84. Zeste 39. Gusto 39. Global 85. Ztele 40. H2 40. Historia 41. Historia 41. ICI (formerly SRC) 42. History 42. Investigation 43. HGTV 43. Juicebox 44. Hollywood Suite 44. LCN (AXN) 45. Leafs TV Actual content available to the customer will depend on whether the customer has subscribed to the channel or not.

Bell Mobility Inc. 21 August 2014 Page 4 of 5

Response to Request Bell Mobility(CRTC)5Aug14-2 Klass

The following table indicates the broadcaster/owner of the channel (or service) for all channels identified above.

Broadcaster/Owner A&E Television Networks Accuweather Al Jazeera Media Network Allarco Entertainment

ATN

BBC America

Bell Media

Channel A&E Accuweather BeIN Sports Super Channel ATN - B4U Music ATN CBN ATN - Cricket Plus ATN - MH1 ATN NDTV ATN - Times Now ATN - Zoom BBC World News 24CH Bell Local BNN Canal D Canal Vie Cinepop Club Junior Comedy Network CP24 CTV (TorontoNancouver) CTV News Network CTV Two (TorontoNictoria) Investigation Juicebox Kids Suite MTV RDS RDS2 SuperEcran TMN Encore TMN/HBO

Broadcaster/Owner

DHX

Discovery Networks Inc. Fox Granite Broadcasting Corporation Group Serdy Group TVA

Hollywood Suite

Insight Sports Knight MLSE

101111111■1 11211131111■1 PBS Pelmorex Radio Canada Rainbow Media Remstar

Rogers Media

Channel Disney Junior Disney Junior French Disney XD Family American Heroes TLC FOX East (Buffalo) ABC East (Buffalo) Evasion Zeste TVA Sports TVA Hollywood Suite (AXN) Hollywood Suite (MGM) Hollywood Suite (SONY) Hollywood Suite (Warner) WFN Gusto Leafs TV NBA League Pass NBA TV Canada NBC East (Buffalo) NHL Mobile TV (Loop) PBS East (Buffalo) Meteomedia Weather Network ICI (formerly SRC) AMC MusiMax MusiquePlus V Montreal City (Vancouver/Toronto) Sportsnet East

Response to Request Bell Mobility(CRTC)5Aug14-2 Klass

Bell Mobility Inc. 21 August 2014 Page 5 of 5

Broadcaster/Owner

Bloomberg LP Blue Ant Media

CBC

CBS Channel Zero Comedy Time Inc

Corus

Broadcaster/Owner

Channel TSN TSN2 VRAK Ztele Bloomberg Cottage Life radX Travel + Escape ARTV CBC (Toronto/Vancouver) CBC News Network Documentary Explore RD! CBS East (Buffalo) CHCH Comedy Time ABC Spark Adult Swim Cartoon Network Encore Avenue Histona Movie Central/HBO Nickelodeon Series+ Teletoon Teletoon (Fr) Teletoon Junior Treehouse W Network YTV

Shaw

Stingray TFO

TVA

NO Wild TV Inc.

*** End of Document ***

Channel Sportsnet One Sportsnet Ontario Sportsnet Pacific Sportsnet West Food Network Global H2 HGTV History Lifetime OWN Showcase Slice Galaxie Music Videos TFO Addik Argent Casa LCN MOl&cie Prise 2 Yoopa TVO Kids (Loop) Wild TV

Response to Request Bell Mobility(CRTC)5Aug14-3 Klass Abridged

Bell Mobility Inc. 21 August 2014 Page 1 of 2

Please describe how the programming services included in the Mobile TV App were selected. Indicate whether changes to existing affiliation agreements were required in order for the services in question to be included, and if so, describe these changes. Specify whether the company pays a separate wholesale rate in order to provide the programming service on its Mobile TV platform.

The success of Bell Mobile TV is entirely dependent on our users' appreciation of the product. As such our programming is focused on meeting the needs of our customers, finding "gaps" in current programming and trying to fill those "gaps".

Overall, like in the case of our Bell Fibe TV or Bell Satellite TV (collectively "Bell Licensed BDU"), we are interested in having programming that is widely popular but at the same time that can appeal to certain segments of the market. Programming is accordingly selected based on a variety of requirements such as:

Filed in confidence with the CRTC:, Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, dated 23 December 2010, as amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1, dated 26 October 2012.

Bell Mobility Inc. 21 August 2014 Page 2 of 2

Response to Request Bell Mobility(CRTC)5Aug14-3 Klass Abridged

Bell Mobility secures mobile distribution rights either through the affiliation agreements that Bell Licensed BDU have with programmers or independently for Bell Mobile TV only. Almost all of the time, a separate wholesale rate is paid for mobile distribution rights but in no cases are these rights ever obtained for free. In all cases we secure the specific mobile distribution rights as indicated in Bell Mobility(CRTC)5Aug14-1 Klass. No changes to existing affiliation agreements are required where we secure the necessary rights through the affiliation agreements of which the Bell Licensed BDU is a party, since we negotiate mobile distribution rights upon renewal of such agreements.

krijed ii1Conficipriceyvith the CRTC.' *** End of Document***

Bell Mobility Inc. 21 August 2014 Page 1 of 2

Response to Request Bell Mobility(CRTC)5Aug14-4 Klass Abridged

Please indicate whether the programming services selection change i) depending on the region of the subscriber of the Mobile TV App (e.g. Ottawa, Calgary, Quebec City); ii) if the subscriber of the Mobile TV App is roaming within Canada; or iii) if the subscriber downloads the French or English version of the application. If so, provide details.

For the vast majority of our channels, there is no variation of content based on the geographic location of the user because we obtain national distribution rights from the broadcaster/content owner. However, in some instances it may vary. The following types of programs will change by region as required by the broadcaster/ content owner: live sporting events: implemented as a requirement of the content owners and regional broadcast rights.

inr-

regional specific channels: implemented by the broadcaster to offer more localized news, content and advertising (e.g. City Toronto vs City Vancouver). ii)

No, content selection will not change based on whether or not the user is roaming on another provider's network. That being said, as indicated above, in some instances content may vary based on geographic location.

FiTed-in cOnfidence with the CRTC.' Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting ifs disclosure in Commission proceedings, dated 23 December 2010, as amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1, dated 26 October 2012.

Bell Mobility Inc. 21 August 2014 Page 2 of 2 iii)

Response to Request Bell Mobility(CRTC)5Aug14-4 Klass Abridged

Bell Mobile TV functions will render in English or French language depending on the device language settings (e.g. if the user sets the device to French language, Bell Mobile TV will appear with a French language user interface and controls and vice versa for English settings). That being said, all Bell Mobile TV content is available to all users regardless of language.

*** End of Document ***

Response to Request Bell Mobility(CRTC)5Aug14-5 Klass

Bell Mobility Inc. 21 August 2014 Page 1 of 1

Please explain if and to what extent Bell Mobility purchases specific programming or programming rights for use in its Mobile TV App. If applicable, specify the programming services in question.

Bell Mobile TV does not generally secure content specific to Bell Mobile TV that is not otherwise available on Bell Fibe TV or Bell Satellite TV (collectively, "Bell Licensed BDU") with some rare exceptions such as NBA League Pass which is not currently available on Bell Licensed BDU. However, as mentioned in our responses to Bell Mobility(CRTC)5Aug14-1 Klass and Bell Mobility(CRTC)5Aug14-3 Klass, we must secure the mobile distribution rights, which are never free, and which in almost all cases results in a separate wholesale rate that is paid of those mobile distribution rights.

*** End of Document ***

Bell Mobility Inc. 21 August 2014 Page 1 of 1

Response to Request Bell Mobility(CRTC)5Aug14-6 Klass

Please indicate if it is possible for a Bell Mobility consumer to subscribe to the French and the English Mobile TV applications? if so, indicate whether the subscriber has to pay for those two Apps separately (for example, pay $5 for 10 hours of content on the French Mobile TV App and $5 for 10 hours of content on the English Mobile TV App)?

There is only one Bell Mobile TV application and language is determined by the language setting on the device or chosen by the user. There are no distinct English and French versions of the app. All content is made available to the subscriber regardless of the subscriber's language. Accordingly, the second question above is inapplicable.

*** End of Document ***

Response to Request Bell Mobility(CRTC)5Aug14-7 Klass Abridged

Bell Mobility Inc. 21 August 2014 Page 1 of 2 Q.

Provide the number of: a.

customers who specifically subscribe to the Mobile TV App on its own and not as part of a bundle or promotional plan;

customers subscribing to the Mobile TV App because it is included in a promotional plan or in a bundle;

subscribers (actual and projected), for each quarter of 2013, 2014 and 2015, that used (or will use), the Mobile TV App to view content;

Gigabytes consumed on average each month by a customer for the Mobile TV App.

Q2 2014 EOP stand-alone =

Q2 2014 EOP rate plans and bundles =

We do not currently have forecasting information for unique users per month that use (or will use) Bell Mobile TV (as opposed to subscribe to it). Nevertheless, we have indicated below the number of unique users per quarter that have actually used the service at least once in the quarter.

#Filed째in confidence

CRTC

Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, dated 23 December 2010, as amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1, dated 26 October 2012.

Bell Mobility Inc. 21 August 2014 Page 2 of 2

Response to Request Bell Mobility(CRTC)5Aug14-7 Klass Abridged

Unique users per quarter that have used the Mobile TV App Year

Q1 EOP

2013

2014

2015 Note: d)

Q2 EOP

N/A

Q3 EOP

N/A

Q4 EOP

N/A

Monthly average unique users ranges between

On average, and excluding users that do not use Bell Mobile TV in a given month in order to avoid skewing these results, our customers consume #.

'it Filed in confidence with the CRTC *** End of Document ***

Response to Request Bell Mobility(CRTC)5Aug14-8 Klass

Bell Mobility Inc. 21 August 2014 Page 1 of 1

Please indicate if it is possible for the Mobile TV App subscribers to have access to described video and closed captioning when they view content from the App on their smartphones? If not, do you intend to take measures to implement these accessibility features in the future?

Bell Mobile TV does not currently support described video or closed captioning. These features are being considered for future releases however dates are not yet confirmed. Recently, Parental Controls were added to Bell Mobile TV.

*** End of Document***

Response to Request Bell Mobility(CRTC)5Aug14-9 Klass

Bell Mobility Inc. 21 August 2014 Page 1 of 1

Please indicate if you are selling your Mobile TV App service to other wireless service providers or wireless carriers.

No, Bell Mobile TV is only available to customers of Bell Mobility and its affiliates. As indicated in Bell Mobility(CRTC)5Aug14-1 Klass the rights Bell Mobility acquires from broadcasters and content owners are non-exclusive and non-transferable distribution rights. As such other wireless service providers or wireless carriers would have to negotiate their own rights directly with broadcasters/content owners.

*** End of Document ***

Bell Mobility Inc. 21 August 2014 Page 1 of 1

Response to Request Bell Mobility(CRTC)5Aug14-10 Klass

Please indicate if it is possible to subscribe to the Mobile TV App on a smartphone without having a voice plan?

Yes, for example customers may subscribe to a tablet plan and still have access to Bell Mobile TV. Similarly, a customer with only voice and no data may subscribe to Bell Mobile TV as we have indicated in Bell Mobility(CRTC)4Apr14-7 Klass. Of course, their device must still be technically capable of receiving such content.

*** End of Document***

Bell Mobility Inc. 21 August 2014 Page 1 of 2

Response to Request Bell Mobility(CRTC)5Aug14-11 Klass

Bell's website to According (http://support.bell.ca/mobilitv/rate plans features/what-is-the-bell-tv-appand-how-do-i-use-it?step=5 ), streaming 1 hour of Mobile TV could use 0.5 GB of data. Specify the quality format this statement refers to and provide the consumption for all quality formats that are available (e.g. standard quality, HD quality, etc.) Please also provide the consumption for one hour of another video service App (e.g. Tou.tv, Nedlix, Youtube, etc.) for all quality formats that are available.

We cannot do an "apples to apples" comparison as requested given that Bell Mobile TV and, from our understanding, providers such as YouTube, transmit at variable bitrates. Our service, for example, breaks down video into six second "chunks" which are transmitted at different bitrates to the end-user as the need for them arises and the "quality" and size of those chunks will adapt to the network conditions available. We find that 0.5 GB is representative of the data that could be used over an hour of Bell Mobile TV usage. With regard to third parties, we note that YouTube lists the following in its FAQ regarding "Live encoder settings, bitrates and resolutions".

Bell Mobility Inc. 21 August 2014 Page 2 of 2

Response to Request Bell Mobility(CRTC)5Aug14-11 Klass

bandwidth

Live encoder settings, bitrates and resolutions Video resolution Based on your available outbound bandwidth, choose the one highest quality from below that you can reliably stream. YouTube will automatically create all of the lower qualities. Remember to account for your backup stream. Example: If you have 10M dedicated bandwidth for your encoder, you Gould safely choose to stream 720p quality. 4M for primary encoder, 4M for backup encoder, with room for overhead. 240p

360p

480p

720p

1080p

426 x 240

640 x 360

854x480

1280x720

1920x1080

1000 Kbps

2000 Kbps

4000 Kbps

6000 Kbps

Recommended 400 Kbps

750 Kbps

1000 Kbps

2500 Kbps

4500 Kbps

Minimum 300 Kbps

400 Kbps

500 Kbps

1500 Kbps

3000 Kbps

Resolution Video Bitrates

Maximum 700 Kbps

, With the new platform, choose only one of the above. All lower qualities will be ,6.14 Nam automatically created from that one stream. Encoder settings Protocol:

RTMP Flash Streaming

Video codec:

I-1.264, Main 4.1

Frame rate:

u. to 60 fps

Based on the above it would appear that YouTube also continuously varies the bitrate and bitrates may vary even within a given video quality "setting". For example, YouTube fists for the 480p video quality setting a maximum bitrate of 2000 Kbps, a minimum of 500 Kbps and recommended bitrate of 1000 Kbps. (Which presumably could result in the transmission of 215 MB to 858 MB per hour, but would likely fall somewhere in between.)

*** End of Document ***

Response to Request Bell Mobility(CRTC)5Aug14-12 Klass

Bell Mobility Inc. 21 August 2014 Page 1 of 2

In its Terms of Service (http://www.bell.ca/BeIl Mobility Terms of Service), Bell states that "Bell considers that data usage in excess of 25GB per billing cycle is disproportionate and excessive for network management purposes. Customers whose wireless usage exceeds this threshold may, in Bell's sole discretion, have their Services suspended, disconnected, changed or restricted, including having data speeds reduced to as low as 16 kbps." a.

Elaborate on the fact that Bell needs to use traffic management practices but at the same time encourages its consumers to use the Mobile TV App service that consumes considerable bandwidth on the wireless network.

If a customer does use more than 25GB of the Mobile TV App service within a billing cycle, would this customer be subject to the same restrictions?

In November 2013, Bell Mobility overhauled its terms of service to comply with Telecom Regulatory Policy CRTC 2013-271, The Wireless Code (the "Wireless Code"). The Wireless Code is clear that a wireless service provider's (WSP's) internet traffic management practices (ITMP) must be set out in the WSP's fair use policy, which must be disclosed to the customer at the time the wireless services contract is entered into: 321. The Commission considers that when a customer subscribes to a plan that is described in the contract as being "unlimited," the customer should not be charged any overage fees for use of any services under that plan. The Commission also considers that for these plans, there should be no usage limitations outside a WSP's fair use policy. WSPs must explicitly explain in the fair use policy (i) the amount of usage that will trigger the application of the policy; and (ii) what the consequences are for the customer of the application of the policy. This will ensure that customers who subscribe to plans that are advertised as being "unlimited" understand the related parameters and that these consumers are not charged unexpected overage fees. The Commission considers that when fair use policies are applied, it is the WSP's burden to demonstrate that a customer has violated the policy. [...] 325. In light of the above, the Commission determines that (i) WSPs cannot charge a customer any overage charge for services described in their contract as being unlimited; (ii) WSPs must ensure that all limitations on the use of their services, including any rules on the appropriate use of the network, are explained in the WSP's fair use policy; and (iii) WSPs must provide this information to the customer at the time that the contract is agreed to. These requirements apply equally to prepaid and postpaid services. [Emphasis added]

Response to Request Bell Mobility(CRTC)5Aug14-12 Klass

Bell Mobility Inc. 21 August 2014 Page 2 of 2

Accordingly, in refining our fair use policy, we set out to balance (1) the business' potential future need for an ITMP to address potential network impacting usage or unanticipated traffic patterns and (2) the Wireless Code requirement to specify, at the time of contracting, the exact amount of usage that may trigger an ITMP and the consequence of that ITMP. Our ITMP has been designed in anticipation of the potential for customers on grandfathered unlimited legacy plans to generate excessive usage as well as for instances where usage is materially impacting. For example, the need for this ITMP could arise should a customer with a legacy unlimited data plan such as those tailored to devices that were incapable of consuming large amounts of bandwidth at the time (ex. a flip phone circa 2005 with an "unlimited browsing plan") change their device without changing their data plan such that they began generating excessive usage that was never anticipated as part of their initial plan. We do not intend to pro-actively restrict the bandwidth of a customer that is not on an unlimited plan or who pays for their heavy usage and indeed, we have yet to apply this ITMP to any customer. b)

Bell Mobile TV users are customers who have contracted for a Mobile BDU service billed on an hourly basis. The technical ITMP mentioned in our contracts would not apply to Bell Mobile TV given that Bell Mobile TV is a broadcasting service and is not offered or charged on the basis of data transit. In any case, our Bell Mobile TV plans are not "unlimited" and users pay extra for hourly usage beyond 10 hours of viewing. *** End of Document ***

Bell Mobility Inc. 21 August 2014 Page 1 of 2 Q.

Response to Request Bell Mobility(CRTC)5Aug14-13 Klass

Please explain the data connectivity requirements from your wireless network to the smartphone to support the Mobile TV application. a.

Please describe the data path from your wireless network (e.g.. Access Point Name (APN) or internal gateway) to the smartphone/tablet.

Is this data connectivity required even if the customer has only subscribed to the Mobile TV App service and not to the data plan?

How does this change if the customer subscribes to both Mobile TV App service and a data plan?

The data path from content source to user was depicted in our response to Bell Mobility(CRTC)4Apr14-7 Klass . The APN creates a virtual path between the device and the packet gateway (PGW) while transiting through the service gateway (SGW). The device first asks for data service from the SGW and is granted access on the APN. The application on the device authenticates and is given the location of the content when requested by the customer, much like the Fibe TV software on a Fibe TV customer's PVR would for Fibe TV content. For a description of the data path in greater detail please refer to Bell Mobility(CRTC)4Apr14-7 Klass. For greater clarity, we have added the APN, SGW and PGW to the diagram below.

Bell Mobility Inc. 21 August 2014 Page 2 of 2

Response to Request Bell Mobility(CRTC)5Aug14-13 Klass

Mobile TV

*Quickplay Media application functions in FED Video Head End (VHE)

Video Hub Office (Mobile TV Caryl:lye)

MisletWorIM :ZSWitchet'

Content Distribution Network

Access Network

Mobile Device

75eryereagE

IP Network:74: Fd

gel& nape S -I 7 41 PGW

Content Acquisition

Encoding

Encryption

Control, Video on demand, and Live TV

Network switching edge

SGW

Access network delivery

Mobile distribution and decode

Yes, just like Fibe TV requires "data connectivity" even if a customer is not an Internet customer, Bell Mobile TV requires "data connectivity" even if the mobile customer does not have a data plan.

There would be no change in the data path. Just like a Fibe TV subscriber that signs up for Internet would now have access to the Internet with no change to their TV service, a Bell Mobile TV customer that signs up for a data plan will have no change to their Bell Mobile TV service as a result of signing up for the data plan.

' End of Document

Response to Request Bell Mobility(CRTC)5Aug14-14 Klass

Bell Mobility Inc. 21 August 2014 Page 1 of 1

In its response to Bell Mobility(CRTC)4Apr14-7 Klass, Bell Mobility stated that "when a Mobile TV user chooses to watch a channel, that content is then distributed in a point-to-point connection between the CDN (content distribution network) servers through the access network, which in this case would be a tower and wireless spectrum, up to the end-user device". a.

Please explain the nature of the point-to-point connection between the wireless network and the Mobile TV App on the wireless device (smartphone/tablet)

How is this point-to-point connection established and terminated?

Is the point-to-point connection maintained even when the Mobile TV App is not being used?

"Point to point" refers to a single communication between end-points. With regards to Bell Mobile TV, the Bell Mobile TV App authenticates to the mobile TV server and requests content based on individual customer actions. The communication is then initiated between the CDN and the user's device. This point-to-point connection (as opposed to a multipoint connection) is not maintained when the Bell Mobile TV service is not being used.

*** End of Document '

Response to Request Bell Mobility(CRTC)5Aug14-15 Klass

Bell Mobility Inc. 21 August 2014 Page 1 of 1 Q.

If there is congestion in the wireless access network, is priority given to the Mobile TV App, Internet or voice services?

In our HSPA network circuit switched voice services have priority over IP traffic meaning that in times of congestion voice traffic would pre-empt IP traffic.

In our LTE network the voice signal is still currently carried over our HSPA network. As such congestion in the HSPA network and congestion in the LTE network (i.e. Voice and IP) do not currently affect one another.

We do not currently prioritize Bell Mobile TV traffic over other traffic.

*** End of Document ***

Response to Request Bell Mobility(CRTC)5Aug14-16 Klass

Bell Mobility Inc. 21 August 2014 Page 1 of 1

Consider a scenario where a subscriber is using a browser or an App (e.g. You Tube) to watch content and starts the Mobile TV App. a.

Please describe how this will affect the browser or App (e.g. You Tube) session on the network in terms of quality and also how this will affect the quality of the Mobile TV App session.

Will the quality of the Mobile TV App service improve if the browser session is terminated?

Generally applications which make use of a device's media viewer, such as a browser used to watch content or the YouTube App, are designed such that it will cease to function or remain in "standby" when it is "put in the background". As such, when a subscriber is watching a video on a browser or the YouTube App and turns on Bell Mobile TV, the browser or YouTube App would be relegated to the background and it would not affect the quality of the Bell Mobile TV service. This would equally be true for an App making use of the media viewer for an internal video stored on the mobile device and accordingly has no bearing on whether the service is a telecommunications service versus a broadcasting service.

In the event a third-party browser or App is designed to be able to function in the background, this browser or App could in theory consume network resources which could otherwise be used by Bell Mobile TV for better video quality. This is not a function of the Bell Mobile TV service and is no different than the fact that a Fibe TV customer's Internet usage consumes capacity in the access network which could otherwise be used for their Fibe TV service. If a third party App is in use in the background and adversely affects the customer's viewing experience then the viewing experience would presumably improve once that third party App was terminated.

*** End of Document ***

Response to Request Bell Mobility(CRTC)5Aug14-17 Klass Abridged

Bell Mobility Inc. 21 August 2014 Page 1 of 1

Please indicate if the Bell Mobility CDN is used exclusively for Mobile TV App services. a.

If not, is this same CDN used when the user accesses other content such as You Tube? Is a different CDN used for these other services and where is this located in the Bell Mobility network?

Certain information contained in this response is being provided in confidence to the Commission pursuant to section 39 of the Telecommunications Act and the directions provided by the Commission in the Appendix to BTIB 2010-961.1 This information consists of network and commercial information consistently treated as confidential, the disclosure of which may result in material financial harm to us. An abridged version is being provided for the public record. CDN providers host content as widely and in as many locations as possible, there is no single location. The location of CDN with regard to the data path of Bell Mobile TV content (how a Bell Mobile TV signal reaches a customer) was depicted in our response to Bell Mobility(CRTC)4Apr14-7 Klass. Google owns its own CDN and therefore YouTube would not share CDN with Bell Mobility. We currently leverage

for the hosting of our content and as such the #

# Filed in confidence with the CRTC' *** End of Document *** Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, dated 23 December 2010, as amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1, dated 26 October 2012.

Tab L

Bell File No. 8622-B92-201316646 2014 10 14

To:

Mr. John Traversy Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A ON2

Subject:

Application concerning billing practices by Bell Mobility and Videotron for mobile TV services â&#x20AC;&#x201D; Response to Requests for Information

Dear Mr. Traversy, 1. We are in receipt of a letter dated 30 September 2014 from Commission Staff requesting further information pertaining to our Bell Mobile TV service and the above-noted proceeding. We note, with some concern, that these questions seem to imply that the organizational structure of a company, the employees involved in provisioning the service or whether Bell Mobile TV is a separate legal entity is somehow determinative, or a factor to consider, in the determination of whether or not Bell Mobile TV is a broadcasting distribution undertaking. Clearly these questions are irrelevant. Fibe TV is not a separate legal entity, for example, being a service offered by Bell Canada. How a company organizes its internal structures is irrelevant to the legal status of the services it offers. Nevertheless, attached are our responses to these requests for further information. 2. Pursuant to section 39 of the Telecommunications Act, in these responses to requests for information, we are providing certain information to the Commission in confidence. Specifically, the reasons which will influence whether we choose to negotiate individually or jointly with content rights holders, the affiliation agreements we are submitting in response to Commission Staffs request for this information and the exact line item and amount reported in our Contribution report where Mobile TV revenues were included, are all confidential. This information is competitively sensitive information we consistently treat as confidential and the disclosure of which could materially harm us. An abridged version of responses containing confidential information has been placed on the public record. Yours truly, Original signed by P. Gauvin

Philippe Gauvin Senior Legal Counsel Attachments

This is Exhibit ,

...... .......... rektred to in the

affidavit of........

...........

.........

sworn before me, this. ..........

day of ....... 00.11.01114.11.1MI.

.. . . .... Wt

MISSIONER Mario, Bertrand, CRTC AKIN:3 AFFIDAVITS an Lynn Jones, Julie Boisvert, CRTC Province of Orrtario, ommissioner, etc, for William Lloyd, CRTC Barristers and S 1" McCarthy IltraultUP xPfres June 18, 2017 Distribution List as per CRTC Letter dated 30 September 2014-F .

*** End of Document *** Bell Canada Philippe Gauvin Floor 19 160 Elgin Street Ottawa, Ontario K2P 2C4 Telephone: (613) 785-6286 Facsimile: (613) 560-0472 beltrequfatory@bell.c,a

Bell Mobility Inc. 14 October 2014 Page 1 of 1

Response to Request Bell Mobility(CRTC)30Sep14-1 Klass Part 1

Provide a corporate organization chart for Bell Mobility, setting out the various groups/divisions into which the company is organized.

President Mobility & BRS & Chief Brand Mori( â&#x20AC;˘

SVP - Marketing & Sales

VP - Services, Products and Content

VP - Marketing Communications

VP - Pricing, Roaming & Carrier Relations

VP - Corporate Stores

VP - Mobile Devices and Logistics

VP - Bell Dealers

VP - Marketing Execution

VP - National Retail

---1 VP - Direct Business Sales

*** End of Document ***

Response to Request Bell Mobility(CRTC)30Sep14-2 Klass Part 1

Bell Mobility Inc. 14 October 2014 Page l' of 1

(a)

Is "Bell Mobile TV" a distinct legal entity? If not, is "Bell Mobile TV" a group or division within a BCE legal entity and, if so, which such entity?

(b)

Is "Bell Mobile TV" a registered trademark, and if so, which legal entity is the owner of the trademark?

No, Bell Mobile TV is not a distinct legal entity, but it is a broadcasting service offered by Bell Mobility. Bell Mobile TV is managed by the VP â&#x20AC;&#x201D; Services, Products and Content who oversees all aspects of the Bell Mobile TV services other than pricing. We note, in this respect, that "Fibe TV" is also not a separate legal entity. It is a broadcasting service offered by Bell Canada. Bell Fibs TV, Bell Internet and Bell Phone services and divisions all form part of an integrated Bell Residential Services team which integrates Internet, Phone and TV services. Employees of each interact with each other as necessary and all report to the President â&#x20AC;&#x201D; Mobility, BRS and Chief Brand Officer, as does Bell Mobility and the team responsible for Bell Mobile TV.

No, Bell Mobile TV is not a registered trademark. However, at law, we own the common law rights to the trademark by virtue of its use. In any case, no conclusions can be drawn with regards to the legal nature of a service based on whether or not the service is a registered trademark or which entity owns that trademark. We note, for example, that "Bell Mobility" is a trademark registered by Bell Canada. Similarly, "Bell Media", which clearly manages and offers broadcast programming content, is also a trademark registered by Bell Canada. Clearly the fact that Bell Canada owns the trademark "Bell Media" does not make Bell Media's services a telecommunications service. "Fibe" is also a trademark owned by Bell Canada. However, like "Bell Mobile TV", "Fibe TV" is not a registered trademark. Nevertheless, its use would be protected under common law where a competitors' use could result in confusion with Bell's Fibs TV or Bell Mobile TV services. *** End of Document ***

Bell Mobility Inc. 14 October 2014 Page 1 of 3

Response to Request Bell Mobility(CRTC)30Sep14-3 Klass Part 1 Abridged

In response to Bell Mobility (CRTC)5August14-3 asking Bell Mobility to describe how the programming services included in the Mobile TV App were selected, Bell Mobility set out some factors according to which programming is selected. (a)

Confirm whether employees of Bell Mobility Inc. are responsible for selecting the particular channels distributed as part of Bell Mobile TV and, if so, identify the name of the corporate group/division within Bell Mobility tawhich they belong.

(b)

If no Bell Mobility employees are involved in the selection, identify the BCE legal entity that has the employees which are involved in the selection of the programming services for Bell Mobile TV.

(c)

If Bell Mobility employees and employees of another BCE legal entity or division are jointly involved in the selection of the programming services, identify the entity or division in question and describe the roles of the employees of Bell Mobility and the other entity or division respectively in the selection of programming.

We are submitting certain information contained in this response in confidence.' Specifically, the reasons which will influence whether we choose to negotiate individually or jointly with content rights holders are confidential. This information is competitively sensitive information we consistently treat as confidential and the disclosure of which could materially harm us. An abridged version of this response is being provided for the public record.

Yes, employees of Bell Mobility Inc. are responsible for selecting channels distributed as part of Bell Mobile TV, and curating the user guide / content menu. They belong to the Product, Services and Content group within Bell Mobility. At times, they work in conjunction with employees of affiliates of BCE Inc. (as do employees of Bell TV, for that matter) as further described below.

This question is not applicable as Bell Mobility employees are involved in content selection.

This information is filed in confidence with the Commission pursuant to section 39 of the Telecommunications Act and the directions provided by the Commission in the Appendix to Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, dated 23 December 2010, as amended in Broadcasting and Telecom information Bulletin CRTC 2010-961-1, dated 26 October 2012.

Bell Mobility Inc. 14 October 2014 Page 2 of 3

Response to Request Bell Mobility(CRTC)30Sep14-3 Klass Part 1 Abridged

Bell Mobility, Bell Canada and Bell Media are all subsidiaries of BCE Inc. As such, where feasible and where other parties are amenable, for efficiency we engage in joint negotiations with content rights holders. This not only makes sense for the BCE Inc. family of companies but also for content rights holders who wish to avoid duplicate negotiations and administrative effort. In cases where Bell Mobility and Bell Canada employees are jointly involved in the selection of programming services, both the Bell Mobility Product, Services and Content division and Bell Canada's Content & Business Planning groups are engaged. In some cases, more than two affiliates may be involved in negotiations. Joint negotiations usually occur: tiâ&#x20AC;˘

3) .- '

#â&#x20AC;˘ and 4)

# Filed in confidence with the CRTC.

Response to Request Bell Mobility(CRTC)30Sep14-3 Klass Part 1 Abridged

Bell Mobility Inc. 14 October 2014 Page 3 of 3

BCE Inc. companies will negotiate on an individual basis: 1)

4. and 3)

Content is selected independently by each Bell affiliate for their respective services and in cases where the same content is required by affiliates, the initiator will engage the other. Moreover, as we noted in our response to Bell Mobility(CRTC)30Sep14-2, Bell Fibe TV, Bell Internet and Bell Phone services and divisions all form part of an integrated Bell Residential Services team which integrates Internet, Phone and TV services. Employees of each interact with each other as necessary and all report to the President â&#x20AC;&#x201D; Mobility, BRS and Chief Brand Officer, as does Bell Mobility and the team responsible for Bell Mobile TV. Clearly, this structure cannot result in a determination that Fibe Internet is a broadcast service or that Fibe TV is a telecommunications service. In determining whether Bell Mobile TV is a broadcasting service, the Commission must look at the nature of the service itself to draw its conclusions rather than on the basis of how a company is structured or whether or not employees of affiliates or other divisions may also be involved.

# Filed in confidence with the CRTC.; ' End of Document

Bell Mobility Inc. 14 October 2014 Page 1 of 2

Response to Request Bell Mobility(CRTC)30Sep14-4 Klass Part 1 Abridged

In response to Interrogatory Bell Mobility(CRTC)5August 14-1(a), Bell Mobility states that it negotiates the non-exclusive, non-transferable distribution rights for its mobile broadcasting distribution undertaking service with each content rights holder in order to broadcast television channels to mobile devices. Further, in response to Bell Mobility(CRTC)5Augustl4-3 at page 2, Bell Mobility states that it secures mobile distribution rights either through the affiliation agreements that Bell Licensed BDU have with programmers or independently for Bell Mobile TV only. (a)

Clarify whether and, if so, how Bell Mobility Inc. acquires the mobile distribution rights and other rights required to distribute Bell Mobile TV service to end users on mobile devices, e.g., through assignment from another legal entity within the Bell family of companies or through direct negotiations with the rights holder(s). If it is not Bell Mobility Inc., identify the legal entity that acquires such rights.

(b)

Provide a copy of a minimum of 6 affiliation agreements that grant mobile distribution rights for Bell Mobile TV.

(c)

Provide a copy of the agreements evidencing the independently negotiated mobile distribution rights specific to Bell Mobile TV referred to in Bell Mobility's response to Beil Mobility(CRTC)5Augustl4-3 at page 2.

We are submitting certain information contained in this response in confidence.' Specifically, the affiliation agreements we are submitting in response to this request for this information are confidential. This information is competitively sensitive information we consistently treat as confidential and the disclosure of which could materially harm us. An abridged version of this response is being provided for the public record.

Bell Mobility acquires mobile distribution rights through direct negotiations with the rights holders or in collaboration with affiliates as further described in our response to Bell Mobility(CRTC)30Sep14-3. Bell Mobility and its employees are always involved in the selection of content and in the acquisition negotiations for Bell Mobility services.

Response to Request Bell Mobility(CRTC)30Sep14-4 Klass Part 1 Abridged

Bell Mobility Inc. 14 October 2014 Page 2 of 2 b)

Attached, in confidence, are affiliation agreements that have been negotiated with: 1)

# — Negotiated by Bell

# Mobility independently;

_It,— Negotiated by Bell Mobility independently;

# — Joint negotiation with

3) affiliates; 4)

negotiation with affiliates;

#— Negotiated by Bell Mobility independently; and #,— Joint Negotiation with affiliates.

We have indicated in 4(b) those agreements which were independently negotiated by Bell Mobility (i.e., which did not involve joint negotiations with other Bell affiliates).

Filed in confidence

file CRTC: *** End of Document ***

Bell Mobility Inc. 14 October 2014 Page 1 of 2

Response to Request Bell Mobility(CRTC)30Sep14-5 Klass Part 1

Further to its response to Bell Mobility(CRTC)4Aprill4-4 in which Bell Mobility described how it invoices its customers for Bell Mobile TV services, are 100% of Bell Mobile TV subscription revenues reported in Bell Mobility Inc.'s financial statements? If yes, provide a copy of that portion of Bell Mobility's financial statement that reflects Bell Mobile TV service subscription revenues. If 100% of the Bell Mobile TV service revenues are not reported by Bell Mobility Inc., identify the legal entities in the BCE family to which the revenues are allocated, and the reasons for the allocation.

100% of Bell Mobile TV subscription revenues are allocated to Bell Mobility Inc. but they are not specifically reported on a disaggregated basis (i.e., there is no Mobile TV line item in our annual report, for example.) Rather, revenues are added into Wireless Service revenues which are reported at page 53 of our 2013 Annual Report.' We also report the number of subscribers we have, like we do for Bell TV. We note that we also provide Blended ARPU in the report at page 54 which included a "blend" of "Data ARPU" and "Voice ARPU". We have included Mobile TV revenues in the "Data ARPU" but this is not indicative of the legal nature of the service and whether or not it is a telecommunications or broadcasting service. Indeed, in the overview of Bell Wireless products and services at page 27 we clearly describe Mobile TV as separate from Data: OUR PRODUCTS AND SERVICES -

Voice and data plans: available on either postpaid or prepaid options;

Extensive selection of 4G LTE-capable devices:

including leading

smartphones as well as the iPad and iPad mini; Data:

E-mail, web browsing, social networking, text messaging, picture and

video messaging and call features; Mobile TV: over 40 live and on-demand channels on smartphones and tablets; Entertainment: games, ringtones, wallpapers, ringback tones, music downloads and video streaming; Mobile Internet: Turbo Stick, Turbo Hub and MiFi; Mobile commerce:

secure debit and credit purchases using Bell Mobility

smartphones;

Report is BCE's 2013 Annual The http://www.bce.ca/assets/investors/AR 2013/BCE 2013 Annual Report.pdf.

available

here:

Response to Request Bell Mobility(CRTC)30Sep14-5 Klass Part 1

Bell Mobility Inc. 14 October 2014 Page 2 of 2

Mobile business services: sales force automation, push-to-talk, field service automation, resource and tracking tools; Roaming services: with other wireless service providers in more than 200 countries worldwide; and Machine-to-machine (M2M) applications: including connected car and usagebased insurance vehicle tracking. Bell Media also supplies content to mobile TV distributors, like Bell Mobile TV. Therefore, we also include Mobile TV in the Bell Media overview at page 29 of the report in a description of Bell Media's content services. We note that we described Bell Media's supply of content to mobile distributors as a separate and distinct service from TV Everywhere services, which would include distribution over-the-top (i.e., over the Internet) of Bell Media content: OUR PRODUCTS AND SERVICES Varied and extensive array of TV programming to broadcast distributors across Canada; Advertising: on our TV, radio, OOH, and digital media properties to both local and national advertisers across a wide range of industry sectors; Mobile TV service:

with live and on-demand access to content from our

conventional TV networks, CTV and CTV Two, as well as real-time access to BNN, TSN, RDS, MTV and other brands in news, sports and entertainment. This mobile content is offered on commercial terms to all Canadian wireless providers; and TV Everywhere services: including TMN GO and CTV GO, which provide live and on-demand content delivered over mobile and Wi-Fi networks to smartphones, tablets and computers. None of these statements were meant to provide a legal definition of Bell Mobile TV. Nevertheless, we submit that even our annual reporting of Mobile TV demonstrates that we treat it as a broadcasting service. *** End of Document ***-

Response to Request Bell Mobility(CRTC)30Sep14-6 Klass Part 1 Abridged

Bell Mobility Inc. 7 October 2014 Page 1 of 1

Identify, by annual revenue report line (e.g., Total operating revenue reported in financial statements, Canadian telecommunications services revenues, etc.), where the company reports its mobile TV service revenue within the contribution regime and provide the corresponding amount reported on each line in its 2013 annual revenue report (i.e., the information filed in March 2014). We are submitting certain information contained in this response in confidence.' Specifically, the amount reported in our Contribution report where Mobile TV revenues were included is confidential. This information is competitively sensitive information we consistently treat as confidential and the disclosure of which could materially harm us. An abridged version of this response is being provided for the public record.

Mobile TV service revenue is reported on lines D.1.A (Total Operating Revenue) and D.7 (Retail Internet Service Revenue) with amounts of $5,849M and

respectively for the 2013 fiscal year. Please note that the Mobile TV service revenue was inadvertently miscategorised under line D.7 and should have been reported under line D.3 (Canadian Non-Telecommunications Revenues). However, given that both lines D.7 and D.3 are exempt from contribution, the net revenue eligible for contribution was not impacted. Future contribution reporting will reflect the categorization of Mobile TV revenue on line D.3.

it Filed in confidence with the CRTC.!,

*** End of Document***

This information is filed in confidence with the Commission pursuant to section 39 of the Telecommunications Act and the directions provided by the Commission in the Appendix to Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, dated 23 December 2010, as amended in Broadcasting and Telecom Information Bulletin CRTC 2010-961-1, dated 26 October 2012.

Bell Mobility Inc. 14 October 2014 Page 1 of 6 Q.

Response to Request Bell Mobility(CRTC)30Sep14-7 Klass Part 1

On the record of this proceeding, Bell Mobility stated that Bell Mobile TV is a broadcasting service and is not offered or charged on the basis of data transit. Bell Mobility also stated that calls for the application of the ITMP framework to Mobile TV's pricing practices must fail since they are grounded in the Commission's jurisdiction under the Telecommunications Act and that Bell Mobile TV is not a telecommunications service. (a)

ii. iii.

(b)

Confirm that the radio authorizations and spectrum licences, issued by Industry Canada pursuant to the Radiocommunication Act, that Bell Mobility is relying on when it uses its wireless access network to transport Bell Mobile TV to its subscribers authorize Bell Mobility to use the spectrum to provide voice and data telecommunications services. Identify any other purpose for which Bell Mobility is authorized to use the spectrum in question. Clarify whether Bell Mobility is authorized pursuant to the Radiocommunication Act to use the spectrum referred to in (i) to operate a broadcasting undertaking.

In Telecom Regulatory Policy CRTC 2009-657, the Commission set out its determinations regarding the use of Internet traffic management practices; it established a principled approach that appropriately balances the freedom of Canadians to use the Internet for various purposes with the legitimate interest of ISPs to manage the traffic thus generated on their networks. In Telecom Decision CRTC 2010-445, the Commission determined that the policy framework established for ITMP applies to the use of mobile wireless data services to provide Internet access. In his Part 1 application, Benjamin Klass stated that Bell Mobility was applying an application-specific economic ITMP to Mobile TV, giving itself an undue preference and, in doing so, unjustly discriminating against consumers and competitors. Assume for the purpose of this question that Bell Mobile TV is a data telecommunications service under the Telecommunications Act and that the $5 charge for 10 hours of use is considered by the Commission to be an economic ITMP and subject to the ITMP framework.

i. i I.

iii.

Describe the ITMP, as well as the need for it in terms of traffic management, its purpose and effect. Does the ITMP results in discrimination, disadvantage or preference? Explain, with supporting rationale evidence, why it does or does not have such a result Assume for the purpose of the following that the ITMP results in any degree of discrimination, disadvantage or preference: 1.

demonstrate that the ITMP is designed to address the need and achieve the purpose and effect in question;

Response to Request Bell Mobility(CRTC)30Sep14-7 Klass Part 1

Bell Mobility Inc. 14 October 2014 Page 2 of 6

2. 3.

establish that the ITMP results in discrimination or preference as little as reasonably possible; and demonstrate that any harm to a secondary application, enduser, or any other person is as little as reasonably possible.

a) i), ii) and iii) Bell Mobility hereby confirms that the radio authorizations and spectrum licences issued to us by Industry Canada pursuant to the Radiocommunication Act authorize us to use this spectrum to provide voice and data telecommunications services and to provide our Mobile TV broadcasting service to subscribers. These authorizations are based on the following: General: The Minister of Industry has issued these licences pursuant to licensing powers granted to the Minister under section 5(1)(a)(11) of the Radiocommunication Act. These spectrum licences authorize us to utilize cellular, PCS, AWS and 700 MHz spectrum. The nature of the services that are authorized under these licences are identified on the licences as "land/mobile". The licences also indicate that the spectrum is licensed to us in our capacity as a "radiocommunication service provider". This latter term is defined in section 2 of the Radiocommunication Regulations to mean "a person who operates radio apparatus' used by that person or another person to provide radiocommunication services for compensation". The term "radiocommunication" is defined in section 2 of the Radiocommunication Act to mean "any transmission, emission or reception of signs, signals, writing, images, sounds or intelligence "Radio apparatus" is defined in section 2 of the Radiocommunication Act to mean "a device or combination of devices intended for, or capable of being used for, radiocommunication".

Response to Request Bell Mobility(CRTC)30Sep14-7 Klass Part 1

Bell Mobility Inc. 14 October 2014 Page 3 of.6

of any nature by means of electromagnetic waves of frequencies lower than 3,000 GHz propagated in space without artificial guide".

Authority to provide Mobile Wireless voice and data radiocommunication services: It can be seen from the foregoing that the term "radiocommunication" includes within its scope the mobile voice and data communications services we provide to our subscribers for compensation in our capacity as a wireless carrier, as these services involve the transmission and reception of signals, writing, images, sounds and intelligence via electromagnetic waves at frequencies less than 3,000 GHz.

Authority to provide Mobile Wireless Broadcasting services: It can also be seen that the term "radiocommunication" also includes within its scope the point to point mobile broadcasting service provided via our exempt Mobile TV digital media broadcasting undertaking.

The term "broadcasting"2 as defined in section 2 of the Broadcasting Act involves the transmission of programs to the public by radio waves. The "programs" which are the subject of these mobile broadcasts include writing, images, sounds or intelligence which, when transmitted through electromagnetic waves at frequencies less than 3,000 GHz, as is the case with our Mobile TV service, is also within the ambit of the definition of radiocommunication.

In other words, the wireless broadcasting service provided by our mobile wireless exempt digital media broadcasting undertaking is a 2

Section 2 of the Broadcasting Act defines "broadcasting" to mean "any transmission of programs, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus, but does not include any such transmission of programs that is made solely for performance or display in a public place."

Bell Mobility Inc. 14 October 2014 Page 4 of 6

Response to Request Bell Mobility(CRTC)30Sep14-7 Klass Part 1

radiocommunication service provided to members of the public on a mobile basis that is authorized pursuant to our spectrum licences and radio authorizations.

Accordingly, based on the foregoing, the Mobile TV service already has all the requisite authority it requires from the Minister of Industry and Industry Canada to provide its mobile broadcasting service for the reasons outlined above. It therefore does not require a "broadcasting certificate" issued by the Minister pursuant to his authority under section 5(1)(a)(ii) of the Radiocommunication Act.

This is because a

broadcasting certificate is required solely to authorize the use of radio apparatus forming part of a "broadcasting undertaking" as the latter term is defined in section 2 of the Radiocommunication Act.

However,

because the list of broadcasting undertakings included within the ambit of this latter definition only identifies:

(i) distribution undertakings,

(ii) programming undertakings and (iii) networks and does not specifically mention point-to-point wireless digital media broadcasting undertakings, like Mobile TV, which operate under the Commission's Digital Media Broadcasting Undertakings exemption order, these exempt types of undertakings are clearly excluded from the defined list of undertakings requiring a broadcasting certificate. This point is reinforced by Industry Canada's "Broadcasting Procedures and Rules", set out in BPR-1, Issue 5, dated January 2009. It can be seen from the introductory paragraph (page 1) that this document establishes the rules applicable to AM, FM, TV, digital radio broadcasting, multipoint distribution television broadcasting, digital programmers and cable systems, all of which embody varying forms of point-to-multi-point broadcasting. None of the rules set out in this document applies to the point-to-point Bell Mobile TV wireless service because all of the requisite technical and other conditions applicable to our use of the spectrum, for this purpose are contained in our spectrum licences.

Response to Request Bell Mobility(CRTC)30Sec14-7 Klass Part 1

Bell Mobility Inc. 14 October 2014 Page 5 of 6

Bell Mobile TV is not an Internet traffic management practice (ITMP). As noted in paragraph 9 of TRP 2009-8573: In the Commission's view, the outcome of this proceeding must be the establishment of an appropriate balance between society's interest in innovation in computer communications and its equally legitimate concern regarding the rights of carriers to manage the traffic thus generated. For this reason, the Commission has found it necessary to devise a policy framework for traffic management that takes into account these competing concerns. [Emphasis added] Bell Mobile TV was never designed as a measure to manage traffic generated over the Internet. Rather, it is the charge for a TV service delivered over a Mobile wireless network. Accordingly, the ITMP framework does not apply to Bell Mobile TV. Moreover, even if Bell Mobile TV were a telecommunications service, it would not result in any unjust discrimination or undue preference.

As discussed in further detail in section 4.3 of our Answer dated 8 January 2014 to Mr. Klass' application, Bell Mobility's data caps are competitively neutral and treat all over-the-top (OTT) content the same, including our own content which is available on websites such as www.ctv.ca or www.tsn.ca.

There is also no unjust discrimination with regards to our customers. Bell Mobile TV is a consumer-oriented service which provides 10 hours of viewing for $5/month, and provides customers who choose to subscribe to Bell Mobile TV with unprecedented access in the form of the most live channels compared with other Canadian wireless broadcast distributors.

Bell Mobile TV provides

Canadians with the flexibility to watch TV on any screen they like, anywhere they like and provides Canadian creators with a welcome new source of distribution and revenue. As we have previously argued, this type of pro-Canadian, pro-

Telecom Regulatory Policy CRTC 2009-657, Review of the Internet traffic management practices of Internet service providers, dated 21 October 2009.

Bell Mobility Inc. 14 October 2014 Page 6 of 6

Response to Request Bell Mobility(CRTC)30Sep14-7 Klass Part 1

consumer and pro-creator wireless broadcasting service needs to be nurtured, not discouraged. For this reason, the Commission should be wary of any attempts to place constraints upon it.

There is no unjust discrimination with regard to content providers, whether OTT or otherwise, as Bell Mobility negotiates with Canadian broadcasters and other rights holders, and pays them for the right to distribute their content over wireless. It is open to any content provider to approach Bell Mobility to negotiate for their content to be included as part of Bell Mobility's Mobile TV service. Indeed, Bell Mobile TV provides a new distribution platform for Independent Canadian programmers to showcase their programming services, with almost one third of the channels offered by Bell Mobile TV being provided by Canadian Independent programmers, while close to 90% of the channels are Canadianowned, including four Canadian public broadcast channels.

To the extent there is any discrimination or preference with respect to OTT content providers, there is no evidence that such discrimination or preference has resulted in unjust discrimination resulting in a substantial lessening of competition. In fact, OTT content providers such as Netflix and YouTube continue to show strong growth in Canada.

*** End of Document ***

Court File No. FEDERAL COURT OF APPEAL BETWEEN BELL MOBILITY INC. Moving Party - and BENJAMIN KLASS, THE CONSUMERS' ASSOCIATION OF CANADA, THE COUNCIL OF SENIOR CITIZENS' ORGANIZATIONS OF BRITISH COLUMBIA AND THE PUBLIC INTEREST ADVOCACY CENTRE, THE CANADIAN NETWORK OPERATORS CONSORTIUM INC., BRAGG COMMUNICATIONS INC. (CARRYING ON BUSINESS AS EASTLINK), FENWICK MCKELVEY, VAXINATION INFORMATIQUE, THE SAMUEL-GLUSHKO CANADIAN INTERNET POLICY & PUBLIC INTEREST CLINIC, DAVID ELLIS and TERESA MURPHY Respondents AFFIDAVIT OF KATHERINE STUBITS McCarthy Tetrault LLP Suite 5300, TD Bank Tower Toronto Dominion Centre 66 Wellington Street West Toronto ON M5K 1E6 Neil Finkelstein Brandon Kain Richard Lizius Tel: 416-362-1812 Fax: 416-868-0673 Solicitors for the Moving Party, Bell Mobility Inc. #14237333

Tab 4

Court File No. FEDERAL COURT OF APPEAL BETWEEN: BELL MOBILITY INC. Moving Party - and BENJAMIN 'CLASS, THE CONSUMERS' ASSOCIATION OF CANADA, THE COUNCIL OF SENIOR CITIZENS' ORGANIZATIONS OF BRITISH COLUMBIA AND THE PUBLIC INTEREST ADVOCACY CENTRE, THE CANADIAN NETWORK OPERATORS CONSORTIUM INC., BRAGG COMMUNICATIONS INC. (CARRYING ON BUSINESS AS EASTLINK), FENWICK MCKELVEY, VAXINATION INFORMATIQUE, THE SAMUELGLUSHKO CANADIAN INTERNET POLICY & PUBLIC INTEREST CLINIC, DAVID ELLIS and TERESA MURPHY Respondents MEMORANDUM OF FACT AND LAW OF THE MOVING PARTY, BELL MOBILITY INC. (Motion for leave to appeal Broadcasting and Telecom Decision CRTC 2015-26, rendered by the Canadian Radio-television and Telecommunications Commission on January 29, 2015) (Section 31(2) of the Broadcasting Act, Section 64(2) of the Telecommunications Act and Rule 352 of the Federal Courts Rules) McCarthy Tetrault LLP Suite 5300, TD Bank Tower 66 Wellington Street West Toronto ON M5K 1E6 Neil Finkelstein Brandon Kain Richard Lizius Tel: 416-362-1812 Fax: 416-868-0673 Solicitors for the Moving Party, Bell Mobility Inc.

TABLE OF CONTENTS PART I— STATEMENT OF FACTS 1. Overview 2. The Facts A. Bell Mobile TV B. The Klass Complaint to the CRTC C. CRTC Decision 2015-26 PART

POINTS IN ISSUE

PART III— SUBMISSIONS 1. The Test for Leave to Appeal 2. Issue #1 – The Telecommunications Act Does Not Apply to Bell Mobile TV 3. Issue #2 – The CRTC Had No Evidence and Misapplied the Burden of Proof PART IV— ORDER SOUGHT

1 1 3 3 6 7 10 11 11 12 24 27

PART Iâ&#x20AC;&#x201D;STATEMENT OF FACTS 1.

Overview

Bell Mobility Inc. ("Bell Mobility ") brings this motion for leave to appeal the

CRTC's Broadcasting and Telecom Decision 2015-26 ("Decision 2015-26", or the "Decision"),1 dated January 29, 2015, under s. 31(2) of the Broadcasting Act and s. 64(2) of the Telecommunications Act. 2.

In the Decision, the majority of the CRTC found that Bell Mobility gave itself

and its customers an undue preference, and subjected other customers and competitors to an undue disadvantage, contrary to s. 27(2) of the Telecommunications Act, when it provided its Bell Mobile TV broadcasting service ("Bell Mobile TV", or the "Service") without charging customers standard data charges that apply to Internet-based video programming services accessed using Bell Mobility's Internet connectivity service. 3.

To obtain leave under ss. 31(2) and 64(2), Bell Mobility need only establish an

"arguable case" that the CRTC committed an error of law or jurisdiction. There are two (2) reasons why this low threshold is unquestionably met here. 4.

First, the majority found that Bell Mobility operates Bell Mobile TV as a

broadcasting undertaking ("BU") governed by the Broadcasting Act, since it acquires and aggregates the programming content made available on Bell Mobile TV for customers. However, despite this finding, the CRTC then proceeded to hold that Bell Mobility's Bell Mobile TV Service acts as a telecommunications common carrier ("TCC") that is subject to s. 27(2) of the Telecommunications Act when it retransmits the Bell Mobile TV content to its customers, since it does so through the same wireless network and subscriber interface that Bell Mobility uses to provide customers with access to the Internet and other telecommunications services. 5.

The legislation is clear that BUs are exempt from the Telecommunications Act

when engaged in broadcasting. Section 4 of the Telecommunications Act provides:

1 Complaint against Bell Mobility Inc. and Quebecor Media Inc., Videotron Ltd. and Videotron G.P. alleging undue and unreasonable preference and disadvantage in relation to the billing practices for their mobile TV services Bell Mobile TV and illico.TV â&#x20AC;&#x201D; Broadcasting and Telecom Decision CRTC 2015-26;29 January 2015, Motion Record ("MR"), Tab 2.

-2 4. This Act does not apply in respect of broadcasting by a broadcasting undertaking. 6.

"Broadcasting" is defined in s. 2(1) of the Broadcasting Act as follows: "broadcasting" means any transmission of programs, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus, but does not include any such transmission of programs that is made solely for performance or display in a public place; [emphasis added]

There are thus three salient features of broadcasting: (1) the transmission of

programs; (2) by means of telecommunication; (3) for reception by the public. Therefore, the fact that Bell Mobility retransmitted Bell Mobile TV programs to the public through the same wireless network and subscriber interface that Bell Mobility uses to provide voice and data telecommunications services is irrelevant to whether Bell Mobility is operating as a BU engaged in broadcasting when providing the Bell Mobile TV Service, since by definition, all broadcasting must involve transmission by some means of telecommunications. 8.

Having determined that Bell Mobility was acting as a BU in respect of its Bell

Mobile TV Service, the CRTC had no jurisdiction to apply s. 27(2) of the Telecommunications Act to Bell Mobile TV. In concluding otherwise, the majority improperly segregated Bell Mobility into a TCC and a BU, when it should have treated Bell Mobility as a single, indivisible BU engaged in the transmission of Bell Mobile TV programs by means of telecommunications that is exempt from the Telecommunications Act. 9.

The CRTC's failure to treat Bell Mobility as a single BU in relation to Bell

Mobile TV undermines the respective regimes of the Broadcasting Act and Telecommunications Act, in addition to the CRTC's own Exemption Order for Digital Media Broadcasting Undertakings (the "DMBU Exemption Order"),2 which defines BUs to include mobile television broadcasting undertakings, such as Bell Mobile TV. It is also inconsistent with a long line of cases in which the Supreme Court of Canada has held that BUs are indivisible for jurisdictional purposes, and violates the Broadcasting Amendments to the Exemption order for new media broadcasting undertakings (now known as the Exemption order for digital media broadcasting undertakings) â&#x20AC;&#x201D; Broadcasting Order CRTC 2012-409, Appendix, 26 July 2012, Appendix B, Book of Authorities ("BOA") Tab 6.

3 Act principle of technological neutrality, since the CRTC's only rationale for characterizing Bell Mobile TV as a TCC was that Bell Mobility offers Bell Mobile TV through the same wireless network and subscriber interface that Bell Mobility uses to provide telecommunications services. As Commissioner Shoan observed in dissent on this point, lilt is the nature of the activity that defines a service, not the nature of its platform".3 10.

Second, and in the alternative, assuming arguendo that s. 27(2) of the

Telecommunications Act applies to Bell Mobility in relation to Bell Mobile TV, there was no evidence to support the majority's conclusion that the exemption of Bell Mobile TV from standard data charges creates an "undue" preference/disadvantage. Indeed, no competitors alleged that they were being subjected to an undue disadvantage or that an undue preference was being conferred. In the absence of evidence that not charging customers for data used in connection with the Service causes or will cause actual harm to competitors and customers, the CRTC instead speculated about the potential for such future harm, and then wrongly imposed the burden of disproving this speculation upon Bell Mobility. This was a fundamental error of law and a material breach of procedural fairness. 11.

Bell Mobility therefore requests that leave to appeal be granted.

The Facts A.

12.

Bell Mobile TV

Bell Mobility is a wholly-owned subsidiary of BCE Inc., and provides wireless

services throughout Canada. 13.

One of the services which Bell Mobility offers is Bell Mobile TV, a Service that

allows customers to view television "broadcasting content" consisting of programming services and other programs on their wireless devices. As the CRTC explained below: The mobile TV services are accessed on mobile devices via apps (i.e., mobile application software) developed by Bell Mobility... These services offer aggregated broadcasting content: they offer mostly live streaming of television

Decision 2015-26, p. 3, MR, Tab 2.

14.

stations, and other related television programming services, with access to a limited library of video-on-demand content.4 Bell Mobile TV currently has approximately 1.6 million customers, and offers a

wide variety of independent Canadian programming services at a low cost in furtherance of several policy objectives in s. 3(1) of the Broadcasting Act.5 The process by which Bell Mobility distributes Bell Mobile TV is significantly different from the process by which Bell Mobility, when functioning as an Internet

15.

service provider ("ISP"), provides customers with wireless Internet connectivity to access Internet-based streaming video applications such as Netflix or YouTube. First, with respect to Bell Mobile TV, Bell Mobility itself acquires the mobile distribution rights for the available programming content from the copyright owners, 16.

aggregates the content to be broadcast, and packages and markets it.6 By contrast, Bell Mobility has no involvement with the content of third-party Internet services that are accessible via Bell Mobility's wireless data service, but simply acts as a TCC, or technological conduit, who enables customers to access those Internet services through connectivity to its wireless network. Second, Bell Mobile TV is only available to persons who subscribe to a wireless voice, data or tablet plan with Bell Mobility or one of its affiliates.7 Therefore, once Bell 17.

Mobility acquires, aggregates, packages and markets the Bell Mobile TV content, it distributes that content directly to Bell Mobility customers who subscribe to Bell Mobile TV using point-to-point technology accessible from their mobile devices. This is in contrast to Internet-based programming services that Bell Mobility enables customers to access in its capacity as an TCC. The programmers of those Internet-based programming services do not arrange for distribution and delivery of their programs to an end-user through a distribution system, but simply upload their services' Decision 2015-26, ¶4, MR, Tab 2, emphasis added. Decision 2015-26, ¶57, MR, Tab 2; Abridged Answer of Bell Mobility Inc., 9 January 2014, ¶7-15, MR, Tab 3A. The submissions of Bell Mobility to the CRTC contained confidential business information. Accordingly, Bell Mobility filed both full and abridged versions of its submissions before the CRTC. In this motion, Bell relies only on the information contained in its abridged submissions. Should leave to appeal be granted, Bell will move under Rule 151 for leave to file its unabridged CRTC submissions in confidence with the Court. 6 Decision 2015-26, ¶15, MR, Tab 2; Abridged Third Responses to Request of Bell Mobility, 14 October 2014, Bell Mobility(CRTC)30Sep14-3 Klass Part 1, MR, Tab 3L

Decision 2015-26, ¶6 and 21, MR, Tab 2.

5 programming to the Internet, where they become accessible to anyone with an Internet connection regardless of whether that connection is provided by Bell Mobility or a different ISP.8 18.

This distinction between Bell Mobile TV and Internet-based video programming

services was recognized by the CRTC itself in the DMBU Exemption Order, under which Bell Mobile TV is regulated as a digital media "broadcasting undertaking" providing a "broadcasting service" that is exempt from the licensing and regulatory requirements of the Broadcasting Act. Whereas Internet-based programming services such as Netflix or Youtube, fall within the definition of digital media broadcasting undertakings ("DMBUs") in s. 2(a) — i.e., programming services streamed over the Internet to anyone with an Internet connection — Bell Mobile TV falls within the DMBU definition ins. 2(b), as a Service provided via point-to-point wireless technology to only those Bell Mobility customers who subscribe to Bell Mobile TV: 2. The undertaking provides broadcasting services, in accordance with the interpretation of "broadcasting" set out in New Media, Broadcasting Public Notice CRTC 1999-84/Telecom Public Notice CRTC 99-14, 17 May 1999, that are: a) delivered and accessed over the Internet; or b) delivered using point-to-point technology and received by way of mobile devices. [emphasis added] 19.

Consistent with these differences, Bell Mobility does not require that customers

who access Bell Mobile TV pay the standard data charges which apply when they access Internet programming services using Bell Mobility's ISP service. Instead, Bell Mobility charges customers $5 per month to access up to 10 hours of Bell Mobile TV, and $3 for each additional hour.9

First Responses to Request of Bell Mobility, 25 April 2014, Bell Mobility(CRTC)4Apr14-7 Klass, MR, Tab 3G. It is true that Bell Mobile TV is also available through Wi-Fi to Bell Mobility customers who subscribe to Bell Mobile TV, as the majority of the CRTC noted: Decision 2015-26, ¶23-24, MR, Tab . However, this does not mean that Bell Mobility operates Bell Mobile TV as a TCC rather than a BU, since the CRTC has long held that there is no requirement that a broadcasting distribution undertaking own its head end and subscriber drops: New Regulatory Framework for Broadcasting Distribution Undertakings —Public Notice CRTC 1997-25, 11 March 1997, ¶78-80, BOA, Tab 14. Further, access to Wi-Fi is not at issue in the Decision as the only undue preference the CRTC found was when Bell Mobility offered Mobile TV over its own wireless network and did not apply data charges in that situation. 9 Decision 2015-26, ¶6, MR, Tab 2.

8 Abridged

-6B. 20.

The Klass Complaint to the CRTC

On November 20, 2013, Mr. Benjamin Klass filed a complaint against Bell

Mobility under s. 27(2) of the Telecommunications Act, alleging that its practice of not charging standard data charges for Bell Mobile TV confers an undue preference upon Bell Mobility, and unjustly discriminates against wireless customers that consume mobile Internet-based video services, and against Bell Mobility's competitors.10 21.

In response, Bell Mobility observed that pursuant to s. 2(b) of the DMBU

Exemption Order, it acts as an exempt BU under the Broadcasting Act when providing Bell Mobile TV, and is therefore not subject to the Telecommunications Act when acting in that capacity. Conversely, Bell Mobility noted that it acts as a TCC when providing wireless access to Internet-based video services as an 1SP, and is therefore governed by the Telecommunications Act rather than the Broadcasting Act in that regard." 22.

The fact that Bell Mobility operates these two distinct undertakings and performs

these distinct roles is no different than when a cable BU, such as Rogers, provides Internet connectivity to its Internet customers and at the same time offers its cable TV customers access to Rogers cable's broadcast programming services via a cable subscription. In all cases Internet connectivity and cable TV programming content are accessible over the same network or coaxial cable, but two distinct services. are being offered by two distinct undertakings: (i) Internet connectivity, a telecommunications service provided by a TCC that is regulated under the Telecommunications Act, and (ii) cable TV distribution, a broadcasting service provided by a BU that is regulated under the Broadcasting Act. 23.

The consequences of this distinction are as follows: (a)

As a matter of jurisdiction, the undue preference/disadvantage prohibition in s. 27(2) of the Telecommunications Act does not apply to Bell Mobility when providing the Bell Mobile TV Service, but only when

Decision 2015-26, Âś1-2, MR, Tab 2; Klass Application, 20 November 2013, MR, Tab 3A. A similar undue preference complaint was made against Quebecor Media Inc., Videotron Ltd. and Videotron G.P. in respect of their illico.tv service by the Consumers' Association of Canada, the Council of Senior Citizens' Organizations of British Columbia and the Public Interest Advocacy Centre, which the CRTC heard concurrently with the Klass Complaint against Bell Mobility. II Abridged Answer of Bell Mobility Inc., 9 January 2014, MR, Tab 3B.

7 providing Internet connectivity and thereby delivering Internet-based video programming services. Conversely, the undue preference/disadvantage prohibition in the DMBU Exemption Order, which does apply to Bell Mobile TV, is inapplicable when Bell Mobility is delivering Internet-based video programming services. It is therefore not legally possible to make an undue preference finding between two distinct services: one, a telecommunications service which provides Internet connectivity, and the other, a broadcasting Service that provides content it has acquired, aggregated, marketed and retransmitted to its customers. (b)

As a matter of CRTC policy, it is inappropriate to find an undue preference based on comparisons between two different categories of services, i.e., an exempt broadcasting Service (Bell Mobile TV) and a telecommunications service (Internet-based video programming) regulated under two different statutes.12

C. 24.

CRTC Decision 2015-26

On January 20, 2015, the CRTC affirmed the Klass Complaint and found that

Bell Mobility violated s. 27(2) of the Telecommunications Act when it exempted Bell Mobile TV from standard data charges. The CRTC did so despite a strong concurring opinion by Commissioner Shoan, who found that the majority improperly treated Bell Mobility as a TCC rather than a BU when providing Bell Mobile TV. 25.

The majority clearly accepted that Bell Mobility is a BU engaged in broadcasting

activities when it assembles and aggregates the various programming services available as part of the Service: The Commission considers that Bell Mobility and Videotron, in acquiring the mobile distribution rights for the content available on their mobile TV services, in aggregating the content to be broadcast, and in packaging and marketing those services, are involved in broadcasting. In this regard, it notes that no party

12 Globalive Wireless Management Corp., operating as WIND Mobile, and the Public Interest Advocacy Centre Applications to review and van., Telecom Decision 2011-360 regarding roaming on Rogers Communications Partnership's wireless networkâ&#x20AC;&#x201D;Telecom Decision CRTC 2012-210, 5 April 2012, 118-22, BOA, Tab 11.

8 to this proceeding disputed that mobile TV services constitute broadcasting services as contemplated by the DMBU exemption order.13 26.

However, the majority went on to hold that, because Bell Mobility retransmits

Bell Mobile TV programming content to customers via the same wireless technology and subscriber interface it uses to provide access to Internet-based programming and other telecommunications services, Bell Mobility somehow ceases to act as a BU and becomes a TCC at some point during the distribution sequence over Bell Mobility's wireless network: The Commission finds that in order to transport their mobile TV services from their servers to subscribers' mobile devices, Bell Mobility and Videotron use their respective wireless access networks. These are the very same networks they use to deliver their wireless voice and data telecommunications services, which are clearly telecommunications services subject to the Telecommunications Act. Moreover, these services' traffic is currently treated the same as other traffic in Bell Mobility's and Videotron's wireless access networks. Based on both Bell Mobility's and Videotron's submissions, the data path is the same regardless of whether the Bell Mobile TV or illico.tv subscriber has a wireless voice plan, data plan or tablet plan. Further, given the network descriptions provided by Bell Mobility and Videotron, the Commission finds that the functions performed by Bell Mobility and Videotron to establish the data connectivity and provide transport over their wireless access networks would be the same whether the content being transported is their mobile TV services, other broadcasting services, or nonbroadcasting services. That is, the purpose of these functions is to establish data connectivity and transport the content - agnostic as to the content itself. As submitted by Mr. Klass, from a subscriber's perspective, the mobile TV services are accessed and delivered under conditions that are substantially similar to those of other Internet-originated telecommunications services. Also, as indicated by Mr. Klass, the consumer accesses the mobile TV service on its mobile device in the same way that it accesses other apps. Subscribers to the mobile TV services require data connectivity whether or not they have a data plan. Data connectivity is required to authenticate the end user as a mobile TV service subscriber and to transmit the content to end users' mobile devices. In the facts of the present case, the data connectivity required to access the mobile TV services cannot be established unless the subscriber obtains a telecommunications service from Bell Mobility or Videotron. In the case of Bell Mobility, only an end user that subscribes to a Bell Mobility (or Bell Mobility affiliate) mobile wireless voice plan, data plan or tablet plan can subscribe to Bell 13

Decision 2015-26,1115, emphasis added.

9 Mobility's mobile TV service. ... As such, 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 noted above, this necessary data connection enables that end user to access the mobile TV services' content.14 27.

The majority then concluded that: 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.15

28.

Based on this conclusion, the majority proceeded to compare Bell Mobile TV

charges with those applicable to the viewing of the Internet-based programming services (e.g., Netflix, Youtube, etc.) made accessible by Bell Mobility's Internet access service, despite the problems with this set out at paragraph 23 above. It was only by making this jurisdictionally improper characterization of the Bell Mobile TV Service as a telecommunications service provided by a TCC and the resulting pricing comparison that the majority found Bell Mobility breached the undue preference/disadvantage prohibition in s. 27(2) of the Telecommunications Act. 29.

In his concurring opinion, Commissioner Shoan took issue with the majority's

conclusion that Bell Mobility does not act as a BU when retransmitting Bell Mobile TV to customers, noting that it is contrary to the premise of technological neutrality which underlies the Broadcasting Act, and ignores the CRTC's own prior determination that BUs are not limited to programming, distribution and network services but include the services identified in the DMBU Exemption Order: The applications pertain to the provision and associated billing of broadcasting services. As technologically neutral legislation, the applicability of the Broadcasting Act is not limited to a particular platform. It was drafted and designed as an evolving statute. As such, the manner in which programming is delivered to Canadians is immaterial; the Broadcasting Act is intended to capture certain activity, namely, the provision ofprogramming to Canadians by way of radio waves or other telecommunications. This is why, despite the fact Decision 2015-26117-21, emphasis added. 15 Decision 2015-26, Âś22, emphasis added.

- 10 that virtually 95% of Canadians receive their programming via cable or satellite companies, the Broadcasting Act does not refer to these distribution technologies as encapsulating the only method by which programming can be disseminated. It was purposefully designed to be platform neutral • • •

With respect to my colleagues, I have difficulty accepting their argument. It is the nature of the activity that defines a service, not the nature of its platform, and a reasonable argument can be made that evolving activity on a platform may change elements of the nature of the service. It may be true that certain networks were initially used solely for wireless voice and data but if, over time, they become networks for programming distribution, thatfact must be reflected in Commission decision and policy-making. Secondly, it is differential pricing by carriers of content on their wireless platform that has spurred the applications - meaning, to some degree, carriers are not acting in an agnostic mariner. They have identified certain programming applications as being worthy of preferential treatment and instituted processes over their networks to give effect to that preference. As such, in my view, the second premise underpinning the majority decision is suspect. In contemplating the application of the Broadcasting Act and, by extension, the DMEO in this matter, the majority did not, in my view, give sufficient consideration as to whether any of the undertakings that comprise a broadcasting undertaking could reasonably apply to the activity of the mobile carriers in this matter. As stated at paragraph 28 of Distribution of satellite subscription radio services by direct-to-home broadcasting distribution undertakings, Broadcasting Decision CRTC 2006-615, 3 November 2006, the Commission has determined that the definition of broadcasting undertaking "includes" programming services, distribution services and a network but may also include other services not specifically named.16 PART II—POINTS IN ISSUE 30.

This motion raises two issues, being whether there is an arguable case that the

CRTC erred in: (a)

holding that it could apply s. 27(2) of the Telecommunications Act to Bell Mobility when distributing Bell Mobile TV, a broadcasting service the CRTC itself acknowledged was operating as a BU; and

(b)

concluding that Bell Mobility breached s. 27(2) based on no evidence of undueness which resulted in a misapplication of the burden of proof.

Decision 2015-26, Concurring opinion of Commissioner Raj Shoan, p. 1 and 3, MR, Tab 2, emphasis added.

PART III—SUBMISSIONS 1.

The Test for Leave to Appeal

31.

The test for leave under s. 31(2) of the Broadcasting Act and s. 64(2) of the

Telecommunications Act is not onerous. Bell need only establish an "arguable case" that Decision 2015-26 was based on an error of law or jurisdiction.I7 32.

In applying this test, the Court should take into account the standard of review

that will apply on appeal. As Cameron J.A. said in Newfoundland and Labrador Hydro: By section 99 of the Public Utilities Act, leave may be granted only in respect of a question as to the jurisdiction of the Board or upon a question of law. ... I accept the submission of the intended respondent that in determining whether there are serious arguable issues consideration should be given to the standard of review to be applied by the Court in respect of the particular issues raised. Obviously, where the standard of review is patent unreasonableness the serious arguable issue test is more difficult to meet than where the test is correctness.18 33.

As to the errors alleged here, the "prior jurisprudence"19 establishes the

following: (a)

whether the CRTC can apply s. 27(2) of the Telecommunications Act to Bell Mobility in respect of Bell Mobile TV – in circumstances where, as here, the CRTC held that Bell Mobile TV acts as a BU – is a true question of jurisdiction, i.e., one "where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter",20 and thus reviewable on a standard of correctness;21

CKLN Radio Inc. v. Canada (A.G.), 2011 FCA 135 at paras. 5-6, BOA, Tab 34. Labrador City (Town) v. Newfoundland and Labrador Hydro Inc., 2004 NLCA 61 (Chambers), ¶5, BOA, Tab 39, emphasis added. See also Nycan Energy Corp. v. Alberta (Energy and Utilities Board), 2001 ABCA 31 (Chambers), ¶4, BOA, Tab 43. 19 Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, ¶57, BOA, Tab 37. Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190,159, BOA, Tab 37. 21 Bell Canada v. Canada (CR.T.C), [1989] 1 S.C.R. 1722 at 1743-1747, BOA, Tab 21; British Columbia Telephone Co. v. Shaw Cable Systems (B.C.) Ltd, [1995] 2 S.C.R. 739,131, BOA, Tab 22; Barrie Public Utilities v. Canadian Cable Television Assn., [2003] 1 S.C.R. 476, ¶9-19, BOA, Tab 18; Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, [2012] 3 S.C.R. 489, ¶7-8 and 11-33, BOA, Tab 51. cf.: Bell Canada v. Bell Aliant Regional Communications, [2009] 2 S.C.R. 764,11, 24-26, 34-42, 55-59 and 77, BOA, Tab 20. 17

- 12 (b)

a finding based on no evidence is a "jurisdictional error" reviewable without deference,22 and a misapplication of the burden of proof raises a "pure question of law" — including a breach of procedural fairness23 reviewable on a standard of correctness.24

34.

Accordingly, the CRTC should not be entitled to any deference on appeal.

Moreover, for the reasons below, the issues raised by Bell Mobility satisfy the arguable case threshold under s. 31(2) of the Broadcasting Act and s. 64(2) of the Telecommunications Act regardless of whether deference will be applied. 2.

Issue #I — The Telecommunications Act Does Not Apply to Bell Mobile TV

35.

As discussed at paragraph 25 above, the majority of the CRTC determined that

Bell Mobility is a BU engaged in "broadcasting" with respect to Bell Mobile TV. This follows from s. 2 of the Broadcasting Act, which provides in part: 2. (1) In this Act, "broadcasting undertaking" includes a distribution undertaking, a programming undertaking and a network; [emphasis added] 36.

The definition of "broadcasting undertaking" in s. 2(1) is inclusive rather than

exclusive. The CRTC affirmed that Bell Mobility falls within this definition when it issued the DMBU Exemption Order under s. 9(4) of the Broadcasting Act. Section 9(4) provides:

Canadian Union of Postal Workers v. Healy, 2003 FCA 380, ¶22, BOA, Tab 29; TEL US Communications Inc. v. Canada (C.R.T.C.), [2005] 2 F.C.R. 388 (C.A.), ¶39-42, leave to appeal refused, [2004] S.C.C.A. No. 573, BOA, Tab 54. Thus, this Court has frequently held that a CRTC finding based on no evidence may be appealed under ss. 31(2) and 64(2): Cathay International Television Inc. v. CR.TC., 1987 CarswellNat 919 (F.C.A.), ¶10-11 and 20 (and 121), BOA, Tab 31; Cathay International Television Inc. v. Canada (C.R.TC.), [1987] F.C.J. No. 350 (CA.), BOA, Tab 32; Arthur v. Canada (A.G.), [1999] F.C.J. No. 1917 (C.A.), ¶20 and 28, leave to appeal to S.C.C. refused, [2000] C.S.C.R. No. 85, BOA, Tab 17; Pachul v. Canada (CR.T.C.), 2002 FCA 165, ¶14, BOA, Tab 44. cf.: Canadian National Railway v. Bell Telephone Co., [1939] S.C.R. 308 at 316-317, BOA, Tab 28; and Genex Communications Inc. v. Canada (C.R.T.C.), 2004 FCA 279, ¶1, BOA, Tab 38. 23 Celanese Canada Inc. v. Murray Demolition Corp., [2006] 2 S.C.R. 189,151, BOA, Tab 33; Anchor Pointe Energy Ltd v. Canada, 2007 FCA 188,136, leave to appeal refused, [2007] S.C.C.A. No. 368, BOA, Tab 16; Nova Scotia (Director of Assessment) v. van Driel, 2010 NSCA 87, ¶42-43, BOA, Tab 42. 24 Canada (Commissioner of Competition) v. Superior Propane Inc., [2001] 3 F.C. 185 (C.A.), ¶169, leave to appeal refused, [2001] S.C.C.A. No. 352, BOA, Tab 27; McGregor v. Canada (A.G.), 2007 FCA 197, ¶13, BOA, Tab 40; Canada (Citizenship and Immigration) v. Khosa, [2009] 1 S.C.R. 339,142-43, BOA, Tab 26; Cyprus (Commerce and Industry) v. International Cheese Council of Canada, 2011 FCA 201, ¶19, leave to appeal refused, [2011] S.C.C.A. No. 385, BOA, Tab 36; and Walden v. Canada (Social Development), 2011 FCA 202, ¶15 and 17, BOA, Tab 56. cf. Xwave Solutions Inc. v. Canada (Public Works & Government Services), 2003 FCA 301, ¶36-37, BOA, Tab 57. This Court has previously granted leave to appeal under s. 31(2) from a CRTC finding which was alleged to misapply the burden of proof: BCE Inc. v. Telus Communications Company, 2013 FCA 58,14, BOA, Tab 19. 22

- 13 [9](4) The Commission shall, by order, on such terms and conditions as it deems appropriate, exempt persons who carry on broadcasting undertakings of any class specified in the order from any or all of the requirements of this Part or of a regulation made under this Part where the Commission is satisfied that compliance with those requirements will not contribute in a material manner to the implementation of the broadcasting policy set out in subsection 3(1). [emphasis added] 37.

By virtue of s. 9(4), the CRTC could only issue the DMBU Exemption Order in

relation to persons who "carry on broadcasting undertakings" within the meaning of the Broadcasting Act. The CRTC recognized two such categories of "broadcasting undertakings" in the DMBU Exemption Order, and defined them in s. 2 as follows: 2. The undertaking provides broadcasting services, in accordance with the interpretation of "broadcasting" set out in New Media, Broadcasting Public Notice CRTC 1999-84/Telecom Public Notice CRTC 99-14, 17 May 1999, that are: a) delivered and accessed over the Internet; or b) delivered using point-to-point technology and received by way of mobile devices. 38.

The category of BUs in s. 2(b), which involves undertakings that provide

"broadcasting services" that are "delivered using point point-to-point technology and received by way of mobile devices", clearly includes mobile television services like Bell Mobile TV. Indeed, the CRTC has described this category as including "mobile television broadcasting undertakings",25 defined as follows: 2. The undertaking provides television broadcasting services that are received by way of mobile devices, including cellular telephones and personal digital assistants. 3. The undertaking uses point-to-point technology to deliver the service; that is, the undertaking transmits a separate stream of broadcast video and audio to each end-user.26 39.

Further, in Broadcasting Notice 2014-190, the CRTC reaffirmed that mobile

television services constitute "broadcasting services":

25 Amendments

to the Exemption order for new media broadcasting undertakings (Appendix A to Public Notice CRTC 1999-197); Revocation of the Exemption order for mobile television broadcasting undertakingsâ&#x20AC;&#x201D;Broadcasting Order CRTC 2009-660, 22 October 2009,115 and 10, BOA, Tab 7. 26 Exemption order for mobile television broadcasting undertakingsâ&#x20AC;&#x201D;Broadcasting Public Notice CRTC 2007-13, 7 February 2007, Appendix, BOA, Tab 9, emphasis added.

- 14 ... Broadcasting services delivered over the Internet or on mobile devices are other examples of exempt services that form part of the television system.27 40.

Therefore, as the CRTC concluded in the Decision itself, "mobile TV services

constitute broadcasting services as contemplated by the DMBU exemption order".28 41.

That Bell Mobility is a BU in relation to Bell Mobile TV is also supported by the

case law. In the ISP Reference, the Supreme Court of Canada held that ISPs are not BUs, because unlike BUs they have no control over the content they provide access to: ISPs provide routers and other infrastructure that enable their subscribers to access content and services made available on the Internet. This includes access to audio and audiovisual programs developed by content providers. Content providers depend on the ISPs' services for Internet delivery of their content to end-users. The ISPs, acting solely in that capacity, do not select or originate programming or package programming services. Noel J.A. held that ISPs, acting solely in that capacity, do not carry on "broadcasting undertakings". We agree with Noel J.A., for the reasons he gave, that the terms "broadcasting" and "broadcasting undertaking", interpreted in the context of the language and purposes of the Broadcasting Act, are not meant to capture entities which merely provide the mode of transmission. Section 2 of the Broadcasting Act defines "broadcasting" as "any transmission of programs ... by radio waves or other means of telecommunication for reception by the public". The Act makes it clear that "broadcasting undertakings" are assumed to have some measure of control over programming. Section 2(3) states that the Act "shall be construed and applied in a manner that is consistent with the freedom of expression and journalistic, creative and programming independence enjoyed by broadcasting undertakings". Further, the policy objectives listed under s. 3(1) of the 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. An ISP does not engage with these policy objectives when it is merely providing the mode of transmission. ISPs provide Internet access to end-users. When providing access to the Internet, which is the only function of ISPs placed in issue by the reference question, they take no part in the selection, origination, or packaging of content. We agree with Noel J.A. that the term "broadcasting undertaking" does not contemplate an entity with no role to play in contributing to the Broadcasting Act's policy objectives.29 42.

Accordingly, Bell Mobility carries on two distinct undertakings. When providing

customers with access to Internet-based video programming and other services, it is a " Lets Talk TV â&#x20AC;&#x201D;Broadcasting Notice of Consultation CRTC 2014-190,1115, BOA, Tab 12, emphasis added. 28 Decision 2015-26,1115, MR, Tab 2, emphasis added. 29 Reference re Broadcasting Act, [2012] 1 S.C.R. 142, Âś2-5, BOA, Tab 50, emphasis added.

- 15 TCC providing a telecommunications service that is subject to the Telecommunications Act and not subject to the Broadcasting Act by operation of s. 4(4) of the Broadcasting Act. However, when acquiring, aggregating and retransmitting Bell Mobile TV to customers, it is a BU providing a broadcasting Service to-which the Broadcasting Act applies and to which the Telecommunications Act is inapplicable by operation of s. 4 of the Telecommunications Act. 43.

Despite this distinction, and despite acknowledging that Bell Mobility was in fact

acting as a BU in purchasing rights to content and aggregating that content, the majority concluded that Bell Mobility was acting as a TCC offering a "telecommunications service" subject to s. 27(2) of the Telecommunications Act when "provid[ingj the data connectivity and transport necessary to deliver Bell Mobile TV",30 since it used the "same networks"3I on which it performed the "same" technical "functions"32 as when providing customers with telecommunications services like access to Internet-based video programming. The majority held that "[t]his is the case whether or not concurrent broadcasting services are also being offered".33 This was an error of jurisdiction for three (3) reasons. 44.

First, it is contrary to the governing legislative scheme. Pursuant to s. 4 of the

Telecommunications Act: 4. This Act does not apply in respect of broadcasting by a broadcasting undertaking.34 45.

It is significant here that s. 4 excludes from the Telecommunications Act all

broadcasting activities by a BU, whether or not they are being carried on while that BU is also a TCC.35 Section 4(3) of the Broadcasting Act further makes it clear that once

Decision 2015-26, ¶22, MR, Tab 2. 2015-26, ¶17, MR, Tab 2. 32 Decision 2015-26, ¶18, MR, Tab 2. 25 Decision 2015-26,122, MR, Tab 2, emphasis added. 54 Section 2(1) of the Telecommunications Act defines "broadcasting undertaking" to have "the same meaning as in subsection 2(1) of the Broadcasting Act" 35 See Public Mobile Inc. v. Canada (A.G.), [2011] 3 F.C.R. 3,184 (F.C.), rev'd on other grounds, [2011] 3 F.C.R. 344 (C.A.), leave to appeal refused, [2011] S.C.C.A. No. 349, BOA, Tab 45 ("Sections 4 and 5 of that Act provide any person, other than a broadcasting undertaking, who operates any transmission facility of a Canadian carrier, is subject to the Act"). 30

31 Decision

- 16 characterized as a BU, it is the Broadcasting Act that applies even if the BU is carried on or connected with a non-BU such as a TCC: [4](3) For greater certainty, this Act applies in respect of broadcasting undertakings whether or not they are carried on for profit or as part of, or in connection with, any other undertaking or activity. [emphasis added] 46. These provisions reflect the fact that broadcasting depends on telecommunications for the transmission and reception of programs. However, BUs are distinguished from TCCs due to the former's role in the creation, preparation or acquisition of programming content beyond the simple transmission activities which characterize TCCs. This is apparent from the definitions of "broadcasting" and "telecommunications" in the Broadcasting Act and Telecommunications Act, both of which include elements of telecommunications: Broadcasting Act 2. (1) In this Act, "broadcasting" means any transmission of programs, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus, but does not include any such transmission of programs that is made solely for performance or display in a public place; • • •

"program" means sounds or visual images, or a combination of sounds and visual images, that are intended to inform, enlighten or entertain, but does not include visual images, whether or not combined with sounds, that consist predominantly of alphanumeric text; (2) For the purposes of this Act, "other means of telecommunication" means any wire, cable, radio, optical or other electromagnetic system, or any similar technical system. Telecommunications Act 2. (1) In this Act, "intelligence" means signs, signals, writing, images, sounds or intelligence of any nature; "telecommunications" means the emission, transmission or reception of intelligence by any wire, cable, radio, optical or other electromagnetic system, or by any similar technical system; [emphasis added]

- 17 47.

The same point is recognized in other related statutes. For instance, s. 4(1) of the

Department of Industry Act provides:36 4. (1) The powers, duties and functions of the Minister extend to and include all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada, relating to (lc) telecommunications, except in relation to (i) the planning and coordination of telecommunication services for departments, boards and agencies of the Government of Canada, and (ii) broadcasting, other than in relation to spectrum management and the technical aspects of broadcasting; [emphasis added] 48.

Similarly, s. 6(1) of the Radiocommunication Act states: 6. (1) The Governor in Council may make regulations • • •

(n) prohibiting or regulating the further telecommunication, other than by persons operating broadcasting undertakings, of radiocommunications; [emphasis added] 49.

Broadcasting, by its very nature, is transmitted via telecommunications. Because

of this fact, s. 4 of the Telecommunications Act explicitly carves out all forms of broadcasting from its ambit. As well, s. 4(4) of the Broadcasting Act, excludes from its ambit any TCC when it is acting solely as a telecommunications provider, though the Broadcasting Act still applies to the extent that the TCC is acting as a broadcaster.37 The key distinction between the two statutes, and therefore the reason why the two regulatory regimes must be kept mutually exclusive, is that a TCC is required to be agnostic as to the content it carries,38 whereas a BU is responsible for selecting and controlling (arid is even liable for) the content it carries.39

In contrast to the Telecommunications Act, which this provision assigns to the Minister of Industry, the responsible Minister for the Broadcasting Act is the Minister of Canadian Heritage: Department of Canadian Heritage Act, ss. 4(1) and 4(2)(i). This underscores the distinct and comprehensive nature of the Broadcasting Act in relation to broadcasting, as discussed in more detail at paragraphs 49-50 below. 37 Section 4(4) of the Broadcasting Act provides: [41(4) For greater certainty, this Act does not apply to any telecommunications common carrier, as defined , in the Telecommunications Act, when acting solely in that capacity. 38 See s. 36 of the Telecommunications Act, which provides that a TCC "shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public" without (rarely given) CRTC approval. 39 Sees. 3(1)(h) of the Broadcasting Act, which declares as part of Canada's broadcasting policy that "all persons who are licensed to carry on broadcasting undertakings have a responsibility for the programs they broadcast". 36

-1850.

In the Decision, although the majority held that by definition Bell Mobility

operates Bell Mobile TV as a BU, in order to find an undue preference under s. 27(2) of the Telecommunications Act the majority also found that Bell Mobility operates Bell Mobile TV as a TCC governed by the Telecommunications Act at the same time. This was a finding beyond the CRTC's jurisdiction. Once the CRTC concluded that Bell Mobility was operating Bell Mobile TV as a BU providing a broadcasting Service, the Telecommunications Act became inapplicable to the entire Bell Mobile TV undertaking. 51.

Second, the CRTC majority's decision to segregate and assign the Bell Mobile

TV undertaking's retransmission activities to the Telecommunications Act, after finding that Bell Mobile TV is a BU under the Broadcasting Act, is contrary to the case law, which overwhelmingly views BUs as indivisible entities for the purposes of establishing jurisdiction, regardless of the technology used to perform the retransmission fimetion." 52.

Over 75 years ago, the Privy Council held in the Radio case that Parliament's

jurisdiction over broadcasting cannot be limited to the transmission of Hertzian waves, but must include their corresponding reception: The argument of the Province really depends on making, as already said, a sharp distinction between the transmitting and the receiving instrument. In their Lordships' opinion this cannot be done. Once it is conceded, as it must be, keeping in view the duties under the convention, that the transmitting instrument must be so to speak under the control of the Dominion, itfollows in their Lordships' opinion that the receiving instrument must share its fate. Broadcasting as a system cannot exist without both a transmitter and a receiver. The receiver is indeed useless without a transmitter and can be reduced to a nonentity if the transmitter closes. The system cannot be divided into two parts, each independent of the other. Although the question had obviously to be decided on the terms of the statute, it is a matter of congratulation that the result arrived at seems consonant with common sense. A divided control between transmitter and receiver could only lead to confusion and inefficiency.41

4Â° See, in addition to the cases cited below: Public Utilities Commission v. Victoria Cablevision Ltd, 1965 Carswel[BC 55 (C.A.), Âś8-13 and 26-30, BOA, Tab 47; C.F.RB. Ltd. v. Canada (4.G.) (No. 2), 1973 CarswellOnt 875 (C.A.),11611 and 16-17, BOA, Tab 23; and R. v. Shellbird Cable Ltd, 1982 CarswellNfld 47 (C.A.), 1112 and 18-21, BOA, Tab 48. 41 Reference re Regulation and Control of Radio Communication, [1932] A.C. 304 (P.C.) at 314-315 and 317, BOA, Tab 52, emphasis added.

-1953.

The Supreme Court of Canada later applied the Radio case in Capital Cities,

where the issue was whether Parliament had the constitutional jurisdiction to regulate cable companies which received and distributed television signals under the old Broadcasting Act. It was conceded in the Capital Cities appeal that Parliament possessed exclusive jurisdiction over the reception of television signals at the antennae of the cable companies, but the argument was made that once the antennae received those signals, any subsequent retransmission by the different technology of cable fell within provincial jurisdiction. In rejecting this argument, Laskin C.J.C. for the majority held: The question that arises as a result of the Radio case is whether the broad sweep of the reasons, stemming from a question that specifically referred to transmission and reception by means of Hertzian waves (but as an included means of radio communication), should be limited for the purposes of the present case because the Hertzian waves end at the antennae of the cable distribution systems and the signals carried by such waves are then converted for transmission through coaxial cables to subscribers' television sets. I am unable to accept the submission of the appellants and of the AttorneysGeneral supporting them that a demarcation can be made for legislative purposes at the point where the cable distribution systems receive the Hertzian waves. The systems are clearly undertakings which reach out beyond the Province in which their physical apparatus is located; and, even more than in the Winner case, they each constitute a single undertaking which deals with the very signals which come to each of them from across the border and transmit those signals, albeit through a conversion process, through its cable system to subscribers. The common sense of which the Privy Council spoke in the Radio case seems to me even more applicable here to prevent a situation of a divided jurisdiction in respect of the same signals or programmes according to whether they reach home television sets and the ultimate viewers through Hertzian waves or through coaxial cable. The fallacy in the contention on behalf of the Attorney-General of Ontario and of the Attorneys-General of Quebec and of British Columbia, and, indeed, of the appellants, is in their reliance on the technology of transmission as a ground for shifting constitutional competence when the entire under-taking relates to and is dependent on extra-provincial signals which the cable system receives and sends on to subscribers. It does not advance their contentions to urge that a cable distribution system is not engaged in broadcasting. The system depends upon a telecast for its operation, and is no more than a conduit for signals from the telecast, interposing itself through a different technology to bring the telecast to paying subscribers.

-20... The contention appears to be that since there is a local character to the cable distribution system in its physical aspect, and it may be receiving signals intraprovincially, it does not fall under total federal legislative authority. I understood, however, that it was conceded that federal jurisdiction was exclusive in respect of the receipt of signals at the antenna of the cable distribution system, wherever be their point of emanation. If that be the case, I do not see how legislative competence ceases in respect of those signals merely because the undertaking which receives them and sends them on to its local subscribers does so through a different technology. • • •

The Privy Council remarked in the Radio case that "'undertaking' is not a physical thing but is an arrangement under which of course physical things are used" ( [1932] A.C. 304, at p. 315). ... The technology of cable television does not make the operation of a cable distribution system which draws on signals emanating from outside Canada any less an "undertaking" than the radio operations which were the subject of enquiry in the Radio case. ... [I]t would be incongruous, indeed, to admit federal legislative jurisdiction to the extent conceded but to deny the continuation of regulatory authority because the signals are intercepted and sent on to ultimate viewers through a different technology. Programme content regulation is inseparable from regulating the undertaking through which programmes are received and sent on as part of the total enterprise. • • •

I cannot accept the submission made on behalf of the Attorney-General of Ontario that there are two undertakings involved in the operation of a cable distribution system, which receives and transmits television signals, simply because the transmission of the same signal to subscribers that it receives through Hertzian waves is done through a different technology. ...42 54.

The Supreme Court made the same point in Dionne, the companion case to

Capital Cities, where Laskin C.J.C. for the majority held that two separately owned entities located in different provinces, one of which broadcasted television signals and the other of which retransmitted those signals to its customers via cable, constituted a single undertaking within the exclusive jurisdiction of Parliament: ...[W]here television broadcasting and receiving is concerned there can no more be a separation for constitutional purposes between the carrier system, the physical apparatus, and the signals that are received and carried over the system than there can be between railway tracks and the transportation service provided over them or between the roads and transport vehicles and the transportation service that they provide. In all these cases, the inquiry must be as to the service that is provided and not simply as to the means through which it Capital Cities Communications Inc. v. Canadian Radio-Television Commission, [1978] 2 S.C.R. 141 at 157 and 159-163, BOA, Tab 30, emphasis added.

- 21is carried on. Divided constitutional control of what is functionally a[n] interrelated system of transmitting and receiving television signals, whether directly through air waves or through intermediate cable line operations, not only invites confusion but is alien to the principle of exclusiveness of legislative authority, a principle which is as much fed by a sense of the constitution as a working and workable instrument as by a literal reading of its words. ... I should emphasize that this is not a case where the cable distribution enterprises limit their operations to programmes locally produced by them for transmission over their lines to their local subscribers. Admittedly, they make use of television signals received at their antennae, both from within and without the Province; and the fact that they may make changes or deletions in transmitting the off-air programmes to their subscribers does not affect their liability to federal regulatory control. The suggested analogy with a local telephone system fails on the facts because the very technology employed by the cable distribution enterprises in the present case establishes clearly their reliance on television signals and on their ability to receive and transmit such signals to their subscribers. In short, they rely on broadcasting stations, and their operations are merely a link in a chain which extends to subscribers who receive the programmes through their private receiving sets. â&#x20AC;&#x201D; 43 55.

Accordingly, the CRTC erred in arbitrarily dividing Bell Mobility's functions

when acquiring and aggregating Bell Mobile TV programming from Bell Mobile TV's functions in retransmitting that content to customers over the Bell Mobility network. The fact that the Bell Mobile TV BU uses the same network and subscriber interface to retransmit Bell Mobile TV content as when Bell Mobility acts as a TCC undertaking providing telecommunications services is not a basis for splintering jurisdiction over the Bell Mobile TV BU between two statutes. As the Supreme Court of Canada emphasized in Dionne, in terms very similar to those used by Commissioner Shoan in dissent below, "the inquiry must be as to the service that is provided and not simply as to the means through which it is carried on". 56.

The Supreme Court's subsequent treatment of Capital Cities in the ISP Reference

is also instructive. The Court there rejected an analogy to Capital Cities for ISPs, because unlike the cable company in that case, ISPs have no "control over content": The appellants in this case argued that we should instead follow Capital Cities Communications Inc. v. Canadian Radio-Television Commission, [1978] 2 S.C.R. 141. In Capital Cities, decided under a 1968 version of the Broadcasting Act, the CRTC had amended Rogers Cable's licence, allowing Rogers to delete Public Service Board v. Dionne, [1978] 2 S.C.R. 191 at 197-198, BOA, Tab 46, emphasis added. See also Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, [2009] 3 S.C.R. 407,160 and 65, BOA, Tab 35.

-22and substitute the television advertisements in the American broadcasts it received before it distributed the broadcast to viewers. The American broadcasting stations argued that the Broadcasting Act was ultra vires Parliament since it purported to regulate systems situated wholly within provincial boundaries. As part of this argument, the American stations attempted to sever the function of receiving television signals from the distribution or retransmission of those signals within a particular province. The Court rejected this severance of reception and distribution, stating that it was a "single system" coming under federal jurisdiction. The appellants argue before this Court that ISPs similarly form part of a single broadcasting system that is subject to regulation under the Broadcasting Act. Like Noel J.A., we are not convinced that Capital Cities assists the appellants. The case concerned Rogers Cable's ability to delete and substitute advertising from American television signals. There was no questioning in Capital Cities of the fact that the cable television companies had control over content. ISPs have no such ability to control the content of programming over the Internet.44 57.

By contrast, Bell Mobility clearly does control the programming content of Bell

Mobile TV, since it acquires, aggregates, packages and markets that content before retransmitting it to customers. 58.

Third, the CRTC majority's decision is contrary to the Broadcasting Act's

fundamental principle of technological neutrality, which requires that the Broadcasting Act apply equally to BUs regardless of their underlying retransmission technologies. This principle is reflected in several provisions of the Broadcasting Act, including ss. 2(1), 2(2), 3(1) and 5(2): 2. (1) In this Act, "broadcasting" means any transmission of programs, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus, but does not include any such transmission of programs that is made solely for performance or display in a public place; â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘

. (2) For the purposes of this Act, "other means of telecommunication" means any wire, cable, radio, optical or other electromagnetic system, or any similar technical system. 3. (I) It is hereby declared as the broadcasting policy for Canada that (d) the Canadian broadcasting system should 44

Reference re Broadcasting Act, [20121 1 S.C.R. 142, 18-9, BOA, Tab 50, emphasis added.

- 23 •. •

(iv) be readily adaptable to scientific and technological change; • • •

(t) distribution undertakings • • •

(ii) should provide efficient delivery of programming at affordable rates, using the most effective technologies available at reasonable cost, [5](2) The Canadian broadcasting system should be regulated and supervised in a flexible manner that •• • (c) is readily adaptable to scientific and technological change; • • •

(f) does not inhibit the development of information technologies and their application or the delivery of resultant services to Canadians; ... [emphasis added] 59.

The CRTC itself recognized the importance of technological neutrality to the

Broadcasting Act when it first proposed the Exemption order for new media broadcasting undertakings, which was later renamed the DMBU Exemption Order:45 The Commission notes that the definition of "broadcasting" includes the transmission of programs, whether or not encrypted, by other means of telecommunication. This defmition is, and was intended to be, technologically neutral. Accordingly, the mere fact that a program is delivered by means of the Internet, rather than by means of the airwaves or by a cable company, does not exclude it from the definition of "broadcasting".

60.

...[T]he Commission considers that the particular technology used for the delivery of signals over the Internet cannot be determinative. Based on a plain meaning of the word, and recognizing the intent that the definition be technologically neutral, the Commission considers that the delivery of data signals from an origination point (e.g. a host server) to a reception point (e.g. an end-user's apparatus) by means of the Internet involves the "transmission" of the content. 6 The Decision carves out part of a BU's operation from the Broadcasting Act,

assigning it instead for regulation under the Telecommunications Act, simply because of the method of delivery used to transmit the BU's programs to its customers. The 4s Exemption order for new media broadcasting undertakings —Public Notice

CRTC 1999-197, 17 December 1999, Appendix, BOA, Tab 10. The New Media Exemption Order was renamed the DMBU Exemption Order in

Amendments to the Exemption order for new media broadcasting undertakings (now known as the Exemption orderfor digital media broadcasting undertakings) — Broadcasting Order CRTC 2012-409, Appendix, 26 July 2012, BOA, Tab

6. 46 New Media —Public

Notice CRTC 1999-84, 17 May 1999,1138-39, BOA, Tab 13, emphasis added. See also Review Regulatory Policy CRTC 2009-329, 4 June 2009, ¶33, BOA, Tab 15.

of broadcasting in new media—Broadcasting

- 24 consequence is that wireless mobile video services like Bell Mobile TV are made subject to the data caps applicable to programming services accessed over the Internet, whereas wireline broadcasting distribution services like Rogers cable TV are not. This violates the principle of technological neutrality and is contrary to the Broadcasting Act. 3.

Issue #2 — The CRTC Had No Evidence and Misapplied the Burden of Proof

61.

In the alternative, even ifs. 27(2) of the Telecommunications Act applies to Bell

Mobile TV — which is denied for the reasons at paragraphs 35-60 above — the CRTC majority erred in finding that any preference or disadvantage resulting from the exemption of Bell Mobile TV from Bell Mobility's standard data charges was "undue". The majority premised this undueness finding on: (a)

"the impact of the significant difference in data charges on consumers";47 and

(b)

"the potential for significant harm in the future to other audiovisual content services accessible on customers' mobile devices that are subject to data caps".48

62.

As to consumers, there was no evidence of harm to them from the Bell Mobile

TV data charge exemption. To the contrary, the data charge exemption means lower prices for Bell Mobility consumers who subscribe to Bell Mobile TV. The practical effect of the remedy which the CRTC ordered in the Decision — i.e., "direct[ing] Bell Mobility to eliminate its unlawful practice with respect to data charges"49 — is that rates for Bell Mobile TV substantially increase. There cannot be an undue preference/disadvantage to consumers for which the remedy is an increase in consumer prices. 63 .

As to competitors, the majority acknowledged that there was no evidence of such

harm from these other services themselves:

Decision 2015-26, ¶55, MR, Tab 2, emphasis added. Decision 2015-26,155, MR, Tab 2, emphasis added. 49 Decision 2015-26, ¶62, MR, Tab 2. 47

-25The Commission acknowledges that no complaints or interventions were filed by competing service providers. ...5° 64.

Instead, the CRTC speculated about what may happen in the future should Bell

Mobility continue to exempt Bell Mobile TV from standard data charges: ... If access to mobile TV services continues to grow, which is a reasonable expectation, the data charges for these mobile TV services, the disproportionately high data limits, and the encouragement for subscribers to use these services, might result in a degradation of other services by contributing to network congestion. • • •

In light of the above, the Commission fmds that the preference given in relation to the transport of Bell Mobility's and Videotron's mobile TV services to subscribers' mobile devices, and the corresponding disadvantage in relation to the transport of other audiovisual content services available over the Internet, will grow and will have a material impact on consumers, and other audiovisual content services in particular. As an example, it may end up inhibiting the introduction and growth of other mobile TV services accessed over the Internet, which reduces innovation and consumer choice.51 65.

Accordingly, the CRTC' s "findings" of undueness were pure conjecture with no

evidentiary basis and no legal value. As this Court stated in Satiacum: The common law has long recognized the difference between reasonable inference and pure conjecture. Lord Macmillan put the distinction this way...: ... A conjecture may be plausible but it is of no legal value, for its essence is that it is a mere guess. An inference in the legal sense, on the other hand, is a deduction from the evidence, and if it is a reasonable deduction it may have the validity of legal proof. ... In R. v. Fuller (1971),1 N.R. 112 at 114 , Hall J.A. held for the Manitoba Court of Appeal that "[Effie tribunal of fact cannot resort to speculative and conjectural conclusions." Subsequently a unanimous Supreme Court of Canada expressed itself as in complete agreement with his reasons: [1975] 2 S.C.R. 121 at 123, 1 N.R. 110 at 112. The evidence on which the Board based its conclusion... is the sheerest conjecture or the merest speculation. ... There are no facts I have remarked in the record, and certainly none cited by the Board, which would found their inference. On that side there is only conjecture.52

5° Decision 2015-26,1155, MR, Tab 2, emphasis added. 51 Decision 2015-26, ¶53 and 58, MR, Tab 2, emphasis added. 52 Satiacum v. Canada (Minister of Employment & Immigration), 1989 CarswellNat 906 (F.C.A.), ¶33-35, leave to appeal to S.C.C. refused, [1989] S.C.C.A. No. 352, BOA, Tab 53, emphasis added.

- 26 66.

More than that, the CRTC's undueness findings were contradicted by the

evidence actually in the record, since Bell Mobility filed data with the CRTC indicating that Netflix and Youtube had increased their market share since the introduction of Bell Mobile TV." 67.

Finally, the CRTC misapplied the reverse onus in s. 27(4) of the

Telecommunications Act in requiring that Bell Mobility bear the burden of rebutting its speculation in the circumstances at issue here: [P]ursuant to subsection 27(4) of the Telecommunications Act, the burden of establishing before the Commission that any preference or disadvantage is not undue or unreasonable is on the Canadian carrier that confers the preference and subjects the person to a disadvantage. ... Given the considerable difference in the data charges in question, the Commission is not convinced by the arguments provided by Bell Mobility and Videotron that there has been no material impact, or that such an impact is unlikely in the future, either on consumers or on the growth of other services. In light of all of the foregoing, the Commission is of the view that Bell Mobility and Videotron have not discharged the burden of establishing before the Commission that any preference or disadvantage is not undue or unreasonable. . . .54 68.

This was an error of law and a breach of procedural fairness. The issue of

whether Bell Mobile TV's exemption from standard data caps would have a material adverse impact on other competing services is something that the CRTC rather than Bell was in the best position to obtain evidence about. Bell could not reasonably be expected to adduce evidence to refute the predicted adverse future impact of its Service on its competitors in circumstances where no actual evidence of harm to competitors was placed on the record of the proceeding. 69.

This was recognized in Superior Propane, where Evans J.A. held that the legal

burden of proving the "effects" element of the efficiency defence under the Competition Act (raised in response to a substantial lessening of competition allegation) should shift

53 54

Abridged Reply Comments of Bell Mobility Inc., 12 May 2014, Âś58, MR, Tab 3H. Decision 2015-26, Âś49, 55, 61, MR, Tab 2, emphasis added. Section 27(4) provides: [21(4) The burden of establishing before the Commission that any discrimination is not unjust or that any preference or disadvantage is not undue or unreasonable is on the Canadian carrier that discriminates, gives the preference or subjects the person to the disadvantage.

- 27 to the Commissioner of Competition, because the Commissioner is in abetter position to obtain evidence on that element than the defendant: [T]he principle that the party who asserts must prove is not absolute... In addition, in the absence of authority, considerations offairness, probability and policy would seem to be important determinants of the legal burden ofproof... These are matters on which the Commissioner is in a better position than the respondents to gather evidence by virtue of the investigative powers conferred on him by statute. Indeed, as Sopinka, Lederman and Bryant note (supra, at page 89), if "one party is peculiarly situated to prove a fact" a court may reverse the burden and place it on that party.55 70.

Therefore, the CRTC should not have interpreted s. 27(4) of the

Telecommunications Act to require a shift in the burden of proof onto Bell Mobility in these circumstances, where the CRTC rather than Bell was in the best position to obtain evidence of the impact of the Bell Mobile TV data charge exemption on competitors. Regardless of the literal wording of s. 27(4), the legislation must be read in its full context,56 including the presumption that Parliament intended the CRTC to apply the reverse onus provision consistently with the common law principle of procedural fairness recognized in Superior Propane. As the Supreme Court of Canada said in CUPE: [A]dministrative law supplies certain inferences and presumptions. For example... "courts generally infer that Parliament or the legislature intended the tribunal's process to comport with principles of natural justice". More broadly, it is presumed that the legislature intended the statutory decision maker to function within the established principles and constraints of administrative law.57 PART IV—ORDER SOUGHT 71.

Bell Mobility requests that leave to appeal be granted, with costs.

55 Canada (Commissioner of Competition) v. Superior Propane Inc., [2001] 3 F.C. 185 (CA), ¶171 and 173 (and1165 and 174), leave to appeal refused, [2001] S.C.C.A. No. 352, BOA, Tab 27, emphasis added. See also: National Trust Co. v. Wong Aviation Ltd., [1969] S.C.R. 481 at 489 and 491, BOA, Tab 41; and Tervita Corp. v. Canada (Commissioner of Competition), 2015 SCC 3, ¶122, BOA, Tab 55. 56 Re Rizzo and Rizzo Shoes Ltd., [1998] 1 S.C.R. 27,121, BOA, Tab 49. 57 CU.P.E. v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539, ¶99, BOA, Tab 24, emphasis added. See also Canada (A.G) v. Mavi, [2011] 2 S.C.R. 504, ¶39, BOA, Tab 25.

- 28 ALL OF WHICH IS RESPECTFULLY SUBMITTED this 20th day of February, 2015. }-----------) Solicitors for the Moving Party, Bell Mobility Inc. Neil Finkelstein Brandon Kain Richard Lizius

PART V—LIST OF AUTHORITIES A.

Statutes and Regulations

Broadcasting Act, S.C. 1991, c. 11, as am., Parts I and II

Department of Canadian Heritage Act, S.C. 1995, c. 11, as am., s. 4

Department of Industry Act, S.C. 1995, c. 1, as am., s. 4

Radiocommunication Act, R.S.C. 1985, c. R-2, as am., s. 6

Telecommunications Act, S.C. 1993, c. 38, as am., Parts I, III and IV

Case Law CRTC Decisions

Amendments to the Exemption order for new media broadcasting undertakings (now known as the Exemption order for digital media broadcasting undertakings) Broadcasting Order CRTC 2012-409, Appendix, 26 July 2012

Amendments to the Exemption order for new media broadcasting undertakings (Appendix A to Public Notice CRTC 1999-197); Revocation of the Exemption order for mobile television broadcasting undertakings – Broadcasting Order CRTC 2009-660, 22 October 2009,

Revocation of the Exemption order for mobile television broadcasting undertakings Broadcasting Order CRTC 2009-660, 22 October 2009

Exemption order for mobile television broadcasting undertakings –Broadcasting Public Notice CRTC 2007-13, 7 February 2007, Appendix

10.

Exemption order for new media broadcasting undertakings – Public Notice CRTC 1999197, 17 December 1999, Appendix

11.

Globalive Wireless Management Corp., operating as WIND Mobile, and the Public Interest Advocacy Centre –Applications to review and vary Telecom Decision 2011-360 regarding roaming on Rogers Communications Partnership's wireless network Telecom Decision CRTC 2012-210, 5 April 2012

12.

Let's Talk TV – Broadcasting Notice of Consultation CRTC 2014-190

13.

New Media – Public Notice CRTC 1999-84, 17 May 1999, emphasis added.

14.

New Regulatory Framework for Broadcasting Distribution Undertakings – Public Notice CRTC 1997-25, 11 March 1997

15.

Review of broadcasting in new media – Broadcasting Regulatory Policy CRTC 2009329, 4 June 2009

-2

Judicial Decisions 16.

Anchor Pointe Energy Ltd. v. Canada, 2007 FCA 188, leave to appeal refused, [2007] S.C.C.A. No. 368

17.

Arthur v. Canada (A.G.), [1999] F.C.J. No. 1917 (C.A.), leave to appeal to S.C.C. refused, [2000] C.S.C.R. No. 85

18.

Barrie Public Utilities v. Canadian Cable Television Assn., [2003] 1 S.C.R. 476

19.

BCE Inc. v. Telus Communications Company, 2013 FCA 58

20.

Bell Canada v. Bell Aliant Regional Communications, [2009] 2 S.C.R. 764

21.

Bell Canada v. Canada (C.R.T.C.), [1989] 1 S.C.R. 1722

22.

British Columbia Telephone Co. v. Shaw Cable Systems (B.C.) Ltd., [1995] 2 S.C.R. 739

23.

C.F.RB. Ltd. v. Canada (A.G.) (No. 2), 1973.CarswellOnt 875 (C.A.)

24.

C. U.P.E. v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539

25.

Canada (A.G.) v. Mavi, [2011] 2 S.C.R. 504

26.

Canada (Citizenship and Immigration) v. Khosa, [2009] 1 S.C.R. 339

27.

Canada (Commissioner of Competition) v. Superior Propane Inc., [2001] 3 F.C. 185 (C.A.), leave to appeal refused, [2001] S.C.C.A. No. 352

28.

Canadian National Railway v. Bell Telephone Co., [1939] S.C.R. 308

29.

Canadian Union of Postal Workers v. Healy, 2003 FCA 380

30.

Capital Cities Communications Inc. v. Canadian Radio-Television Commission, [1978] 2 S.C.R. 141

31.

Cathay International Television Inc. v. C.RT.C., 1987 CarswellNat 919 (F.C.A.)

32.

Cathay International Television Inc. v. Canada (C.RT.C), [1987] F.C.J. No. 350 (C.A.)

33.

Celanese Canada Inc. v. Murray Demolition Corp., [2006] 2 S.C.R. 189

34.

CKLN Radio Inc. v. Canada (A.G.), 2011 FCA 135

35.

Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, [2009] 3 S.C.R. 407 Cyprus (Commerce and Indust-1y) v. International Cheese Council of Canada, 2011 FCA 201, leave to appeal refused, [2011] S.C.C.A. No. 385

36. 37.

Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190

38.

Genex Communications Inc. v. Canada (C.R T C.), 2004 FCA 279

39.

Labrador City (Town) v. Newfoundland and Labrador Hydro Inc., 2004 NLCA 61 (Chambers)

40.

McGregor v. Canada (A. G.), 2007 FCA 197

41.

National Trust Co. v. Wong Aviation Ltd., [1969] S.C.R. 481

42.

Nova Scotia (Director of Assessment) v. van Driel, 2010 NSCA 87

43.

Nycan Energy Corp. v. Alberta (Energy and Utilities Board), 2001 ABCA 31 (Chambers)

3 44.

Pachul v. Canada (C.RT. C.), 2002 FCA 165

45.

Public Mobile Inc. v. Canada (A.G.), [2011] 3 F.C.R. 3, (F.C.), rev'd on other grounds, [2011] 3 F.C.R. 344 (C.A.), leave to appeal refused, [2011] S.C.C.A. No. 349

46.

Public Service Board v. Dionne, [1978] 2 S.C.R. 191

47.

Public Utilities Commission v. Victoria Cablevision Ltd., 1965 CarswellBC 55 (C.A.)

48.

R v. Shellbird Cable Ltd., 1982 CarswellNfld 47 (C.A.)

49.

Re Rizzo and Rizzo Shoes Ltd., [1998] 1 S.C.R. 27

50.

Reference re Broadcasting Act, [2012] 1 S.C.R. 142

51.

Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, [2012] 3 S.C.R. 489

52.

Reference re Regulation and Control of Radio Communication, [1932] A.C. 304 (P.C.)

53.

Satiacum v. Canada (Minister of Employment & Immigration), 1989 CarswellNat 906 (F.C.A.), leave to appeal to S.C.C. refused, [1989] S.C.C.A. No. 352

54.

TEL US Communications Inc. v. Canada (C.RT.C.), [2005] 2 F.C.R. 388 (C.A.), leave to appeal refused, [2004] S.C.C.A. No. 573

55.

Tervita Corp. v. Canada (Commissioner of Competition), 2015 SCC 3

56.

Walden v. Canada (Social Development), 2011 FCA 202

57.

Xwave Solutions Inc. v. Canada (Public Works & Government Services), 2003 FCA 301

Court File No. FEDERAL COURT OF APPEAL BETWEEN BELL MOBILITY INC. Moving Party - and BENJAMIN KLASS, THE CONSUMERS' ASSOCIATION OF CANADA, THE COUNCIL OF SENIOR CITIZENS' ORGANIZATIONS OF BRITISH COLUMBIA AND THE PUBLIC INTEREST ADVOCACY CENTRE, THE CANADIAN NETWORK OPERATORS CONSORTIUM INC., BRAGG COMMUNICATIONS INC. (CARRYING ON BUSINESS AS EASTLINK), FENWICK MCKELVEY, VAXINATION INFORMATIQUE, THE SAMUEL-GLUSHKO CANADIAN INTERNET POLICY & PUBLIC INTEREST CLINIC, DAVID ELLIS and TERESA MURPHY Respondents MOTION RECORD IN WRITING OF THE MOVING PARTY, BELL MOBILITY INC. McCarthy Tetrault LLP Suite 5300, TD Bank Tower Toronto Dominion Centre 66 Wellington Street West Toronto ON M5K 1E6 Neil Finkelstein Brandon Kain Richard Lizius Tel: 416-362-1812 Fax: 416-868-0673 Solicitors for the Moving Party, Bell Mobility Inc. #14242685