“Walled gardens” threaten future of mobile services, CRTC hears

Wireless carriers accused of playing favourites with content

Allowing mobile carriers to influence content is bad policy and hinders the development of mobile services, according to Paul Temple, senior vice-president, regulatory and strategic affairs at Pelmorex Media.

In their presentation to the Canadian Radio-television Telecommunications Commission, Pelmorex, who owns The Weather Network and Meteo Media, raised concerns about how wireless carriers can potentially control mobile content.

The presentation was part of the CRTC’s ongoing hearing into whether to regulate new media and alleges that some Canadian carriers have established “walled gardens” that feature preferred content and higher rates for consumers seeking access to alternative content.

Section 27(2) of the Telecommunications Act states that landline ISPs cannot unjustly discriminate or give themselves undue preference, a rule that, according to Temple, does not apply to wireless carriers.

“Under the rules as they exist today, mobile carriers can decide which programming gets preferential packaging and they can ask programmers to pay a fee for it,” Temple told the commission. “And if we say no to the fee or we aren’t even given the opportunity to be packaged, [carriers] may require customers to pay more to access our content.”

This practice, he says, raises concerns about fair and equitable access on the mobile platform for Canadian services, “a platform that is poised to become extremely important for the delivery of programming.”

Pelmorex claims that it has experienced a number of issues firsthand, including:

• One unmanned carrier blocking display ads on its mobile website;
• Multiple carriers removing tracking codes from its mobile websites, preventing it from delivering ads and tracking page delivery to mobile devices;
• Carriers forcing customers to access the Internet through proprietary home pages;
• “punitive” fees for text messages that include ads

The current ability to control and/or restrict ad content presents serious revenue problems as the majority of products on the Internet are supported by advertising dollars. As it stands, wireless carriers can ask for a portion of a programmer’s advertising revenue. By declining, Temple says, companies are in danger of having their ad content restricted or having the rates customers pay to see the content increased.

“People should be free to access what they want on their mobile devices without the carriers playing editor,” says Temple. “If mobile carriers were subject to [section] 27(2) then we think most, hopefully all, of these issues would go away. Or at least if there were regulations in place then we would have grounds for complaints.”

He feels that the carriers should take a leadership role and agree with reinstating the rules of section 27(2).

“The large wireless carriers can compete successfully in the marketplace without controlling content,” he says, “so I really don’t think they need that type of protection.

“We just want the same rules for everyone and not have the carriers making the rules.”