CRTC Publishes New Framework Regarding Differential Pricing Practices in Respect of Net Neutrality

On April 20, 2017, the Canadian Radio-television and Telecommunications Commission (CRTC) published a new framework regarding differential pricing practices of Internet service providers (ISPs) (Framework).

The Framework responds to net neutrality issues associated with recent practices by ISPs with respect to differential pricing, where the same or similar products or services are sold to customers at different prices. This Framework deals with the practice of discounting data traffic, where data from a certain source (e.g. a particular website or application) is discounted or not counted at all against a customer’s monthly data cap. Practices associated with ISPs’ own managed Internet protocol networks are not included in the analysis and determinations set out in the Framework.

The Framework sets out the criteria the CRTC will apply in determining whether an ISP’s pricing practices are consistent with subsection 27 (2) of the Telecommunications Act, which requires that “[n]o Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.”

The evaluation criteria established in the Framework are:

1. the degree to which the treatment of data is agnostic (data is treated equally regardless of its source or nature);
2. whether the offering is exclusive to certain customers or certain content providers;
3. the impact on Internet openness and innovation; and
4. whether there is financial compensation involved.

The CRTC clarified that the degree to which the treatment of data is agnostic is the factor that would carry the most weight and that it would consider whether there are any “exceptional circumstances that demonstrate clear benefits to the public interest and/or minimal harm associated with a differential pricing practice.”

CRTC’s Press Release can be found here.

Summary By:  Lisa Danay