Waterloo, Ontario’s Sandvine (TSX:SVC), whose network policy control solutions are deployed in more than 300 networks in over 100 countries affecting hundreds of millions of data subscribers worldwide, testified in front of the CRTC’s “Examination of differential pricing practices related to Internet data plans” hearing today in Gatineau.
Sandvine’s platform allows internet service providers to reduce network costs and improve subscriber quality of experience on fixed, mobile and converged communications by optimizing and securing network traffic either through virtualized network functions or purpose-built Sandvine hardware.
“Sandvine believes that differentiated subscriber services that feature zero-rating provide more choice for subscribers, and are becoming an important basis of competition between service providers,” said Don Bowman, Chief Technology Officer, Sandvine. “Sandvine is proud to be able to share our experience in implementing zero-rating plans with both the CRTC and the industry as a whole.”
Sandvine’s intervention document, along with the company’s prepared presentation, make clear that barring the absolute removal of data caps, its service represents a workable alternative for ISPs to shape traffic through differentiation.
In underdeveloped markets, where bandwidth is an obstacle, Sandvine’s platform has enabled ISPs to deal with the constraints posed by network limits on user demand.
Sandvine presented several recommendations at the hearing for ISPs launching zero-rating plans, including that:
i. The “unlimited” offer applies to all content/applications in the zero-rated class (e.g., all streaming radio services, not just Pandora or Spotify). Operator-owned (in whole or in part) services should only be zero-rated if all other services in its class are also identically zero-rated.
ii. The zero-rated data should not be prioritized in the network, beyond what would otherwise be done for purposes of reasonable network management.
iii. The ISP should not be compensated by the content/application provider per unit of zero-rated data.
iv. When the zero-rated data includes data from different service categories (e.g., Facebook includes HTML, video, chat, voice, photos, etc.), zero-rate all of the data (i.e., not just the HTML and photos). Subscribers find the alternative (e.g., a “Facebook” service includes some Facebook traffic, but not all) difficult to understand, which could lead to transparency issues and frustration. Additionally, for services (like Facebook) in which a user might click on a link and be taken to a different (i.e., not zero-rated) site, then – in accordance with the transparency principles – the ISP should alert the subscriber to that fact (e.g., a message along the lines of “You are now accessing content that will be billed at your regular data rate of ___/GB”).
The CRTC hearings last all this week, with presentations by stakeholders both for and against differential pricing including: the Canadian Media Concentration Research Project, Sandvine, Facebook, the British Columbia Broadband Association, Eastlink, OpenMedia, TekSavvy, Québecor Média, and a representative of Canada’s Competition Bureau, among others.
Sandvine will be hosting a webinar on December 13 at 10:00 a.m. on the subject of Best Practices for Application Zero-Rating, detailing how to successfully implement a zero-rated offering that grows revenue and minimizes revenue leakage.
Sandvine will also be presenting from November 7-9 at the Canadian ISP Summit in Toronto.
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Great in principle, but what happens when a new service joins a category, such as a new music streaming service?
Are they telling their systems to zero-rate by analyzing network traffic with a stateful network appliance, or simply by reading the source address?
Would there be an expectation of how quickly they have to add new services to the authorised list?
There’s a lot of questions being left unanswered here, and the implications do carry weight.