CRTC hopes differential pricing ruling will give consumers more data for less money

Internet service providers can no longer exempt some content, like certain video and music streaming applications, from counting towards customers' data caps, says Canada's telecommunications watchdog.

The CRTC ruled that ISPs must treat all web traffic equally and cannot prioritize such content by exempting its use from being tallied towards a data cap. 

The practice, known as differential pricing, could give an unfair advantage or disadvantage to some content providers and consumers, the commission said.

The CRTC did not go so far as to ban monthly data allotments as some consumer advocacy groups had urged, but said it hopes the new differential pricing framework will spur companies to offer consumers more data at lower prices.

"We do believe that there will be a downward pressure on the use of caps as a result of this decision,'' said CRTC Chairman Jean-Pierre Blais.

"In fact, the decision proves that some ISPs obviously have extra capacity,'' he said, explaining some were offering the data used to stream certain services "for little or nothing.''

"There is obviously ... room for them to have less reliance on data caps.''

Josh Tabish, a spokesman for consumer advocacy group OpenMedia, which campaigned for the CRTC to end the practice of data caps in Canada, said he's fairly optimistic the ruling will make a difference.

When providers can't use billing gimmicks like differential pricing, he said, companies will only be able to compete on data, speed and price.

Rogers (TSX:RCI.B) and Bell (TSX:BCE) both did not respond to questions about offering cheaper plans with more data in the future.

Bell said it already operates in a way that is consistent with the new framework and Rogers called it a good decision that prevents Internet providers from acting as gatekeepers.

The CRTC decision came following hearings held last fall into differential pricing practices. The hearings stemmed from a complaint about Quebecor-owned Videotron over the way it bills customers for the data they use.

Videotron launched an unlimited music streaming service in August 2015 that allowed its customers to stream music from specific third-party services without it counting against their monthly data cap.

The CRTC ruled that Videotron must ensure this service complies with the new regulations within 90 days.

Videotron said in a statement that it's disappointed by the decision as it believed its service was responsive to consumers' needs and interests.

The company said it will study the decision and determine how to proceed. 

It will advise customers who use the unlimited music streaming service, which will be maintained until further notice, of any developments.