Wireless carriers cripple Canadian innovation in critical industry

By Adrian Duyzer
Published March 10, 2009

In Storm clouds ahead for wireless world, Michael Geist reports on explosive allegations that have come forward in a submission to the CRTC by Pelmorex Media, the owner of the Weather Network in Canada.

Although the submission does not name names, it claims that Canadian wireless carriers routinely impose restrictions on the ability of content providers to deliver advertising as well as restrict or charge more if a customer accesses that advertising. These restrictions undermine the profitability of mobile websites.

Moreover, Canadian carriers have established "walled gardens" that feature preferred content. When consumers seek access to alternative content, they typically face higher charges.

The submission points to the following incidents Pelmorex says it has experienced first hand:

  • Wireless reseller blocking ads from mobile sites.
  • Wireless carriers stripping out tracking codes embedded in Web pages, thereby limiting ability to deliver ads.
  • Wireless carriers establishing "walled gardens" that provide preferential access that reduces data charges for sites within the walled garden.
  • Wireless carriers forcing users to use the wireless carrier home page when accessing the Internet on feature phones.
  • Wireless carriers demanding prior approval of applications for use on smart phones.
  • Wireless carriers imposing additional fees for text messages that include advertisements.
  • Wireless carriers limiting to whom ads in text messages may be sold.

The net effect of these practices dampens the potential for online innovation and has a negative impact on mobile electronic commerce in Canada. This comes at a particularly bad time, since the mobile Internet has just begun to gain broad consumer acceptance. Some Canadian media companies have told the CRTC traffic to their mobile sites nearly equals visits to their fixed Internet sites.

This is not just about being able to get your hands on shiny new toys. This is about innovation.

It's not just about being able to access the cool stuff on your phone, it's fundamentally also being able to build cool stuff for phones.

As a programmer and web developer, I'm hugely frustrated by the fact I can't even test my creations on my devices, because they're so locked down.

The Internet on my phone (from Telus) is such a locked-in piece of garbage that I don't even bother with it. Meanwhile, I'm hooked on applications and mobile sites on my iPod Touch, which accesses the net via wifi. My ISP, Cogeco, lets me do what I please with my Internet.

I fail to see why my ability to put applications on my phone should be in any way more limited by what I am able to put on my computer, or why the Internet via Telus should differ fundamentally from the Internet via Cogeco.

I paid for the phone and I get gouged on a monthly basis for the service. That ought to give me the right to use my device and my service as I see fit. Instead, as far as I can tell, there is no easy way for me to install a ring tone on my phone without paying for the "privilege".

I was impressed by this comment on Geist's article, which I have edited slightly:

The real shame of it is that Canada has an opportunity to become one of the global leaders in mobile technology. Consider the following:

  • RIM is the #1 smartphone producer in the world.
  • Canada has some of the top schools for computer science and engineering, and many of them are a stone's throw from Kitchener-Waterloo (home of RIM).
  • Canadians are naturally creative, innovative and media-savvy.
  • Canadians are multiculturalists, with a better sense for global software needs than virtually anywhere else on the planet.
  • The barriers to entry for mobile development and deployment are (in neutral circumstances) incredibly low -- virtually ANYONE can develop apps and peripherals.
  • The one thing holding back this explosive 'virtual cottage industry' is the high cost of data and the locked-up feature sets of our handsets.

My point in all of this is that this goes far beyond a consumer rights fight, although there is tremendous validity to that argument. There are key economic development concerns for Canada that are being crippled - at the expense of our own futures, and ensuring that only a few pockets get lined.

I couldn't agree more. The CRTC ought to be focusing on this issue, not considering foolish proposals to tax ISPs in order to fund online Canadian content.

Technological innovation in the field of mobile computing and devices is advancing at a feverish pace. If we are serious about retooling for a new economy, this field represents an excellent opportunity that does not need much funding. All we need is a level playing field.

Adrian Duyzer is an entrepreneur, business owner, and Associate Editor of Raise the Hammer. He lives in downtown Hamilton with his family. On Twitter: adriandz


View Comments: Nested | Flat

Read Comments

[ - ]

By Frank (registered) | Posted March 11, 2009 at 08:24:43

That's why I paid to have my phone unlocked. I have the Blackberry Flip and unless you pay for the Rogers internet package, you can't use the wifi browser... So I forked 20 bucks over and got a number to unlock it...presto!

Permalink | Context

[ - ]

By UrbanRenaissance (registered) | Posted March 11, 2009 at 08:40:28

Frank's post shows exactly why DRM and other locks put on our devices/media just don't work. Anyone who really wants to use a certain feature on a cell phone, or listen to a legally purchased CD on an iPod, or god forbid use a cell phone on another network, will find a way to do it. These kinds of locks only punish those who are trying to create new media content and those who try to play by the rules, (just ask anyone who has had issues trying to play Blu-Ray discs). As Adrian said, the CRTC needs to focus more on accessibility and fairness to the consumers and content creators, not some ridiculous tax on ISPs to subsidize internet Canadian Content.

Permalink | Context

[ - ]

By JonC (registered) | Posted March 11, 2009 at 10:15:15

They're so worried about 'protecting' themselves that they lose site of what actually makes a good product.

Brings to mind my favourite term of purchase, a label on the outside of sealed package indicating that by opening the packaging you agree to the terms and conditions contained inside. Something like this.... http://therawfeed.com/pix/roomba_EULA.jp...

Permalink | Context

[ - ]

By cable (anonymous) | Posted September 22, 2009 at 02:34:51

This is pure genius! I'm amazed that you could keep this in so long. Thanks for sharing it.


Permalink | Context

View Comments: Nested | Flat

Post a Comment

You must be logged in to comment.

Events Calendar

There are no upcoming events right now.
Why not post one?

Recent Articles

Article Archives

Blog Archives

Site Tools