Home > net neutrality, netflix, shaw > Does Shaw know or care about internet rules?

Does Shaw know or care about internet rules?

What’s going on with Shaw Communications? Of all the telecommunications companies in Canada, none seem to be more schizophrenic than western Canada’s largest cable provider, if recent actions are any indication.

The company was back in the news late last week, but likely not for the reasons it hoped. While its announcement of a rival service to Netflix - called Movie Club - was the intended headline grabber, Shaw instead took flak for what looked like a blatant net neutrality violation.

Movie Club, according to the Calgary Herald, will essentially replicate Netflix’s all-you-can-eat movie service for a monthly fee. But, as company president Peter Bissonnette said, watching stuff on Movie Club won’t count against Shaw customers’ monthly usage caps:

As well, subscribers to Movie Club — who initially can watch on their TV or computer, with phones and tablets planned to come on line later — can view content without it counting against their data plan. “There should be some advantage to you being a customer,” Bissonnette said.

To anyone familiar with net neutrality, that would of course be a violation in the first degree. Net neutrality rules in Canada require telecom and cable companies to treat all services that run over the internet equally. By not counting the hefty gigabytes that online movies chew up, Shaw’s Movie Club would inevitably be cheaper and more desirable to use than Netflix.

Not surprisingly, Shaw took heat for the move. Michael Geist said a complaint under the Telecommunications Act to the CRTC would be inevitable while Open Media said it was a clear attempt to try and turn the internet into a two-tier service. I was pretty shocked at Shaw’s blatant anti-neutrality move myself and said on Twitter that it was either incredibly bold or amazingly dumb. More on that in a minute.

A day later, on Friday, Shaw shifted into damage control mode. Through Twitter and other statements, the company clarified that the Movie Club service going through cable subscribers’ set-top TV boxes would not count against monthly data caps, but if customers used it over the internet - on their computers or tablets, for example - it would. Net neutrality concerns were therefore not necessary, since Shaw’s service will play by the rules. As the company said on Facebook:

Shaw Movie Club is intended to be watched through your set-top box. You can order your movies online through vod.shaw.ca and send it to your set-top box for viewing - watching movies on your set-top box won’t affect your included Internet data. However, you can also stream your Movie Club movies online to your computer – this WILL contribute to your Internet data.

Movie Club thus sounds like two different services. The internet portion, which will count toward users’ monthly data limits, sounds very much like an “over-the-top” service such as Netflix. The TV version, however, sounds more like a repackaging of the cable provider’s existing video-on-demand service. Rather than VOD users paying per selection, they’ll simply get unlimited access for a monthly fee instead.

Open Media still has problems with this set-up, but I’m not as concerned. Bandwidth isn’t much of a problem when it comes to traditional cable, so if Shaw wants to be able to introduce a Netflix competitor that way, it shouldn’t just be allowed to - it should be encouraged to do so. It is when such a service is offered in a discriminatory manner over the internet that the problem occurs, which doesn’t appear to be the case with Movie Club.

However, it’s starting to become clear that Shaw’s left hand might not know - or agree with - what the right hand is doing. Bissonnette, one of the company’s top executives, was pretty explicit in saying that Shaw customers should have some advantages in using Movie Club over non-customers, a position the Herald reporter stuck to in her follow-up story. Yet a day later, someone else at the company - it’s not clear who - either overruled or corrected him.

The company was similarly lost in the woods on the usage-based internet billing issue. Back in May, when Shaw introduced new internet plans that feature large usage caps in response to user complaints about UBB, company executives also gave people the impression that they’d have to subscribe to cable TV to get those plans. According to multiple reports from people who attended meetings with the executives, the company wasn’t planning on offering standalone super high-speed, high-usage internet plans, thereby raising the spectre of tied-selling, a practice that is illegal in Canada.

The company has since made standalone internet plans available, albeit at a $15 markup, but that particular bullet from the Competition Bureau has been dodged, for now at least.

That brings us back to the question of whether the company is incredibly bold or amazingly dumb. In both the Movie Club and UBB cases, executives have shown themselves to be oblivious to how their products may violate existing CRTC or Competition Bureau rules. In both cases, executives touted services without apparently knowing whether or not they were legal. That either means they simply don’t know about the rules, or they don’t care about them. Quite frankly, I’m not sure which is worse.

Categories: net neutrality, netflix, shaw
One blogger likes this post.
  1. July 19, 2011 at 2:26 am | #1

    I don’t even understand how this ‘Movie Club’ is supposed to be anything new and special. It’s not just a repackaging of the VOD service, it IS the VOD service. Shaw already had the watch online option for a selection of their VOD titles. You already had an option of watching subscription movies instead of pay-per-selection with a Movie Central on Demand subscription (which was included in the Movie Central channel package). And a good portion of their Movie Club titles are actually already available to Movie Central subscribers. I actually could barely find anything I was interested in on Movie Club that I didn’t already get through Movie Central. Movie Central also has some things that are supposedly a hit in the US like Game of Thrones.
    This is the same VOD service, the one so old and antiquated it supposedly isn’t even physically capable of holding a 1000+ title library without frequent rotations while offering the ability to choose any one of them to watch at any given time.

    And of course when you actually look at the titles on their VOD, these ‘newer movies’ don’t even include a single one of the movies on their new releases page, they’re all still $6 a pop.

  2. Marc Venot
    July 19, 2011 at 4:00 am | #2

    You should provide at least one graphic.

  3. July 19, 2011 at 8:29 am | #3

    None of Shaw’s recent decisions make any sense and in every instance are just plain bad for consumers.
    They’re trying to reach deeper and deeper into peoples’ pockets by fragmenting existing services and then re-valuing the resultant pieces higher than they were previously combined.

    What were once affordable internet connections are priced and measured using completely made up and baseless metrics (UBB). I switched to MTS in January and haven’t looked back since. There is no advantage to being with Shaw or any provider who thinks an internet connection is anything other than potential for transmission - also referred to as capacity or bandwidth ( http://en.wikipedia.org/wiki/Bandwidth_(computing) ) .

    Don’t get excited when you hear about “innovation” in Canadian telecom. These days, it has come to mean “successfully marketing something worse”.

  4. Rui
    July 19, 2011 at 9:03 am | #4

    I must say that I am somewhat confused how they would be able to determine how the Movie Club packaged is to be accessed. For example, I stream from my wi-fi router to my blu-ray player. I access my content over the net. Now how could they tell I am accessing it via my tv or pc? They shouldn’t actually since it once it’s gets to my wire it should be available to all my devices. So would they suggest that I hook up a separate, regulated, wire to my tv for this? Technically, this is confused which in my mind means they are stupid.

    • Jon
      July 20, 2011 at 4:38 pm | #5

      access through tv = cable box

      access through wifi/bluray/computer = internet data

  5. Mike
    July 20, 2011 at 10:51 am | #6

    I HATE rogers and SHAW.. I hope they go out of business.. SOOO BADLY, this kind of crap should be tolerated and shaw should be charge for attempting it alone..

  6. Alan
    July 20, 2011 at 12:42 pm | #7

    we had a Shaw tech here the other week and brought up the UBB. he tried telling me that it was the CRTC that was making them do it.

  7. Reggie
    July 20, 2011 at 4:45 pm | #8

    I’m not arguing against anything you said, but it seems crazy to complain about shaw when they have by far the fairest and most competitive internet pricing deals out there.

    • William
      July 21, 2011 at 11:30 am | #9

      Reggie: This doesn’t look like a complaint to me. It looks a lot more like a concerned article about some serious issues in the communication industry. Just because they’re offering good plans right now doesn’t mean they should be excused from scrutiny, especially on subjects like neutrality and tiered selling.

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