CRTC urged to push for shorter-term phone contracts
Public hearings into proposed code start Monday with consumers groups calling for a cap on long-term contracts
anada’s telecom watchdog needs to avoid regulating competition out of the marketplace in its effort to protect consumers through a code of conduct for wireless providers, a public hearing on the proposed code was told Monday.
In a submission to the Canadian Radio-television and Telecommunications Commission, Telus Corp. senior government and regulatory affairs vice president Ted Woodhead said while the B.C. -based telecom supports establishment of a mandatory, “consumer friendly” national code, it is concerned about unintended consequences.
He said the code should leave room for different business models and service innovation, adding that rules creating “unnecessary costs and complexity” divert resources from assuring services for the country’s more than 26 million wireless users are fair and transparent.
Woodhead said the wireless industry has sought authoritative federal regulations to replace a patchwork of provincial rules and to reduce the volume of consumer complaints over issues including data charges, restrictive contracts and locked phones.
CRTC chair Jean-Pierre Blais, however, said consumer discontent has forced the regulator to intervene amid evidence “the market is not working.”
Consumer advocates say three-year contracts in particular, along with heavy charges on roaming plans, are among hot-button items that have not been dealt with through the normal supply and demand process of the market.
John Lawford, general counsel for the Public Interest Advocacy Centre, told the five-member CRTC panel that while contracts on cellphones and other mobile devices are available for terms less than 36 months in Canada, the conditions are not appealing. Consumers get a deal on the price of the handset with three-year deals but can end up paying almost full price for the phone on shorter offers, he said.
He said carriers need a “little push” to offer shorter contracts with proportionate upfront subsidies.
In its CRTC submission, the PIAC also proposed that the onus be on the service provider to prove that a customer consented to disputed charges; that customers be allowed to unlock their phones immediately, and that the code apply to customers of prepaid wireless services and to customers of existing contracts.
Bernard Lord, CEO of the Canadian Wireless Telecommunications Association, said the group opposes a ban on three-year contracts, arguing that consumers should be allowed to choose according to their preference. He told the panel that a solution is for consumers to be able to opt out of long-term contracts without penalty if they pay the balance remaining on the upfront handset subsidy.
Telus said it offers 36 month and one-year contracts and terms of any length with “device balance” settlement, A Bell spokeswoman said the Montreal-based carrier welcomes discussion leading to a mandatory code, but said more details will be provided on its position when Bell appears before the CRTC later in the week.
A spokeswoman for Toronto-based Rogers Communications said the carrier would welcome a clear set of rules for wireless contracts and pay-as-you-go services, arguing that the industry is already responding to customer feedback with clearer terms and reforms in areas including roaming, early termination and access fees.
The CRTC is conducting a week of public hearings leading to establish a code, a development inspired by consumers’ anger with issues such as changes in contact terms on a wireless contract without notification, and what consumer groups call excessive fees for services such as premium texting. The commission is considering suggestions including a 15-day cooling-off period during which consumers who sign long-term contracts for fast-selling mobile devices such as phones and tablet PCs can opt out without penalty.
The commission is also mulling whether the new code should be “grandfathered” or become effective immediately after implementation of the regulations, which could be phased in over time. The CRTC will accept written comments until March 1 and responses to the comments until March 15.
