OTTAWA – The CRTC yesterday initiated a show cause proceeding and call for comments on the use of the term “manufacturer’s suggested retail price” (MSRP) in the Wireless Code.
The CRTC is examining the term after Quebecor submitted a letter to the Commission last March, which claimed it had observed Bell, Rogers (RCCI) and Telus “appear to be inflating the retail price of their mobile devices,” the CRTC’s notice of consultation says.
The retail price of mobile devices is relevant to the fees consumers are on the hook for if they terminate their wireless contracts early.
Termination costs are limited “to the value of the device subsidy provided as part of the contract,” the CRTC’s notice explains. The Wireless Code directs service providers “to calculate such fees by using the lesser of either the manufacturer’s suggested retail price or the price set for the device when it is purchased from the service provider without a contract.”
While Bell, RCCI and Telus argue prices used by original equipment manufacturers (OEM) to sell their own devices at the retail level are not the same as MSRPs, Quebecor argues those retail prices are the MSRPs.
Based on this, in its March 2021 letter to the Commission (submitted in French), Quebecor alleged Bell, RCCI and Telus have been inflating retail prices for some devices thereby inflating the value of the associated device subsidy, resulting in “excessive” termination costs. At the time, Quebecor said it was essential the Commission launch an investigation into the matter. (Quebecor declined to comment on the current proceeding initiated by the CRTC.)
“On a preliminary basis, the Commission considers Quebecor’s interpretation of the term “manufacturer’s suggested retail price”, namely that the price at which an OEM sells its own devices at the retail level becomes the de facto MSRP, is consistent with the objectives of the Wireless Code,” the CRTC’s notice says.
The Commission, however, also noted the use of the term in section G.2.ii.b) of the Wireless Code is ambiguous, and therefore says it “does not consider it appropriate at this time to assess whether Bell, RCCI, or Telus are in non-compliance with that provision of the Wireless Code.”
The deadline to submit interventions to this proceeding is April 20, 2022.
For the CRTC’s full notice of consultation, please click here.
