GATINEAU – Wind Mobile has some pretty harsh words for the CRTC’s attempt at creating a wireless code of conduct for mobile service providers. The upstart carrier says the Commission completely missed the boat in not addressing three-year contracts and the de-linking of handset subsidies and service terms.
Simon Lockie, chief regulatory officer at Wind, lauds the CRTC for taking this necessary step to listen to consumers concerns and try to implement a wireless code of conduct, but by not dealing with three-year term contracts or exploring ways to separate handset subsidization from service pricing, the Commission is missing a prime opportunity to create a wireless market that is consumer friendly.
“It’s a positive development in Wind’s view that the Commission is seeking so actively to connect to consumers and to hear from them directly,” he tells Cartt.ca in an interview. “The number one issue that consumers have is these three-year term contracts. So, the absence of any mechanism to address that in the code, we think is a significant omission and we think they’ll be hearing a lot from the public on the topic and they’ll be hearing a lot from us on the topic.”
The public has already spoken and is letting the CRTC know once again that it’s not happy it didn’t address three-year contracts in the draft code. Many have voiced their opposition to these contracts in the ongoing online consultation and below is just one.
“I don't think Canadians can speak more loudly on this one!” wrote cash27 in a January 30 post (commenters do not have to register their real names). “Have you looked at the responses on this forum? Canadians clearly want a maximum contract term of two years, like most of the rest of the world. Remember, you represent us, NOT the wireless companies, so why are you tip-toeing around this issue? I suspect corporate interests have a very loud voice on this particular issue (they must have, to drown out all the voices in this discussion)!”
Lockie points to the U.K. as the example that Canada could follow on term contracts. There, contracts have a maximum length of two years yet “they still preserve consumer choice to obtain handsets on whatever finance terms they want over three years.”
With respect to handset subsidies and service terms, Wind says it’s wrong the incumbent carriers are allowed to do this, considering it’s illegal in some jurisdictions. Devices that don’t last as long as the contract term is nothing more than “a retention tool” instituted by the incumbents, Lockie adds. “Now people do choose these options, but they choose them because it’s basically foisted upon them as the only reasonable way to get service from these guys,” he says.
There was an acknowledgement from Lockie that letting consumers know how much of their monthly bill goes towards to the handset subsidy is a step in the right direction, but it’s still not enough. “That’s sort of similar to payday loans having to show how much of your payments are going to interest and how much are going to cash. If people are taking on these terms, they’re doing it sort of under duress,” he says, adding “putting warning labels on cigarettes doesn’t seem to be stopping a lot of people from smoking.”
While Lockie was disappointed that some elements didn’t make it into the draft code, the Public Interest Advocacy Centre (PIAC) was pleased with its overall direction. John Lawford, executive director at PIAC, notes that the code is going to have to straddle consumer interests, but also be an instrument under which the carriers can operate.
“I’m more interested at the end of the day in having something that really works for consumers so it actually does make a huge difference right away, but it does have to be something that the industry can live with and that the CRTC can manage.”
On termination fee formula: “As good as we’re going to get” was the way Lawford describes it. “I think it will go a long way towards people being able to actually compare and make the decision to switch if they want because they’ll see their actual maximum termination fee,” he says. “They will know they have the right to terminate without some other [hidden charge] or contractual fee being dropped on them in the last bill.”
Telus is happy with what the Commission included in the draft code. The company has been out on front on this file. “It’s a good place start,” says spokesman Shawn Hall. In a blog posting by regulatory chief Ted Woodhead, the company notes that it “has been clear in its support for a code and we believe that the CRTC staff has done a very good job of distilling the many comments submitted into a balanced discussion draft.”
The post did raise a couple of concerns Telus has with elements of the draft code. The company says it will review an option relating to the unlocking of devices that out of contract. According to Hall, the company charges consumers $35 to unlock devices.
While three-year contracts have been raised by consumers as being one of their major bones of contention, Hall notes Telus has always given consumers the choice of either purchasing the device upfront and going month to month or signing a three-year contract with a subsidized device. He adds that the company doesn’t charge contract termination fees and consumers who want to cancel service only have to pay the remaining handset subsidy amount.
Another point of dispute for the national wireless operator is a provision that would force carriers to notify consumers when they are approaching their voice minutes ands text messages allowances. “These would take significant time and expense to implement, and in some forms may not even be possible,” Telus writes.
