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Wireless code of conduct could help consumers but will it be enough?

Dec 29, 2012

Source: Toronto Star

A national code of conduct that aims to keep wireless service providers in line and better protect consumers is on tap for 2013, but will the rules have a serious bite?

Enforcement mechanisms for mobile wireless service contracts are among issues to be sorted out in a process that first needs to determine what the code will contain, whether it should apply to all existing contracts, and how its effectiveness should be assessed.

According to Janet Lo, legal counsel for the Ottawa-based Public Interest Advocacy Centre, the path of least resistance may be for the federal broadcast regulator to grant the Commissioner for Complaints for Telecommunications Services expanded powers to enforce the code.

The Canadian Radio-television and Telecommunications Commission is drafting the guidelines after a series of consumer complaints over hidden service charges, fees to unlock phones, penalties for ending contracts, and so-called system access fees.

The CRTC has slated a second round of online public consultations for January and a week of public hearings in Gatineau, Quebec starting February 11 and could issue a draft of the code before the hearings begin.

Lo said a final version may be drawn up and enacted in early 2013, or the standards could be applied as contracts between carriers and wireless device users are negotiated or renewed.

Liberal MP and leadership candidate Marc Garneau applauded the CRTC for responding to consumer concerns over wireless service in a market that includes incumbent national carriers Bell, Rogers and Telus.

But he said ultimately, a code of conduct “is kind of futile,” because it will lack authority of law. While it could eliminate some of the “abuses,” he said “major carriers will still find ways to gouge consumers.”

The CRTC said the code for cellphones and other mobile devices will outline new regulations to help consumers understand their rights and the responsibility of their service providers. The code might require plain language in contracts and require clear information about conditions under which a provider can amend service agreement terms.

The wireless service companies said the code needs to improve transparency, but consumers are looking for more dramatic changes, such as an outright ban of three-year service contracts.

The code of conduct is supported by wireless carriers after the industry called for a national code as a preferred alternative to a series of provincial and territorial standards.

Garneau, who has made wireless contract concerns part of his Liberal Party leadership campaign, issued a policy statement contending that mobile data, roaming and Internet telecommunications service rates in Canada are unjustifiably high.

The member for Westmount-Ville-Marie and former Liberal industry, science and technology critic said removal of caps on telecom foreign ownership would kick start competition to the benefit of consumers.

Garneau said additional entrants would help counter the influence of the major carriers to bring down monthly mobility bills in Canada, which he said are 20 per cent higher than in the U.S. and 100 per cent more than in Germany, where there are no restrictions on foreign ownership in telecommunications.

Canada has chosen to auction wireless radio wave spectrum to attract investment, with the most recent auction leading to the emergence of upstart cell retailers including Wind Mobile.

The federal government is planning another auction for 2013 with air waves to be set aside for new telecom companies.

The new code of conduct, meanwhile, should require that providers better inform consumers on contract terms and conditions, pricing and allow breathing room for contract cancellations.

According to some of the more than 900 online submissions to the CRTC from the public and consumer groups during a first round of consultations, the code should also require that providers inform consumers when they are about to exceed their data cap.

Several of the submissions argued for a limit on wireless contacts at 18 or 24 months.

“Where is the competition? These plans are all the same,” read one submission below a chart showing wireless plans being offered by the big three.

The CRTC has solicited public input on whether the code should:

 • Require more clarity on advertised prices of services including data and roaming charges and any associated fees

 •  Require that service providers not charge consumers for optional mobile wireless services they have not ordered

 •  Require that consumers with capped or metered billing of mobile wireless services be provided with adequate tools to monitor usage

 •  Require that service providers disclose and notify customers of amendments to their privacy policies

 • include guidelines that address how service providers disclose hardware warranty and extended warranty policies

 • Include a provision that sets out how service charges will apply while the handset is being repaired

 •  Require information on how service charges and contract terms will be applied if a device is lost of stolen

 • Include a provision that addresses conditions under which a service provider can require a security deposit, that sets a maximum amount, establishes conditions under which a deposit is returned and stipulates conditions under which a provider can disconnect services

© Toronto Star