CRTC to hear consumers on hot-button issues like roaming, 3-year contracts, handsets by LuAnn LaSalle
Feb 10, 2013
Source: Vancouver Sun
MONTREAL - The hot-button issues the Canadians have with cellphone contracts — roaming fees, ability to unlock handsets and three-year contracts — will get another opportunity to be heard this week.
The CRTC will hold a week of public hearings starting Monday on its proposed wireless code. The regulator is aiming for a set of national standards for the content and clarity of cellphone contracts.
In the lead-up to the hearings, Canadians have again made it clear they don't want three-year contracts offered by wireless carriers.
"Eliminate three-year contracts," said a comment submitted by a user identified as Celli041 on the online forum for the Canadian Radio-television and Telecommunication Commission's draft wireless code.
"Eliminate onerous processes that make it harder to get out of a contract and go elsewhere for cellphone services."
The CRTC has said it heard a lot of "anger'' from Canadians about three-year contracts when it was putting together the draft version of the national code for wireless services, released last month.
So far, the CRTC hasn't taken up the idea to get rid of such contracts and has instead dealt with such issues as early termination fees, allowing the consumer to cancel service at any time.
Telecom analyst Iain Grant said three-year contracts should be banned by the CRTC because they don't foster competition and prevent consumers from easily moving to another carrier.
"You lock them in and you get them into some sort of auto-renewal cycle forever," said Grant, managing director at the SeaBoard Group.
"What does that do to a vibrant marketplace?"
He also said it makes it harder for new wireless companies like Public Mobile, Wind Mobile and Mobilicity to win customers.
Grant said the CRTC has chosen to "treat the symptoms and not the disease," noting Canada is the exception with its three-year cellphone contracts while two-year contracts are the norm in the United States and Europe.
Consumers can also get stuck with aging devices.
"In the land of technological innovation, which is the smartphone world, three years is an eternity," Grant said.
A participant in the CRTC's online forum agreed.
"Maximum two-year contracts," wrote Yeti.
"Longer contracts make no sense to customers because new cell phones models appear on the market every few months. Right now, long contracts are used to disguise high cost of a phone, that's why."
However, consumers don't always like paying up front for their iPhone, Android or BlackBerry smartphones.
Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T) say most of their smartphone customers choose contracts that have device subsidies and usually opt for three-year contracts that have the largest subsidies.
On the CRTC's online forum about the draft wireless code, participants also complained about locked cellphones.
The draft code says the carrier must provide the consumer with the means to unlock the device after no more than 30 days of service, at the rate specified in the contract.
"The cost of switching mobile providers is increased, because the consumer is forced to either pay an unlocking fee, or else purchase a new phone," commented Argilo.
Roaming fees were another sore spot.
"The greatest challenge of roaming is that customers are both unable to unlock their device in order to use it abroad, and little information is available in advance by carriers regarding pricing in each country, and what offerings they have to mitigate those costs," wrote Drazev.
The CRTC says in the proposed code that consumers can set a cap for additional fees that can occur, which would including text messaging, data and roaming charges, for example.
The federal Competition Bureau said it supports measures to limit contract length.
"However, if contract lengths are not limited by the wireless code, then it is particularly important that contract terms and termination fees are clear and not unnecessarily restrictive, so that customers are not tied to these contracts in a manner that will harm competition," the Competition Bureau said in its submission to the CRTC.
The CRTC hearings are taking place in Gatineau, Que.