GATINEAU, Que. – Consumer groups and cellphone companies with starkly opposed views about contracts for handheld devices started to make their cases Monday as the CRTC began public hearings on a proposed wireless code.
Representatives of three consumer groups urged the national telecom regulator to do away with three-year terms in favour of capping contracts at two years. They also argued that any new wireless code ought to apply to all existing contracts — including prepaid deals — not only new ones.
“Consumers are sick of termination penalties designed to keep them locked into long-term contracts,” said John Lawford of the Public Interest Advocacy Centre.
“Consumers are tired of locked handsets. Consumers are often in shock after opening a bill where roaming charges or coverage fees have been applied.”
Major carriers counter it would be difficult to apply new rules to existing contracts.
These and other contentious issues are before the Canadian Radio-television and Telecommunication Commission as it holds a week of hearings in Gatineau, Que., on its proposed wireless code, which aims to set national standards for the content and clarity of cellphone contracts.
In the lead-up to the hearings, the CRTC says it heard a lot of angry comments about three-year contracts offered by wireless carriers when it was putting together a draft version of the national code for wireless services.
So far, the commission hasn’t taken up the idea of banning such contracts and has instead dealt with such issues as early termination fees, allowing the consumer to cancel service at any time.
But the consumer groups say the CRTC should get rid of thee-year contracts altogether. Doing so, they claim, would actually make the wireless market more competitive.
“The commission has not, as yet, proposed a reduction in the length of the maximum term of long-term contracts,” said Jean-Francois Leger, a lawyer representing the three consumer organizations.
“A shorter term, combined with improvements in provisions governing termination charges would likely enhance the competitiveness of Canada’s wireless marketplace.”
The consumer groups claim most carriers’ two-year plans are not true options for consumers. Most three-year plans offer deep discounts on the price of the handheld device — in some cases, offering phones at no cost. But the groups say two-year plans often charge a lot for the device itself on top of the monthly service fees. For that reason, many consumers opt for the three-year plans.
On the CRTC’s online forum about the draft wireless code, participants also complained about locked cellphones and roaming fees.
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.
And the CRTC says in the proposed code that consumers can set a cap on additional fees, which would including text messaging, data and roaming charges, for example.
The federal Competition Bureau said it supports measures to limit contract length.
In his opening remarks, CRTC chair Jean-Pierre Blais noted the working document doesn’t necessarily reflect the views of the five-member panel or the final version of the wireless code.
There are 27 million wireless subscribers in Canada, he said — which may explain the widespread interest the proposed code has generated.
“Our consultation has attracted a lot of attention right across the country,” Blais said.
“During the first phase, Canadians posted close to 600 comments on our online discussion forum and sent in over 3,500 written submissions.”
Many people asked that cellphone contracts be written in clear language with no hidden fees, he added.
The CRTC is also scheduled to hear from wireless service providers — including Telus, Bell Canada, MTS Allstream, SaskTel and Quebecor — later in the week.
Monday, February 11, 2013