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New wireless rules are great, but let’s not kid ourselves

Jesse Brown on the the CRTC’s pro-consumer stance


 

Spencer Platt/Getty Images

The CRTC, determined to reform Canada’s usurious wireless phone cartel, has just issued a strict new “Code of Conduct.”

Effective this December, three-year phone contracts will be available, but unenforceable. If you’re stuck in one of these abusive long-term relationships, you’ll be able to sever it at the two-year mark without penalty.

You know those bill-shocker stories about customers getting hit with thousands of dollars in data overage fees after letting their kids watch YouTube on their iPhones while vacationing in Cuba? Roaming data overage will now be limited to $100 a month, domestic to $50.

You’ll be able to have your subsidized phone unlocked after 90 days, you’ll have a right to a simpler contract and you’ll be able to negotiate changes to that contract.

Hooray, right?

Yes and no. The CRTC’s new pro-consumer stance is, without question, a good thing. But our big three carriers (Bell, Rogers and Telus) still control 95 per cent of the mobile market. Canadians are not going to start using less mobile anytime soon, regardless of the terms we’re offered. In fact, a wireless industry lobby group just sponsored a major study which (they claim) proves that Canadians are actually willing to pay more than we already do for our smart phones. Industry lobbiests are already using the report to suggest that Canadian consumers are getting a bargain. I say charging $50 for an umbrella during a thunderstorm isn’t a good deal just because people would still buy them at $60.

The point is, if the big three can’t maintain their globally-envied RPUs (revenue per user) under the old rules, they’ll find other ways to keep profits up while colouring within the lines of the new ones.

What will that mean? You can expect monthly fees to climb, and new “bonus” add-ons to be fabricated  marketed. We already see carriers offering 4G speed-upgrades — for a fee. I predict that any new speed capacity will be chopped into separate products at separate price points, in a move akin to offering regular, premium and super-premium gasoline. That’s off the top of my head. If there are other ways to sneak new costs into our bills, wireless companies will find them.

The missing ingredient in Canadian wireless is not a tough regulator, but tough competition, backed by unrestrained foreign investment. However, even if Ottawa steps in to untangle the red tape and make this possible, our international reputation may be too tarnished. After the recent experiences of Mobilicity and Wind, who felt “left to the dogs” by Canada’s government once they were wooed in, the Canadian market may be a no-go zone for international mobile firms.

All around the world, smart phones are getting cheaper, wireless speeds are getting faster and people are doing more and more new things with their mobile devices. It’s happening here too. Just less so.

Follow Jesse on Twitter @JesseBrown


 

New wireless rules are great, but let’s not kid ourselves

  1. Too little too late. What about data charges? Does data come come from the land of printer ink?!?

  2. The initial cost of phones will go up, as they will now be subsidized over 2 years instead of 3. And they will put a cap on data roaming and simply turning it off after the $100 limit…but managing this will mean that you’ll get less MB for that $100. All too soon we will be decrying these changes that we insisted to protect us from ourselves.

  3. >>>The missing ingredient in Canadian wireless is not a tough regulator, but tough competition

    You seem to have missed that point that the new regs are aimed directly at increasing competition. For example, two-year contract maximums means more frequent renewals, meaning more frequent shopping for the best rates.

  4. I would like to know where this “paid study” has been taken from – who in their right mind would state that they are willing to pay more for a bill then what they are currently paying!

  5. If the RPUs are globally envied, and foreign entry is permitted, CRTC “friendship” would be less relevant to a large European or American player try to enter the market, no?

  6. I have a Talk & Text-Only plan with Voicemail and Caller Display. Instead of a data plan, I just find free WiFi when necessary. My cost is $25 per month. When the same plan with at least 5 Gigabytes of data becomes available for the same price, I’ll consider upgrading.

  7. Obviously, the CRTC works for the phone companies, not for Canadian citizens, what a disgrace the CRTC is!!

  8. This is going to raise the cost of phones so that the economic inducement over the 24 month term is amertized, and once you break your contract after those two years your free. The states already has this in effect.

  9. One virus and your plan is cleanup…

    antywirusy

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