GATINEAU – After hearing from a range of Canadians via Facebook in February and March (some who had cogent complaints and arguments, some who, um, did not…), the CRTC this week gathered up final written submissions on its new proposed Internet code of conduct for providers of retail fixed internet services.
Canadian carriers generally support such a code, or at least the idea of one, which would “enhance the transparency of Internet contracts, help consumers, regardless of who their Internet provider is, to better understand their rights and responsibilities under these contracts and enable them to participate in the competitive market for Internet services in a fully informed manner,” reads Bell Canada’s April 23 submission to the CRTC.
However, there are a few problematic areas to the code which was proposed by the Commission in the launch of this proceeding. While large and small providers agree on some things, they diverge when it comes to which ISPs a new code will apply. The Commission’s initial thinking is it will only apply to large incumbent facilities-based carriers – and not to smaller independents.
“The Internet Code should apply to all ISPs,” reads the Telus submission. “To the extent that the measures set out in the Code are justified, all customers are deserving of equal protection, regardless of the ISP from which they choose to receive services.”
Independent ISP Teksavvy disagrees, noting the provisions in such a code may be too onerous for small companies to be able to afford, and besides, independents like them aren’t really the problem here anyway. “The Commission… states that it is necessary to respond to consumer concerns about Internet services and related issues, specifically: contract clarity, clarity of promotional offers, prevention of bill shock, and reduction of barriers to switching service providers,” reads TekSavvy’s April 24 submission.
“These are not issues raised by the way TekSavvy offers our Internet services. In fact, TekSavvy goes to great lengths to avoid exactly these issues.”
Plus, any problems it does have with customers can be traced back to yet-to-be-completed CRTC wholesale rate proceedings, or its wholesale backbone providers, the large cablecos or telcos, which frustrate their operations every step of the way.
Complaints lodged against it with the Commission for Complaints for Telecom and television Services (CCTS), reads the Teksavvy submission, “were about service delivery issues, which are experiences controlled by incumbents’ wholesale network access: the process and timelines for access, accuracy of information in wholesale carriers’ qualification tools, the unavailability of next-day install and repair appointments, technician no-shows, escalations when there are service issues, and delayed or insufficient carrier responses to service issues like intermittent, inadequate, or loss of service.”
Not so fast, said Rogers. “It is our view that, as always, TekSavvy is quick to point blame at others for its service deficiencies when in reality it has considerable influence over the quality of its customers’ connection,” reads its submission. “For example, TekSavvy has direct control over aspects of the service such as the timing of modem delivery, the provisioning of bandwidth for its customer and the quality of service available from its DNS (Domain Name System) server. As such, Rogers rejects TekSavvy’s expressed view that the root cause of its Internet service complaints is beyond the control of the ISP.”
Carriers also urged the CRTC to keep small business customers out of the code since each contract with a small business is different, sometimes complicated and expensive because of the additional work which often goes into connecting businesses and providing their networking needs. Often, large upfront costs are amortized over years-long contracts so small businesses don’t have to pay big upfront fees for connectivity.
“Businesses have a broader range of requirements than individual consumers for Internet services. Internet connectivity is generally only one part of a larger suite of telecommunications and managed services which may be contracted for by a business. This broader relationship is not contemplated at all by the proposed Internet Code,” reads Bell’s submission.
“Because we offer customized services to business customers, often with high installation and build-out costs, imposing prescriptive limits on early cancellation fees or trial periods for business services would be unworkable. Furthermore, if we are required to charge for installation costs upfront, a trial period would be meaningless,” reads the submission from Shaw Communications.
“It is not, however, appropriate for the provision of wireline Internet services and would result in significant negative consequences for consumers, ISPs and, consequently, competition.” – Rogers
“And without the ability to recoup build-out and installation charges, the business case for expanding in this market will be severely undermined, reducing competition in a market long dominated by a single platform-based provider.”
Carriers were also concerned about the proposed code’s limitations on early cancellation fees (a maximum of $50) and a requirement to provide written offers to customers within 24 hours of an agreement to buy internet service.
Often, customers are enticed by deep discounts in the competitive market to switch from one provider to another, with the stipulation they sign a contract to remain with a company for a certain period of time (so the company can recoup its invesement). If the cancellation fee is just $50 and customers can walk away cheaply after what will have been an expensive switch (carriers have said recently that installs on new customers can cost them between $200 and $1,000 or more each), competitive pricing battles might well disappear, to the detriment of Canadian consumers.
Many carriers, not just the large ones, expressed reservations on this part of the proposed code. “Rogers believes that ($50) was an appropriate provision in the context of fixed-term contracts for consumers of wireless services who do not have a subsidized device under their service agreement,” reads the company’s submission. “It is not, however, appropriate for the provision of wireline Internet services and would result in significant negative consequences for consumers, ISPs and, consequently, competition.”
As for providing written offers or quotes to customers, or in the language of the proceeding “pre-sale critical information summaries,” both Telus and Rogers report they are already well on their way to providing that to their consumers soon and Bell already does it for residential services.
“Fixed price offers are available today because of competition, not regulation, and the Commission should continue to let competition deliver the outcomes sought by Canadians,” said Telus.
Besides, added Teksavvy, it would be rather burdensome for it to adhere to brand new CRTC-mandated customer offer paperwork, noting the “imposition of… mandated pre-sales quotes for every prospective customer discussion, would require a significant amount of internal resources to operationalize certain requirements of the Internet Code into TekSavvy’s sales processes and build and code large-scale automation and operational changes to the way our hundreds of employees serve prospective and existing customers.”
Shaw also opposed such a move, saying it fields millions of inbound customer communications now and having to provide such documents “would be severely restrictive, inefficient and administratively burdensome.”
“The incumbent would unfairly ‘double dip’ by: (a) profiting from the wholesale payments for installation, access line, and capacity used during the trial period; and (b) earning revenue from the acquired subscriber.” – Teksavvy
Carriers also said trial periods, as there are in wireless, are problematic when it comes to wired systems due to the far higher upfront costs (labour and equipment) on an install of wired internet, however, Shaw said it would support a trial period for disabled customers.
Bell said it didn’t like the sounds of a trial period but that it would not oppose a mandated 30-day cooling off period where customers can pull out without any fees.
Teksavvy cautioned against that, however, warning customers it won away from incumbents would be heavily targeted with win-back promotions in such a 30-day window. “(T)he incumbent would be the likely service provider chosen by the customer exercising their right to a cooling-off period, so the incumbent would unfairly ‘double dip’ by: (a) profiting from the wholesale payments for installation, access line, and capacity used during the trial period; and (b) earning revenue from the acquired subscriber,” says its submission.
As well, all noted there are already codes on the books in the CRTC’s Wireless Code and TV Service Provider Code of Conduct and while the carriers generally want the new ISP code to be aligned with the TV code (because TV and internet are so often sold bundled together), they’d rather see less confusion and codes and instead one overall protocol covering everything – something the Commission said it would like to do when it released its report on telecom sales practices in February.
The CRTC has not yet set out the timing for next steps in this proceeding.
