By Ahmad Hathout
The CRTC has not provided reasons for why it believes Rogers, Bell and Telus are violating the regulator’s new rules on activation fees, even after the companies provided justifications for charges related to device handling and SIM cards, according to submissions by the Big Three.
As such, Rogers and Bell are backing a procedural request by Telus this month to bifurcate the CRTC’s inquiry: first, establish a proceeding to consider whether a violation has been committed by any of the companies, and, if required, establish a proceeding to consider if any enforcement remedies are necessary in the event a violation has occurred.
Otherwise, the CRTC, through its show-cause proceeding on June 30, is not providing a case for the companies to respond to – and is already contemplating administrative monetary penalties (AMPs).
“The Commission is vague in its allegations, stating only that the Companies ‘may be charging fees that appear to be prohibited under section 27.04 of the Act and that appear to be contrary to the Wireless Code and the Internet Code,’” Telus says in its July 17 request. “This is insufficient from a procedural fairness standpoint, and under the Commission’s own guidelines, for the Companies to know the case to meet in a show cause proceeding.”
In March, the CRTC established new rules to eliminate fees that it considers barriers to customer switching, including on activation, changes and cancelations – with some exceptions. The fees could continue to be charged on optional services, such as when a subsidized device is provided by the wireless service provider, which represents a real cost to the business; and in a situation where the internet service provider is doing an installation at the customer’s home.
The enforcement deadline was June 12.
In the lead-up to that date, Bell and Telus started, or were in the process of, charging new fees related to device setup and SIM cards. Believing that these fees were not exempt under the new rules, the CRTC sent letters warning them that they may not be compliance with the rules ahead of their enforcement.
Then, on the day of its enforcement, the CRTC sent follow-up letters asking for an update as to whether the telcos stopped charging those fees.
Bell argued that the $40 device handling fee is related to “fulfillment costs” associated with optional device purchases through Bell and has nothing to do with the activation of a service plan. “To be clear: there is there no requirement for customers who activate or change a wireless service plan with us to purchase a device from us and customers can and regularly do activate wireless service or change their wireless service plan with us without incurring this fee,” Bell said in its response.
Telus started charging $15 for SIM cards. “Customers purchase SIM products for a variety of reasons, including when starting a new plan, replacing a damaged SIM, acquiring an additional SIM for travel, etc,” Telus told the regulator in response to its initial request for information. “As such, charging for a SIM product is not an activation fee. Even if it were an activation fee (and TELUS contends it is not), it would fall within the exemptions articulated by the Commission in its definition of an ‘activation or modification fee.’”
Following the June 12 deadline, the CRTC turned its attention to Rogers’s $40 device setup charge. The cable giant argued the charge only applied “upon the optional purchase from Rogers of a wireless device, and then only when such device is purchased through assisted-channels, namely retail and customer care,” adding it’s not charged for subscribing to a plan and not to those who bring their own device or buy one from Rogers’s digital self-serve channels. The CRTC also took aim at the cable giant’s SIM card and shipping fees, which Rogers said were not new and not related to activation: the SIM fee is to replace a lost or damaged card and the shipping fee covers the cost to ship the devices.
Despite those explanations, the CRTC came back on June 30 and initiated a show-cause proceeding, forcing the telecoms to explain why they should not be found in violation of the rules; why they should not be subject to AMPs of up to $10 million for the companies and up to $25,000 for their relevant officers or directors; and why a mandatory order requiring them to take the necessary steps to come into compliance should not be issued.
Telus’s procedural request came two weeks later, on July 17. “At the insistence of Commission staff, TELUS, along with Bell and Rogers, have filed detailed explanations as to why their practices are compliant,” Telus says in its application.
“The Commission has provided no analysis or other information responding to those arguments,” it continues. “In this context, the absence of reasons constitutes a complete lack of notice of the case to meet. Making a decision based on allegations, facts, or potential consequences that were never clearly communicated to the affected party deprives them of a meaningful opportunity to respond, and such decisions may be quashed by the courts on review.”
The Vancouver-based telco argues that the CRTC has a history of bifurcating these types of cases into first, an inquiry to consider whether violations have actually occurred and, second, a consultation on enforcement measures.
Telus adds that the CRTC allegedly made a procedural error by prejudging that an AMP is the appropriate remedy, “despite not having heard from the parties.”
“AMPs are not intended to be the first enforcement option and the CRTC is not obliged to issue an AMP, but may do so if a violation is found,” Telus says, adding later that other enforcement measures, include a commitment to invest some amount of money, are available.
Rogers and Bell submitted letters in support of Telus’s request.
“It is apparent from the record that the Commission has not explained the alleged contraventions or set out the case that the companies are required to meet,” Rogers says in its supporting letter, dated July 22, adding CRTC staff allegedly did not respond to the cable giant’s explanation about why its fees are not prohibited and still has not laid out what the contraventions are in the show-cause notice of consultation.
“Despite the fact that a Device Handling Fee has, on its face, not been prohibited by the Commission, and despite having the benefit of Bell’s extensive submissions, neither the Commission in TNC 2026-155 nor Commission Staff in any of their letters have articulated the particulars of any alleged violation of the Act or set out the case the Companies are to meet,” Bell said in its supporting letter.
“Indeed, they have not engaged with Bell’s or any of the Companies’ submissions at all. Instead, Commission Staff proceeded immediately to threaten regulatory action, state in the media a summary conclusion as to whether a violation has occurred, and initiate this proceeding to consider enforcement action.”
The Public Interest Advocacy Centre (PIAC) and the Forum for Research and Policy in Communications (FRPC) are asking the CRTC in their own, separate procedural requests for an oral hearing on the matter.
“This oral hearing will not only better assist the Commission in developing the record required to determine the nature and scope of any violation, but also enable it to consider the appropriate enforcement measures, and potential liabilities based on a clear and fulsome record,” PIAC argued, adding the hearing should take place “ideally two or three weeks” after July 30.
The FRPC said of the 21 show-cause proceedings held by the CRTC since 2011, just one involved an appearing public hearing.
“The fact that the CRTC has adopted a practice of holding very few public hearings a year does not in and of itself justify a decision not to hold a public hearing in the 2026-155 proceeding, given the extent to which many consumers may have been subjected to the fees being considered in the proceeding,” the FPRC argued, adding it believes a two-day hearing held within the next five weeks is sufficient for this matter.
Both Telus and Bell, however, argue that the proceeding does not require an oral hearing.
Telus notes that the issue at the heart of the matter is a “narrow legal question related to the Commission’s definition of modification and activation fees and parties can participate effectively in written submissions.
“The Commission’s own documentation notes that an oral hearing is used if the Commission determines that it will ‘improve overall effectiveness of the proceeding’ and ‘a hearing is often used for new broadcasting licence applications, major policy issues or amendments to its broadcasting and telecommunications regulations,’” Telus added.
“The current proceeding does not fall within these types of consultations, nor would an oral hearing improve the effectiveness of the proceeding,” the telecom continued. “In fact, an oral hearing would result in additional process, expenditure of time and resources and undue delay, even with an ‘expedited process’ as requested by PIAC. Indeed, oral hearings impose costs on all parties, ‘in the form of delays, the diversion of administrative resources, the time actually consumed, and the need to engage advocates and legal advisors.’”
