The CRTC on Tuesday launched a proceeding requiring Bell, Telus and Rogers to show cause why fees they have introduced recently are not in violation of the telecom regulator’s prohibition on activation and modification fees, which came into effect on June 12.
The proceeding, open to comments from the public, is being launched following CRTC warnings to Bell over its new $40 device handling fee, to Telus over its $15 SIM purchase fee, and to Rogers over its $40 device setup fee — charges to customers that the wireless providers introduced as the CRTC’s publicized activation fee prohibition was set to take effect.
As part of the proceeding, if the companies are found to have committed a violation under the Telecommunications Act, they are also required to show cause why administrative monetary penalties — up to $10 million for the companies and up to $25,000 for their relevant officers or directors — should not be imposed, and also why a mandatory order requiring them to take the necessary steps to come into compliance should not be issued.
Bell, Telus and Rogers have until July 30 to make their submissions to the proceeding. Interested parties can also submit interventions until July 30. The deadline for the Big Three companies to file replies to matters raised during the intervention phase is August 10.
Bell has previously told the CRTC its $40 device handling fee is fully compliant with the Telecommunications Act and the amended Wireless Code. The Montreal-based telco has argued purchasing a device is optional for its customers, who can elect to purchase a device elsewhere, and not a result of activating a new retail wireless service plan. In a June 17 response to a CRTC request for information, Bell told the regulator it would continue to apply the device-handling charge, and restated that the one-time fee is related to the optional purchase of a device, recovers legitimate device fulfilment costs, and does not discourage customers from switching or modifying plans.
In its own June 17 response to a request for information from the CRTC, Vancouver-based Telus confirmed it had not stopped charging customers for SIM products, telling the regulator it considered this practice to be compliant and allowable under the act and the CRTC’s new policy prohibiting activation fees. Telus argued customers have many reasons to purchase a SIM card or eSIM, including to replace a damaged one or to acquire one for travel, and therefore this fee is not an activation fee. Telus further argued if it were an activation fee, it would fall under the exemption in the policy because its main purpose is to recover costs associated with providing the SIM product, and the fee is not meant to discourage subscribers from modifying their service plans or cancelling their contract.
In a June 18 response to a CRTC query about its $40 device setup charge, Toronto-based Rogers told the commission the fee (introduced on June 14 by Rogers and its flanker brand Fido) is not related to the activation of a new retail wireless service plan or the modification of an existing one, and its main purpose is not to discourage subscribers from modifying or cancelling their service plan. It is only charged upon the optional purchase of a wireless device, Rogers said, and then only when the device is purchased through assisted channels, namely retail and customer care. It is not charged to customers who purchase a device through Rogers’s digital self-serve channels, Rogers said.
The CRTC had also queried Rogers about its $25 shipping charge for devices ordered online and an unspecified SIM fee. Regarding the shipping fee, Rogers told the CRTC it has been charging for shipping, off and on, for many years, and the fee reflects a real cost to ship merchandise or equipment to customers. A shipping charge is not a fee incurred as a result of activating a new retail telecom service plan or modifying an existing one, Rogers argues. As for the SIM fee, Rogers told the commission this is not a new fee and it only applies to customers who request a new physical SIM card to replace a lost or damaged SIM card.
Rogers confirmed to the CRTC it continues to apply all of these charges to customers, saying none of these fees fall within the definition of an activation or modification fee as set out in the CRTC’s new policy, nor act as a barrier to customers switching plans or service providers.
