GATINEAU – Upstart wireless operator EastLink had its opportunity to address the contentious issue of a mandatory $50 cap on overage charges on customers bills as a way to prevent bill shock on day three of the CRTC’s wireless code of conduct hearing.
The Commission’s draft wireless code calls for a cap on additional fees of $50 (usually driven by data usage), but also says that once the cap is hit, the service provider is to suspend all service so that no more charges are incurred.
“We feel basically a cap is just not necessary or necessarily the best approach for managing bill shock, just because consumers may occasionally go a certain amount over [their] plan,” argued Denise Heckbert, manager of wireless regulatory at Eastlink in response to a question from commissioner Elizabeth Duncan. “Our opinion is it’s not necessary because you have the notifications… you have the online tools to track usage and especially now with the added protections of the ability to change your contract or switch providers,” she said, adding “there’s so many options in the market to protect those consumers.”
The Eastlink representatives couldn’t go into too much detail because the company has yet to officially launch its wireless service. That will happen on Friday.
During the first two days of this hearing, the arbitrary $50 amount was also panned by two incumbent mobile operators, Telus and Rogers. Both companies said the amount is too low and applying it to all discretionary services such as airtime, texts, data and roaming charges would simply be too expensive.
Commissioner Candice Molnar wondered how much it would cost for carriers to allow consumers to adopt their own caps (something the draft wireless code also ponders). David Fuller, chief marketing officer at Telus, noted that it would “hugely expensive” to adopt personalized caps whereas current systems are pretty straightforward. “If now the database needs to actually [to have] potentially a million different caps in there as everybody's chosen different numbers, it will add a huge amount of complexity,” he said.
Rogers agreed that the complexity of a system that incorporates blocks on all services as outlined in the draft code would be expensive. “Aggregating everything with a real-time usage and rating engine would cost hundreds of millions of dollars as it did for our pre-paid service where we have that kind of engine. But to add that to the post-paid platform would be too expensive,” said Ken Engelhart, senior VP of regulatory for Rogers. “If you tried to say $50 across domestic data and data roaming, now you've got two systems that have to be smashed together and it is more expensive and it doesn't always work.”
Prepaid customers gets their due on day three
THE APPLICABILITY OF THE wireless code to prepaid services was also brought to the fore on the third day of the hearing with the Diversity Canada Foundation arguing that prepaid customers are being unfairly treated and their rights need to be protected under a new code.
Celia Sankar, lead plaintiff in a class action lawsuit against Bell Mobility and its prepaid wireless services, noted in her opening remarks that it’s wrong for the Canadian Wireless Telecommunications Association (CWTA) to suggest that prepaid wireless cards are much like rental car agreements.
On the first day of the hearing, the CWTA said just like there are time and usage limits in renting a car, there are with prepaid wireless. “What is mistaken is that people simply buy minutes or texts or data. They actually buy that and they buy access to the network for a period of time,” said CWTA president and CEO Bernard Lord.
Jim Patrick, CWTA senior VP, added that significant complications would arise if prepaid minutes didn’t expire. He warned of a significant increase in the number of telephone numbers prepaid wireless cards with time remaining on them didn’t expire. “I think we'd be looking at more area codes more often if you allowed these prepaid accounts to remain open forever with any amount of time on them,“ he said. “If we try to impose that model onto prepaid wireless cards, you'd be looking at a lot of wasted phone numbers which would have a pending and mounting liability over time.”
Telus insisted in its appearance earlier in the week that non-expiry of prepaid services could have some big negative securities regulation consequences. Ted Woodhead, senior VP of federal government and regulatory affairs, explained that the prepaid numbers can’t remain in existence forever because the company would be accused of padding its subscriber numbers and that would run counter to financial and securities regulations.
“So while I understand their concern, there are reasons why that can't be done and why there are costs associated with tying up that number when we don't have any idea whether that account is just simply dormant, the person is waiting to use it, or the person… is dead or for whatever reasons. So that's kind of where our concern was with it,” he said.
These arguments didn’t seem to satisfy Sankar.
Wireless carriers, she said, allow consumes to use these prepaid cards to buy all sorts of things, including texting, video messaging, Internet browsing, ringtones, wallpapers, music, games and apps. This puts prepaid wireless in the same category as retail gift cards, added Sankar. The important element to remember is that when customers purchase the prepaid wireless card, they are providing cash for a good to be used at a later date. “Cash does not expire, nor should a cash equivalent, such as a prepaid wireless top up,” she argued.
Bell Canada, which was originally expected to appear before the Commission on Thursday, presented its opening remarks on Wednesday afternoon. It will be back in front of the panel to answer questions on Thursday morning. Surf back here tomorrow for coverage of their Q&A and others coming up such as Public Mobile, Globalive (Wind), Quebecor (Videotron), SaskTel and MTS Allstream. Click here for our coverage of days one and two.
