GATINEAU – The Canadian Wireless Telecommunications Association urged the CRTC to take national responsibility for regulating consumer cell phone contracts. The CWTA made the comments during the first day of hearings into a wireless code of conduct.
Canadians “would be best served by a single set of regulations, not today’s patchwork of provincial laws, regulations, guidelines and interpretation bulletins,” said CWTA president and CEO Bernard Lord. He urged the Commission to adopt a code that “supersedes any current or future provincial legislation in this area.”
Under questioning, the CWTA said multiple pieces of guidelines, codes or legislation will only increase costs on consumers. “Every layer of regulation you add, adds cost. And eventually that cost is paid by someone and that someone usually ends being the consumer,” explained Lord. “So we feel having one set of rules across the board best serves consumers because it provides clarity and certainty and also reduces cost.”
Lord argued that the Commission is the right place for these types of guidelines to reside because it will ensure the code is national in nature and applicable to all Canadians in the same way. The association’s big concern is the co-existence of the CRTC’s code along with provincial legislation. “We think it serves everybody to have one clear set of rules,” he said in response to a question from commissioner Candice Molnar. “I really believe that it is the role of the CRTC to occupy this space. I think it’s important under the constitution. Responsibilities have been outlined for the federal government versus responsibilities outlined for the provincial government [and] I believe it’s the duty of the CRTC to occupy this space now.”
The Public Interest Advocacy Centre (PIAC) said it plans to file a legal opinion, commissioned by it and Bell Canada, on March 1 that says telecommunications is an exclusive federal jurisdiction and therefore any provincial legislation is unconstitutional.
Telus Corp. was the first of the incumbent wireless operators to appear before the commission and agreed that a national code from the CRTC would overrule any provincial legislation. “Our view is that once the CRTC has acted to regulate the aspects of consumer wireless services covered by the Code, the field will have been occupied, for constitutional law purposes, and there will be no room for provincial regulation of wireless services,” Ted Woodhead, senior VP of federal government and regulatory affairs at Telus, said during his opening remarks.
The company acknowledged that adapting to Quebec’s consumer protection legislation didn’t carry a huge cost because it was already in the process of upgrading IT systems that enabled compliance. The problem comes, added Woodhead, when other provinces decide they want to adopt similar, yet slightly different, legislation which could amount a $40 million cost the carrier will have to absorb.
The issue of three-year contracts was addressed by all parties appearing before the commission on the first day of the hearing. The Public Interest Advocacy Centre isn’t against three-year contracts, but says more work needs to be done to encourage both two-year and three-year contracts.
Janet Lo, counsel at PIAC, explained the reason two-year contracts are virtually unused is because the math for the handset subsidy didn’t line up compared to the subsidy with three-year contracts. It just doesn’t make sense that a two-year contract would see a handset subsidy of perhaps $10 while the three-year contract would see a device price much lower.
“It really pushed the consumer to the three-year contract and didn’t in their view offer a reasonable option to have a shorter contract. So we would like to see the two-year evolve somehow,” she said.
John Lawford, executive director of PIAC added that much the pain surrounding three-year contracts could be mitigated if some of the safeguards in the code come into force. “If all the best things that we see in this code come through (termination fees, caps and notifications), it takes away a lot of the sting out of a three-year contract because you can leave after two years four months and you know how much exactly how much it’s going to be,” he explained.
As an additional option to spur development of the two-year and one-year contract market, Lawford suggested that perhaps the Commission require wireless carriers to offer shorter-term contracts if they choose offer three-year terms. “We just don’t see the two-year and one-year developing without a little push,” said Lawford.
Telus says this became a non-issue for its customers after the company introduced the device balance concept. Consumers are now fully aware of their device subsidy and how much they are paying each month.
Dave Fuller, chief marketing officer at Telus, noted that after the company started using the device balance approach, the number of consumers subscribing to three-plans “shot through the roof” while the number of complaints to the Commission for Complaints for Telecommunications Services dropped significantly.
Perry Hoffman is covering the CRTC’s wireless code of conduct hearing in Gatineau all week. Facing the Commission panel tomorrow will include CIPPIC, OpenMedia and Rogers Communications. You can listen live on the CRTC web site or watch the proceedings online at www.cpac.ca.
