GATINEAU – If adopted, the draft wireless code of conduct will likely cause some significant unintended consequences, SaskTel told the CRTC during the last day of the hearing Friday. The provincial Crown corporation pointed to the potential for unsatisfactory experiences, increased use of notifications and mandatory caps on overage fees as ones that could have big negative impacts on Canadians.
The amount of information that consumers will need to know can be considered excessive and will hinder wireless operators’ ability to improve efficiencies, according to SaskTel executives. Under the draft code, consumers would be subjected to a lengthy process involving an explanation of the rate plan, a four-page information form, the main elements of an eight to 10 page simplified contract, and a description of the code, SaskTel’s fair use and privacy policies.
“After about an hour, the customer will walk out of the store with 30 pages of materials she is never likely to read,” said Mike Anderson, CFO of SaskTel. “In addition, the customer is unhappy because they just wanted to learn how to operate their new cell phone and two other customers are unhappy because they have been waiting in line while all this is going on.”
Others such as Public Mobile said Thursday that imposing the wireless code on its prepaid services could increase its costs. See day four coverage here for more information.
Bell Canada suggested that unrealized consumer expectations with respect to services could be an unintended consequence of de-linking the handset purchase from the service subscription, something commissioners had questioned operators on throughout the week. Wade Oosterman, president of Bell Mobility, noted that the company offers mobile TV, but other carriers may not. “If the subscriber believes, ‘oh well, I get this device that has a little TV in it’, and now they leave our network and go to a competitor's network and the little TV isn't working anymore, that is not the device,” he said. “It's the network operator that doesn't offer the service.”
Testimony on Friday showed that despite all the talk about the need to separate the purchase of the handset (with or without subsidy) from the services agreement, this type of approach is already working in Canada. Discussion on this topic appeared to gain momentum over the course of the week, culminating in the Friday appearances of Quebecor Media and Wind Mobile.
But even before their testimony, Rogers Communications and Telus had offered information earlier in the week demonstrating that once an early termination fee (ETF) mechanism based on the handset subsidy is in place, the length of the contract is largely irrelevant. Bell Canada argued in its testimony that if the Commission were to mandate a separation of device purchase from service, the company would have to rethink its handset subsidy approach altogether.
QMI explained during its appearance that following the coming into force of Quebec’s consumer protection legislation, the company changed the way it offered devices and services. Now the wireless operator has a fixed-term contract for the purchase of the device under which the consumer has 36 months to pay for the handset. In terms of services, the company offers a month to month service, or a contract with indefinite term.
Ed note: It’s worth noting here again that the draft code of conduct is based on the Quebec consumer protection legislation.
Wind noted that its customers get a Tab on which to make payments to pay off the device subsidy. This is combined with a month to month contract. “The customer can choose to pay off that tab at any time or make payments towards that Tab as they choose, so they can bring it down. The customer can leave at any time and simply pay off the balance of the tab,” said Ed Antecol, VP of regulatory and carrier relations at Wind.
Most of the wireless operators appearing before the CRTC this week agreed that the early termination fees should be based on the remaining amount of the handset subsidy. SaskTel didn’t agree with this approach, noting that it costs more than $200 to acquire a customer and would like to recoup some of that when a customer cancels a contract.
Bob Hersche, senior director of regulatory affairs, SaskTel explained that without additional contract cancellation fees in addition to paying off the handset subsidy, contracts don’t mean anything.
