Earlier this month, the Canadian Radio-television and Telecommunications Commission invited the public to help create a national code of conduct for wireless companies such as Bell, Rogers, and Telus. The consultation is expected to generate widespread interest, providing frustrated consumers with an outlet for grievances on lengthy contracts, problematic terms and conditions, exorbitant roaming costs, or onerous cancellation fees.
My weekly technology law column (Toronto Star version, homepage version) notes the decision to embark on a national, enforceable code of conduct for wireless services supported by the wireless carriers represents a dramatic policy shift that was scarcely imaginable only a few years. Indeed, when then-Industry Minister Maxime Bernier pushed through a policy direction to the CRTC in 2006 aimed at limiting regulation by calling for “greater reliance on market forces”, consumer-focused regulations were viewed as an impossibility. Consistent with the market-led approach, the Canadian Wireless Telecommunications Association introduced a voluntary code of conduct in 2009 with no expectation of government regulation.
The move toward new regulations provides a valuable lesson on the role that the provinces can play to jumpstart otherwise stagnating issues. In the case of wireless services, the introduction of provincial consumer protections geared specifically toward the wireless sector ultimately encouraged the carriers to drop their opposition to new regulation as they recognized that a uniform federal policy was preferable to the emerging piecemeal provincial framework.
The provincial shift started in the province of Quebec, which enacted new consumer protections in 2010. Those protections included safeguards against pricey termination fees, prohibitions against unilaterally changing terms of service, and greater disclosures about warranties. The wireless carriers unsurprisingly opposed the new rules, claiming they would result in higher consumer costs and delayed access to new smartphones and other devices.
Those claims proved unfounded and the Quebec initiative was quickly followed by similar developments in Manitoba and Ontario. In Manitoba, a consultation on new consumer protections was roundly criticized by the Canadian Wireless Telecommunications Association, which said “the rationale for provincial intervention in the telecommunications sector is not compelling, and that at the end of the day, consumers are better served by competition than by regulation.”
Interestingly, the CWTA submission revealed as an emerging divide within the wireless industry. Mobilicity, one of the new wireless providers, publicly chastised its own association with a release stating that “we are exceptionally disappointed with the CWTA’s lack of foresight in continuing to act only in the interests of the Big Three wireless oligopoly. As a members of the CWTA, we repeatedly voiced our opposition to its submission to no avail.”
Months later, the momentum for wireless consumer protection moved to Ontario, where Ontario MPP David Orazietti had been waging a campaign for safeguards against high cancellation fees, expiring pre-paid cards, incomprehensible contracts, and carrier-locked phones. The government supported an Orazietti private members bill, over the objection of the industry, which maintained “we don’t think legislation like this is needed to satisfy customers and meet their demands.”
With Nova Scotia and Alberta emerging as the next provinces to develop enforceable, provincial-based wireless consumer protection laws, earlier this year the industry admitted that the provincial regulatory approach was worse than a single enforceable code. It therefore reversed its position and asked the CRTC in March to establish a national code of conduct.
The new national code will come from a new CRTC, however. Since the appointment of chair Jean-Pierre Blais, the Commission has gone out of its way to prioritize consumer concerns. Assuming the public rallies behind the consultation, the process is likely to place the carriers on the defensive against a litany of consumer complaints with a resulting code that provides consumers with new legal rights and a regulator prepared to enforce them.