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    How Telco Lobbying Helped Quietly Kill Consumer Cell Phone Cost Calculator

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    Monday August 31, 2009
    Last week I discussed the well-known challenge faced by millions of Canadians as they sort through a myriad of cellphone pricing plans in a marketplace still lacking in robust competition.  The subject of this week's technology law column (Toronto Star version, homepage version) is that previously unreported, however, is Industry Canada officials identified much the same problem and worked for years to develop an online tool to address it.

    After spending tens of thousands of dollars creating and testing an online calculator designed to help consumers select their ideal wireless plan, Industry Minister Tony Clement killed the project weeks before it was scheduled to launch. Government records suggest intense lobbying this spring by Canada’s wireless companies, who feared the service would promote lower cost plans, played a key role in the decision.

    The Office of Consumer Affairs (OCA), a branch within Industry Canada with a mandate to promote and protect consumer interests, was the original source for Which Cell Plan? A Calculator. The calculator asked consumers for detailed information about their current or anticipated cellphone use and then provided them with a detailed list of suitable plans from Canadian providers. In 2008, the OCA paid Decima Research almost $60,000 to conduct extensive usability testing. The company conducted 12 two-hour focus group sessions in Halifax, Vancouver, and Montreal that included cellphone users as well as “cellphone intenders” – those expecting to purchase a cellphone within a year.

    Decima Research’s report noted “participants felt being a consumer of cellphones is frustrating and difficult. The service plans of different providers are difficult to compare because they are all different…Secondary frustrations and challenges included the length and limitations of contracts, billing inaccuracies, and quality of service issues such as dropped calls and coverage.” The focus groups’ response to the cellphone cost calculator was positive, with the vast majority of participants indicating they would use the tool and encourage friends and family to do the same.

    Yet just as Industry Canada was set to launch the tool, the major wireless carriers began lobbying against it.  According to lobbyist registration records, the Canadian Wireless Telecommunications Association and Bell Canada met with officials from Clement’s office on April 8th, with the association listing telecommunications regulation and consumer issues as the topics of discussion.  Two weeks later, Telus also met with the same officials to discuss consumer issues.

    The carriers were apparently concerned that the tool only covered voice services and that it was geared toward lower-priced plans. Sensing that Clement was facing pressure to block the calculator, Canadian consumer groups wrote to the Minister, urging him to stick with it.

    Despite months of preparation, thousands of dollars in taxpayer expense, the creation of an effective tool, and the obvious benefits for lower income Canadians, Clement nevertheless killed the project. Given the tool’s potential to encourage more Canadians to adopt wireless services, the decision ironically came just as Clement was meeting with technology executives in an effort to kick-start a national digital agenda. According to an Industry Canada spokesperson, “technical limitations” were to blame.

    With public dollars having funded the mothballed project, the government should now consider releasing the calculator’s source code and enable other groups to pick up where the OCA left off.  In the meantime, Industry Canada has posted a cellphone checklist that asks consumers many of the same questions, but does not provide any information on carrier plans or pricing.

    Update: CBC.ca covers this story with comments from Industry Canada, PIAC, the CWTA, and Bell. Note that Bell indicates that they did not have a separate meetings on the issue and let the CWTA handle the issue on their behalf. The CWTA reaffirms its support for killing the calculator.

    Update II: Catherine Middleton points out the FCC is asking questions about similar consumer disclosures and cost comparisons.

    Comments (20)add comment

    Janice said:

    Obfuscation for sure
    As we're contemplating adding a third cell to our family's plan, I desperately wish that there was something like this cell plan calculator. Even just comparing plans within the same company is an exercise in frustration and makes me more likely than not to defer reviewing our plan (to their financial benefit, I expect).
    August 31, 2009

    ex cell phone user said:

    at the very least release the tool!
    once again we see the lack of competition in the canadian telecom marketplace, this time at its most blatant.

    at the very least, Industry Canada should release the tool for hosting elsewhere!

    it was developed with public money, but the public can't use it...the public should benefit from that spending, not the telecommunications compaines.
    August 31, 2009

    David Eaves said:

    Can't we FOI this information and recreate ourselves
    Michael - do we even need to ask them to release it? Couldn't we potentially FOI all the relevant documentation and then use that to build a parallel app?
    August 31, 2009

    upset said:

    No confidence in the Harper gov.
    Of course they want this killed.

    In the states the big money makers are now kids (a report is out this week saying 1/2 of 12-yr old have wireless access). The net, SMS etc ect is like crack to kids. Everyone knows this.

    Now we have to look at who profits off of this. Oh wait, let us instead look at Bell Canada's "Bell-Fund wiki". It was covered here by Jon Newton:

    ‘Get kids to nag parents’ - Bell Canada
    http://www.p2pnet.net/story/22694

    The Bell-fund (with CRTC blessing) paper tries to get the industry to target children. trying to get them to use as much B/W as possible and trying to get them to use as much money as possible, and trying to get them to "nag mom and dad" to allow them to buy this corporate crapoloa.

    The CRTC said the Broadcasting Act doesn't apply to Bell on the net (and I guess this would hold true with Quebec laws about targeting children). With these hurdles out of the way, Bell can now legally target children.

    Now with their successful lobbying tea-time with the minister, and the ministry out to protect consumers and the people, there is nothing the average parent can use to help themselves financially. Or to find something an average parent can afford (these contracts and prices are really high).

    The CWTA, Rogers, Telus and Bell even defeated the Quebec Consumers Union in asking the CRTC to put measures in place to protect people from these predators feeding off our children and the vulnerable (The CWTA even went so far to say that the Consumers Union data of what happened should be removed from public view and Rogers was claiming their data harms them and needs to be removed from public view).
    See: http://www.crtc.gc.ca/ PartVII/eng/2009/8620/u11_200901951.htm

    All this just goes to show what is really going on. Price gouging and service gouging to the maximum extent possible and the industry minister, CRTC and our lack of a competition bureau is helping Bell et al. achieve this.

    This is the exploitation of the Canadian people as they raise prices, use traps, use locks, use marketsing to target children and the vulnerable.

    Industry Minister, you showed your colors. There are words for this type of thing.

    I want the code and the money back.
    August 31, 2009

    Cody said:

    Crowdsource it
    I think David Eaves had the right idea, but a FOI request may not be necessary.

    A website dedicated to collecting anecdotal data from Canadian wireless consumers about their cell phone plans and billed usage when compared to actual billed costs could go a long way to filling this gap. If we could aggregate this anecdotal data into simple measures such as average cost of features (bundled and unbundled), cents-per-minute for daily use, system access fees, data costs, etc., we could shed some light on the true costs of cell phone usage in Canada.

    At the end of the day, it doesn't matter how much the wireless companies claim these plans cost. It is what end up on the bill that consumers need to know.
    August 31, 2009

    BCBud said:

    Government for whom?
    Yet again, the Harper government (like the Martin, Chretien and Mulroney governments that preceded it) shows that it represents the interests of big business, not those of its citizens. When will Canadians wake up and stop voting for governments that screw them over?
    August 31, 2009

    Brian said:

    Write your MP
    I did. Demand the software you paid for.
    August 31, 2009

    Exploder said:

    The best government money can buy.
    Corporate money, that is. Don't get much input for all the taxes WE pay. I can hardly even see what use voting does any more. We have a small handfull of mostly useless parties. We have a juggernaut of corporate interests ready to shred any real opposition, and through which anyone must pass before getting anywhere near elected to office. The rich make all the rules one way or another, and for some strange reason, it's always to their best interest.

    Sorry to be in such a funk, just can't help it.
    August 31, 2009

    Aaron Mavrinac said:

    Importance
    An anecdote: I pay $30 flat (absolutely no extra fees) per month -- without a contract -- for a Virgin Mobile phone that does everything a run-of-the-mill voice and text user like me reasonably needs. As a graduate student, this is good for my wallet. Despite the availability of many such options on the market, the vast majority of people I know whose phone usage I would characterize as similar to mine have "more featureful" contract plans from one of the major providers which, all told, cost them upwards of $60 per month.

    From my vantage, I can see the availability of this tool having an impact on the mobile carrier/plan choices of a huge number of people. As Industry Canada evidently recognized, this kind of connectivity is rapidly transitioning from a luxury to a necessity, and a level playing field is lacking in the extreme while predatory providers lock uninformed consumers into highly inflated pricing.

    The release of this costly project's source code under an open license is the absolute minimum I would accept from Industry Canada. Personally, I'd rather see the project back online for launch.
    August 31, 2009

    bshell said:

    Info is available online for people willing to haggle with the phone companies
    It's now important and necessary to bargain for better deals with your cellphone provider. Never pay any of their posted prices. All the companies have secret unpublished pricing plans they offer to people who bargain seriously as though haggling with a street vendor in the back-alleys of Cairo. There are many websites online that explain how to do this. e.g. HowardForums, Your Mobile Phone Community & Resource - The Fido Loyalty Thread - All threads related to retention, loyalty, and winback. or Fido - Retention Plans - RedFlagDeals.com Forums .
    For instance, when I tried this, I was offered a plan with Fido, $17.50/mo for 200 minutes, no system access fee, no 911 fee, free after 5:00pm and weekends. This is not advertised anywhere. With such a low monthly fee for voice, you can easily add a data package that supports one of the new smart phones. Although these can be haggled for as well. A key point to remember is that providing these services cost somewhere in the neighbourhood of 100 to 1000 times less than what they are charging, so the profit margins are enormous. They have lots of room to bargain. You have to have the guts to walk away. Your best advantage is when your contract is nearly up. At that time, you make a call and tell them you are going elsewhere unless they offer you a package that's half what you are currently paying.
    August 31, 2009

    chris said:

    Is Bell lying?
    This subject was picked up by the CBC today:
    http://www.cbc.ca/technology/s...ying.html

    Bell claims, as quoted, in the article:
    "Mark Langton, a spokesman for Bell, said the company did not lobby Clement and let the CWTA handle the issue.

    "There was no separate or unique Bell effort," he said. "Geist insinuates in his column that Bell had talked to Clement or his office about the subject. We did not."

    My reading of Prof. Geist's entry above shows no insinuation. Just fact and proof.

    "According to lobbyist registration records, the Canadian Wireless Telecommunications Association and Bell Canada met with officials from Clement’s office on April 8th, with the association listing telecommunications regulation and consumer issues as the topics of discussion."

    He then links to:
    http://bit.ly/AbFxk4

    Showing that on April 8th, George Cope of Bell Canada met with the Industry minister as a lobbyist.

    One question though, are their transcripts or meetings form these meetings?
    August 31, 2009

    Joseph said:

    ...
    " ex cell phone user said:

    I think we should release that tool Clements from his position. Just wondering who's favouring who?

    Why did you waste tens of thousands of our tax dollars?

    When I see how inexpensive cell phones & plans are States-side, we are getting SHAFTED!! That was driven home two years ago, when I was in Cleveland. Our friends from Pittsburgh all thought nothing of calling each other, even to see where one was in a mall. Total disbelief on my part. When I was shown that 5 phones on a family plan with unlimited calling between anyone anywhere on their carrier with 1000 anywhere, anytime minutes to "others" for a total of $125/month, I could understand why.

    This year, I could buy a Virgin cell phone at WalMart in Solon for $20 including 100 anywhere/anytime minutes, and topups for effectively 10 cents per anywhere/anytime minute.

    Canada, you are being gouged, screwed and shafted.

    Time for an election.
    August 31, 2009

    Peter St. Amour said:

    System Consultant
    As a Canadian Taxpayer, I would like a copy of this comparison software so I could run it my self!
    I suspect I could obtain a copy of it under the Freedom of Information Act! .

    August 31, 2009

    /i/nsurgency said:

    Spineless bastards...
    If China executes three functionaries daily for corruption and this does not help, I don't know what will help Canada.

    Copyright consultation will likely have the same sort, we already saw lobbyist takeovers in the Toronto townhall who did not invite the town. But, please, don't stop, keep talking about copyright, so that lobbyists' efforts are less legitimate!

    "Time for an election. "

    Yep, time for an election. Time for a _proportional_ election. Make sure that you SPOIL YOUR BALLOT if you are not given one.
    August 31, 2009

    ah said:

    Telus admits to it
    Telus admits lobbying to get rid of it. Per one of their Senior regulatory guys:
    http://twitter.com/hennessy4408/status/3676822381

    "we were right to fight a bad model"

    August 31, 2009

    Tony said:

    ummm...
    go to comparecelleular-dot-ca, lots of information out there
    September 01, 2009

    Jake said:

    ...
    Meh. The Canadian Financial Services Something Commission has tons of great info on things like credit card fees, etc., and I don't think anybody really looks at them. The reality is that whatever shows up highest on Google will end up getting read, and your links, Mr. Geist, help them do better in that, so thank you.
    Here they are again: cellplanexpert.ca and cellphones.ca
    September 02, 2009

    Michel Monette said:

    Vivement une alternative citoyenne
    Il va falloir développer une alternative citoyenne. Je trouve intéressante l'idée d'un site accumulant des données fournies par une armée de consommateurs. Si notre gouvernement ne peut plus (ou ne veut plus, après tout les conservateurs sont plutôt pro entreprises), alors il faut se défendre soi-même.
    September 14, 2009

    quad band cell phone said:

    quad band cell phone
    Copyright consultation China cell phone wholesalewill likely have the same sort, we already saw lobbyist takeovers in the Toronto townhall who did not invite the town. But,quad band cell phone please, don't stop, keep talking about copyright, so that lobbyists' efforts are less legitimate!
    November 08, 2010

    quad band cell phone said:

    quad band cell phone
    with all its stresses and costs, cannot be justified on health grounds in the light of current evidence," reads an accompanying editorial from Oxford University's John Bithell.
    http://chncellphone.com
    November 08, 2010

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