The Commissioner for Complaints for Telecommunications Services released his annual report yesterday resulting in a wide range of interpretations with some citing improved customer service due to an overall decline in complaints, others focusing on declining customer service owing to an increase in complaints from misleading contractual terms, and yet others pointing to the CRTC Wireless Code as the reason behind the overall decline in complaints.
Despite some improvement in service, the most notable aspect of the report is a review of compliance with the wireless code. With the code now fully operational, there is simply no excuse for carrier non-compliance. Yet the data suggests that there are numerous confirmed breaches. Bell is easily the most notable company when it comes to failure to comply with the code: when you combine Bell Canada, Virgin Mobile (which it owns), and Northern Tel (which it now also owns), 2/3 of the confirmed breaches all come from the same source. In other words, every few weeks, Bell Canada or one of its companies had a confirmed breach of the wireless code.
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Update 5/7/14: Government reverses course and announces it will back up the CRTC in court.
The Canadian Press reports that the federal government appears ready to walk away from the CRTC’s proposed enforcement of the new consumer wireless code. While the government has touted the code as an example of a pro-consumer approach, the CRTC’s attempt to ensure the code applied as quickly as possible may be lost due to the government’s decision to stay out of a legal battle over the issue. With the major telcos looking to limit the power of the CRTC and a federal court ruling that the Commission cannot advocate for itself, it falls to the federal government to do so.
The issue was raised yesterday in the House of Commons, yet the government refused to respond directly:
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The CRTC released its consumer wireless code last month, receiving kudos for new measures that should eliminate three-year contracts. Now the major telecom companies are preparing a lawsuit challenging the rules associated with the implementation of the code. While the code will take effect for any new, renewed, or changed contracts starting on December 2, 2013, the CRTC has stated that all consumers should benefit from the code by June 3, 2015 or two years after its initial release. The telcos object to this position, arguing that it retroactively applies new conditions to contracts that existed prior to the start date of the code. According to an affidavit from SaskTel, the major concern involves the potential for consumers on three-year contracts to walk away from those contracts in June 2015 without further payment, despite terms that could run months longer.
Yet during the wireless hearing, some telcos assured the CRTC that customers would benefit from the code within two years. For example, SaskTel told the Commission that its customers now upgrade their devices (and thus would fall under the code) roughly a year and a half after signing the initial contract:
Customers are turning over their devices in the second to third year. We have introduced an early device upgrade program in October of last year which gives customers the ability to upgrade their device at any time. Since we have implemented that program we’ve seen customers upgrading after about 17.5 months.
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I appeared yesterday on CTV’s Power Play to discuss the CRTC’s Consumer Wireless Code. The video can be accessed here.
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The CRTC released its much-anticipated consumer wireless code this morning. While much of the code remains unchanged from an earlier draft proposal, the headline-grabbing change is that the Commission has effectively brought three-year contracts to an end. The issue of contract length was the top issue raised by consumers, who argued that Canadian wireless contracts were longer than most other countries and that they represented a significant barrier to effective competition.
While the incumbent wireless carriers argued that consumers like three-year contracts, the CRTC sided with consumers. Effective December 2, 2013, consumers will be allowed to terminate their wireless contracts after two years with no cancellation fees. The ability to cancel with no further costs should result in two years becoming the standard for a long-term wireless contract. It will be interesting to see how quickly the carriers implement this change as smart consumers may decide to delay signing new contracts unless they are protected by the new wireless code if the carriers insist on retaining early cancellation fees in the final year of a three-year contract until the code takes effect.
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