Cellphones: to regulate or not

Do you want the government to put more regulations on your cellphone provider? The Canadian Radio-television Telecommunications Commission wants to know.

Do you want the government to put more regulations on your cellphone provider?

The Canadian Radio-television Telecommunications Commission wants to know.

The CRTC is now accepting submissions from both industry and the public about whether or not it should step in and create a “national code for wireless services.”

For the Public Interest Advocacy Centre, the answer is a resounding “yes.”

“What we’re seeking is some kind of regulation in wireless because it’s completely out of control,” said John Lawford, who works as counsel for the consumer advocacy organization. “There is a shopping list 20 or 30 issues long on my desk of problems with wireless.”

Chief among the complaints are things like penalties for leaving a contract before the end of its term, charges for subsidized handsets, and unilateral changes of contract terms mid-contract.

And the way contracts are written often makes it difficult for customers to figure out just what they’re being charged for, said Lawford.

System-access fees are a case in point.

“System-access fees are an artifact of the ancient days of cellphones when you had your own licence,” he said.

Before the government started to sell off blocks of wireless spectrum to telcos, each cellphone users had to get their own licence from the now-defunct communications department. But while those licences have disappeared, the fees haven’t.

“There’s no reason that they shouldn’t roll the $7.95 or whatever they charge into the general per-month cost of having your phone,” said Lawford. Even when the terms of a contract are clear, Lawford said the charges are often excessive.

“There’s no relation to actually provide the service at the network level and what they’re charging you,” he said. “We figure it’s between 100 times too much and a 1,000 times too much, which I think is criminal.”

But consumer advocacy groups and disgruntled customers aren’t the only ones calling for more regulations.

Both Rogers and Telus have come out in favour of greater regulation of the industry.

In fact, the CRTC was prompted to take a look at this issue after Rogers submitted its own draft wireless code to the regulator.

Having industry’s support on this issue is something that came as quite a surprise to Lawford.

“If you had said to me a year ago that two of the big three wireless companies would say, ‘We need to have some controls on ourselves,’ I would have laughed in your face for an hour,” he said.

But for industry, having a national code makes good business sense, said Marc Choma, spokesperson for the Canadian Wireless Telecommunications Association. It has also come out in support of greater regulation.

That’s because in the absence of federal intervention, provinces are stepping in to fill the void.

Quebec and Manitoba and Newfoundland have already passed legislation governing cellphone providers and Ontario is looking to do the same.

“Essentially you could end up with 13 different sets of regulations covering the same industry,” said Choma.

And that gets expensive.

“Having different rules in each province will result in higher operating costs, which will ultimately be passed on to the consumers,” warned Rogers in its submission to the CRTC.

A few years ago the Canadian Wireless Telecommunications Association developed its own industry code of conduct, although because it is an association it didn’t delve into issues like pricing and contract terms.

However, the CRTC has the power to not only develop those kinds of rules but enforce them.

Having one set of national rules would be better for everyone, said Choma.

“We think that should be done at the federal level because it would put all Canadians on the same footing,” he said. “What we’re asking the federal government to do is to set a minimum standard that every Canadian has access to.”

But not everyone is so supportive.

Both Northwestel and its owner, Bell Canada have yet to make a submission to the regulator.

But that’s not too surprising. According to the commissioner for complaints for telecommunications services, Bell Canada garnered almost 30 per cent of all consumer complaints, the most of any telco by a significant margin.

With most of the industry on side though, Choma is hopeful that the regulator will move quickly on this issue.

Lawford, on the other hand, isn’t holding his breath.

Back in the mid 1990s, the CRTC decided that it would leave the Canadian wireless sector alone and “allow market forces to guide the industry’s growth.”

Before the commission starts regulating the wireless industry, it first has to decide if it was wrong to leave everything up to the market.

And that might pose a problem because the industry doesn’t look all that different than it did in the late 1990s, said Lawford,

The CRTC is accepting online and written submissions from the public on this issue until May 3.

Contact Josh Kerr at