At the request of carriers and public interest groups, the federal telecommunications regulator is looking into partially regulating wireless
It may sound odd, but some of the country’s biggest wireless carriers want more regulation.
They may get it.
The Canadian Radio-television and Telecommunications Commission (CRTC) , the federal telecommunications regulator said Wednesday it is willing to look into the idea of creating a national wireless services code for consumers after being pushed by Rogers Communications Inc., Telus Communications Co., and several public interest groups.
It is unlikely that should the commission get into the area it would regulate the monthly pricing of wireless services.
However, there are a number of charges that the commission might oversee. For example, says John Lawford, counsel for the Public Interest Advocacy Centre, “if there’s a completely chronic problem area, like roaming fees, they could take inspiration from the European telecom regulator and try to fashion wholesale – or wholesale and retail – caps on wireless roaming fees.”
Rogers suggests the code would mandate that contracts with subscribers be written in simple terms and describe its essential details (such as monthly rates and term length), that carriers can’t change the terms of a fixed service during a contract, the conditions under which subscribers can cancel a contract, notice of expiry of a contract and controls over carrier advertising of fees.
“Many of those who requested a national wireless consumer code noted that several provinces have recently introduced amendments to consumer protection legislation that directly or indirectly impact wireless services,” the commission said in a statement. “These interveners submitted that this was a clear indication of a demand by Canadian wireless consumers for a national code for wireless services.”
However, before the commission can ponder the idea it first has to decide if it will reverse a 1994 decision to leave the wireless industry unregulated. That means it has to decide if there is enough wireless competition to keep its hands off, or if there’s enough problems to intervene.
In some cities (Vancouver, Calgary, Edmonton, Montrreal), there are five wireless carriers. In Toronto there are six. However, in large parts of the country there may be only one.
Considering the cellular industry has more operators than ever, asking whether there’s enough competition “is a little bit odd,” said Amit Kaminer, an industry analyst with the SeaBoard Group, a Montreal-based telecommunications consultancy.
Lawford says regardless of the number of carriers, PIAC will argue there’s enough consumer billing complaints to justifiy intervention from the regulator. “Since they’re asking for proof you can believe that I’m going to be shovelling mountains of reports at them, and hopefully thousands of public comments on to their public comments page on how crappy wireless service is in this country.”
For this first part of the consultation — on competition — the commission will accept written arguments up to May 14. The commission’s decision will be a “bellweather,” Lawford said. “It will test the ideological resolve of the CRTC” to say competition doesn’t solve all problems.
The commission’s move to even think of regulating wireless is full of ironies. In 2006 the new Conservative government of Prime Minister Stephen Harper directed the commission to rely on market forces as much as possible. Earlier this year it sharply criticized the commission for trying to get out of the way of the private sector when the CRTC approved usage-based billing for wholesale residential Internet pricing.
“Our practice has been to rely on market forces as long as we are convinced that the interests of consumers will be looked after,” Leonard Katz, the CRTC’s acting chairman said in a statement. “In this case, we are seeking evidence that our intervention is necessary before considering the development of a national wireless code.”
The appeal by carriers for a national code comes after Quebec and Manitoba amended their consumer protection legislation to set certain wireless pricing standards.
Quebec’s legislation sets out a formula wireless carriers operating there have to follow which limits early subscriber cancellation fees.
Last month Rogers [TSX: RCI.A] asked the commission to create a coast-to-coast code to prevent a hodge-podge of regulations across the country.
“The ideal solution is a single comprehensive national consumer code that will protect consumers in a reasonable and consistent manner,” its submission said in part.
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One way to measure subscriber dissatisfaction with wireless is by looking at the annual annual report of the Commissioner for Complaints for Telecommunications Services (CCTS).
Of the 8,007 complaints it received from consumers and small businesses during its 2010-2011 year, 62 per cent dealt with wireless. The CCTS, which is funded by industry, tries to resolve complaints from telecom subscribers who can’t get satisfaction from their wireless or wireline providers (who not only offer local phone but also Internet service).
Almost 80 per cent of complaints were either billing errors or contract disputes.