ISPs gain from CRTC ruling on switching providers

Independent Internet service providers fighting for subscribers will likely benefit from a new policy by the federal telecommunications regulator to make it easier for phone, Internet and TV customers to shift to new company.

Changing providers can be a frustrating and costly experience, the Canadian Radio-television and Telecommunications Commission (CRTC) said Friday. Some companies will accept a cancellation request from the new provider on behalf of the subscriber, while others insist on talking to the subscriber — giving them a chance to make a better offer. Sometimes carriers offering multiple services had different policies depending on the service.

So the commission said it will change regulations to make it clear all providers have to accept a customer cancellation from a new service company representing the customer.

In essence, subscribers will now be able to switch service providers with only one phone call to the new service provider they’ve chosen.

The commission also mandated that transfers have to be completed within two business days of making a request, except for wireless transfers, which have to be done within two and a half hours.

Subscribers can still cancel services directly.

The CRTC also made it clear the new policy doesn’t erase any contractual cancellation penalties subscribers may have to pay for shifting companies.

The decision “would be good news for any company that has a competitive offer,” said Amit Kaminer, a research analyst at Montreal-based SeaBoard Group, a telecommunications consultancy.

The ruling pleased Vancouver-based Telus Corp, which last year complained to the regulator that Western Canadian cableco Shaw Communications Inc. was unfairly getting in the way of customers it was luring.

“Some carriers purposefully inject delays into the cancellation process,” Telus spokesman Shawn Hall said in an interview. “They try to reach a customer directly allegedly for confirmation of cancellation,” but really want to stop a defection

The CRTC decision “makes it easier to move to another carrier. That’s good for consumers.”

Also delighted was Dave Dobbin, president and CEO of wireless startup Mobilicity. Rogers Communications Inc. asked the commission to force subscribers to contact their existing provider and ask to switch service, he pointed out. [BCE Inc.’s Bell Canada did as well. If the commission didn’t agree with that, it added, it wanted the regulator to make changes that applied to broadcast distributors only.] That would be a backward step, Dobbin said, because existing regulatory rules for wireless carriers a call from a subscriber’s new operator is good enough to start the transfer process.

“We’re just glad that Rogers was not successful in having the cable TV un-consumer -friendly process brought to wireless,” he said.

The issue isn’t quite closed. Some phone and cable carriers are required to have carrier or customer service groups separate from their sales divisions to handle subscriber transfers. That way competitors can safely transfer sensitive and competitive information back and forth. But carriers suggest this split prevents them from offering customers better deals before they leave. So the commission will hold a special hearing on the need for these groups.

The decision only helps intensify competition in an era when incumbent telephone companies like BCE Inc.’s Bell Canada and Telus Corp. continue losing landline phone customers to Internet service providers (ISPs) and cable companies offering voice-over IP phone service.

At the same time the phone companies are luring TV and Internet subscribers from cable companies like Rogers Communications Inc, and Shaw Communications Inc. with new high speed fibre optic service.

The regulator’s new policy was triggered by request from Shaw for clarification on the transfer policy and one from Bell that the different rules for telephony providers and cablecos be harmonized. The Harper government’s 2006 policy directive to the regulator not to interfere with market forces requires the policies to be identical, Bell argued.

The commission agreed, but turned down Bell’s request that the regulator make subscribers deal directly with the carrier they’re leaving. It would be “inappropriate” to remove a service provider’s authority to act on customer’s behalf to cancel services, the commission said.

Bell did not reply at press time to a request for comment on the decision.

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