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We Canadians pay the highest mobile rates in the world, thanks to the entrenched Bell-Rogers-Telus oligopoly that for years has been gouging customers with impunity. The CRTC, the regulatory body that has generally been in the pocket of the wireless companies, has been taking some baby steps towards actually protecting consumers in recent years, thanks to a huge backlash and an acknowledgement that the current situation is hurting business and innovation. But these baby steps haven’t done much to stem the tide.

Now, the long-awaited new Wireless Code announced by the CRTC after months of public hearings promises to address a few of the most egregious issues. Among them:

  • Canadians will be able to cancel their plans after two years with no penalty, even if they signed a deal for longer.
    This is all well and nice, considering that the three-year plan cycle was stifling innovation. But considering that there really aren’t any better options out there, cancelling and going to a competitor is illusionary freedom at best.
  • Caps on extra data and roaming charges to $50 and $100 respectively within a given billing cycle.
    This is perhaps the biggest win for consumers; stories of $22,000 phone bills or other ridiculous overage charges have abounded in the media lately, embarrassing providers and frustrating consumers. Even smaller amounts are ridiculous: A friend recently returned from a trip to the UK to discover a $1,287 phone bill, all for committing the cardinal sin of having forgotten to purchase a data plan, and having accessed Google Maps a few times while abroad. Such charges far exceed any reasonable costs that the providers have, and amount to a punitive tax on the unsuspecting for no reason other than they’ve been allowed to get away with it for far too long.
  • Canadians will be able to unlock their devices after 90 days, or immediately if they didn’t purchase a phone on contract.
    Anyone who wanted an unlocked device was already doing so on the grey market for a few dollars. It’s useful for people moving out of the country or for those of us who travel a lot; Canada remains one of the only countries in the world where you can’t get off a plane and pick up a local SIM card for a matter of a few dollars to use during your stay. (I do this all the time with my unlocked phone; it’d saved me thousands in roaming charges in countries from France to Israel to Vietnam.) But for most Canadians, with no competition to speak of in the market, unlocking your device will only allow you to switch to an equally bad provider, which is really no choice at all. All this means in practice is that providers will raise the prices of the phones in the first place, arguing that they can no longer subsidize them to as great a degree.
  • Contracts must be in plain language, with wording explained clearly and with the option to opt out of all changes.
    This ought to have been the price of entry and a given for anyone doing business. The fact that it needed to be said was sad. A step in the right direction, to be sure. But the Code doesn’t set out any restrictions on what the wireless providers can and cannot put in the contracts, as long as it’s spelled out in plain language.

What’s missing from this Code? Quite a lot.

  • There’s no mention of the fundamental unfairness of charging for incoming calls and text messages — a particularly egregious issue considering how much spam and how often my phone rings with unsolicited telemarketing calls. When I complained recently to Rogers about the dozens of robo-calls I’ve been receiving lately (“Congratulations! You’ve won a trip!”), I was basically told that I had no choice but to pay for the calls. There’s also the fact that we take the double-charging (paying for both outgoing and incoming minutes) as a given here in Canada, when most people from other countries would find that shocking.
  • There’s next to nothing being done to address the lack of competition in the marketplace. Bell, Telus and Rogers collectively own the vast majority of the wireless spectrum. Efforts in recent years to open up parts of the spectrum to bidding from smaller players are failing, since the small players are being sold one by one to the big ones. Virgin Mobile is owned by Bell; Fido is long owned by Rogers; Telus is in talks to buy Mobilicity; Public and Wind are both up for sale. Only Videotron here in Quebec is making a go of it, since as a larger cable company it can afford to compete, but its service and offerings aren’t exactly advantageous compared to the Big Three. And anyway, Rogers and Videotron have a network sharing agreement that will effectively prevent them from actually competing. With so few choices, we all lose, regardless of market regulation or consumer codes. Since, after all, the Big Three can charge whatever they want, as long as they spell it out in plain English.

Ultimately, this Wireless Code is Too Little, Too Late. It will get us to where we needed to be as a country five years ago, but it does very little to address the future. And we will continue to fall behind the rest of the world in terms of mobile adoption rates and technical innovation.

But, it’s a step in the right direction.

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Coming on the heels of the news-that-will-shock-nobody that Canadians pay the highest cell phone bills in the world, someone’s taking notice… and it ain’t the CRTC:

Unlimited wireless data plans are almost unknown in Canada, and that’s a strategy telecom carriers elsewhere are starting to emulate as they look for ways to cope with booming demand and capacity limits.

BCE’s Bell Canada, Rogers Communications and Telus Corp  – Canada’s “Big Three” telecoms – command profit margins that are the envy of the industry. They have an historical advantage over their peers because Canadians accept that they have to pay for as much capacity as they use.

Or, maybe it’s because the CRTC is more interested in protecting those profit margins that are the “envy of the industry” than in protecting consumers, in our price-fixed, oligopolistic market.

And it’s got consequences. Less affordability translates to lower smartphone penetration, which means companies have less incentive to stay ahead of the curve on wireless development, which means Canada will – as usual – continue to lag behind the rest of the world when it comes to innovation. That’s bad news for everyone… unless, of course, you happen to be an executive at Bell, Rogers or Telus.

We’ve lagged behind the rest of the world long enough. We’re supposed to “accept” things that are unheard-of in the rest of the world, like punative three-year contracts with ridiculous cancellation fees, “system access fees” of $8.95 a month, being charged for incoming voice minutes and even text messages, and ridiculously high data plan pricing. Us Canadians don’t “accept” that we have to pay as much for data as we do; we’re forced into it because we have no choice. That is, no choice other than opting out of owning a smartphone entirely, which is the choice I’ve made.

Instead of admiring our market, the world should be mocking it. And instead of protecting the anachronistic, anti-competitive marketplace, the government should scrap the CRTC and throw the doors open to real competition. Until then, consumers and businesses will be the big losers.

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Update on the cell phone wars

07.10.2008

Responding to massive public pressure, including an online petition that garnered over 57,000 signatures, Rogers has announced a $30 data plan for the iPhone. It’s not the unlimited flat plan that people had hoped for, but at 6 gigabytes, it’s pretty close. And so far, it’s only available to people who purchase their iPhone before […]

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Want my vote? Dissolve the CRTC

12.23.2005

Here’s yet another reason: For 25 months now, cell-phone users in the United States have been able to change service providers and take their numbers with them. This spares you the laborious process of notifying everyone who has your number that you have a new one now. [ . . . ] This week the […]

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