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New draft telecom rules take aim at runaway mobile bills

A woman talks on her cell phone in front of Union Station in Toronto.

Louie Palu/The Globe and Mail

Canada's telecom regulator is tackling a slew of hot-button issues that drive consumers crazy about cellphone contracts.

The Canadian Radio-television and Telecommunications Commission wants to impose new rules for the unlocking of smartphones, place caps on roaming fees and force carriers to come clean on the limits of so-called "unlimited" plans.

The sweeping new code, which will govern how mobile services are sold, represents the CRTC's biggest step to beef up consumer protections and regulate the $19-billion wireless industry since the early 1990s.

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More than 27.4 million customers now subscribe to wireless services, and complaints about wireless have topped the list of grievances filed with Canada's Commissioner for Complaints for Telecommunications Services for the past four years.

The proposed rules aim to take the sting out of a variety of issues that hit consumers directly in the pocketbook.

For instance, the CRTC wants consumers to be able to unlock their devices at "reasonable terms."

The regulator also wants to oblige carriers to provide more clarity on fees, including advertised rates. The commission is also mulling whether to cap extra fees that consumers rack up by making long-distance calls, blowing through their allotted voice minutes, sending text messages, surfing the Web and while roaming on other carriers' networks.

Under the proposals, which will be finalized after upcoming hearings, services would be stopped when the cap is hit, until the customer agrees to pay more.

Consumer advocates were pleased with the draft code, which included many of their suggestions.

"It has most of what we asked for," said John Lawford, executive director of the Public Interest Advocacy Centre. He was particularly happy to see the provision that calls for consumers to be notified when they hit 50 per cent, 80 per cent and 100 per cent of their usage limits, and then caps extra payments.

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Mr. Lawford also likes the clarification of termination fees, so people will know up-front how much it will cost to get out of a contract. However, he said there will likely be a debate at the upcoming hearing over whether the new code will apply retroactively to people who have already signed wireless contracts.

Carriers were also supportive. Rogers Communications Inc., BCE Inc. and Telus Corp., the big three wireless providers, all said Monday that they agree with the CRTC's move to put a code in place, although they will reveal any detailed input into specific provisions at the hearings to be held the week of Feb. 11.

But upstart Wind Mobile argued there is one major omission from the code, saying it fails to deal with long-term contracts, which often tie consumers to a carrier for three years.

Those contract are the "No. 1 issue for Canadians," said Simon Lockie, chief regulatory officer of Globalive Wireless Management Corp., which owns the Wind brand. "So the fact that the draft code does nothing to address this issue is something we expect the commission to hear about loudly and clearly."

Although Canadians have complained about three-year contracts, the CRTC "felt it was more appropriate to deal with the effects of the three-year contracts such as transparency in billing: (separating phone set subsidy from service) and the cancellation fees rather than removing an option that many Canadians choose," spokesman Denis Carmel said.

The CRTC, meanwhile, is calling on Canadians to comment on the code, which chairman Jean-Pierre Blais called "a work in progress." Once it is finalized, the code would be administered by the Commissioner for Complaints for Telecommunications Services. In that regard, the CCTS would have various powers including the ability to force a carrier to stop certain practices; ordering them to provide consumers with explanations or apologies; or ordering them to provide compensation up to a maximum $5,000.

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About the Author
Reporter, Report on Business

Richard Blackwell has reported on Canadian business for more than three decades. At the Financial Post and the Globe and Mail he has covered technology, transportation, investing, banking, securities and media, among many other subjects. Currently, his focus is on green technology and the economy. More

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