The Canadian Radio-television and Telecommunications Commission has fittingly performed its function with its announcement on Monday of a new wireless code, which will come into effect six months from now.
There are three major cellphone carriers in Canada, Rogers Communications Inc., BCE Inc. and Telus Corp. They constitute a de facto oligopoly; moreover, there is a limited amount of spectrum. Generally, suppliers in such circumstances are quite content to be regulated; they want to know “the rules of the game,” rather than having to compete fiercely over very small differences in their contracts. Jean-Pierre Blais, the CRTC’s chairman, and his colleagues have supplied such rules, which may well endure – until the wireless business evolves enough that some new regulatory configuration is needed.
In recent years, the federal government has, to its credit, tried to increase competition, but the startups that resulted hold only a tenuous position and are looking for new owners. The CRTC’s wireless code will not lead to more competition in the sense of conjuring into life any wonderful new suppliers, but with the consumers’ new ability to change the prevalent three-year contracts into two-year ones, the existing suppliers have a fresh incentive to give better service. And two-year contracts are in any case standard in the United States and other countries.
Consumers can already avoid those three-year contracts, by buying their phones outright (“unlocking,” in the relevant dialect), but most have seen fit not to do so – and not all devices are available on those terms. The CRTC’s code will allow customers to unlock after 90 days, which is reasonable.
The new code is also praiseworthy in requiring more clarity on fees. And it restricts the companies’ ability to unilaterally change important terms of the contract, which corresponds to basic fairness and equity, and is the right thing to do. On general principles, a contracting party should be free to regard the contract as terminated, in such an event.
The peculiar habit of calling the large service-providers “incumbents” seems to be a relic of the days of telephone-company monopolies. It is to be hoped that, with the opening up of new spectrum, there will be more competitors, more competition, less need for the CRTC’s protection, and no incumbency.
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