The federal Competition Bureau is weighing in on Canadians’ ongoing love-hate affair with cellphone carriers, saying, among other things, that carriers shouldn’t advertise “unlimited” data plans that are actually quite limited, and should stop locking smartphones to prevent them from working on competing networks. These are good recommendations that fall within the mandate of the Competition commissioner, but they are not the real answer to consumers’ frustrations. Someone needs to remind Canadian cellphone owners that they have a lot more control of their fates than they think; it’s time for them to stop turning to the government for help and start flexing their collective muscle.
Canadians love their cellphones. Close to 85 per cent of the population was subscribed to a carrier in the fourth quarter of 2011, according to IAB Canada, which represents the digital marketing and advertising industry. Of that 85 per cent, it is safe to say that 100 per cent has griped at some point about poor service, lengthy contracts, prohibitive cancellation fees and other frustrations. Yet we keep signing three-year contracts with service providers, then turn to Ottawa for relief when we want out of those contracts.
Ottawa obviously does have a role to play. The Canadian Radio-television and Telecommunications Commission (CRTC) is developing a code of conduct for wireless carriers; the Competition Bureau has proposed to the CRTC that it prohibit false claims about “unlimited” data and ban the locking of smartphones, thereby making it possible for consumers to switch carriers and benefit from competition. It also wants contract termination fees to be minimized and made more manageable for consumers.
But the Competition Bureau quite pointedly does not call for a limit on the length of cellphone contracts. It points out that contracts of longer than two years are illegal in Europe, and that in the United States most contracts top out at two years. But the bureau does not say there should be any imposed limit in Canada.
Perhaps that is because Canadian consumers have been told over and over again that they can save money by the paying full price for an unlocked phone, shop around for the best service deal, and never lock into a contract. Instead they happily choose to amortize the cost of a phone over the life of a three-year contract, because they don’t want to, or believe they can’t afford to, pay $600 or more up front for a phone they can own.
This is an economic choice. No one has to sign a contract. The simple act of making the smarter economic decision by saving up your money and paying full price for a phone, which would eliminate the headache of contracts and save money in the long run, would put pressure on providers to lower the length of contracts. Canadian cellphone users have the power to get the deals they want. They’re just not choosing to use it.