It’s still only a draft, but a proposed national code of conduct for wireless operators is already prompting a flurry of industry concessions.
Rogers Communications Inc. says “worry-free” flat-rate roaming is coming soon to appease customers dinged by steep data charges when they take their phones to the United States.
Rogers is letting buyers “unlock” mobile devices after 90 days, enabling them to switch carriers.
Rogers is also pondering whether to match Bell and Telus with rate plans that allow new customers to access their network without buying a phone.
The moves by the country’s leading wireless provider come – perhaps not coincidentally – as the Canadian Radio-television and Telecommunications Commission opened public hearings into its new code of conduct.
Canadians have made it clear to the federal regulator they are not happy with the way they have been treated by mobile carriers.
Among other grievances, they are tired of roaming “bill shock” when they take their phones on the road; they’re fed up with contracts that tie them to a carrier long after their device becomes obsolete; and they want more freedom to switch phone companies.
A code of conduct is a nice idea. More competition and choice would be even better for Canada’s 27 million mobile customers.
And a good start would be to dismantle the foreign ownership restrictions that keep the industry in too few Canadian hands and ban outsiders from controlling our telecoms.
Ottawa should also do more to encourage new entrants in the market by pushing ahead with a promised spectrum auction.
There is nothing inherently wrong with a code of conduct. The U.S. Federal Communications Commission prodded the industry to adopt a voluntary code of conduct in the early 2000s. It was sensibly amended in 2011 to ensure wireless companies alert customers when they’re nearing limits on voice, text or data use. The European Union regulates roaming charges and other behaviour.
But arbitrary rules may not get at the problem. It is unlikely the CRTC’s final code will go as far as the draft, which, among other things, proposes to cap roaming fees at $50, limit contract cancellation fees and allow easier unlocking of devices.
It’s also not clear how the code would address the biggest disconnect between the industry and its customers – the way plans are sold. Companies dangle heavily subsidized new BlackBerrys, iPhones and Android devices to lure customers into three-year contracts, even as data and voice charges steadily decline. Companies often have thousands of plans out in the marketplace, with wildly variable prices.
Consumers may think they are getting a new BlackBerry Z10 for the heavily advertised price of $150. What they are really buying is a monthly voice and data plan, inflated by the amortized cost of the device. It’s a misleading way to sell wireless service.
The main industry players, backed by a small army of lawyers and executives, descended on the CRTC’s headquarters in Gatineau, Que., last week to help shape the rules.
The carriers want more time to make changes. They don’t want the code to apply to existing contracts. And they’re not fond of imposed caps on roaming charges or contract lengths (now typically three years in Canada).
In his opening remarks last week, CRTC chairman Jean-Pierre Blais hinted at what he is looking for: More transparency.
“We are hoping to create a more dynamic marketplace empowered by informed consumers,” said Mr. Blais, making it clear the draft code is a “working document.”
It’s a step in the right direction.
But as long as the industry is in the hands of three dominant national carriers, customers face limited options. Together, Rogers, Bell and Telus control more than 90 per cent of the market. In the United States, there are five national providers, four of which control more than 90 per cent of the market.
Concentration limits choice because the national carriers rarely stray far from the herd in their plan offerings.
Cellphones have been around for years. Consumers might rightly wonder why it has taken carriers so long to start offering reasonable roaming fees, unlocked phones and other consumer-friendly options.
Choice and a well-functioning marketplace are the best ways to ensure that consumers are treated fairly.
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