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Report On Business Three years in, CRTC to review code of conduct for wireless industry

The relationship between Canadians and their cellphone providers? It's complicated.

Canada's telecom regulator introduced a national code of conduct for the wireless industry in 2013. It set new standards for cellular contracts – limiting term lengths and putting caps on overage charges for roaming and data use – and established rules around clear and simple information for consumers. The goal was to help people enter into contracts with their eyes open, to make that relationship less complicated.

Now, three years after the code came into effect, the Canadian Radio-television and Telecommunications Commission (CRTC) wants to know how well it's working. The commission is holding a four-day public hearing starting Monday to address the code's effectiveness.

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"To the extent that the commission had this fantasy that the wireless code would bring down wireless pricing, that hasn't happened," John Lawford, executive director of the Public Interest Advocacy Centre (PIAC), said in an interview. "But to the extent that it's helped consumer protection, I think it's been good."

Complaints about wireless services have been declining, according to regular reports from the Commissioner for Complaints in Telecommunications Services (CCTS). The CRTC's own survey conducted last fall found 17 per cent of Canadians with wireless plans reported making a complaint, down from 26 per cent in 2014.

"Over all, the main message is: The thing is working. … It's changed the market for the better," Mr. Lawford said, noting that caps on data overage and roaming charges, as well as clarity on how to calculate early cancellation fees, have helped reduce some of the most common complaints.

But PIAC still plans to highlight possible improvements when it appears at the hearing Monday as part of a coalition of consumer groups.

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Mr. Lawford says one major area to be addressed is the interpretation of certain wording in the code, "where I think the [wireless] companies have bent the terms to their will perhaps a little unfairly."

Most of those issues relate to data usage and billing, he said. That aligns with the results of the CRTC survey, which found "bill shock" remained a concern for 21 per cent of respondents, with data-overage fees and roaming charges cited as the main reasons for nasty surprises.

Mr. Lawford highlights one issue that has caused conflict as family share plans have become more popular. Some providers have taken the position that anyone with a device on the plan can consent to additional charges for roaming or data overages. The consumer groups argue that only the account holder – i.e. the person who pays the bill – should be able to authorize those charges. The CCTS has also taken this view but the practice continues in some cases.

Beyond settling interpretation debates, Mr. Lawford says the commission should require companies to display essential contract terms more prominently. PIAC also wants the commission to promote greater awareness of the CCTS, which handles telecom complaints that customers can't resolve directly with their service provider.

When the CRTC first unveiled the wireless code, the biggest shock to the industry was that it effectively banned three-year cellphone contracts (by ruling that carriers can recover the cost of upfront subsidies they offer customers on handsets over a maximum of two years.)

Although Telus Corp. has asked the CRTC to revisit the two-year limit – citing comments by individual consumers who say they would like the option to spread the cost out over a longer period of time – the other two national carriers BCE Inc. and Rogers Communications Inc. have not proposed specific changes to that provision.

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The national carriers generally argue the wireless code has served its intended purpose by empowering customers with more information and making contracts clear. Apart from small tweaks, they suggest the CRTC should not introduce new regulations, which they say could hamper innovation.

The CRTC will not be considering wireless prices or other issues related to the competitiveness of the market at the hearing.

Maher Yaghi, an equity analyst at Desjardins Securities Inc., says the decline in complaints seen in the CRTC survey bodes well for wireless providers as they head into this week's hearing. "We believe these results … generally reduce the likelihood that the CRTC will implement additional heavy regulation on the industry."

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