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CRTC, Set Our Phones Free

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"The convoluted, micro-print contracts do not protect consumers. Consumers needs to be heard and the big three companies need to be taken to task."

That's just one small part of what Jennifer O'Neill of St. John's, Newfoundland, sent in to inform the CRTC's promised Code of Conduct to protect cell phone users -- a demographic that now includes the vast majority of Canadians.

It's no small wonder that the CRTC, Canada's telecom authority, has finally found the nation's cell phone market to be far too concentrated to ensure citizens get what they deserve. With approximately 94 percent of the industry controlled by three big players -- Rogers, Bell, and Telus -- it's clear both to Canadians and to these corporations that unhappy users simply have nowhere else to go.

The CRTC's plan to address this problem is coming in the form of the aforementioned Code of Conduct, which will lay out minimum national standards to ensure Canadians aren't being abused by their cell phone service providers. Announced in October and set to be discussed at a public hearing in Gatineau, Québec, in February, the Code is meant to make the cell phone market more fair.

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Recently, three months and thousands of comments after their initial announcement, the CRTC released a first draft of their Code to the public.

The bulk of the comments sent to the CRTC appear to have come through a page hosted by grassroot group OpenMedia.ca (this writer's home organization), http://CellPhoneHorrorStory.ca. Our group's goal in this matter is to use citizens' tales of cell phone service frustration to humanize the process for the CRTC, and to ensure the
Code is grounded in the lived realities of Canadians. But did the CRTC deliver?

At first glance, it's clear that Commissioners at least tried to bring the public interest into the development of their Code.

What's covered?

The Code's scope -- comprising eleven key issues including pricing clarity, contract termination fees, and the unlocking of devices -- remained unchanged since it was initially proposed back in October 2012. This scope resonates well with what was found when OpenMedia.ca's crack content analysis team looked for common themes in Canadians' Cell Phone Horror Stories; it represents a good starting point in the Code's development.

However, the draft Code's protections against Big Telecom abuse for each of these issues did not end up quite as strong as they ought to be.

Stuck in our contracts

For one thing, the widely-despised three-year contract was not ruled out. Canadians have been more than clear that being locked into an agreement for that long a time prevents them from taking advantage of the (albeit limited) choice in the wireless market. This leaves the door open for Big Telecom, knowing their customers can't leave them, to provide poor quality service and to generally treat users disrespectfully.

OpenMedia.ca has found that a whopping 63.45% of partipants in the Cell Phone Horror Story campaign complained about poor service, with 36.11% citing contracts as a key issue.

Early contract termination fees, however -- mentioned 33.09% of Cell Phone Horror Stories -- were addressed by the draft Code. In theory, they were all but eliminated: "If the consumer cancels the contract early, the consumer cannot be required to pay any fee, charge, penalty, interest, or other amount other than the termination fee described below," the draft code provides. But of course the devil is in the details.

Often when Canadians sign up with a wireless provider, they're incentivized with a cell phone given to them at a lowered price. The only catch is that they have to stay in their contract. But with an
undefined standard for contract length, Big Telecom is free to devalue the length of time someone had put into their contract before choosing to leave, and charge more for the remainder of the phone's price. In short: a de facto termination fee still exists, and can end up being quite expensive.

Another example of a small but important loophole can be found in the Code's section on device unlocking. One comment from the Cell Phone Horror Story campaign, written by Ottawa's Mike Mallett, explains the problem clearly: "There is absolutely nothing in the consumers' interest in having a service provider lock a cellular phone onto their network. It stifles competition and choice, and perpetuates an
atmosphere of corporate control over what we do with our own tools."

Locking Canadians in

Rather than outright prohibiting the practice of locking cellular devices, though, the CRTC proposed a rule that require providers to give their customer the means to unlock a device within a 30-day period, and possibly for a high price ("at the rate specified in the contract"). To truly respond to Canadians' needs -- no to mention to make room for innovative services -- the Code should ensure that Canadians can have their devices unlocked by their service provider upon request and free of charge.

When it comes to these and many other problems Canadians face with their cell phones, it's clear that the CRTC's rules need to be stronger and more specific. With a few multi-billion dollar companies
doing everything in their power -- from lobbying to shady deals to contract ambiguity--to restrict Canadians' choices and boost their bottom lines, citizens should be able to look to a Code of Conduct
with some teeth.

The real fix

Of course the CRTC's Code of Conduct on its own won't do the full job of allowing for innovation and citizen choice in Canada's cell phone market. As the Montreal Gazette's Jason Magder so eloquently put it, "...the CRTC has addressed one pain point of consumers -- getting gouged without knowing it. But it fails to address the main frustration -- getting gouged in the first place."

The end of price-gouging, restrictive agreements, and disrespectful customer service will come only when all key decision makers--not just the CRTC, but also Industry Canada, the Competition Bureau, and even MPs -- realize that Big Telecom's control over Canada's digital future has gone too far for too long, and take action.

On February 11, the first day of the CRTC's public hearing on the Code of Conduct, OpenMedia.ca will release a citizen-powered report that will detail a wide range of recommendations for policymakers looking to advance and protect the future of communications in Canada.