01/25/2013 04:54 EST | Updated 01/25/2013 04:56 EST

CRTC's Wireless Code Of Conduct: How Things Might Improve For Frustrated Canadians (Q&A)


Canadian wireless users will have one last chance to give their input on what they’d like to see included in the country’s first national mandatory mobile code of conduct.

The Canadian Radio-television and Telecommunications Commission plans to post a draft version of the code on Monday and will hold a second round of online consultations, allowing consumers to comment on the draft code until Friday, before it launches public hearings Feb. 11.

What do you want to see in the Code of Conduct? Leave a comment.

The CRTC announced last year that it would pursue guidelines after receiving a number of consumer complaints on issues such as cancellation fees, roaming charges, length of contracts and hidden service charges. Hundreds of people responded to the first online consultation, with the vast majority complaining about being "held hostage" to three-year terms. At the same time, the country’s telecom companies also began to ask for a single national code after provinces began to adopt their own, creating piecemeal legislation.

What's it all about? Here are answers from stakeholders to some of the big questions, as posed by Huffington Post Canada national business reporter Sunny Freeman.

Note: Some answers have been condensed.

Michael Geist is a law professor at the University of Ottawa, where he holds the Canada Research Chair in Internet and E-commerce law. Geist is also a columnist on technology law issue at The Toronto Star and The Ottawa Citizen, as well as a blogger at The Huffington Post Canada.

John Lawford is executive director/general counsel at the Public Interest Advocacy Centre. He will argue at the upcoming CRTC hearings on behalf of consumers, a role his organization often plays at the CRTC where it argues for lower rates and better services from telecoms and broadcasters.

Ted Woodhead is vice-president of telecommunications policy and regulatory affairs at Telus. The company believes a provincial patchwork of wireless requirements increases the costs of providing service to accommodate the different billing and terms and conditions required. Woodhead says these multiple, provincial codes would be bad for consumers.

Simon Lockie is chief regulatory officer at new wireless entrant Wind Mobile. Wind has voiced its support for a mobile code of conduct, arguing consumers should be protected from confusing contract terms, termination fees and hidden charges.

Q: What do you hope to be accomplished at these CRTC hearings?

Michael Geist: I think the mere fact that we’re moving toward something that will include an enforceable standard for consumer protection in this space is a big step forward. It wasn’t that long ago that we were in an environment where the argument of the industry was that self regulation was sufficient and that consumers had little worry, because consumers had choice and the industry could regulate itself. That for a while resonated with some governments, and over time an increasing number of provincial governments said ‘that’s not good enough,’ so what we’ve started to see is first provincial governments moving in this area and now the federal government.

John Lawford: The thing I most hope will be accomplished is the simple fact that we will have a code. Even that, honestly, is such an incredibly huge step forward. If you had asked two, three years ago if the wireless industry would ever agree that what they do is ever wrong, or in any way there needs to be rules on them, it was always answered by ‘competition solves everything, and have a nice day.’ We knew from consumers that they were extremely unhappy with that industry, and they got legislators involved, so even the acknowledgement – the actual putting something in place – that says there is a baseline of decency in contracts with consumers ... is a huge victory.

Ted Woodhead: We hope to listen to what consumers, consumer groups, the provinces and other parties have to say, and at the end we are confident that the CRTC can develop a uniform national code that will come as close as possible to the provisions already in place in provinces like Quebec, which has a very comprehensive and consumer friendly code that can largely be implemented nationally.

Simon Lockie: We know Canadians want simple contracts with easy-to-understand language, contract terms limited to two years maximum, no hidden fees, inclusion of basic call control features as part of any basic cellular package and no punitive cancellation charges. We hope that the code is able to bring about those changes. We also need a code of conduct that comes with enforceable consequences for breaches. Basically, the code needs to have teeth if there’s any hope in seeing change among the incumbent carriers.

Q: Some telecom companies have come out in support of a CRTC code of conduct. What are their motivations?

Michael Geist: The carriers arrived at the conclusion that the only thing worse than an enforceable code was 10 different enforceable codes province by province, and as they started to see different provincial initiatives, and started to see some variation on a province-by-province basis, that became more troubling than nothing, so that became a problem, so they looked to the CRTC to enact a single national enforceable code ... in a sense, pre-empting some of those provincial differences.

John Lawford: To some extent, I’ll give them a little credit. They have moved to the viewpoint that a totally unregulated market can be a little difficult for them, too, in terms of the amount of consumer frustration and negativeness that gets expressed to politicians about their industry … In any other area where the big communications companies are working – and that can be broadcast, telecom wireline, Internet – any time there’s a public fight, they look like the bad guys because everyone hates their guts on cell phones and so they get a rough ride from the politicians. … They just want to have the CRTC looking after them because a) they don’t think the CRTC would ever put their executives in jail or fine them, but they also do want uniformity across the country.

Ted Woodhead: For Telus’ part, we are on a journey to put customers first in everything we do, and we believe that customers deserve a national code and, in fact, will be better off with a national code that reflects the kinds of protections included in the code submitted by Telus. At the end of the process, and after full discussion, all stakeholders should have greater certainty and transparency with respect to their wireless services.

Simon Lockie: The Big 3 have had no issues in the past trying to “game” the system to their advantage, but we’re confident the CRTC will ensure these hearings will allow all sides to be heard. We expect the CRTC to work hard to ensure that the rights of Canadian consumers come first and foremost when crafting the code of conduct and that the end result is a code that helps ensure a better wireless experience for everyone.

Q: After years of allowing the wireless players to be self-regulated, why do you think the CRTC is moving now toward regulation through a code of conduct?

Michael Geist: We have seen a big change at the CRTC, but I think there are two elements here. Again I reiterate, the carriers asked for this and so in a sense, the CRTC is responding to a request that comes from the carriers. But this may also be a case of “be careful what you wish for that you just might get it,” because I think the carriers initiated this at a time when they were quite hopeful that the outcome would be something that they would be quite comfortable with.

John Lawford: There are two things. One is the CRTC itself has this chair who is committed to consumer issues and has a chief consumer officer, which is great. The other thing is, more importantly, the provinces got off their rear ends and did something about this … so once they saw it sweeping across the country, they’re like, “no, we’re not going to live with 10 different versions.” That’s the only reason that we’re agreeing with them – and really that’s the only reason they’re playing ball right now. So if that weren’t hanging over them, they would have stuck with “the competition will solve everything” line.

Ted Woodhead: The CRTC conditionally forbore from regulating wireless prices many years ago, but still retains the jurisdiction to impose conditions. In this case, the CRTC is using its constitutional jurisdiction to create a uniform set of norms that will benefit consumers and ensure that they have the same rights regardless of where they live or use their wireless device in Canada.

Simon Lockie: The wireless market in Canada has seen tremendous growth in recent years. However, as Industry Canada has noted, the mobile services market is still dominated by Rogers Communications Inc., Bell Mobility Inc. and TELUS, which have a total of more than 23 million wireless subscribers and a combined national subscriber market share of 93 per cent. Bell and TELUS also share a network and common network cost base. Thus in most markets we have a duopoly market structure with a very high concentration of market power. This market power creates opportunities for consumer abuse. More regulation is required if we want to stop Canadians from being gouged on their wireless bills.

Q: What are some of the biggest issues that you see coming up?

Michael Geist: I don’t think we’d see them regulate prices, much of what they would do would be skirting around the contractual term – that’s things like contract termination, contract term, unlocking phones, some of the disclosure requirements.

John Lawford: The ones we’re concerned about, that we don’t know if we can get the code to address or not, is notification when your bill gets big. So for us that’s the one we’re really asking for, the other one that some other people may not have identified, but we have, is bill shock. It doesn’t matter if it comes from roaming or whether it comes from you having a text message plan and you blew the the text message numbering or data and you went over the data cap, you suddenly open your bill and its like $350 more than you usually get in a month. Most people can’t absorb 350 bucks, so that’s what we’re trying to avoid, and we’re trying to at least pin the companies into notifying people. (Other issues include) termination fees, length of contract, what people are given when they first sign up – like a summary so they can understand what the deal is.

Simon Lockie: Big issues at the upcoming hearing will likely include: limits on the duration of term contracts; limits on cancellation penalties; rules requiring truth in advertising (i.e. all inclusive pricing with no hidden compulsory add-ons such as system access fees or regulatory recovery fees); the application of the National Wireless Code to prepaid monthly services, and the interaction of the National Wireless Code with various provincial consumer protection legislation.

Ted Woodhead: I think data alerts, plain language contracts, device balance tools or calculators will be big issues the CRTC will want to examine.

Q: How do you think Canada’s wireless sector stacks up globally in terms of competition and what consumers are offered here?

Michael Geist: When you look at the various surveys and reviews you find we don’t do nearly as well as Canadians would like to do. Roaming fees feel high, the length of contract is longer in Canada than most other jurisdictions, the practice of locking phones more common in Canada than you find in some other jurisdictions, so I do think we’re in an environment right now when Canadians are looking at what’s a critically important industry and critically important to their daily lives and feeling that we should be able to do better.

John Lawford: I think the service is comparable to most places, maybe the broadband is a bit slower and the rollout of new phones is a bit delayed, which is because either the small market or the structure of the market. But for the pricing and the onerousness of the services, like the length of contracts, it’s simply a lack of competition. You’ve got three big providers and they all also own all the wireline and everything else, Internet and such, and unless there’s a credible fourth player, or fifth, there’s no market participation. There’s too much market power, so the prices are just super high and the terms are crappy. There’s just no other way to put it.

Ted Woodhead: Despite the disparaging comments about the industry from some parties, the wireless sector is a huge success story. Seventy-five per cent of the Canadian population now has access to LTE (“long-term evolution,” an industry standard for high-speed wireless data). That's a world-leading statistic. The wireless sector is deployed to 98 per cent of the Canadian population with HSPA and HSPA+ (“High Speed Packet Access,” another industry standard). It’s an understatement to say you would be hard pressed to name one example where networks have been deployed as quickly or to the vast geographical extent anywhere in the world. ... There is considerable choice in wireless pricing, options, and plans, and the fact is that Canadians have higher minutes of use and are rapid adopters and users of wireless data.

Simon Lockie: Canadians have been subjected to a monopoly in Canada which has contributed to the problems we see today in the market — wireless is too expensive, penalties are too steep and consumers feel trapped with their providers because of long-term multi-year contracts. It doesn’t have to be this way, and it’s certainly never been that way at WIND.

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