Manitoba carefully edges closer to new cellphone contract law

The Manitoba government will have to choose its words carefully when it draws up its upcoming legislation on cell phone contracts, or the new law could end up in court, a consumer group says. “Communications has been found to be federal only,” John Lawford, a research analyst and counsel at the Public Interest Advocacy Centre (PIAC), said in an interview. The Government of Manitoba is currently holding a public consultation on regulating cell phone and texting contracts. In its consultation paper, the government says consumers often complain that mobile service contracts are difficult to understand. “There are lots of complaints formally and informally,” Jan Forster, acting director of the Consumer Protection Office with the Government of Manitoba, said in an interview. “Everybody knows someone who is having trouble with their cell phone contract, and it seems it’s a fitting time . So many Manitobans are using cell phones and texting, and it’s only growing.” In the paper, the province said it aims to improve the situation by mandating the use of plain language, and by promoting fairness for consumers and carriers. The government also said it plans to consider fair practices for contract-cancellation clauses. The consultation paper presents a series of questions for the public to consider, including how pricing is presented in contracts, consent for new services, how contracts should be laid out, how carriers handle damaged or broken mobile devices, contract renewals, and customer service. Manitoba plans to introduce its new rules this spring through legislation under its Consumer Protection Act, which protects consumers from unfair practices and exploitation. The proposed changes to the act are part of the government’s “Let’s Make a Better Deal” consumer-protection strategy. Introduced last May, the strategy is a five-year plan for stronger consumer protection, including legislation for new-home warranties, protection for car buyers, protection from hidden travel-package costs, and fair mobile service contracts. Lawford said Manitoba is heading in the right direction with its plans for new legislation, and noted that PIAC also receives many complaints from the public about wireless services. But Lawford added that the province has to be careful about implementing new cell phone contract laws. In 1989, he said, the federal government ruled that telecommunications falls under federal, not provincial, jurisdiction. This means that if a province gets too close to pinpointing mobile phones in its consumer protection act, it could open the door for carriers to argue the province is overstepping its bounds and trying to regulate a federal industry on a provincial level. “If I called it the ‘Cell Phone Protection Act,’ I’d be leading with my chin, but if I called it the ‘Distance Contracts Act,’ maybe I could say it’s applicable to anything else.” Last year, the Quebec government implemented its own cell phone contract law, while the Ontario government is considering similar legislation. Lawford noted that Quebec ensured its law doesn’t pinpoint cell phones. Consider the name of the legislation, he said: “Contracts Involving Sequential Performance for a Service Provided at a Distance.” “It’s obviously intended only for cell phones, but you could theoretically use it for any business that had a similar structure,” with subscription services and early-termination clauses, Lawford said. Forster said the Manitoba government plans to make it clear that the new legislation applies to contracts—not communications services. Michael Geist, Canada research chair in Internet and e-commerce law at the University of Ottawa, said contracts should be considered at the provincial level. “This is largely a provincial matter, making it tough for the federal government to intervene with consumer contracts. Their role is better served facilitating greater competition,” he said. “At the provincial level, these legislative reforms may help push Canadian wireless companies to introduce changes to their existing contractual approach.” But Marc Choma, spokesman for the Canadian Wireless Telecommunications Association (CWTA), said in an interview that provincial laws for cell phone contracts are redundant. The CWTA brought in an industry code of conduct last year, and many of the issues Manitoba is considering are covered there. All of the CWTA’s members have signed on to the code of conduct. “They have already committed to ensuring that customers very clearly understand exactly the terms and conditions of their service,” whether it’s a contract, month-to-month, or pre-paid, Choma said. Choma also argued regulations add costs to the government, and to carriers. If service providers have to change their national billing systems, marketing systems and customer care processes to deal with individual provincial rules, it can get expensive, he said, and those costs inevitably fall on consumers. “Sometimes a government proposal may sound good in the political arena, but when you take a closer look at it, you don’t want to create any hardships for consumers that aren’t there in the first place,” he said. But Forster said the Manitoba government wants to help, not hurt the market. “What we want to do here is not make challenges for industry, but provide better fairness for consumers and business. If consumers have all the information to make informed decisions, it will benefit the industry as well,” she said. Choma also noted that Canada has a federal Commissioner for Complaints for Telecommunications Services (CCTS). “ has that code of conduct to hold the wireless carriers accountable to what customers have signed up for,” Choma said. The CWTA’s code of conduct says an unsatisfied customer should contact the commissioner. But Forster said the CCTS only ensures the industry abides by the contracts they already have with consumers, and doesn’t monitor the contracts themselves to evaluate their fairness. Forster said the CWTA’s code is has a very positive intent, but “needs more teeth” to ensure consumers are protected. “If it was enforceable to a greater degree I think we’d see perhaps more fair and clear contracts, and we don’t,” she said. Forster said Manitoba has received more than 100 submissions for its consultation so far, adding that the government will provide a written summary of the responses after Jan. 17. The government also continues to meet with industry and consumer group representatives, Forster said. “We continue to research and review Quebec, and how their legislation is working, and what the pros and cons are,” she said. “Our minister intends to fly there in the next month or so to talk with the Quebec minister about the legislation.” The Manitoba government is accepting written submissions or comments until Jan. 17. Choma and Lawford said their organizations plan to contribute submissions. news@thewirereport.ca

Manitoba carefully edges closer to new cellphone contract law

News | January 7, 2011

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