Competition Bureau supports regs for shorter wireless contracts, free device unlocking

The CRTC should introduce rules to prevent wireless carriers from hindering customers who want to switch providers and require carriers to provide clearer service and pricing information to the public, the Competition Bureau said in regulatory a filing. In a submission released Wednesday for the CRTC’s online consultation on a proposed code of conduct for wireless carriers, the Competition Bureau said “switching costs,” such as termination fees, and consumers’ lack of clear pricing and packaging information are impediments that “diminish the effect of competitive forces” in Canada’s wireless industry. “These features can deprive consumers, competitors, and the Canadian economy of the beneficial effects of competition in this industry, namely lower prices, higher quality service and greater innovation,” the federal agency said. In the submission, the Competition Bureau said carriers’ practices that reduce their subscribers’ ability to switch to another wireless provider limits competition by cutting into new entrant carriers’ ability to compete in the market. The practices, it said, include signing subscribers to lengthy three-year contracts, locking wireless devices so they can’t be used on another carriers’ network, and charging “excessive” termination fees. The bureau said it supports sections of the CRTC’s draft code that would require carriers to unlock handsets for subscribers and limit termination fees to the costs associated with handset subsidies. The bureau said it would also support measures to restrict the length of the contracts carriers enter into with their subscribers, though no such measure was included in the commission’s draft code. “Canada is one of the only jurisdictions worldwide where a large proportion of wireless contracts are three years in duration,” the bureau said, citing European laws that prohibit wireless contracts longer than two years. “f contract lengths are not limited by the Wireless Code, it is particularly important that contract terms and termination fees are clear and not unnecessarily restrictive, so that customers are not tied to these contracts in a manner that will harm competition,” the submission said. The Competition Bureau also said it would support any CRTC requirement that wireless carriers be more clear and direct in their advertising practices and communications with subscribers. It encouraged the CRTC to require carriers to provide “all-in” prices that clearly identify “all mandatory costs” in their advertisements, and restrict carriers’ ability to advertise wireless plans as having “unlimited” components “if, in fact, the plan is limited in some material way.” In December, incumbent carrier Telus Corp. launched a false advertising lawsuit against new entrant carrier DAVE Wireless Inc., which operates under the brand Mobilicity, over a series of television ads that promoted wireless plans offering “unlimited” data services. Telus said the data package was not truly unlimited because Mobilicity said it reserved the right to slow down a users’ data traffic after a certain monthly threshold. A Supreme Court of British Columbia judge later rejected Telus’ request for an injunction to stop the ads during the busy holiday season. Telus is still pursuing damages in the case. Under former commissioner Melanie Aitken, the Competition Bureau launched high-profile cases against Canada’s incumbent carriers, including one against Rogers Communications Inc. related to advertising about the new entrants and another against BCE Inc., Rogers and Telus related to premium text messages and rich content services on mobile devices. The bureau also reached a $10 million settlement in 2011 with Bell over what it called misleading advertising relating to Bell’s wireless prices. The Competition Bureau is conducting a search for a new commissioner to replace Aitken, who stepped down in September. John Pecman, a long-time Competition Bureau employee, is serving as interim commissioner. The CRTC will hold a hearing next week with the aim of creating a national code to govern wireless carriers’ relationships with subscribers. Several carriers had requested the code after a “patchwork” of provincial regulations started to emerge for the wireless industry. In January, the commission released a draft code that it said “is intended to stimulate debate” for the hearing, and that “does not constitute a preliminary view” of what the final code will look like. The Competition Bureau, which was commenting on the CRTC’s draft code, also suggested the commission commit to a three-year review of its wireless code of conduct, “iven the rapid pace of technological change, the likelihood of convergence in the wireless industry, and parallel developments such as mobile payments.” —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Simon Doyle at sdoyle@thewirereport.ca

Competition Bureau supports regs for shorter wireless contracts, free device unlocking

News | 02/07/2013 10:48 pm EST

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