CRTC looks to tighten wireless service rules

OTTAWA — The national telecom regulator will look at ways to give parents more control over household cellphone data charges as part of a review of its four-year-old wireless code of conduct being held this week in Gatineau, Que. The Canadian Radio-television and Telecommunications Commission is also looking for ways to tighten rules governing wireless service cancellation fees, says a spokeswoman for the agency. But at least one carrier is hoping the CRTC will loosen limits on the length of contracts and clarify how caps on data overage fees should apply. The first code, brought into force in 2013, effectively killed three-year contracts, limiting them to 24 months.

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But that led, in many cases, to higher monthly cellphone bills as the service providers were forced to recoup the cost of subsidized smartphones over a shorter period. Customers should be given the option of signing three-year contracts again so the cost of so-called zero-dollar phones can be amortized over 36 months, allowing carriers to offer cheaper rates, says Rogers Inc. Carriers also want to be able to recoup the cost of items offered for free to customers as incentives to sign a contract. Currently, service providers can charge consumers for the residual value of subsidized cellphone hardware if they cancel their contracts early. For example, a customers could be charged $300 if they cancel a two-year contract after one year, if the initial value of the incentivized phone was set at $600. But the code doesn’t allow carriers to recover the cost of other promotional items, such as new TVs or tablets. “We don’t really want somebody signing up for a three-year contract, getting a free TV and then saying three months later ‘I’m gone,’ and the only penalty they would face under the current rules is they’d have to pay (the residual value) of the handset subsidy that they received,” said Rogers. “They wouldn’t have to pay anything back for the value of the television set.” Industry and consumer groups acknowledge the code has been largely effective since coming into force. The most recent survey commissioned by the CRTC revealed about 46 per cent of consumers paid fees for exceeding their data limits. But the TNS Canada survey, conducted in September, also showed that only about one in five respondents experienced “bill shock” from their wireless services, down from 28 per cent who said they experienced the problem in 2014. Complaints to the Commissioner for Complaints for Telecommunications Services also dropped sharply between 2015 and last year, according to the watchdog. Several carriers also offer data management tools that warn consumers when they’re about to reach or exceed their data limits.

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But questions will be raised at the four days of hearings this week about increasingly popular family plans that spread data use over a number of devices in a household. Account holders have complained that the management tools often don’t work, and that it’s too easy for children to approve data overage charges at the push of a button, sometimes resulting in massive bills. “It wasn’t an issue at the time (the code was introduced) but now it is, said CRTC spokeswoman Patricia Valladao. Other issues that need to be addressed at the hearing include fees charged for unlocking cellphones and clarifying how data caps are applied. The existing code places a $50 a month limit on what carriers can charge for data overages. But while consumer advocates argue the cap should apply to individual accounts, including family plans, some carriers have been applying the charge for each wireless device. In that case, a family of four, with four devices, could face up to an extra $200 in overage fees.