Mark Goldberg


www.mhgoldberg.com





#CTS20

Paying for protection

The CRTC has launched a Review of the Wireless Code, a proceeding that will culminate with an oral hearing in early February 2017.

The Wireless Code was created in 2013, “to address the clarity and content of mobile wireless service contracts and related issues”. The CRTC says its objectives are to:

  • make it easier for individual and small business customers to obtain and understand the information in their wireless service contracts;
  • establish consumer-friendly business practices for the wireless service industry where necessary; and
  • contribute to a more dynamic wireless market.

In establishing the Wireless Code, the Commission had committed to measuring and reviewing the Code’s effectiveness within three years of its implementation.

392. The Commission considers it appropriate to develop an evaluation plan for to evaluate the effectiveness of the Wireless Code, including the WSPs’ compliance reports referred to above. The results of this evaluation will form part of a formal review of the Wireless Code following its implementation. The Commission considers that a three-year time frame for this review is appropriate to (i) monitor compliance with the Code, (ii) ensure the Code’s effectiveness, and (iii) correct any issues that may develop during the implementation process.

In the current review, the CRTC has asked for detailed comments on a range of issues:

  • The effectiveness of the Wireless Code;
  • The evolution of the retail mobile wireless market since the implementation of the Wireless Code;
  • The content and wording of the Wireless Code;
  • Consumer awareness of the Wireless Code;
  • How the Wireless Code’s effectiveness should be assessed and reviewed going forward; and,
  • The effectiveness of the Wireless Code.

But, the CRTC has already determined that a number of issues are out of scope, including “rates and competitiveness of the marketplace.”

What is less clear is whether the CRTC will consider the costs of the Wireless Code itself: how much are consumers paying for some of the provisions of the code?

Three years ago, I wrote about some of these “costs of regulation“, including the increased monthly charges associated with having to recover the cost of a device over 2 years instead of 3. There are other provisions in the Wireless Code that raise costs for consumers.

For example, the Wireless Code specifies a 15 day “trial period”:

250. Accordingly, the Commission considers that a requirement to provide a trial period lasting a minimum of 15 calendar days for contracts under which the consumer is subject to an early cancellation fee represents an appropriate balance between the needs of consumers and the burden that such a requirement places on WSPs.

As a result, if you buy a phone from a wireless carrier, you can return it within 15 days and cancel the contract. The carrier has to accept the phone back and cannot charge a restocking fee. The carrier is now stuck with a used device. Note that if you buy the device from a big box retailer, there is no obligation for the retailer to take back your used device. The cost to the carriers of these trials is being borne by the overall subscriber base.

Measuring the effectiveness of the Wireless Code is important. Will the CRTC seek evidence to help measure the cost-effectiveness of each provision of the Wireless Code?

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