Is the CRTC intentionally sabotaging its own prohibition on fees?
Before the Canada Day holiday, the Commission launched a consultation, “Show cause and call for comments – Compliance with the prohibition of fees that are a barrier to switching cellphone and Internet plans”.
I’ve already provided my opinion on the CRTC’s prohibition. No carrier charges activation fees that are a barrier to switching. What rational business would? Businesses are always trying to win over customers.
Now, if a service provider charged a fee when you want to terminate a subscription, that could be considered a barrier to switching. But the CRTC already has rules about early termination fees.
Take a look at the CRTC’s Notice of Consultation and you will see how the CRTC is setting itself up for ridicule. The Commission asked one of the carriers if it had ceased billing customers $25 for shipping a device ordered online. A shipping charge?
A recent article by Canadian Press highlights some of the mixed-up thinking at the Commission. A CRTC executive seemed to argue for greater transparency in the prices paid by consumers, while opposing shipping fees for precisely those kinds of charges. Wouldn’t such discrete costs provide such transparency? “If you have to increase your prices so be it, but do that through the front door. Charge a price, don’t surprise consumers with price increases in the middle of the contract, don’t have these special little fees that come out of nowhere.”
Isn’t that the approach being taken by the carriers? If you want a device shipped to you, is a shipping charge unreasonable? If you lose or destroy your SIM card, who should pay for that?
In its March Regulatory Policy (that took effect June 12), the CRTC observed that recent amendments to the Telecommunications Act broadly prohibit activation and modification fees, while recognizing “that prohibiting fees related to installation services at a customer’s premises could have a negative effect on future broadband Internet rollout because those installation services represent actual, necessary, and sometimes significant costs.” The CRTC also said “fees related to optional services and products do not fall under the category of “activation or modification fees” related to the telecommunications service itself.”
So the Policy set out a new definition, stating:
Activation or modification fee
Any fee incurred as a result of activating a new retail telecommunications service plan or modifying an existing one, except for reasonable fees related to the physical installation of a telecommunications service at a customer’s premises or fees related to additional products or services the customer has explicitly chosen to purchase.
If the rules need further clarification, then the CRTC should fix its self-inflicted ambiguity. Alternatively, it would be a good time for the Commission to back down and let the marketplace work.