Is the CRTC now regulating devices beyond reason? Have we reached a peak ‘nanny state’ state approach to telecommunications despite vibrant competition in that sector?
About 3 years ago, I wrote “Regulators regulate”, saying that it was a corollary to Maslow’s Hammer: “If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.”
How else can we explain some of the recent regulatory over-reach as part of the Commission’s implementation of legislative changes to the Telecom Act?
In early July, I wrote about cancellation fees over-reach, but there is another case that I find equally troubling. From the outset, let me say that I don’t think the CRTC should be regulating the way mobile devices are sold. The CRTC regulates mobile phone sales by service providers, but not sales by the manufacturers or by independent retailers such as Amazon. Financing plans are regulated if the financing is by the service provider, but not if the financing is provided by a bank card, even though the service providers are often providing zero-per cent financing versus annual financing charges by credit cards of 18-20% or more. These imbalances on their own should raise questions.
Today’s post was stimulated by a series of letters dealing with the CRTC intervening on robbery and loss-prevention strategies for mobile service provider retail outlets.
In April of 2025, Bell wrote to the CRTC to inform the Commission that the company was experiencing an increase in crime at its stores associated with the theft of high-end mobile devices. Given that smartphone prices are now running in the thousands of dollars, Bell said that initially locking the devices and then automatically unlocking them after the first 60 days would serve as a disincentive for thieves. In November, Commission staff told Bell that the company had not made its case. “Bell has not demonstrated that the practice of locking cellphones for up to 60 days after purchase is a necessary and proportionate response in this case. Specifically, Bell has not demonstrated that this practice is effective.”
In May, TELUS filed an application for authorization of the 60-day device locking to be formally approved on a temporary and permanent basis. As it explained in its application:
Canadian mobile devices were essentially transformed into the digital equivalent of [bearer] instruments, because of the following defining traits:
- Resale Liquidity: an unlocked iPhone 17 Pro Max or Samsung Galaxy S25 Ultra, retailing for amounts up to $3,000 CAD,23 functions on any GSM/LTE/5G network globally the moment it leaves the store.
- Anonymity of Transfer: unlike vehicles or real estate, which require registration upon transfer, an unlocked phone requires no handshake to transfer ownership. It can be sold for cash or crypto, leaving no auditable trail.
- High Value-to-Weight Ratio: a single backpack can hold devices worth tens of thousands of dollars, making them attractive targets for theft and trafficking across borders.
The prohibition on locking removed the only technical deterrent in the illicit device resale market.
By way of a letter, the CRTC asked the public to respond to respond for the temporary relief and suggested that the request for a permanent change be made as part of the CRTC’s public consultation on “Harmonizing the consumer protection codes”.
In its “Anticipated releases for the week of 3 to 7 August 2026”, the CRTC said it planned to issue a notice of consultation for a “Show cause and call for comments –Compliance with the prohibition on selling locked devices and other matters”. That was not released as planned.
In the meantime, Bell’s EVP and Chief Regulatory Officer had a post on LinkedIn that provided answers to some of the CRTC staff concerns from last November. Bell’s locking proposal was in response to a 500% increase in robberies and attempted robberies at its retail stores. In response, Bell “introduced a targeted safety practice: devices are automatically unlocked after 60 days and can be unlocked sooner upon request at no cost to customers.”
Since then, in-store robberies have been nearly eliminated, fraud targeting customer accounts has decreased by 80%, and thefts from warehouses and shipments have fallen by more than 35%. Most importantly, this practice is helping keep our employees, customers and communities safe.
As to the CRTC staff concern about proportionality, Bell says fewer than 1% of customers choose to switch providers within the first 60 days of acquiring a new device.
I don’t understand why the CRTC is regulating device pricing and financing at all. The CRTC doesn’t regulate hardware retailers, such as Costco, Best Buy or the Apple or Samsung stores selling the same devices. There is no regulation of credit card companies financing these same devices.
In its consultation for “Harmonizing the consumer protection codes”, the CRTC says 30% of consumers are “renting” their mobile devices with plans that allow customers to trade-in or return their device to the service provider at the end of their contract. The Consultation says “customers may not always be fully aware that they opted into a device rental plan, and that they may have to pay a balance to keep their device after their contract ends.”
Really? Isn’t this another case of regulating beyond reason? Can we treat consumers like adults? Do consumers who lease their cars not realize that they have a balance owing at the end of the lease?
I see ads for free high-end devices from US carriers, such as T-Mobile, Verizon, or AT&T, tied in to 2 or 3 year commitments on higher service plans.
I wax nostalgically. Canada used to have free phones available until the Wireless Code came around. I referred to the cost of regulation back in 2013. The increased cost of devices was seen as a short term cost in order to gain the longer term benefits of competition. An August 6 report from Scotiabank characterizes Canada’s mobile sector as a “competitive four player market”.
Right now, the way the CRTC is regulating devices has resulted in higher costs for consumers and carriers alike. Perhaps it is time for the CRTC to get out of the business of hardware regulation.