The news broke yesterday that Bell and TELUS were starting to tell their mobile customers that they plan to start charging for incoming text messages. No news releases were issued, leading to some mis-information. Customers were being notified by billing inserts providing them with 30 days notice of the rate increase, as provided for in their contracts.

Bell’s contract reads:

We will not increase your basic monthly voice plan charge or out-of-bundle airtime charge during any Committed Service Period, as long as you remain qualified to receive your chosen plan and Services throughout the Committed Service Period. If you no longer qualify to receive a plan or the Services at the fees offered to you (for example, a corporate plan or employee plan, due for instance to termination of employment or termination of a corporate agreement) then Bell may transfer you to a comparable Service and plan, at the appropriate fees and charges for which you then qualify, and you accept same. During the Term we may increase other fees (including the System Access Fee), and charge additional fees, after giving you 30 days advance notice. Any promotional and upgrade offers are offered at our discretion for limited periods of time [emphasis added]

I generally don’t have a problem with services providers charging what they want and what they believe the market will allow. Consumers have choices and can shop around to select the package that best meets their needs. Besides the big 3 (Bell, TELUS and Rogers), there are lots of alternatives out there, many of which have very attractive text messaging plans. In some cases, the ‘off brands’ like Fido, Solo and Koodo may save consumers lots of money. You even get to take your phone number with you.

One of my contacts tells me the charges won’t apply to incoming spam, but I have no idea how service providers will define spam. For example, a new form of school yard bullying could be for kids with text messaging plans to start sending messages to one of their schoolmates without a plan. Do the carriers really want customers calling into the call centres each month looking for text messaging credits?

Will the Canadian service providers provide the same tools as in the US for end-users to manage their incoming messages? If customers are going to have to pay for incoming messages, then they should get to control those charges.

The main issue I have with this new text message plan is changing the rates in the middle of contract periods. People shopped around last Christmas and selected devices and packages based on the pricing that was in effect. They signed 2 and 3 year contracts based on the analysis they did at that time. Now, the rules are getting changed part way through.

It is another example of a one way contract I wrote about in May. At that time, I wrote:

How can it be reasonable for the service provider – a major Canadian telco – to lock up a customer for 2 years, but be free to change the price substantially in the middle of the contract period? What exactly is the meaning of a contract if one side gets to change a key term, price.

Just as I have written about changes to System Access Fees, if service providers want to change the rates, go ahead. But if consumers are tied up under a contract, the service providers should be held to honour their commitment as well, or release them from their contract to go shopping again.

The National Post has a couple commentaries about the AWS spectrum auction this morning.

Terence Corcoran has an editorial entitled “Ottawa’s spectrum auction is nothing but a tax grab“.

Also on the FP Comment page, there is an article that echoes the proposal that Michael Sone and I set out in our opening remarks at The Canadian Telecom Summit last month. Michael Janigan, Janet Yale and I co-authored the piece calling for the auction windfall to be earmarked for a program to bridge the digital divide in Canada: “Canada needs a national broadband strategy“.

The article concludes with:

In the 21st century broadband must be treated as part of a nation’s core infrastructure. Canada has the opportunity — and now the means as well — to do just that.

A few weeks ago, the Federation of Canadian Municipalities used the final day of The 2008 Canadian Telecom Summit to release a report called “Highway Robbery: How Federal Telecom Rules Cost Taxpayers and Damage Public Roads” [download full report here].

The report claims that the CRTC deprives local governments the power to recover their costs from companies that tear up roads for their telecom networks, shorting municipal governments about $100M per year in road repairs.

The report and one of the backgrounders takes a cheap shot at the CRTC, blaming staff and commissioners for an insensitivity to municipal issues because of their backgrounds:

Given the technical knowledge and expertise required to fulfill its core mandate, many present and past CRTC members have been drawn from the Canadian telecommunications industry. Former telecommunications business executives, industry lawyers, engineers, and venture capital financiers all bring their perspective to the issues. Looking inside the Commission, one finds a comparable set of skills among the CRTC’s staff.

While such appointments ensure that telecommunications carriers will be well understood when appearing before the Commission, the scenario is quite different when an entity from outside the industry, such as a municipality, appears to defend its interests in this specialized industry forum.

We used to hear the complaints from city councils about the traffic tie-ups due to fibre construction crews working downtown. I found that movie crews tended to close more lanes, but we didn’t cry about that because films are more glamourous and perhaps the economic benefits were more visible.

The CRTC recognized those economic benefits in its Decision 2001-23:

The benefits of a competitive telecommunications market and greater access to modern high-speed networks… provide generalized benefits throughout the municipality, attracting industry, creating jobs [and] increasing tax revenue.

FCM fought and lost in front of the CRTC and it has lost judicial appeals of this decision.

Maybe it is time to move on.

For a couple years now [see here and here], I have been challenging municipalities to actively promote positions that promote a friendly approach to investment in telecom infrastructure.

Which communities will be first to recognize the economic benefits to cooperatively building advanced infrastructure?

One little word in Michael Geist’s column in the Toronto Star today made me decide to write this post.

What is that word?

The word “usage” in the following sentence is just plain wrong.

Canada ranks toward the very bottom among developed countries for cellphone usage as the lack of competition leaves Canadians with some of the highest prices for wireless services in the world.

Actually, Canadian cell phone usage is among the highest in the world, an inconvenient fact that doesn’t fit the thesis set out in the article.

Maybe a copy editor didn’t like the word “penetration” and decided to change the word to “usage” without checking if it changed the context

I have no trouble with people wanting lower prices for their wireless service – I have written many times before about how much I like free. I might even agree with Professor Geist that users should have the right to remove software and technical locks on handsets as long as they recognize that they are voiding their warranty and don’t start complaining to tech support about problems.

Let’s try to get the facts right so that we can engage in a real dialog.

Technorati Tags:
Toronto Star

It appears that today may see the end of bidding in the AWS spectrum auction. Friday’s rounds 190 through 195 saw bidding stabilize just barely shy of the $4.2B mark. Of course, that is if you consider $5M to be “just barely shy”.

$4.2B is a lot of money. More than double the original estimates.

Of course, bidders are spending their cash based on what their business plans say is reasonable, but there is no one in Canada who can say that they honestly expected that the government would raise this kind of cash.

What will we do with that multi-billion dollar windfall?

At The 2008 Canadian Telecom Summit, we laid out a broadband proposal to see the government reinvest in telecommunications as a critical infrastructure.

What do you think? What would you have the government do with the more than $2B extra dollars raised?