New CRTC wireless code - what does it mean for you?

If you've not turned on a Canadian media in the past 24 hours, you've probably not heard about this.  But everybody's talking about it.

The CRTC (Canadian Radio-Televesion Telecommunications Commission) has dropped some new 'code' for wireless providers.  Essentially, after millions of complaints over the past decade or so about pricing and potentially unethical (but well within their rights) behaviours by the wireless companies, the CRTC has started to look into the matter.

Back in April they held some round-table discussions with some stakeholders and deliberated on what they found.  Put it all together and they have some new 'guidelines' for how the wireless companies should practice.  Let's take a look
You can look through the whole thing if you like, it's located at:  http://www.crtc.gc.ca/eng/archive/2013/2013-271.htm

It's fairly lengthy, but let's take a look at some of the bits.  In essence, this document provides appropriate behaviour guidelines for companies and their 'interaction' with customers.  This is to ensure that there's no abuse, or price gouging.  I'm not saying there is, or was, just that as we've grown into a society where the cellphone is a necessity that there have been enough complaints about how the system worked, especially when compared to similar countries and markets.

These regulations will start on December 2, 2013.

Here are the big points:

No more 3 year contracts!  Caps on ETFs
When you look at other countries, primarily the US, they do not have such a lengthy contract, only 2 years (not that a year is super long extra).
And that's what you'd like to think, HOWEVER, 3 year contracts are still allowable, except that customers should be allowed to leave the contract after 2 years if they want to, without early termination fees (ETFs).
This comes from the fact that your subsidy of your phone is now going to only be over a maximum of 2 years.  So after 2 years, the subsidy you had on the phone is 'paid off' and there's no monetary reason to penalize you, should you want  leave your carrier.  This also means that should you want to cancel earlier than the 2 years, you'd only have to pay the remaining amount of the subsidy (example, you get a $700 phone for $100... meaning that for 24 months you're paying $25 into the phone's price.  If you want to cancel on month 18, you'd have to pony up 6 months worth of $25, or $150 to cancel the plan)
What the code DOESN'T say anywhere is if the plan is now being reduced after the subsidy is paid off.  They talk about being VERY clear about the subsidy of the phone and how it's amortized over the contract, but I can't find anywhere in the document saying that once the subsidy's done will you see a reduction in your bill.  At least that I can see.
Overage charges caps
We've all heard the horror stories (and I've heard of friends with iPhones that have 'data roaming' turned off STILL getting them).  Go on a trip overseas and come home to several hundreds in overage/roaming charges.
Well, that will be a thing of the past now.  Some companies had this in place already.  For example, my wife didn't realize her phone wasn't on WiFi while she watched some Netflix and went way over her plan.  Her provider has a 'flex data' plan that if she goes over, for a small fee it'll bump her up to the higher plan.  Usually cheaper than paying overages.
The CRTC is now saying that there should be a 'ceiling' to how much you're going to be charged over.  That's $50 for data and $100 for roaming.  At that point the provider will terminate availability (some companies turn that off automatically), and if you wanted to continue you'll have to verify by some means to continue usage and the fee for that.
Unlocking
I remember the first time I ran into this.  I bought a phone off eBay way back when from someone in the US... and finding out it was unusable to me.  How annoying.
What the CRTC is saying is that now, if you buy a phone outright, they should unlock the phone for you.  If you are past 90 days into your contract, they should unlock it for you.  Now they will charge you a fee for this, but it should be reasonable.
Those are the big ones.  There's also a lot of language around being very TRANSPARENT and clear language as to proper costs and when a contract is up for renewal, or if it is renewed, etc...

Overall, I think this is good for the consumer.  It just requires the WSPs to be very honest in how they're charging you.  Now, will your plans go up?  Maybe... that example I gave above about a $700 phone is subsidized to $100 on a 2 year plan (paying $25 a month to the phone cost)... well on a 3 year plan it would have been about $16.67/month.  So, either you will see an increase in your rates of about $8.33/month OR increase the cost of the phone (this is what I hope that WSPs will do).

Take the previous example.  Let's say that some $650 phone right now is $150 on a 3 year plan.  That means the subsidy is ~$13.89/month.  Well, squeeze that onto a 2 year plan.  Instead of being subsidized $500 of the phone, you're only going to get $333.33 (24 months x $13.89).  So the phone that used to be only $150 will now cost you $316.

That's a huge jump in price, but I'd rather pay it up front rather than have rates go up.  And here's my reasoning.  Most people don't get a new phone as soon as the plan is up.  They wait around.  They're not all like Tom and I.  So, for those few extra months they go before they upgrade, they'll be paying $14/month extra for a phone that's already paid for.  I was surprised the code didn't mention anything of a reduction in the service fees after the contract period.

A lot of this talk about the behaviour is about 'cancelling', what about those customers that stay with their provider?
Previous
Next Post »