Canada’s wireless future: Who should make the rules?

Do Canadian wireless consumers need more protection from carriers?

Recent moves by the Canadian Radio-television and Telecommunications Commission and the Ontario government to impose greater control over the wireless industry seem to suggest they do. At the same time, they raise questions over how much regulation the sector needs in the first place, who should impose it, and whether they're all too late to the party.

The CRTC kicked off the process earlier this month when it announced it would seek consultation on the current state of competition in Canada's $17 billion wireless market — a process that could lead to a national code of conduct aimed at ensuring all carriers play by the same rules surrounding customer contract management, renewal and cancellation. The regulator's action comes in response to consumer advocate requests for protection against being unfairly charged for services after switching providers.

The winds begin to shift

The CRTC's announcement marks a major change in direction for the government regulator. In 1994, it decided on a hands-off approach to wireless regulation, concluding then that the marketplace was sufficiently competitive. Acting Chairman Leonard Katz said 18 years later, things might be changing.

"Our practice has been to rely on market forces as long as we are convinced that the interests of consumers will be looked after," he said in a statement. "In this case, we are seeking evidence that our intervention is necessary before considering the development of a national wireless code."

The consultation comes on the heels of growing pressure by the carriers themselves for greater government and regulatory involvement — a move some observers say is designed to blunt consumer criticism of carrier heavy-handedness. The carriers' advocacy group, the Canadian Wireless Telecommunications Association, has been increasingly vocal in its calls for government to define the rules. In February, Telus called on the CRTC to reach out to the public for input on possible national standards for wireless contracts.

Rogers last month echoed the Telus move, and released a draft consumer code that suggested the following:

• Guidelines over how a carrier could — or could not — modify customer contracts, as well as rules governing acceptable notice for such changes.

• Relaxed timelines allowing customers to cancel whenever they wish — as long as they provide 30 days notice. The guidelines would also limit how much carriers can charge for early cancellation.

• Increased rigidity around contract renewal processes, specifically requiring carriers to provide 60 days' notice before renewal, and banning them from automatically renewing contracts unless they shift to month-to-month.

• Greater transparency in advertising, ensuring all monthly fees are clearly indicated and not buried in the fine print.

The CRTC's actions in the wireless space are part of its wider strategy to open up the telecom market in general and tighten the perception gap between the regulator and the tech-heavy sectors it's mandated to oversee. Last September, the CRTC drafted a similar code of conduct to prevent abuse of power by integrated media companies.

Government gets involved

The Ontario government, perhaps sensing a change in consumer sentiment, added fuel to the regulatory fire late last week when it introduced legislation that would, among other things, limit cancellation fees, which can currently range well into the hundreds of dollars, to $50, require contracts to be written in simple, straightforward language and add transparency to sometimes-questionable bait-and-switch advertising practices.

Ontario's proposed Wireless Service Agreement follows similar moves by provincial governments in Quebec, Manitoba and Newfoundland, and if it survives and becomes law — hardly guaranteed if the minority Liberals are voted down over the budget — it could be in place by this autumn.

Too little, too late?

As much as the industry seems to welcome the changes, there is risk inherent in relying too heavily on legislative and regulatory bodies to smooth out wrinkles that would otherwise be addressed by the checks and balances inherent in a relatively open market.

Although new players like Mobilicity and WIND Mobile have been slow to erode the 95 per cent market share currently claimed by Bell, Rogers and Telus, their addition to the marketplace has accelerated the shift toward lower-priced, simpler voice and data plans. The rules for the upcoming 700 and 2,500 MHz spectrum auctions similarly lay the groundwork for a more balanced competitive landscape.

With the market already heading in a more fluid direction, Ontario's and the CRTC's efforts to put their stamp on codifying acceptable wireless industry behaviour smacks of political gamesmanship more than effective stewardship. The industry is already, albeit slowly, learning how to self-police. And growing levels of competition — also too slow for some, but positively trending nonetheless — would ultimately address the onerous contractual terms at the core of most consumer complaints.

Which begs the question of whether additional bureaucratic layers and government-imposed regulation are what wireless customers — and the economy at-large — really need. Which further begs the question of where the CRTC goes from here.

Carmi Levy is a London, Ont.-based independent technology analyst and journalist. The opinions expressed are his own. carmilevy@yahoo.ca