Cell Phone Legislation Overview

On Monday 29 Apr 2013, the Ontario government re-introduced consumer protection legislation affecting the wireless (cellular) industry. There is no doubt that the industry could do with a little regulatory oversight in the areas of contract clarity, billing practices and service charges, most notably cancellation fees, all areas addressed in the proposed legislation.  

On 01 May 2013, similar legislation came into effect in Nova Scotia. 

In both cases the powers behind the legislation are touting the limit of $50.00 to consumers when they cancel any future contracts with a carrier. (Sorry, the rules are not retroactive and will not apply to existing contracts.)

In some cases, this is may well be an accurate statement; in other cases it will not be. Let me explain.

There are two distinct parts that come into play for the majority of consumers when they enter into a contract. The first part is the subsidy or economic incentive provided by the vendor and applied to the cost of the phone they provide. They provide a phone at a reduced price or free in return for signing a fixed term contract, usually three or occasionally two years. The second part is the revenue expected by the vendors from the consumer over the length of the contract. Historically, carriers based the amount charged to cancel a contact on the amount of time left on the fixed length contract. The cost of the phone was not a major part of the calculation in most cases as it was folded into the monthly service costs.

The new legislation separates the two parts and makes them in effect two separate transactions. The $50.00 limit only applies to the second part; the amount of time left on the contract. The new rules still allow the vendors to recover the amount of the subsidy or economic incentive provided with the phone.

 I have not seen the Ontario formula but the Nova Scotia one appears straight forward. This is from the government's Access Nova Scotia website:

"… Nova Scotians can now cancel their contracts at any time and the government will limit what cancellation fees can be charged. There are three possible scenarios:

1. If you were given a phone for free or at a reduced cost when you signed up for a fixed term contract, the cancellation fee will be based on the value of the phone, divided over the remaining term of the contract. 

For example:

You received a $300 phone at no cost when you signed a three-year (36 month) contract.  You cancel the contract after one year (12 months). The maximum cancellation fee is $200:  300 - (300x12/36) = $200

2. If you were given a phone for no cost or at a reduced rate when you signed a no-term contract (no fixed term), the maximum cancellation fee is divided by a 48 month time period.

For example:

You received a $300 phone at no cost when you signed a no-term contract.  You cancel the contract after 12 months.  The maximum cancellation fee is $225: 
300 – (300 x 12/48) = $225. 

3. If you were not given a phone as an incentive for signing a contract and are using a phone you provided yourself, the maximum cancellation fee is $50 or 10 per cent of the remaining cost of the contract, whichever is less."

It is unclear to me whether or not the  $50.00 service cancellation fee is included in the calculations.  Regardless one could still receive a rather large bill for cancelling a contract early. Yes, it is less than the $400.00 to $600.00 charged before but it is still significant.

And guess who gets to set the initial value of the phone?  Would it surprise you to learn that the vendor sets the basic value number used in the calculation?  I checked the EastLink website and found only two smartphones that retail for less than the $300.00 used in the example. The majority were between $500.00 and $700.00. This would double the prices quoted in the government produced example. 

Even with the new legislation coming into effect across the county, I still feel the best deal is to buy a phone outright, get it unlocked and then sign up for service. Yes, I know it can be pricey, but there are a lot of good deals available in the used phone marketplace. Also, there are a number of advantages of having an unlocked phone, especially if one travels.

Deferral Account Areas Site Survey Reports

I am receiving reports that there is a third party conducting cell tower site location identification and surveys on behalf of Bell in some of the Deferral Account areas. The most recent report noted an Echo Lake locale.  

I am interested in hearing from readers if they know of any similar activity, especially in the Algoma District Deferral Account areas, namely the areas shown on the maps at this link: Echo Bay, Goulais, SSM –Airport, St. Joseph Island or Wawa. 

You can post the info in the comment section below or contact me at wlefresne@adnetalgoma.ca

Tower and Cell Site Protocol 28 Feb 2013

The Canadian Wireless Telecommunications Association and the Federationof Canadian Municipalities announced on 28 Feb 2013 they signed a joint protocol and template to address the procedure for locating  wireless (cellular) antenna and tower systems.

The template adheres to but elaborates on the Industry Canada/Spectrum Branch regulatory recommendations set out in the  guidelines. Overall I found the protocol a little easier to read and understand even if it did not add anything of consequence to the procedures.

In reality, the procedures outlined in the protocol have been followed by the wireless (cellular) industry when dealing with the locating of antenna and tower locations for some time now.  This blog gives some detail of how Bell handled one particular case.

The protocol appears to be directed more at the municipalities as it provides a template to create common procedures across the country. I know from personal experience that not all local government have identified a Designated Municipal Officer as the empowered local official as the point-of-contact for matters related to wireless site selection by both the vendor and the general public.  

The protocol is just that a protocol. It is only a guide and not compulsory or legal requirement. However, all the major vendors and Industry Canada support the protocol and encourage its adaptation and implementation by municipalities.  Nevertheless if would be useful if municipalities published a link on their website and the vendors did the same on their announcements about public consults.

Do You Have Any Comments on Bell Cell Service in North Sault Area

I am interested in receiving feedback from anyone in the North Sault area about their experiences with the Bell cellular service in the area. I am particularly interested hearing about data hub broadband and smartphone services for items such as download speed and consistency.  Also, from anyone who switched from one service provider to another.

Either use the comment box below or send an e-mail to me at wlefresne@adnetalgoma.ca .

Competition Bureau Responds to the CRTC Regarding a Cell Vendor Code

The Federal Competition Bureau (CB) has finally broken its self-imposed silence on competition in the cell phone industry with a submission to the CRTC as part of the ongoing examination of the proposal for a national cellular code.

The CB addressed two distinct areas with a number of specific issues, namely restraints to users switching service providers with the subsequent impact on new and competitive service providers and the need for clarity in all aspects of the service provider and user relationship.

With regard to switching service provides, the CB named three current practices that they think are restrictive in nature and need to be modified:

a. Contract length: - like most respondents, they found fault in the three year contract model. Also like most respondents, the CB referenced the standard two year policy in the US and the legal requirement in the European Union (EU) for a two year maximum term.

b. Handset Locking: - Ideally, the CB wants to do away with handset locking. At a minimum it wants a simplified process with little or no costs, especially if the unit is no longer being subsidized by a vendor.

c. Separate the subsidy from the service: - The CB suggests the subsidy contract or agreement be treated as a standalone purchase on credit contract with flexible payment conditions including early payout. It should only be tied to the handset, presumably unlocked, since the user could freely move to any compatible service provide while still paying the original vendor for the handset.

The other major area of concern for the CB was accurate information.

a. The CB recommend that the agreement total all in pricing showing all fees, options, charges , etc. that will be added and any options which may impact on them. They were willing to allow a little more flexibility in marketing and advertising as long as it was not misleading.

b. The use of the term "unlimited" raised a number of red flags for the CB. They want the service providers to clearly spell out their definition of "unlimited" and identify anything that may limit the "unlimited" in a material way. ( One of my favourites is the claim of unlimited data service but with the fine print caveat that significantly reduces the speed transfer after a data cap of a small number of GB i.e. the first 3 GB are at 6 Mbps but everything after that is throttled back to 256 kbps until the start of next billing period. Yes it is unlimited data; it just cannot be used for a lot of applications.)

Finally, the CB recognized the rapid pace of technological change and recommended a full review of the code every three years.

What is not clear in the CB submission is whether or not it was a shot across the bow of the service providers, and to lesser degree the CRTC, that unless they saw significant change in the application of policies affecting their area of concern, they might be willing to exercise their legal authority and force change on the industry.

What  does come through very clearly, is the CB is interested in increased competition in the industry and is concerned about any activity that may restrict or prevent  the new entrants from gaining market share through fair and open competition. 

Response to a Comment on Goulais River Service 31 Jan 2013

I received the following comment submitted under the blog "Goulais (Buttermilk) Canopy Service–22 Jul 11" As I stated in the reply on the blog, I came to the conclusion that the reply was worthy of a dedicated blog entry.

This is the text of the original comment. I took the liberty of applying some edits to make it easier to cross reference the response.

I also live in the Goulais River area and was told that the towers are becoming too congested and that there is simply not enough bandwidth to satisfy everyone, every person is only allowed so much bandwidth on days that the service is clear you will get your full bandwidth if the service ever clears. Ha-ha.

Now people close to the towers get what they call the umbrella and get fast speed all the time and they pay like 60$ for unlimited.

My buddy knows the guy that actually works on the towers for Tbaytel and said all that has to be done is to open up the bandwidth more. He said it's like a gate; the more they open the more you get. Problem is it costs them a lot to open it more. But apparently that's all it would take to fix the problem is for them to man up. Hopefully bell will come out with service soon

The author raised a number of issues. I will try to address them individually. Based on the last sentence in the comment, I assume the references are to the service provided over the Tbaytel infrastructure which is also used by Rogers for HSAP+ and by Bell for CDMA.

There are approximately 3800 people that have permanent residence in the "greater" Goulais River area. There are three main Tbaytel cell sites (Bellevue, Goulais and Batchawana) and two secondary sites (Heyden and Ryan) that provide service in the area. The Searchmont site does not service the area directly. By any standard, this would be considered sparse coverage and in no small way contributes to the problems experienced in Goulais.

A. Yes, all the towers/sites are showing signs of congestion i.e. in simple, though not 100% accurate terms, too many users chasing too little bandwidth. However, the amount of bandwidth available is not based simply on the number of users. It also factors in the type of service such as voice or data, burst or streaming applications, distance from the tower/site, frequency /channel and signal propagation effects are amongst the issues which may impact bandwidth available to an individual. Also, voice and other real-time uses will take precedence over routine data traffic. I other words, voice service may work long after data traffic ceases to work.

B. The Tbaytel towers/sites serving Goulais have a theoretical maximum speed of 7.2 Mbps download. Once overhead and management data is considered there is only around 5-6 Mbps left for the average user. In reality, anything over 3 Mbps on a regular basis is considered normal. The Bell sites and the pure Rogers sites have a 21 Mbps theoretical speed which puts the actual speeds in the 4- 8 Mbps range on a regular basis.

There are always users that claim speeds outside these ranges, both faster and slower. It is important to realize that speed measurement is a snapshot of one instant in time and is continually changing.

Published and advertised speed variance from actual speed experienced by users is one of the largest sources of complaints to the regulators, in many cases second only to dissatisfaction with three year contracts. This blog explains how you can make your views known to the regulators.

C. The term umbrella has recently taken on a second meaning when discussing cellular service. Umbrella effect traditionally described the area under a tower site that had no communication capability. It was usually explained by the streetlight in the fog analogy where the light standard or pole created a shadow around the base of the pole where there was no light. In the case of cell service, there are techniques used to reduce this null lobe effect and allow communications close to a tower.

Recently, umbrella has been used to describe small cell sites used to fill in gaps in overall service. They can cover an area as small as a single building to single city block and do away with the need for a large tower.

I am aware of people living near towers that get good data hub speeds most of the time but they pay the same flex rate for their data consumption as everyone else; it is not a free ride, unlimited or available for a maximum of $60 a month.

Most of these people are fortunate enough to live in an antenna sector area with very few users and therefore very little competition for service. (By way of explanation, there are two main type of antennas used at tower/cell sites. These are monopole stick or whip antennas that transmit in roughly a single 360 degree sector such as at Tbaytel Batchawana and sector antennas covering anywhere from 60° to 180° depending on design such as the 3 x 120° panels at Tbaytel Goulais.)

The only unlimited service available for around $60 is the Tbaytel Canopy service at speeds of 3.0 Mbps maximum.

D. I am not too sure what you the term "open up the bandwidth more" means. The current hardware configurations are maxed out. There are four conventional ways to increase bandwidth capacity, none of which are cheap, From least costly to most expensive they are: a. - add more radio frequency carriers (already done in Goulais); b. – add more transceiver radio chains; c. - add more and different frequencies on existing site such as 1900 MHz to the current 850 MHz; d. - split cells by adding more tower/sites. Of these, the latter is the most effective but also the most expensive.

E. Bell has limited HSPA+ service in the Goulais area.

The best chance for relief in the Goulais area rests with Bell and the Deferral Account programme. Unfortunately, that will not be available until August 2014 under the current schedule.

Call to Comment on National Cellular Consumer Code

The CRTC has taken another step on the path to the "development of a consumer code for cell phones and other mobile devices" that I first addressed in the blog of 16 Oct 2012.

 

The Commission issued a number of inter-related releases on 28 Jan 2013. The lead document is an open invite to comment on a draft wireless code. A related document entitled "Proceeding to Establish a Mandatory Code for Mobile Wireless Services" contains a copy of the Wireless Code Working Document (WD) at the Appendix.

The general public can provide comment on the WD by logging in through the consultation website. (Note; I had to create a new log-in credentials even though I have other CRTC log-ins registered.) The time frame for comments is 28 Jan 2013 to 15 Feb 2013.

The WD is an extensive manuscript that is divided into numerous parts from A to F, many with multiple sub-parts. Each part addresses particular areas that were raised in the initial go around from last October. There are two columns associated with each part. Column one identifies the policy or code issue and column two provides proposed wording for the item.

In some cases, the WD provides options for the reviewer to comment on as shown in this sample:

A3. Application of the Wireless Code to pre-paid and post-paid wireless services	Option 1: The Wireless Code applies equally to pay-as-you-go and other types of pay-in-advance services (“pre-paid services”) and to “post-paid services” (i.e. services where the consumer pays after receiving a bill).
	Option 2: All sections of the Wireless Code apply to post-paid wireless services. The following sections of the Wireless Code apply to pre-paid wireless services: To be determined.

In my estimation, the WD addresses many of the concerns often expressed by users concerning their relationship with cell vendors. Will everyone be satisfied with the document or its intent? Absolutely not. is it a step in the right direction? Absolutely yes.

Further, I feel a national code is far better than a mishmash of provincial regulations that vary from province to province.

If there is a weakness in the WD, it is the lack of detailed information on how the code will be enforced. There has to be a methodology to allow for quick and effective response to consumer complaints that lead to a satisfactory or legal solution applicable to all involved within a reasonable timeframe, say 90 days. At that point, some form of sanctions needs to be available to enforce compliance.

I encourage readers to take the time to read the WD even if you do not wish to comment. Feel free to submit comments to this site if you wish.