CRTC Wireless Code Published

The CRTC released its long awaited and anticipated Wireless Code today, 03 Jun 2013.  The code will come into effect for agreements signed after 02 Dec 2013. Terms and conditions of the CRTC Wireless Code cannot be applied retroactively to existing contracts.

Like any attempt at regulation of an industry, there are good points and bad points depending on which side of the fence you are on.

I imagine the feature that will attract the greatest attention is the fact that the CRTC Wireless Code in effect does away with the three year contact without really doing away with the three year contract. Confused?  What the CRTC did was make it against the code to charge anything extra to cancel a contract after its 24^th month. Bear in mind these only impacts the revenue the vendor may have received for the remainder of the contract.

The consumer is still on the hook for the cost of any hardware subsidy they may have received.

The CRTC Wireless Code identifies how the cost of the subsidy is to be calculated based on either the Manufacturer’s Suggested Retail Price  - the MSRP tag we are used to for other products but which is seldom charged – or the price the vendor will sell the hardware for without a contact. In either case, the bill opt out of a contract could still be hefty based on the subsidy received. 

I suspect there will still be backlash against the need for users to payback any subsidy.  The problem as I see it that people want a phone that retails for $400.00 to $700.00 to be provide for around $150.00 with the vendor absorbing the difference every time the user wants to change to phones.

The CRTC Wireless Code stipulates that the cancellation date shall be the date is notified of the request to cancel and not 30 days later. This 30 day policy was particularity annoying to users who owned their hardware and wanted to switch vendors.  

You can also get ready to receive a huge pile of paper or a large data file when you sign up for service. The list of compulsory items to be included is extensive. A current cell phone contract can run in the range of 12 to 20 pages. I suspect the new ones will be longer as they move from “legal” to “simplified” and they add all the various provincial code requirements.

One issue addressed but not resolved gives the user the right to refuse any unilateral change in contract by the vendor that does no benefit the user. The CRTC Wireless Code does not state what happens if the user refuses. Previously, a user had the right to refuse but the vendor had the option to cancel the contract and therefore the service without charge to the user. This will likely need clarification.  

Full details of the CRTC Wireless Code can be found at this website. An infographic version of the highlights is available at this website.

Batchawana Bell Cell Site in Google Maps Street View

I was playing around with Google Maps in the North Sault area when I came across this Street View of the Bell cell site called Batchawana near the intersection of Hwy 17 and Hwy 563.

I am sure it was coincidental that the Google plotting cars drove by that day but it shows the new tower under construction in the Aug/Sep 2012 timeframe. 

The pictures show a new tower under construction beside an existing tower, a reference map and detail showing the riggers climbing the tower. 

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.