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Regulators need to heed the call…

It’s a safe bet to guess where most Canadians stand on the prospect of Bell being hit with a $100-million class action lawsuit. A Toronto law firm, acting on behalf of an Elliot Lake woman, has served notice to Bell Mobility and its parent company, BCE Inc., alleging that expiry dates on pre-paid wireless services are illegal. Anyone who’s ever dealt with cell phone services in this country will be cheering on Celia Sankar.

Chances are if you have a cell phone – and 77 per cent of Ontarians do – that you feel like you’re being treated poorly, with high rates and unfair contracts. The reason you feel that way is because that’s just what’s happening: studies consistently show we pay among the highest fees – for regular monthly charges, roaming and data, among others – in comparisons with Organization for Economic Co-operation and Development (OECD) countries.

The reason? Lack of competition, with the bulk of the market cornered by the Big Three: Bell, Rogers and Telus.

That, says the advocacy group OpenMedia.ca, has led to many unfair practices that hit Canadians in the wallet.

“We don’t have enough choice in our wireless market,” says the organization’s Lindsey Pinto from its Vancouver headquarters, noting the group is pushing for regulations that encourage more competition.
“If Canadians have somewhere to turn outside of the Big Three, then the Big Three will make changes that benefit consumers.”

One way to do that, she notes, is to ensure small companies get access to the wireless spectrum in the auction expected next year.

“What we really need is a bold move to allow small companies to get a foothold in the market,” said Pinto. “We have to put a check on big telecom’s power.”

OpenMedia is lobbying for great competition, along with regulations that put the interests of consumers ahead of profits for the oligarchy that controls almost 95 per cent of the market. Caps on wireless rates and measures, such as warning messages, that protect consumers from massively inflated roaming charges, for instance, would be a good first start.

Pinto points to Ontario’s plans, announced last month, to protect cell phone customers as a good starting point for a national policy.

The Ontario bill, which includes measures originally introduced by MPP David Orazietti, would make contract terms clearer and cap cancellation fees, among other things.

“Millions of Ontarians subscribe to wireless phone services and, given the unwillingness of the federal government to protect consumers from costly one-side contracts, we are moving forward with important legislation that reaches the same objectives as those proposed in two bills I previously introduced,” says Orazietti, MPP for Sault Ste. Marie. “This is a pocketbook issue that consumers want addressed, and our government bill contains measures that will reduce costs, cap cancellation fees, prevent automatic renewal and make cell phone contracts considerably more fair and transparent.”

The Wireless Services Agreement Act, 2012 contains measures to bring greater fairness to agreements for wireless services. Specifically, the bill will allow consumers to cancel agreements at any time, with limits on cancellation charges; require the express consent of the consumer to renew, extend or amend a contract; and require greater disclosure and clarity in contracts for wireless services. Also included are provisions to force companies to use all-included prices in their advertisements and a prohibition against charging customers for services while their phones are in for warranty repairs, for instance, and they clearly aren’t using the service.

The legislation will affect new contracts for wireless phone and data services and would take effect six months after being passed. The legislation will also cover existing agreements that are amended, renewed or extended after that date.
“For too long large telecom companies have been gouging consumers on their cell phone bills,” Orazietti says.

These kind of controls, coupled with real competition, would make cell phone usage cheaper and more consumer-friendly, Pinto argues. Full disclosure and transparency are a good first step, as all too often the companies rely on consumer ignorance to run up their bills and keep them tied to unfair contract provisions – “keeping us out of the loop is their way of doing that.”

While some new entrants have emerged – the last spectrum auction in 2008 saw the debut of Wind Mobile, Public Mobile, Mobilicity and Quebec-based Videotron – the reality is those companies account for less than six per cent of the market. The emergence of a bona fide fourth national player would be helpful.

In Ontario, the Big Three account for 97 per cent of the market, with six others sharing the remaining three per cent. We’ve got a long way to go before real competition has an impact on the pricing and business practices of those who dominate the cell phone market.

For now, we cheer on the likes of Celia Shankar and her lawsuit that takes aim at just one of the many unfair ways the Big Three do business.

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