Telus asks for ‘guidance’ on pro-rated refunds

A CRTC directive that service providers must offer pro-rated refunds to customers who cancel their wireless contracts based on the number of days left in a month’s billing cycle effectively abolishes the monthly contract, Telus Corp. argued in a new Part 1 application. Posted to the regulator’s website on Thursday, the application asks for “guidance and advice” on what Telus calls a “surprise” decision in the spring to require telecom providers to pay the refunds of all service fees paid in advance in the event of a cancellation. The decision in question stems from a May 5 press release issued by the CRTC that individuals and small business customers were entitled to the refunds, as the commission also turned down a pair of applications from Quebecor Inc. and Telus about the cancellation policies of BCE Inc. and Shaw Communications Inc. Telus said it was “at a loss to understand how a bilateral dispute between two competitors can be elevated to a major change in an industry wide regulatory policy with significant impacts.” Among those impacts is that the decision “effectively transforms all contracts into day-to-day contracts,” the application said. According to the application, if a customer has a $20-per-month device subsidy built into their contract and they cancel their service three days into the month, “a literal interpretation of the Decision” obliges the provider to pro-rate the cancelled month’s subsidy. Telus’ calculations put the company having to pay the customer back $18 out of that subsidy. That means the company can only recoup $2 for the partial month instead of the entire $20. The company said in the application that it wants the CRTC to specifically clarify that outstanding device subsidies are not subject to the portion of the monthly fee that gets refunded on a pro-rated basis, ensuring that the provider would receive the entire $20 for the cancelled month. “To require a refund effectively turns a monthly contract into a daily one, which can be cancelled without notice,” Telus said. The May 5 notice runs counter to advice Telus said it proactively sought out from the CRTC on multiple occasions, beginning in 2014. The move is also antithetical to the release’s focus on “removing potential barriers to switching service providers” since “the Decision creates an anti-consumer result by virtue of the potential suppression of rivalry in the marketplace that is evidenced by the level of promotional activity,” Telus said. The company would see revenues reduced “by tens of millions of dollars per annum,” Telus said, adding that it would affect the company’s capital investment program, workforce and investors. “Reducing carrier revenues will need to be accounted for elsewhere and the likely result would be to reduce the costs associated with promotional offers,” the application said. Pro-rated refunds operate on the assumption that the charges are levied on the basis of time instead of usage, Telus added. “Under one interpretation of the Decision, a customer could use the entirety of their monthly usage allowance in a single day, and if they cancelled on that day, would be eligible” for a nearly full refund of the month’s fees. Comments on the application are due Aug. 22. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Telus asks for ‘guidance’ on pro-rated refunds

News | July 25, 2016

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Telus asks for ‘guidance’ on pro-rated refunds

News | July 25, 2016

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