CRTC seeks to clarify Wireless Code after Quebecor files cancellation fee complaint against big 3

The CRTC issued a show cause proceeding and call for comments on its Wireless Code after it determined that a section of the code was “ambiguous and requires clarification,” and therefore could not assess whether Canada’s big three telecom companies are in violation by inflating the retail price of their mobile devices. The Wireless Code was established by the CRTC in 2013 as a mandatory code of conduct that governs wireless carriers’ relationships with subscribers. According to research commissioned by the regulator last year, the code “continues to have positive impacts on Canadians” and resulted in fewer Canadians paying for data overage fees and fewer complaints over wireless service charges. In the code the commission noted that high early cancellation fees act as a barrier to customers who want to switch wireless service providers (WSPs) and imposed restrictions on ECFs in order to minimize the cost to the consumer. In the code, the commission limited the maximum ECF to the remaining amount of any device subsidy that was offered at the time that the customer entered into the contract. In March 2021 Quebecor Inc. submitted a letter to the CRTC claiming that BCE Inc., Rogers Communications Inc., and Telus Corp. “appear to be inflating the retail price of their mobile devices.” Quebecor stated that its assertion was based on a comparison of those prices with the retail prices listed by original equipment manufacturers who also sell devices directly to consumers, referred to as the manufacturer’s suggested retail price (MSRP). Quebecor argued that if the price is inflated then the early cancellation fees are also inflated, which is a violation of Section G of the Wireless Code. “Quebecor submitted that this is an issue because the retail price is typically the starting point for WSPs to offer a series of discounts. With those discounts, the customer ends up paying their provider a lower retail price up front. However, the initial price, before discounts are applied, is the price that determines the applicable early cancellation fee should a customer terminate their contract before the end of the commitment period,” according to the CRTC’s call for comments. The big three responded to the commission by claiming that Quebecor’s claims have no merit. Rogers argued that the companies “are free to establish their own pricing models to attract customers” and that the original equipment manufacturers’ retail prices are not the manufacturer’s suggested retail price. “Rather the manufacturer’s suggested retail price are prices that original equipment manufacturers, who do not traditionally retail products themselves, sometimes provide as guidance for retailers,” Rogers argued according to the CRTC documents. “Although some original equipment manufacturers now have their own retail channels with their own retail offers, such prices should not be confused with manufacturer’s suggested retail price.” Rogers further argued that there are no generally reliable Canadian manufacturer’s suggested retail prices for wireless devices, while Quebecor responded that when a manufacturer sells its own devices at the retail level, this price becomes the de facto MSRP. “Given that the Wireless Code specifies that service providers, when calculating early cancellation fees, are to use the lesser of the MSRP or the price set by the WSP, the commission considers that without a formal definition of MSRP in the Canadian market, WSPs are left to calculate early cancellation fees using the price set for the device when it is purchased from the WSP without a contract. However, it would appear that most WSPs do not offer wireless devices for sale without a contract,” the commission determined in its analysis. As a result, the commission determined that Section G of the Wireless Code was ambiguous because neither the manufacturer’s suggested retail price nor the price set by the providers for the device without a contract provide a reliable metric to calculate the cancellation fees. The commission is taking the preliminary view that Quebecor’s interpretation of MSRP is in line with its objectives to lower fees for consumers and is seeking comments on its view “that the regular (ie. non-sale) price for a wireless mobile device as published by the original equipment manufacturer is to be considered the de facto MSRP for the purpose of Section G. of the Wireless Code.” – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

CRTC seeks to clarify Wireless Code after Quebecor files cancellation fee complaint against big 3

News | April 5, 2022

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

CRTC seeks to clarify Wireless Code after Quebecor files cancellation fee complaint against big 3

News | April 5, 2022

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Freedom Mobile no longer pursuing full MVNO status

Federal arbitrator releases paid time political broadcast schedule

TV broadcasters denounce streamers’ appeals of CRTC’s broadcasting contribution decision

CRTC considering expanded mandate for Broadcasting Participation Fund

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us