Essay about Analysis of Canadian Wireless CRTC

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Op-Ed: The CRTC Fails to Curb Corporate Gorging of Wireless Consumers

Saving money is undeniably a top priority for Canadian consumers in the current economic climate, with every consumer looking for ways to optimize their savings. Cell phone bills seem to be the exception to this rule. Consumers are spending an average of $77 per month per phone line in 2013, up nine dollars from $68 in 2012.1 Canada notoriously has one of the highest monthly service charges of cellphone service around the world, and the government has taken notice. The CRTC wireless code that has come into effect as of Dec. 2, 2013 has long been anticipated by Canadian consumers as the solution to outrageous service charges and overage fees. In reality, the code has provided consumers with very little in savings and protection.
Starting with the announcement of a new wireless code in early 2012, there was an anticipatory feeling in the telecom world. MobileSyrup and other tech blogs quickly began speculating on the amazing changes to be seem by Dec. 2, 2013.2 Soon, concrete news started to pour in. The CRTC would make contract cancellation after two years free, it would control overage charges in roaming areas, etc.3 These announcements were undeniably exciting after years of consumer suffering under strict three year contracts, with no hope of breaking out without the threat of huge penalties.
Many consumers were adamant about waiting until late 2013 to purchase a new mobile device. However, this consumer attitude proved to be a fairly large mistake. In the time between the announcements of the CRTC in early 2013 to six months before its implementation in December 2013, mobile phone plans were the best to date. The Big Three of Canadian cellphone retailers (TELUS, Rogers, and Bell) and their affiliated bargain banners (Kudoo, Fido, and Virgin Mobile) had pre-emptively implemented many of the CRTC’s mandates by the fourth fiscal quarter of 2012. Fido, for example, had isolated three year plans to its highest “Max Plans” tier, a tier necessary only to get the most expensive devices at a subsidised rate (such as the iPhone 5). The other two tiers were limited to two year commitments with an option to upgrade three months before the end of term. This “optional three year term” system functioned beautifully, with consumers having the ability to choose between a high price device on an expensive plan and a less powerful device on a reasonable plan. The system provided a full range of choice for the consumer, allowing her to choose what device package fit her best.
As the implementation of the CRTC grew nearer, the Big Three began to fully transition their platforms. By August 1st 2013, all three major companies and their affiliated banners had completely scrapped three year plans, only allowing those that were signed before the August 1st. This proved to be a significant and sudden date for mobile phone retailers and consumers. Working for a multi-banner retailer myself, no warning was given to me or my coworkers, and the changes were literally sprung overnight. Gone were the $50 per month two year price plans that allowed the consumer to receive an Samsung Galaxy SIII fully subsidized ($0 down), and in their place were plans starting at $70 per month with a decrease in the average subsidy amount for all high end devices (the Samsung Galaxy SIII rose to $100 down). This dramatic change was a surprise, and not a good one. Customers were disappointed that attractive price plans we had quoted them days before were no longer available and replaced with plans equivalent in value for higher in price by approximately $20. This change proved to be steady across the board for each major cell phone company, and can be said to be directly due to the looming implementation of the CRTC.
By trying to prevent consumer gorging in a market that is largely monopolized, the CRTC has only changed the way in which consumers are taken advantage of. Prices of monthly
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