The Ontario government is taking strong action to help eliminate the shock many consumers get from opening their cell phone and wireless services bills. The province is introducing legislation to make it easier to understand the costs and terms of wireless services agreements while ensuring service providers are upfront with information before contracts are signed.
Here’s how consumers will benefit if the legislation is passed:
- Contracts will be written in plain language
- Contracts would spell out which services come with the basic fee, and which would result in a higher bill
- Providers must get it in writing before they renew or amend a contract
- A cap on the cost of cancelling a contract
- Only a modest fee for walking away from fixed-term contracts
The proposed legislation, which would affect new contracts, would take effect six months after being passed. It would also cover existing agreements that are amended, renewed or extended after that date.
“We are grateful that Ontario is taking further steps to ensure its citizens are not impacted by restrictive, oppressive wireless practices, like excessive early contract termination fees,” said Mobilicity President and Chief Operating Officer Stewart Lyons.
“Carrier codes governed by the Canadian Wireless Telecommunications Association (CWTA) have proven ineffective in protecting consumers and seem to act in the best interests of the Big 3, not Canadians,” Lyons added. “Ontario is definitely on the right track and we hope other provinces will keep the trend going until all consumers from coast-to-coast get the protection they deserve.”
The province’s wireless consumer protection legislation has received its fair share of ups and downs since it was originally introduced by MPP David Orazietti in 2010 as Bill 133 (The Wireless Phone, Smart Phone and Data Service Transparency Act, 2011).The planned legislation requires wireless carriers to provide clear disclosure of all optional and mandatory services and contract cancellation penalties, and limit contract termination fees.
Last year, Mobilicity voiced strong support of the private member’s bill and has advocated for greater protection of wireless consumers. The no-contract carrier has also encouraged other provincial governments to explore the introduction of consumer protective legislation similar to that in the province of Quebec.
“Hats off to the Government of Ontario for demonstrating leadership on consumer protection in the wireless market,” said Anthony Lacavera, Chairman and CEO of WIND Mobile. “As longstanding champions of wireless choice for Canadians, WIND Mobile is glad to see Ontario taking strides to promote real competition and protect consumers from unfair practices. This is a good day for consumer protection.”
Canada’s wireless sector has historically suffered from a high degree of concentration and insufficient competition. Market mechanisms and self-regulation alone have not been enough to protect Canadian consumers from abusive practices of the dominant wireless carrriers, such as activation fees, system access fee and relatively long (three year) contracts. For example, according to a 2010 study, “Death Grip: Caught in a Contract and Cannot Quit”, at 24-36 months, typical Canadian postpaid contract terms are the longest in the world. The same report noted that a Canadian seeking to cancel his or her iPhone after 6 months would pay a about twice as much as an American – An AT & T customer would pay $256, while a customer of one of the Big Three would pay between $500 and $600.
“Everyone wins with greater competition. We are happy Ontario has recognized that mandatory clear rules and effective enforcement tools are necessary to ensure that consumers can make informed choices and act on those choices, which is what is needed to keep the traditional wireless carriers from abusing their market power,” added Lacavera. “It shows that the Government of Ontario understands that competition is not just allowing new providers into the marketplace. We also need to remove the barriers that prevent consumers from taking advantage of increased choice and better value. The proposed legislation promises to do just that. All Canadians should be offered similar protection and I hope other provinces will follow suit.”