CRTC Protects Consumers from Discriminatory Differential Pricing Practices
New rules strictly limit when internet service providers can bill differently depending on the content Canadians access
OTTAWA, April 20, 2017 – The Public Interest Advocacy Centre (PIAC) today welcomed new rules generally prohibiting internet service providers (ISPs) from billing customers for data based on content. The new rules require that all data generally be billed at the same rate regardless of the type of data consumers access, effectively ending “differential pricing” or “zero-rating”.
“This is a clear win for Canadian consumers that future-proofs their internet access from arbitrary control by their internet provider,” said John Lawford, Executive Director and General Counsel of PIAC. “Gone are the days of unjust preference of certain services and extra costs for consumers that are not on higher cost plans.”
Under the new framework announced in today’s decision of the Canadian Radio-television and telecommunications Commission (CRTC), consumers, consumer groups, and competitors will be able to bring a complaint when an internet service provider engaged in differential pricing. The CRTC will consider whether the pricing is unjustly discriminatory, taking into account:
- the degree to which the treatment of data is “agnostic” (i.e. data is treated equally regardless of its source or nature);
- whether the offering is exclusive to certain customers or certain content providers;
- the impact on Internet openness and innovation; and
- whether there is financial compensation involved.
Applying this framework to Videotron’s “Unlimited Music” program, the CRTC concluded that Videotron’s program conferred an undue disadvantage on certain content providers and customers and effectively ordered Videotron to halt the program.
PIAC led an alliance of non-profit consumer groups known as the Equitable Internet Coalition (EIC) that challenged the Videotron practice. The Coalition included the British Columbia Public Interest Advocacy Centre (BC-PIAC), Consumers’ Association of Canada (CAC); Council of Senior Citizens Organizations of British Columbia (COSCO); and National Pensioners Federation (NPF).
For more information please contact:
John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre (PIAC)
T: (613) 562-4002 ×25
C: (613) 447-8125
lawford@piac.ca
www.piac.ca
#UnitedAirlines: Why Canada Needs Air Passenger Protection Rules Today
Consumer protections for air travel passengers? What a crazy idea! This past week, U.S. air carrier United Airlines had to navigate an embarrassing and offensive incident which resulted from a passenger being physically dragged off a flight from Chicago, Illinois to Louisville, Kentucky to open up seats for other airline employees. The event prompted a public outcry and serious questions about the level of discretion airlines should have over their customers.
In 2015, PIAC recommended the creation of an Airline Code and an Air Passenger Complaints Commissioner in order to protect air travel consumers. (Photo courtesy of the Nigeria Model United Nations Society)
Canadian airline passengers may be asking the same question here, especially as there are few consumer protection rules and no bill of “air passenger rights” in Canada. The United States at the least has had clear and concrete air passenger rights in the case of flight and tarmac delays since 2009. The European Union also has regulations in place to protect air passenger rights in situations such as flight delays, flight cancellations, and lost baggage. In Canada, airlines are permitted to develop their own policies as to how they will treat passengers in cases such as flight delays, overbooking or lost baggage. Where a passenger disagrees with an airline’s remedy, they can complain to the Canadian Transportation Agency to resolve their specific issue, or file a lengthy legal application to challenge the reasonableness of the airline’s policy.
PIAC Calls for an Airline Code and an Air Passenger Complaints Commissioner
However, it is clear this is no longer enough. Canadians need a single standardized set of air passenger rules so they know they are entitled to certain rights in situations where a flying experience does not go smoothly. In 2015, PIAC prepared a report on Consumer Protections for Airline Passengers for the Canada Transportation Act Review Secretariat recommending the creation of an Airline Code and an Air Passenger Complaints Commissioner in order to protect air travel consumers. The Airline Code could include rules on flight delays and cancellations, delayed or lost baggage, overbooking and child passengers. The #UnitedAirlines incident shows what can go terribly wrong when airlines have full discretion to decide how their customers can be treated. All parties, both air carriers and consumers alike, could use a little air traffic control on these issues.
Transport Minister Confirms a Code is Coming – Hold Him to It
On Tuesday, Transport Minister Marc Garneau confirmed the Canadian federal government will introduce new legislation this spring, and the new “air passenger bill of rights” will address situations such as flight bumping. In PIAC’s view, this is the right step for Canadian airline consumers; a mandatory code of air travel rules could not come any sooner. PIAC will be watching for the new rules and advocating for your consumer rights and protections in air travel. We encourage you to contact your local Member of Parliament (M.P.) and the Transport Minister if air travel rights are important to you too.
PIAC believes additional clarity for air passengers is on the horizon. If air travel rights are important to you as well, contact your M.P. or write the Minister of Transport to let them know. (Photo courtesy of Pixabay)
Fixing TV Service Will Keep Complaints Commissioner Busy
OTTAWA – Over the last six months, Canadians made 2,734 complaints about their television services to the Commissioner for Complaints for Telecommunications Services (CCTS). That is more complaints than the CCTS received in relation to wireless, internet, local voice, or long-distance voice services. What makes this particularly surprising is that the CCTS cannot yet address complaints about TV services– it won’t be able to until September 2017, when the “TV Service Provider Code” comes into effect.
With Canada’s communications regulator reporting that it received 3,191 complaints about broadcasting distribution undertakings in a year in its most recent data , it looks like the CCTS will have its hands full bringing TV Service providers up to the standards Canadians expect.[1]
The Public Interest Advocacy Centre (PIAC) fought for the TV Service Provider Code, just as we fought for the Wireless Code before it. These mandatory codes protect consumers and promote competition. Both Codes focus on allowing consumers to make informed choices.
Communications consumers face ongoing problems with communications service providers. These are highlighted in the CCTS mid-term report’s statistics, which outline thousands of complaints made in relation to wireless, internet, local phone, and long-distance services.
| Top 10 Issues | Complaints Aug 1-Jan 31 |
| Non-disclosure of terms/Misleading information about terms | 795 |
| Incorrect Charge | 698 |
| Intermittent/Inadequate quality of service | 632 |
| Legitimacy and amount of early cancellation fees | 477 |
| 30-day cancellation policy/Charges billed after cancellation | 398 |
| Credit/refund not received | 344 |
| Data charges | 283 |
| Credit reporting | 235 |
| Breach of Contract | 232 |
| Material contract change without notice | 224 |
The TV Service Provider Code will help to address more of these problems. In short, the Code requires carriers to communicate clearly. More specifically it requires carriers to:
- Clearly explain promotional offers, including how long the promotion will last, the price at the end of the promotion, and any commitment period or cancellation fee;
- Write contracts and related documents in a way which is clear and easy to read;
- Clearly itemize all charges, including equipment rental fees, installation fees, and access fees;
- Provide a permanent copy of the contract setting out specified important terms;
- Provide a critical information summary summarizing the contract;
- Provide notice when they are changing prices or packaging of channels, and setting out the customer’s options; and
- Clearly explain their policies in relation to service outages and disconnection.
We look forward to the CCTS’ assumption of responsibility for the TV Service Provider Code this September.
For more information, please contact:
Jonathan Bishop
Research & Parliamentary Analyst
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×23
jbishop@piac.ca
John Lawford
Executive Director
Public Interest Advocacy Centre
ONE Nicholas Street, Suite 1204
Ottawa, ON K1N 7B7
(613) 562-4002 x25
(613) 447-8125 (cell)
jlawford@piac.ca
http://www.piac.ca
[1] http://www.crtc.gc.ca/eng/publications/reports/policymonitoring/2016/cmr3.htm#a3iv
CRTC asked to reconsider affordability subsidy
Lower-income Canadians, fixed income earners and seniors should have access to “basic service” including broadband
OTTAWA, April 5, 2017 – The Public Interest Advocacy Centre (PIAC), ACORN Canada (ACORN) and National Pensioners Federation (NPF) today jointly filed an application to review and vary the Canadian Radio-television and Telecommunications Commission’s (CRTC) “Review of basic telecommunications” decision to reconsider a fund to ensure all Canadians, including lower-income Canadians, have equal access to broadband and other telecommunications services.
“The CRTC missed a crucial opportunity to level the playing field so that all Canadians, regardless of their socio-economic status, can have access to the same standard of internet and telephone service that the CRTC said all must have”, said John Lawford, Executive Director and General Counsel at PIAC. “We must ask, therefore, on behalf of Canada’s least well-off, for the CRTC to use their mandate and authority to create an affordability fund.”
The “affordability funding mechanism” (AFM) proposal was filed with the CRTC in the basic service hearing last year by a coalition named the Affordable Access Coalition, which included PIAC, ACORN and NPF. The AFM would provide low-income Canadians with a monthly subsidy to use on the telecommunications service of their choice (broadband, home phone or cellphone service) and from the service provider of their choice.
“The CRTC found that broadband, like home telephone service, is a ‘basic’ telecommunications service that all Canadians should have access to so that they are able to participate in Canadian society and the digital economy,” said Herb John, President of the NPF. “Therefore Canadian seniors and those on a fixed incomes should not be shut out of these essential services simply because they lack the means to access them,” he added.
Jonethan Brigley, ACORN Canada national board member, added: “The CRTC tossed the hot potato of fair access to broadband to the federal government – but Canada Budget 2017 shows the feds only want to play a supporting role. We need CRTC leadership or there will be no real change.”
A copy of PIAC, ACORN and NPF’s Application to review and vary Telecom Regulatory Policy CRTC 2016-496 can be found on PIAC’s website at www.piac.ca.
For more information please contact:
John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre (PIAC)
(613) 447-8125 (cell)
(613) 562-4002 ×25
lawford@piac.ca
www.piac.ca
Herb John
President National Pensioners Federation (NPF)
(519) 350-3221
herb.john@npfmail.ca
nationalpensionersfederation.ca/
Judy Duncan
Head Organizer
ACORN Canada (ACORN)
416-461-5322 (office)
416-996-6401 (cell)
canadaacorn@acorncanada.org
www.acorncanada.org
Switching Providers Isn’t All About Reasons: It’s Just Hard.
Written by: Alysia Lau, Legal Counsel at PIAC
Recently, I took the plunge—I switched internet service providers. Although the switching process itself was as smooth as I could have asked for, the inertia and personal resistance to switching I experienced took me by surprise.
I had been with a major Canadian telecommunications provider for several years and had thought about switching for a good number of them. I knew I could probably get a “better deal” with another provider, had suffered very hostile conversations with customer service, and didn’t necessarily agree with the ethos of the company. All good reasons, right? Yet, every time I called, I got talked out of cancelling at that moment. Every single time. So far I have internet access that works, who knows what could happen if I tried to switch? Could I experience an internet blackout for weeks? Why rock the boat? “I’ll do it another time,” I told myself.
Then, a significant event happened earlier this year which highlighted once and for all that my provider wasn’t for me. I could not risk calling customer service to be talked out of my decision again. So, I decided the only way I could definitively switch was by subscribing to a new provider first before breaking up with my old one. It still wasn’t easy. In fact, as hard as it is to admit, I had filled out all my information with my new provider, before quitting the form at the last minute rather than sending it in. Then I told myself to get a grip, manually completed the entire form again, and hit submit.
That was, in effect, the hardest part. As a visit from the technician was scheduled, I called my old provider and spent half an hour trying to cancel as they clung on to me in every possible way: “Is your new internet installed yet?” “Can you cancel your new order?” “Is the technician on their way right now?” “You could get a refund.” “There is still time!” I resisted the entreaties not because I didn’t feel myself becoming slowly entrapped in the spinning thread of appeals and petitions, but because I couldn’t. I was already gone.
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I have been struck by comments made by high-profile regulators – institutions created to protect the public interest – which have lamented that telecom consumers are in part to blame for their strife and complaints about high prices, low data caps, and throttled broadband speeds. Why don’t consumers just cancel their service and switch providers? Why don’t they try to negotiate with their service providers? Why don’t they do in-depth research into their contracts instead of relying on customer service representatives?
These statements discount an array of reasons which have formed the foundation of today’s consumer protection laws and regulations, including:
- The significant imbalance in bargaining power between companies and individual consumers;
- The traditional “take it or leave it” nature of service terms and contracts;
- The disparity in resources available to a company and to a consumer in cases where “something goes wrong” or a dispute arises;
- The complexity of the telecommunications market and the high cost of information acquisition;
- The effect of high switching costs and barriers such as bundled services and fixed-term contracts; and
- The fact that a market of goods or services rooted in the ability of a consumer to “negotiate” a better contract creates an inequitable system which vastly favours consumers who traditionally have more time, independence, income, knowledge, education, mobility, and confident language skills.
However, regardless of these reasons, and rather than going into the stormy debate about the competitiveness of Canada’s telecom market and coordinated pricing in the wireless sector, I thought I would simply share my own personal anecdote.
What did I learn? Switching is just hard. I am a consumer advocate and was as entangled in the incumbent web as anyone else. It is not merely a matter of being at the mercy of any penalties your old telecom provider may impose on you, or having to pay upfront for a new modem and installation costs, although all these things matter—inertia and fear are true consumer barriers. It’s a matter of being human, and companies know exactly how to take advantage of it.
Consumer inertia has been the study of behavioural economists, business administrators, psychologists and other researchers for decades. While various models have been created to predict consumer willingness to switch, the basic conclusions made by researchers have widely resonated with one another. Notably, following the liberalization of markets which were formerly dominated by monopolies, economists expected consumers to actively seek out and switch to the best companies. This would, in effect, theoretically lower prices and increase service quality overall. Yet, while this has happened to a certain degree, consumer behaviour has not met the original expectations of creating highly competitive markets; in fact, the majority of consumers, even when offered the option, regularly choose to stay with their incumbent provider.
While there have been several explanations for this, I will only focus on a few here.[1] To begin, the telecommunications market is unique not merely because of the fast-paced changes in technology but also because consumers must make complex decisions related to several different products and services at the same time. Thus, instead of deciding which brand of dish detergent to buy, a consumer is considering equipment, wireless modems, broadband speeds, data allowances, rental or purchase options, and so on. Moreover, a consumer must make a value judgment of a telecom service based on forecast usage even though there is a great deal of uncertainty as to how the service will actually be used by the consumer or by their dependants. This is because usage of communications services is influenced by, and can vary significantly based on, circumstance, experience, relationships, and day-to-day interactions and events. Studies have shown that not only are consumers reluctant to switch, but when they do, particularly in electricity or telecom markets, they end up subscribing to “sub-optimal contracts”—many end up paying more than they need to for their actual usage.
Moreover, researchers have identified various consumer behaviours which affect willingness to switch and which are exacerbated in markets such as telecom where the “consumer surplus” – or net gains a consumer would make by switching – are difficult to visualize in the present moment. For instance, the “endowment effect” describes the phenomenon that individuals tend to value a good already owned more than the same good not yet owned. Similarly, the “loss aversion” theory arises from findings that consumers tend to assign twice as much “weight” to giving up a good than to gaining that exact same good. According to Lunn, in the telecom sector this means that “consumers may be foregoing substantial gains, because alternative providers would need to provide several times the consumer surplus of the current contract before consumers would be willing to switch.”[2] Ultimately, incumbent companies tend to have the strong brand advantage.
So, what is my message to regulators? Consumers need all the help they can get, particularly in a highly technical sector that is challenging for the average customer to understand. After you have done all that you can to empower them, then give consumers time – time to adjust, to reconsider, to adapt – and give credit to those who did make the change. When was the last time you switched your telecom provider?
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By the way, I am now the happy customer of a small, local non-profit ISP. My monthly cost is lower, my broadband speeds and data caps are higher, and I just feel good about the provider I’m supporting. So pluck up your courage, and if you believe it’s right – make the switch. It’s worth it.