Open Letter to the CRTC

To the Secretary General, CRTC

I am confused about the CRTCs role in Canadian society. You are said to be a watchdog, but to me it seems the only parties you are watching over are the 4 big telecommunication companies in Canada and their monopoly on everything from television transmission to internet services and mobile networks. This impression has been with me for a long time but recent decisions on Usage Based Billing and unlocking of cell phones for a price have made me put serious questions to whether the CRTC is put in place to ensure fairness or if it’s actually just a government appointed body that protects a monopoly.

Usage Based Billing is not fair for anyone

The debate over Usage Based Billing is limited to a debate over whether or not the big telecoms should be allowed to impose billing practices on their 3rd party resellers. The arguments against this practice largely focuses on two points:

1. Limiting bandwidth to users prevents them from using new more data heavy applications and stifles innovation.
2. The argument that heavy users should pay for their keep makes little sense seeing as the difference in cost to the supplier of transmitting 1GB vs 100GB is minimal. The cost imposed is grossly exaggerated.

First of all, these arguments apply just as well to the main telecoms as to the resellers, so if the ruling is overturned (as it should be) it begs a revisiting of the regulations regarding the main telecoms and their capping of services.

More importantly however is an issue not addressed at all: That the big telecoms have a vested interest in capping their services, not to preserve bandwidth but to block out competition and force the public to use only services provided by the big telecoms.

The simplest example is Netflix, but it is far from the only one. With caps on internet traffic users will be hard pressed to use streaming audio, video and imaging services without having to pay huge overages. This forces them to use only services provided by the big telecoms.

Thus it can be argued that the capping of internet services by the big telecoms is actually a move against competitors to push them out of the market, and an unfair one at that because these same telecoms have a monopoly, imposed by the CRTC, on bandwidth in Canada.

Such a policy enacted by a company in any other industry would be considered questionable, and it reeks of activity normally reserved for criminal cartels.

Capping of internet services is bad for communication, bad for investment, bad for the industry and bad for consumers. The only party that benefits from it is the big telecoms. If they are allowed to continue this practice, the CRTC needs to break the monopoly and allow other actors into the market to create a fair market.

I work in the web industry and we are in the process of developing an application that requires a lot of bandwidth from the users. It’s a free service that will help them get more out of their photos online. With internet caps these types of services are doomed to failure, not because they are too bandwidth heavy but because the big telecoms and the governing bodies that mandate them are not thinking forward but trying to anchor us firmly in the past.

Unlocking of Cell Phones: If I own it I should be able to use it

Yesterday it was announced that the CRTC will be imposing on the big telecoms to allow unlocking of all fully paid cell phones so that the users can use the network of their choice. This is a practice that has been in place in most other western countries for over 10 years and is only fair. After all, if you own a product outright you should be allowed to use it in any way you want.

The problem is that the CRTC is letting the telecoms charge a fee for unlocking the phones. Reportedly Telus will be charging $50 for the unlocking of a phone. This is tantamount to a ransom and is unacceptable.

When a consumer purchases a full price cell phone or buys out their contract, they are paying full price plus a markup on the cell phone just like they would if they bought a vacuum cleaner, an MP3 player or a car. It is only fair to assume then that seeing as the company that sells the cell phone has no vested interest in it and is in fact turning a profit, the consumer should be able to use the cell phone in any way they see fit. Until now this has been impossible because the telecoms have asked the cell phone manufacturers to lock the phones so they can only be used on their networks. This is a simple software key and it can easily be unlocked with the right code, but the code has so far been hard to obtain.

Now with this new rule in place, the telecoms have to unlock the phones upon request, but they are allowed to charge for that unlocking. And they are charging $50 which is $30 more than what the same unlocking would cost on eBay.

The problem here is that a) the locking is done at the request of the telecom, b) the unlock procedure costs the telecom nothing and c) when fully paid the phone is the sole property of the consumer and should be fully functional.

Forcing the telecoms to permit unlocking is the only correct thing to do here. Allowing them to charge for this service on the other hand is unacceptable. Just like any car owner is allowed to buy gasoline from the vendor of their choice, so should a cell phone owner be allowed to buy cell phone services from a provider of their choice. This is basic free market theory. What we have at present is closer to cartel or even mafia practices.

What is your role and who protects my consumer rights?

I am left wondering what the role of the CRTC is. Based on these recent decisions and others before it I find it hard to imagine it can be protecting anyone but the telecommunication companies the body is set out to be a watchdog over. If it is to protect consumers the body has utterly failed and it would be time to revisit its mandate.

But more importanly, who is protecting my rights as a consumer? I am from Norway, a country where consumer rights are valued. What I see happening in the telecom industry in Canada could never happen in my home country because it is unfair and puts the consumer at a permanent disadvantage. To put it plainly, if not the CRTC then who is protecting Canadians from being screwed over?

I would very much like to hear your thoughts on this because as of right now I see no rhyme nor reason in the decisions made by the CRTC.

Yours truly,

Morten Rand-Hendriksen