Canadian phone charges: 5 important questions that deserve an answer

I recently got quite a shock. I looked in my bank account to find a large chunk of my savings wiped out. I didn’t have enough money to pay off my credit card, despite having just been paid. I couldn’t understand it. I found the culprit: Fido charged me $1,287.18 for one month’s mobile phone service. Over a thousand dollars on a phone bill!!

I always knew that Canadian mobile phones are the most expensive in the world, and I’ve blogged about it before, but I had no idea just how extortionate it is to use your phone overseas in any country other than the USA (and even then, it’s crazy expensive). The advertised rate for roaming is 3c per kilobyte. Which doesn’t sound that bad. But when you realize it’s over $30 per Mb, and that a megabyte can be downloaded over 3G in just two seconds you realize how ridiculous this is.

There are horror stories in the press such as the $9,380 bill one Canadian got, the $22,000 phone bill received by a British Columbia man, or the $201,000 phone bill in Florida. But it seems to me this can happen to anyone. As one friend put it very well.. the charges are so high, that if you knew in advance what they were, you would not use the service. They make huge amounts of money from customers’ mistakes – they profit from our lack of awareness or preparedness. I find this  immoral.

So based on my experience, here’s five questions I would like to know an answer to.

1) How much does it really cost the network to download 1Mb of data when roaming from a Canadian provider ?

Is it in the same ballpark as the $30 that Fido charge? How much of it is profit? How much is due to the amounts the phone companies charge each other?

2) Why is roaming from Canada so much more expensive in every country except the USA?

It seems reasonable to expect a similar data roaming charge in different countries, especially when many of those countries (UK, Japan, Germany) have much more advanced phone networks than the USA & Canada. What is the justification for charging three times more for roaming to any country except the USA?

3) Why does Canada’s official complaints commissioner forbid complaints about pricing?

Both the CRTC and the Consumer Protection office of Quebec refer you to CCTS, the Commissioner for Complaints for Telecommunications Services for any complaints. This is an independent agency which telcos sign up to. In its mandate, it contains the following statement:

We are able to assist with most types of problems that can arise between you and your service provider, including […] billing disputes and errors (but not the price of the service itself).

[…] While we are able to assist with the issues above there are certain services and issues that are frequently associated with the telecommunications industry which we will be unable to assist. […] Examples of matters which we will be unable to assist you with are complaints about […] the pricing of services […].

In their FAQ, they provide the following question and answer:

I think my provider charges way too much for its services. Can you look into this?

Our mandate is to determine whether the provider has complied with its obligations to you under its Terms of Service and internal policies and procedures. The amount that your provider charges for the services it delivers is a business decision that it alone is entitled to make. Marketplace competition means that you may find a better deal with another provider.

Does this sound like a statement from a regulatory body that is protecting consumers? Or a statement from a conglomerate of media companies trying to protect their profits? Is that last sentence true?

4) Why is there no authority with a clear mandate to handle consumer complaints over cellphone pricing?

The CCTS website says that for matters it does not cover, consumers should visit their resources page. The only applicable resource on that page is the Canadian Wireless Telecommunications Association. The CWTA includes a code of conduct for its members (which includes all major telcos). What are you supposed to do if your carrier has broken this code? CWTA says you should complain to the CCTS. They send you back where you came from. Does no agency take responsibility for protecting consumers against high prices?

5) Why aren’t cellphone companies required to notify you or block you when your bill amount gets unusually and dangerously high (say > $300)?

This is something that has been recently discussed by CRTC. The media companies are in denial, saying “customers don’t want caps”. 

Telcos already have the mechanisms in place to cut you off if you don’t pay your bill. Do they they let such large charges build up simply because they know it’s pure profit they can keep?

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These are important questions that must be answered. And if you agree, please sign the OpenMedia petition and Demand Choice.

If anyone knows where we can find answers to these questions or has other ideas, please add your thoughts & comments below.

 

Related reading: Why Internet access is like healthcare by Alistair Croll