ARCHIVED - Telecom Commission Letter Addressed to Robert Hersche (Saskatchewan Telecommunications)

Ottawa, 14 August 2014                                                          

Our references: 8665-C12-201212448

BY EMAIL

Mr. Robert Hersche
Senior Director
Regulatory Affairs
Saskatchewan Telecommunications
document.control@sasktel.com

RE:  Wireless Code Implementation – Compliance Reports – Action Required

Dear Mr. Hersche:

This letter is to inform you that it appears to the Canadian Radio-television and Telecommunications Commission (the Commission) that your company, Saskatchewan Telecommunications (SaskTel), has made most, but not all, of the necessary changes to its contracts, policies, and procedures to implement the Wireless Code (the Code). The Commission appreciates your company’s efforts to implement the Code on time. However, the Commission considers that there are one or more remaining issues that your company must resolve in order to fully and appropriately implement the Code. SaskTel is required to respond to the Commission’s concerns, set out in more detail below, by 22 August 2014. In your letter you should explain whether you have taken the actions directed by the Commission in this letter in order to come into full compliance with the Code.

The Commission intends to publish a report for consumers in August 2014 that summarizes the results of the Wireless Code implementation process, including the information submitted by your company in your Wireless Code compliance reports and in response to follow-up correspondence, including this letter. If your company demonstrates in its response to this letter that it has made the necessary changes to fully implement the Code, the Commission’s upcoming report will reflect this.

The requirement to implement the Wireless Code

In The Wireless Code Policy^{Footnote 1}, the Commission established the Wireless Code, a new mandatory code of conduct for providers of retail mobile wireless voice and data services (wireless services). The Wireless Code applies to all wireless services provided to individual and small business consumers in all provinces and territories regardless of the status and business models of the wireless service provider (WSP).

As required by paragraph 377 of the Wireless Code Policy, WSPs filed reports with the Commission in January 2014 detailing how they have implemented the Wireless Code^{Footnote 2}.

Commission staff reviewed these reports and, on 22 May 2014 and 6 June 2014, issued letters to follow up with certain companies to seek clarification on specific issues in these reports. Your company filed a response on 29 May 2014.

Specific issues to be resolved

Based on the above-mentioned reports and correspondence, it appears that your company needs to address the following issues to fully and appropriately implement the Code:

• Trial period – restocking fees

In section G. of the Wireless Code, Contract cancellation and extension, the Commission required wireless carriers, including SaskTel, to provide a trial period to customers when they sign up for a new contract. Specifically:

“(i)   When a customer agrees to a contract through which they are subject to an early cancellation fee, a service provider must offer the customer a trial period lasting a minimum of 15 calendar days to enable the customer to determine whether the service meets their needs.

(ii)   The trial period must start on the date on which service begins.

(iii) A service provider may establish reasonable limits on the use of voice, text, and data services for the trial period.

(iv)  During the trial period, customers may cancel their contract without penalty or early cancellation fee if they have:

1. used less than the permitted usage; and
2. returned any device provided by the service provider, in near-new condition, including original packaging.

(v)   If a customer self-identifies as a person with a disability, the service provider must extend the trial period to at least 30 calendar days, and the permitted usage amounts must be at least double the service provider’s general usage amounts for the trial period.” [Emphasis added]

The contract sample you provided with your Wireless Code implementation report indicated that customers may have to pay a restocking fee if they avail themselves of the trial period.

In a letter dated 22 May 2014, Commission staff sought clarification on this point and asked SaskTel to explain how it considered that its approach was consistent with the requirement set out in the Wireless Code.

In your reply, dated 29 May 2014, SaskTel stated the following:

“Sasktel wireless contracts allow customers to return their device within the 15 day trial period with no penalty if the device is returned with all packaging, is in new condition, has not exceeded the usage limits and is cancelling their agreement with SaskTel.

There are different reasons why a customer may pay a restocking fee such as if the device is only swapped out for another device and the customer retains their contract. The fee is a safeguard for the business and incentive for the customer to treat the device with care and attention prior to a return and to prevent abuse of our return policy.

A device returned cannot be resold at full price, if it has missing pieces, has physical damage or is not in the original packaging. There is also a cost to put the phone back in stock for sale as new or used, as well as the time required to wipe the phone of all its content.

SaskTel is of the view that it has met the requirement of the code and notes there are situations when a re-stocking fee is appropriate. SaskTel is attaching procedural documentation that provides more information concerning the application of re-stocking fee and when the fee would not apply.

Lastly, SaskTel notes that the policy concerning a re-stocking fee is comparable to the re-stocking terms filed by Bell Canada in its compliance report.”

SaskTel also submitted the following additional information, including a table that is reproduced in Appendix 1:

“Restocking Fees

• Customers who are returning their device and cancelling their service contract within the Trial Period will not be subject to restocking fees.
• Customers who wish to return their device and exchange it for a different device within the Trial Period will be subject to a restocking fee.
• Customers with declared disabilities will not be subject to restocking fees. They will need to present their copy of the Self-Declared Disability Form they completed at the time of purchase.
• Restocking fees are $25 for feature phones and $50 for smartphones.
• Restocking fees are charged through SaskTel store and dealer POS.”

While the Commission notes that there are scenarios in which SaskTel is not charging a restocking fee during the trial period, the Commission is concerned about those situations in which SaskTel is charging a restocking fee even though the conditions in the Wireless Code are met.

In this regard, the Commission notes paragraph 247 of the Wireless Code policy in which the Commission explains why it considered that it was necessary to require a trial period: “The Commission notes that consumers who purchase a mobile device seek to do so in as timely a manner as possible and considers that consumers may not be able to take in all the details of a wireless service contract prior to the start of service. As well, consumers may not discover certain constraints on their services until after they have started to receive service. For example, service coverage maps provided by WSPs may not be sufficient to determine the adequacy of wireless services in a customer’s home, office, or other location where they want to use their device. The Commission considers that a consumer’s experience of the device and service coverage in a consumer’s home or office cannot be adequately tested at the time of sale. Therefore, some trial of the service in these places is necessary.” [Emphasis added]

The Commission hereby clarifies for SaskTel that where the Wireless Code states “(iv) During the trial period, customers may cancel their contract without penalty or early cancellation fee if they have (a) used less than the permitted usage; and (b) returned any device provided by the service provider, in near-new condition, including original packaging” that “penalty” should be read to include a “restocking fee” or other similar fee. As a result, a customer could not be charged a penalty, including a restocking fee, if they have met conditions (a) and (b) referenced above, irrespective of whether they are changing devices during the trial period.

Action Required

The Commission considers that SaskTel needs to do the following in order to fully implement the Code:

• Remove the reference to “restocking fees” during the trial period from your contracts and provide a revised copy of your template contracts.

Pursuant to section 37(2) of the Telecommunications Act, the Commission hereby directs SaskTel to file a response by 22 August 2014, demonstrating that it has made the necessary changes as set out above.

If SaskTel fails to take the action required by 22 August 2014, the Commission may take further steps to enforce its requirement.

Should you have any questions regarding the above matter, please contact Nanao Kachi at 819-997-4700.

Procedural information

This letter and all subsequent correspondence form part of a public record. As set out in Broadcasting and Telecom Information Bulletin 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, WSPs may designate certain information as confidential. WSPs must provide an abridged version of the document involved, accompanied by a detailed rationale to explain why the disclosure of the information is not in the public interest.

All submissions are to be made in accordance with the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure, SOR/2010-277.^{Footnote 3}

Sincerely,

ORIGINAL SIGNED BY

John Traversy
Secretary General

c.c.: nanao.kachi@crtc.gc.ca

Enclosure: Appendix
Appendix

Date modified:

2014-08-14