ARCHIVED - Transcript, Hearing 11 February 2013

Volume 1, 11 February 2013

TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION

SUBJECT:

Proceeding to establish a wireless code for consumers Telecom Notice of Consultation CRTC 2012-557, 2012-557-1, 2012-557-2, 2012-557-3 and 2012-557-4

HELD AT:

Outaouais Room

Conference Centre

140 Promenade du Portage

Gatineau, Quebec

11 February 2013

Transcription

In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.

However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.

Canadian Radio-television and Telecommunications Commission

Transcription

Proceeding to establish a wireless code for consumers Telecom Notice of Consultation CRTC 2012-557, 2012-557-1, 2012-557-2, 2012-557-3 and 2012-557-4

BEFORE:

ALSO PRESENT:

HELD AT:

Outaouais Room

Conference Centre

140 Promenade du Portage

Gatineau, Quebec

11 February 2013

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TABLE OF CONTENTS

PAGE / PARA

PRESENTATION BY:

- v -

UNDERTAKINGS

PAGE / PARA

Gatineau, Quebec

--- Upon commencing on Monday, February 11, 2013 at 0900

1 LE PRÉSIDENT : Bonjour, mesdames et messieurs, et bienvenue à cette audience.

2 Nous tenons cette audience dans le cadre de notre consultation visant à établir un nouveau code national sur les services sans fil, dont les cellulaires et autres appareils mobiles personnels.

3 There are currently more than 27 million wireless subscribers in Canada -- a number that keeps growing every year. More and more Canadians are using wireless services to keep in touch with family, friends, customers, co-workers and to connect to the Internet.

4 Last fall, the CRTC asked Canadians for their help in developing a code to clarify wireless companies' responsibilities and provide consumers with new tools to better understand their rights. This will ultimately assist them in making informed choices about their wireless services. As a result, we are hoping to create a more dynamic marketplace empowered by informed consumers.

5 Notre consultation a suscité beaucoup d'intérêt partout au pays. Au cours de la première étape, les Canadiens ont écrit près de 600 commentaires dans notre forum de discussion en ligne et ils ont envoyé plus de 3 500 observations écrites. Entre autres, ils ont demandé que les contrats soient rédigés en langage clair et qu'ils ne comportent pas de frais cachés.

6 Il y a deux semaines, le CRTC a publié une version provisoire du code afin d'alimenter le débat lors de cette audience publique. Les observations que nous avons reçues ont contribué à orienter ce document de travail et nous avons lu avec grand intérêt ce que les Canadiens en pensent.

7 Le document de travail contient des propositions au sujet du contenu du code, des entreprises auxquelles il devrait s'appliquer, des méthodes d'application et de promotion, ainsi que de la façon dont son efficacité devrait être évaluée et révisée.

8 It should be noted that the working document does not necessarily reflect the views of this panel or the final version of the wireless code.

9 We would like to extend a special welcome to everyone listening to us online. For the very first time you will be able to participate in one of our public hearings by posting comments in real time at http://consultation.crtc.gc.ca. We will be keeping an eye on your comments as the hearing progresses and look forward to your input. The discussion forum will remain open for comments until 5 p.m. Pacific Standard Time on Friday, February 15.

10 We would also like to thank everyone who has participated up to now. All comments, whether submitted in writing, posted on the discussion forum or made orally at the hearing, will be taken into consideration as we finalize the wireless code.

11 Avant de commencer, j'aimerais vous présenter les membres du comité d'audition :

12 - premièrement, Mme Elizabeth Duncan, conseillère régionale de l'Atlantique et du Nunavut;

13 - Mme Candice Molnar, conseillère régionale du Manitoba et de la Saskatchewan;

14 - Mme Louise Poirier, conseillère nationale;

15 M. Steve Simpson, conseiller régional de la Colombie-Britannique et du Yukon; et

16 - moi-même, Jean-Pierre Blais, président du CRTC. Je présiderai, de toute évidence, l'audience.

17 The Commission team assisting us includes:

18 - Celia Millay, Hearing Manager and Manager of Consumer Policy;

19 - Crystal Hulley and Moïra Letourneau, Legal Counsel; and

20 - Lynda Roy, Hearing Secretary and Supervisor of Public Hearings.

21 I would now invite the Hearing Secretary Madame Roy to explain the procedures we will be following as decided by the Hearing Panel.

22 So I now pass the floor to the Secretary.

23 Madame la Secrétaire.

24 LA SECRÉTAIRE : Merci, Monsieur le Président.

25 Bonjour à tous. Good morning to all.

26 Before we start I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.

27 When you are in the hearing room we would ask that you please turn off your smartphones and beepers as they are an unwelcome distraction and they cause interference on the internal communication systems used by our translators. We would appreciate your cooperation in this regard throughout the hearing.

28 We expect the entire hearing to last five days. Participants are reminded that they must be ready to present on the day scheduled or, if necessary, the day before or after depending on the progress of the hearing.

29 Please note that we will also be starting at 8:30 a.m. for the remainder of the week and we will let you know of any schedule changes as they may occur.

30 You can examine all documents on the public record of this proceeding in the Examination Room, which is located in the Papineau Room.

31 Le service d'interprétation simultanée est disponible durant l'audience. L'interprétation en français se trouve au canal 2. Vous pouvez vous procurer les récepteurs d'interprétation auprès des commissionnaires à l'accueil du Centre des Conférences.

32 Nous désirons rappeler aux participants d'allouer un délai raisonnable pour la traduction lors de leur présentation à vive voix, tout en respectant le temps alloué pour leur présentation.

33 Please note that simultaneous interpretation is available during this hearing. The English interpretation is on channel 1. You can obtain an interpretation receiver from the commissionaire at the entrance of the Conference Centre.

34 We would like to remind participants that during their oral presentation they should provide for a reasonable delay for the interpretation while respecting their allocated presentation time.

35 There is a verbatim transcript of this hearing being taken by the court reporter sitting at the table to my right, which will be posted daily on the Commission's website. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break.

36 Veuillez noter que les documents seront disponibles sur Twitter sur le compte du Conseil à arobase CRTCaudiences (au pluriel), en utilisant le mot-clic diaise CRTC.

37 Please note that the Commission will also be tweeting the documents during the hearing at @CRTChearings using the hashtag number sign CRTC.

38 Just a reminder that pursuant to section 41 of the Rules of Practice and Procedures, you must not submit evidence at the hearing unless it supports statements already on the public record. If you wish to introduce new evidence as an exception to this rule, you must ask permission of the Panel before you do so.

39 Nous aimerions vous rappeler que, conformément à l'article 41 des Règles de pratique et de procédure, les seules preuves admissibles à l'audience sont celles faites à l'appui d'allégations déjà sur le dossier public. Si vous souhaitez présenter une preuve nouvelle comme une exception à cette règle, vous devez demander la permission au comité d'audition avant de le faire.

40 Nous tenons à annoncer également qu'afin de s'assurer que les intervenants ont suffisamment d'occasions de présenter leurs positions sur le document de travail et de répondre aux positions des autres parties, le comité d'audition a décidé d'ajouter une possibilité supplémentaire de déposer des observations écrites après l'audience.

41 Ainsi, tout intervenant pourra déposer des observations écrites finales au plus tard le 1er mars 2013 et des observations écrites en réplique finale au plus tard le 15 mars 2013. Une modification de l'avis de consultation à cet effet sera publiée aujourd'hui même.

42 I would like to announce that in order to ensure that interveners have sufficient opportunity to present their positions on the Working Document and respond to the position of others the Panel has decided to add an additional opportunity to file written comments after the hearing.

43 As such, all interveners may file final written comments by the 1st of March 2013 and final written reply by the 15th of March 2013. An amendment to the Notice of Consultation to this effect will be published today.

44 Please note that if parties undertake to file information with the Commission in response to questioning by the panel these undertakings will not be confirmed on the record by legal counsel. Instead, parties are asked to speak with legal counsel at the next available break following their presentation to confirm the undertakings.

45 Please note that all undertakings must be filed by noon on Friday, February 22nd.

46 For the record, Mr. Chairman, please note that the following parties have indicated that they will not be appearing at the hearing. Veuillez noter que les parties suivantes ont avisé le Conseil qu'ils ne comparaîtront pas à l'audience :

47 - Government of Yukon;

48 - le gouvernement du Québec, représenté par le ministère de la Culture et des Communications du Québec et l'Office de la protection du consommateur du Québec;

49 - ainsi que les intervenants Richard Aubé et Maxime Landry.

50 And now, Mr. Chairman, we will begin with the presentation by the Public Interest Advocacy Centre, PIAC; Consumers' Association of Canada and Council of Senior Citizens' Organizations of British Columbia.

51 Appearing for this panel is Mr. John Lawford.

52 Mr. Lawford, please introduce your colleagues for the record and you have 20 minutes for your presentation.

PRESENTATION

53 MR. LAWFORD: Thank you, Madam Secretary. Good morning to everyone.

54 Mr. Chairman, Commissioners, Commission staff, other parties and Canadian wireless consumers, my name is John Lawford and I am Executive Director and General Counsel to the Public Interest Advocacy Centre. I am here today with Janet Lo, co-counsel at PIAC; also with Jean-François Léger, counsel, who is assisting us with this proceeding; and, on my left, Alysia Lau, PIAC's articling student. We represent PIAC and the Consumers' Association of Canada, as well as the Council of Senior Citizens' Organizations of British Columbia and we ask that you refer to us as "PIAC/CAC/COSCO" rather than the "consumer groups".

55 As the CRTC is aware, we made a procedural motion on Friday to add a legal opinion. Given the announcement of the Hearing Secretary that there is an opportunity to file further documents on March 1st, we will be filing that document on that date.

56 The time is now for the Commission, with the assistance of all the parties here and, most importantly, the input from individual Canadians, to create a national wireless code for the benefit of all wireless customers.

57 This hearing is about healing; it is about hope; and it is about co-operation.

58 We can heal the sickness that has crept into the wireless market. Consumers are sick of termination penalties designed to keep them locked into long-term contracts. Consumers are tired of locked handsets. Consumers are often in shock after opening a bill where roaming charges or overage fees have been applied.

59 There is now real hope that a comprehensive wireless code can change this market. Not two years ago consumers were in despair; even we were resigned to nibbling at the edges: challenging 30-day notice penalties and dreaming idly of price regulation.

60 Today, we feel the spirit of co-operation: we can create a Code that will work. This industry has in the past been openly hostile to the regulator and, more shockingly, disdainful of its own customers. Consumers have come here today in a spirit of trust that the wireless companies will adopt a new attitude and change their reality.

61 To that end, PIAC/CAC/COSCO have proposed 12 guiding Consumer Principles for this Code: Neutrality; Liberty; Certainty; Transparency; Clarity; Accessibility; Fairness; Security; Comprehensiveness; Universality; Enforceability; and Efficacy. Our position is aligned with these principles and we urge the Commission to ensure the Wireless Code is as well.

62 Our presentation will address five issues that we feel are key to creating the best Code, but that may be the most difficult or contentious. They are: notification and caps; changes to contracts; the termination formula; unlocking; and enforcement. We have provided you with a chart as an presentation aid for our submission on all elements of the Code.

63 Before handing things over to my colleagues, let me first highlight three things regarding the application and the implementation of the Code.

64 First, the issue of the application of the Commission's Draft Code to prepaid services.

65 We see no reason why these customers taking prepaid service should be left behind when the majority of rules in this Code seek to regulate aspects of service that have no relation to how or when payment is made for them.

66 Second, there should be no "grandfathering" of old contracts when this Code comes into force.

67 Third, this Code should be put into place as soon as reasonably possible. Wireless customers have spoken loudly and clearly that they want and demand better wireless contracts now.

68 Janet...?

69 MS LO: Thank you.

70 I will start by addressing notification and caps for additional fees.

71 Consumers are frustrated when they receive billing surprises from their wireless service provider. PIAC has conducted research on two specific sources of bill shock for wireless customers, mobile premium services and international data roaming, but we hear from many consumers who have experienced wireless "bill shock" for other services. All consumers we speak with are united that they need safeguards to prevent bill shock.

72 We strongly support all of the provisions as drafted in the Draft Code in D5 -- notification of additional fees and tools to monitor and manage usage. Consumers expect and demand notifications, as well as the ability to suspend usage when they exceed planned monthly costs. The market has not developed these tools to meet consumers' needs.

73 The Draft Code's pre-set monthly default threshold of $50 for additional fees aligns with our objective of ensuring consumer security and protection from unanticipated high charges.

74 In PIAC's data roaming survey, filed in our comments, 92 percent of consumers selected a cut-off threshold of $50 or lower for additional data roaming fees. The option for consumers to customize the default cut-off is thus key to maximize consumer control, as we cannot generalize that all consumers can afford an additional $50 on their monthly wireless bill.

75 The ability to restrict features upon request must be required in the Code, as the market also does not offer these key mechanisms for consumer control.

76 Finally, we offer suggestions to strengthen provisions addressing mobile premium services and unsolicited wireless services charges. We suggest that the Code require wireless service providers to directly refund to the consumer any charges that the consumer has not consented to. Some consumers have told us that when disputing third party charges, their wireless service provider sends them to the third party service provider to pursue a refund. This is not acceptable. If the service provider is the point of billing, then the service provider should also be responsible for crediting or refunding the customer where there is a dispute over the charges.

77 Further, the onus must be on the service provider to prove that all charges on the bill are legitimate, otherwise the charges must be waived. The only evidence of the purchase lies with the wireless service provider and the customer's attempt to access this information is often frustrated. We have heard several anecdotes from consumers that their service provider requires the customer to prove that they did not authorize a transaction for premium services. This is unfair and can be corrected by requiring service providers to prove that all charges on the bill are legitimate.

78 Turning now to the issue of changes to contracts.

79 One source of great frustration for consumers is unilateral contract changes to terms or services, such as unilateral price changes or reductions in usage limits while under contract. The Draft Code attempts to provide clarity surrounding consumer rights if the service provider amends the contract. As drafted, both options allow service providers to unilaterally change any term of the contract.

80 Section D2.1 requires further improvements to work for consumers. As a starting point, consumers expect that when they commit to a contract for a term period, their wireless service provider will fulfill the terms of that contract for the duration of the term. When the service provider unilaterally imposes a change to the terms of that contract, such as a price increase or less included usage, this is viewed by consumers as a breach of fundamental terms of the contract and unfair. Section D2.1 of the Draft Code should prohibit such changes.

81 Certain key terms of the contract should never be unilaterally changed by the service provider. This could be achieved by prohibiting changes to the terms of the contract specified in D1.2 of the Draft Code. Where a service provider attempts to make such a change, the change would be void and unenforceable.

82 If the Commission opts for one of the two options as drafted, clarity is needed as to whether a "penalty" or "cost or monetary penalty" includes the "early termination fees" described in D3.3.

83 Option 2 of the French version of the Draft Code offers more clarity as prohibiting "frais ou pénalité pécuniaire", which would include "frais de résiliation anticipée".

84 For consistency, the English version of the Wireless Code should accord with the French language and include "early termination fees". Thus, if the Commission opts for one of these options, it should clarify that a customer who cancels their contract due to a unilateral change by their service provider can do so without paying "early termination fees". Since a consumer cancellation at any time during a contract triggers the "early termination fees", this clarity would provide a distinct right for consumers when the service provider unilaterally amends the contract.

85 If the Commission allows a service provider to amend any term of the contract, we strongly recommend that the onus fall on the service provider to secure express consent to the change, otherwise the change will be of no effect. This would effectively restore the balance of power between the consumer and the service provider and eliminate the practice of unilateral changes that consumers find offensive. If a service provider wants to change the contract, they must ask the consumer and the consumer must explicitly consent.

86 J-F...?

87 MR. LÉGER: On contract expiry, termination and renewal, conditions regarding the termination of contracts by consumers are a key consideration in meeting the Consumer Principles that John enumerated earlier.

88 The Competition Bureau has expressed concern on the impact of switching costs arising from incumbent service providers' long term contracts. We have also expressed similar concerns in this proceeding. The Bureau has proposed limiting both the term of long-term contracts and the extent of termination charges.

89 The Commission has not, as yet, proposed a reduction in the length of the maximum term of long term contracts. A shorter term, combined with improvements in provisions governing termination charges, would likely enhance the competitiveness of Canada's wireless services marketplace. We remain advocates of contract terms no longer than 24 months.

90 In Item D3.3, the Commission has set out two options regarding the calculation of termination charges. In our view, both mechanisms very generously compensate the service provider for the value of the device subsidy. In today's marketplace, virtually all such subsidies offered by the incumbents focus on the handset or other device. Even with the benefit of the subsidies, however, consumers appear to be paying a significant premium for the privilege of avoiding paying for the device up-front.

91 Regarding the calculation of termination charges, Section D3.3, we prefer Option 2 as it appears to cover a broader range of scenarios and appears easier to explain.

92 We have three reservations regarding Option 2, however.

93 First, terminology. The words "economic incentive" do not appear elsewhere in the Draft Code. For greater certainty, we suggest the use of "device subsidy", which is used in key section D1.2 and in the Personalized Information Summary.

94 Second, in instances in which the consumer received no device subsidy, we question why the consumer should have to incur a charge when terminating -- in this case, the lesser of $50 or 10 percent of the monthly rate for unexpired months. If the customer received no device subsidy, we see no reason for penalizing her or him in this way.

95 Third, in the discussion concerning Monthly Term Service, the proposal that the minimum monthly credit be set on a 48-month basis appears to overcompensate the service provider unless the rate was set on the basis that the cost of the phone would be recovered over 48 months. As far as we know, today no service provider recovers the cost of the handset or device over such a long period.

96 Regarding automatic renewals, Item D3.4, we favour Option 1, provided that the following sentence is added after the second sentence:

"A fixed-length contract cannot be extended or renewed during its term by a service provider unless a consumer provides express consent before the contract expires."

97 The change we are proposing would do away with situations in which the consumer is misled into a new 3-year contract mid-term without explicit consent, as often happens today.

98 Alysia...?

99 MS LAU: Good morning. I'm going to be discussing phone locking this morning.

100 We believe unlocking one's phone is central to consumers' liberty to have control over their services and to be able to select the carrier that best suits their needs. We echo the individual public comments made throughout this proceeding that have consistently stressed that phone locking should not be allowed at all.

101 Many consumers noted that when they sign a fixed-term contract they are obligated to pay termination charges if they decide to end the contract early. They see prohibitions or constraints on unlocking as additional and unnecessary restrictions on their use of their phone.

102 The wireless service providers have put forward a variety of reasons for locking their phones. We find the carriers' arguments difficult to reconcile, given the range of inconsistent unlocking policies followed by different providers. The wireless carriers have not proven that the practice of locking is based on genuine technological or subsidy recovery requirements.

103 We sympathize with many of the individual public respondents who said that unlocking should be allowed from day one.

104 Between Options 1 and 2 proposed by the CRTC, we prefer Option 1. However, we would modify Option 1 so that it allows consumers to unlock their phones immediately.

105 We are also concerned that Option 1 allows service providers to set any rate they wish when a customer requests to unlock his or her phone. A high fee could render the right to unlock meaningless. We have suggested Option 1 provide that service providers only be allowed to charge a rate based on cost recovery to a reasonable amount.

106 Finally, the Commission, directly or through CCTS, should also monitor unlocking fees to ensure they are not exceeding cost recovery.

107 As noted by the Competition Bureau, unlocking should not effectively operate as a barrier that prevents customers from switching carriers.

108 J-F...?

109 MR. LÉGER: On enforcement, we believe that achieving the guiding consumer principles to which John referred earlier will require a Code which is based upon effective enforcement and we have some suggestions in this respect.

110 We agree with the recommendation in the Draft Code that primary enforcement responsibility be exercised by CCTS. Based on experience to date, CCTS has proven to be efficient and responsive in dealing with consumer complaints. We expect that enforcement of the Code could add to CCTS's workload and this should be reflected in matters such as staffing and budgeting for the organization.

111 In the Draft Code, the Commission has adopted, without change, the remedies CCTS is currently authorized to exercise. We encourage the Commission to consider giving CCTS additional flexibility. For example, CCTS should have the ability to hear complaints filed on behalf of a group or class of customers. CCTS should also have greater flexibility in granting compensation. It is our understanding that today CCTS can only compensate for direct losses.

112 Under the current CCTS process customers must be specifically identified in a complaint and must have authorized that the complaint be filed on their behalf individually in order to be entitled to relief. For a carrier, being found to be in violation of the Code in such circumstances means that even though a practice may have harmed many customers, only the consumer, or consumers, who originated the complaint would be entitled to a remedy.

113 This approach will provide little incentive for carriers to comply with the Code. We note in this respect that some of the carrier practices which we hope the Code will stop have been very lucrative.

114 For example, CCTS complained in three successive annual reports about carriers' requirement for 30 days advance notice of a consumers' decision to terminate a contract, without effect on the incumbent service providers' practices. We then filed a complaint before the Commission about the 30-day notice requirement and still nothing happened until in this proceeding the incumbent service providers finally decided to abandon the practice.

115 Giving CCTS the flexibility we propose would add to the impact of CCTS' decisions on carriers, to the benefit of all consumers.

116 Finally, we trust the CRTC will monitor the reports of CCTS regarding the Code compliance and will be both active on its own initiative and responsive to applications from concerned parties about widespread or fundamental Wireless Code violations, as stated in Draft Code section C1.

117 John...?

118 MR. LAWFORD: PIAC/CAC/COSCO believe that this hearing is a unique opportunity to create a durable, workable and fair Wireless Code that will truly protect all Canadian wireless consumers for a long time to come. We must seize this opportunity and work through the hard questions now.

119 Our responsibility is to respond to the needs of wireless consumers; you, as Commissioners, must consider how to crystallize these needs in a Code of Conduct that service providers will respect and uphold and the CRTC will steward. We come in hope today that you can heal the retail wireless market and we all are here, consumers, carriers and governments, to work together towards that goal.

120 We now welcome your questions on any part of the Code. Nous sommes maintenant prêts à répondre à toutes vos questions sur n'importe quel article du Code.

121 Merci. Thank you.

122 LE PRÉSIDENT : Merci beaucoup pour votre présentation.

123 What I'm hoping to do, I will start off with the bigger picture and then we will drill down into some of the details. By the nature of it, it may seem a bit disjointed because there are a lot of detailed questions.

124 But I did want to start off with the big picture question and ask you to think into the future once we put into place, after this collaborative process, a Code and it has operated for some time, what would success look like?

125 MR. LAWFORD: Success for us would be increased satisfaction of consumers and that could be indicated either by polling or even by the health of the retail market.

126 Once these matters I think are out of the way we would like to think that competition could occur on what matters and that these distractions -- and they are almost artificial distortions of the market when you have super high termination fees for example. When those are out of the way the carriers can compete on what matters to consumers.

127 So we are hoping that there will be much more clarity in terms of what consumers are buying and that they will start to get in the habit of comparing and switching, moving and that this will aid in the competition in the market in general.

128 MS LO: I would add to that, that we would like to see consumers feel that they have power in the market. So I think a lot of what we are hearing in terms of consumer complaints right now is driven from their feeling that they are powerless in this market against the service providers.

129 So what John has described are indicators of consumers feeling like they have some ability to bargain for their own personal needs.

130 THE CHAIRPERSON: Okay. I'm going to push you a little bit on that because those are very wonderful aspirational objectives, but if we are indeed in a number of years going to evaluate whether we achieved it, I think I need something a little bit more concrete than that.

131 So you have talked about polling and health of the retail, what exactly do you mean? Like have you given some thought as to the sorts of things, the indicia, the metrics, what we should be looking at specifically?

132 I will tell you why. In another life I used to be involved in government programs and it's important to evaluate those programs regularly and the most successful evaluations were those where when we started off we actually had specific objectives to meet, you know, maintain something, raise something, increase something.

133 So could you help me a little bit more?

134 MS LO: We think it's very important to articulate any assumptions that the Commission builds into the Wireless Code. So, for example, if we are going to say that increased competition is the ultimate objective of the Code and we believe that a competitive market will offer for example different term lengths for contracts, then you need to be able to measure whether the market is actually providing that.

135 If, for example, we are trying to give consumers clearer rights so that they are able to exit their contracts and understand how the termination fees work, we need to know if consumers are actually exiting their contract. If we give consumers the ability to refuse changes that are imposed by service providers, then we need to know if consumers are actually using their rights to refuse those changes.

136 So I think any time you build an assumption into the Code that assumes that consumers will use it or that assumes a competitive objective in the marketplace, I agree that we would need to build and articulate the metric that measures whether those assumptions are met.

137 THE CHAIRPERSON: Have you given some thoughts as to the exact performance measures that would...?

138 MR. LAWFORD: We did address some of them in our comments around paragraph -- our initial comments -- 244. We supported, at that point, a measure of the number of times a wireless service provider attempts to change contractual terms as defined in the Code, the corresponding number of consumers who consequently sought a remedy and the number of complaints generated about the new contractual term and that was one example.

139 In preparing for this we had some other ones which we had batted about.

140 If it's of any assistance, we did prepare a list -- we weren't certain whether this question would come up -- which we would be happy to provide to you as an undertaking.

141 THE CHAIRPERSON: Right. As we announced earlier, there is an additional comment period and maybe some of the details can be brought into the exact question, but I do think we have to drill down and give those performance measures so we know.

142 I take it your position, though, to get whatever those metrics are, you are saying that a survey would be the way to evaluate?

143 MR. LAWFORD: That's one way but, as Janet quite rightly pointed out, there are a number of junctures where you are making a decision, a value decision about whether the Code is based on this or that principle and those assumptions I think can be teased apart. For example, if there is no prohibition on 3-year contracts the number of people who continue to complain about length of contracts, that might be an indication that we want to track.

144 MR. LAWFORD: But using a survey that could come up with some others is also a good way.

145 THE CHAIRPERSON: Is the number of complaints a relevant matter to be assessed?

146 MR. LAWFORD: Where the Code builds in an assumption that one or the other approach for consumers is better, then I think, if complaints come on, if you will, the path not chosen, I believe that could be an effective measure of whether it is working or not, because if complaints mushroom up in another area, when the code has chosen a particular path, that could be a good indicator of whether it is effective or not.

147 MS LO: Certainly, I think, any complaints that go to CCTS would be of use. CCTS has a wealth of information, and if they are finding that consumers are reading the code as written in a particular way, but carriers are not exercising or implementing it in that way, then the number of complaints on that particular section could demonstrate the vagueness or the lack of perhaps certainty that consumers have in that area.

148 Part of the challenge in developing metrics is, because we don't know what the code will ultimately say, it is hard for us to suggest what the metric should be without seeing the code.

149 But we will certainly undertake to, in the comment period, address these issues.

150 THE CHAIRPERSON: Right. You mentioned in the first answer you gave the amount of switching occurring between carriers. Do you have a view as to what the percentage is or --

151 Are, in fact, churn rates indicia of a dynamic marketplace?

152 MR. LAWFORD: I would think so, and it has historically been extremely low, at around 2 percent.

153 Part of it is due to a lot of other mechanics: how many carriers there are in the market, who gets what spectrum, and where and when. Right?

154 But certainly making it easier for consumers to terminate, knowing what the termination charge will be, I would think would lead to situations of positive -- I will call it positive churn, where they test the market and look for better carriers, simply because they were frightened out of their minds to have to face the termination fee at this time, and would be more -- would be braver in the future to actually try the market out.

155 THE CHAIRPERSON: Could it be, though, as well, that if you don't switch, it's because you are satisfied?

156 How do we calculate that?

157 MR. LAWFORD: I guess, at that point, you are going to start looking at complaints about -- you are going to have to start polling consumers at some point and seeing whether they are satisfied with their carriers.

158 I am sure that the carriers will also be doing the same thing. Hopefully they will be adding packages that respond to people's needs.

159 Keeping track of the way the packages develop, I think, would be also quite interesting. I am not sure that is done at the moment.

160 MR. LEGER: If I could add perhaps an additional perspective, in a dynamic marketplace you would expect service providers to be actively chasing after these customers.

161 Now, the way the rules are set up today, it makes it very difficult for a customer to even consider switching because of the high termination charges that subscribers face. But when we speak of the anticipated impact, in a sense, again, a marketplace that encourages service providers to go after that business because there is a reasonable chance that the customer is available, because termination charges are not difficult to cross a bridge, that should contribute to, again, a more dynamic and a more innovative marketplace.

162 THE CHAIRPERSON: Perhaps it is because of the job I have, but it seems to me that I see a great deal of advertising and publicity campaigns out there by carriers and service providers to, I guess, keep, maintain, build their client base.

163 Isn't that indicia of a successful marketplace?

164 If there were such barriers, surely they wouldn't be spending this great deal of -- this considerable amount of money on advertising campaigns.

165 MR. LAWFORD: Well, that gets you in the store. It gets you in the store.

166 But, then, when you get in the store -- here is an example. You have the phone at zero dollars, a three-year contract.

167 You have the phone, you can pay the whole thing upfront, and you don't have that three-year commitment.

168 If you ask for two years, forget it. They don't offer you a two-year plan.

169 I am sure the carriers will say that they do, but if they offer the two-year plan -- let's say that you got your phone completely subsidized at three years. Well, if you try to take it for two years, they are going to charge you, on a $600 phone, $590.

170 So you are not really getting a real option for two years, and I would think, given the public comments in this proceeding, that the carriers should be chasing after people who want two-year contracts, but we don't see that.

171 THE CHAIRPERSON: Okay. I will move to another subject matter, but I think it is a point that I wanted to make, not just to yourselves, but others, that if we are going to evaluate this policy, I think that we have to --

172 I take your point that we don't quite know what is in the code, but at one point we need to have concrete, measureable outcomes that we will be able to measure in a quantitative way, to find out if we are on the right track.

173 Let me move to the locking and unlocking of devices. In your presentation, you said that you preferred Option 1, if I am not mistaken, but then moved on and redefined Option 1 entirely, to something completely different, in a sense.

174 Am I reading that correctly, from your position? What you basically want is that there should be an immediate right of unlocking, a bit like we proposed in Option 2, when there is no subsidized device.

175 MR. LAWFORD: Yes, it has been whittled down to zero time, but carriers can still provide the phone locked.

176 We are not saying that all phones should be provided unlocked by default, we are saying that they should be allowed to provide them locked, but that the consumer has the right to unlock it from Day 1, with a reasonable fee, which I think is more like Option 1.

177 It doesn't matter whether it is more like Option 1 or not, that's what we are proposing.

178 THE CHAIRPERSON: And you suggest that there could be a fee for it, but just a cost recovery fee.

179 MR. LAWFORD: Yes, I understand that some work has to be done on the database for the IMEI, and you have to go and link it up and take off the carrier-specific identification on the phone, and that does require a technician of some kind to do. It's not a database that consumers can go in and access themselves.

180 So we expect that carriers have some cost there, and we are just saying a reasonable amount.

181 And it is also on the consumer to ask to have the phone unlocked, so we are not saying that all phones should come unlocked by default.

182 THE CHAIRPERSON: Would you just leave it at that, it has to be on a cost recovery basis, or do you see some role for the CRTC to get involved in setting those rates?

183 MR. LAWFORD: Not in setting the rates, but what we tried to make clear is that CCTS could monitor complaints about -- if the code said cost recovery, or reasonable cost recovery, if there were then complaints that someone was charging $55, there is no way that is cost recovery, that could come back up through CCTS to be reported to the Commission as an issue, and then that would be dealt with.

184 THE CHAIRPERSON: So there is no suggestion that the Commission would get involved in any of that rate-setting, and that seems contrary to our decision to have forborne.

185 MR. LAWFORD: That's right. So this is skating as close as you can, if you will. It is saying that we would like to have cost recovery, and the companies can certainly say "Our costs are this much for unlocking phones."

186 However, we think there has to be some reasonable limit on it, and if consumers are complaining, from a particular carrier, that the unlocking seems to be extremely high, such that it is acting, in effect, as a barrier, that should be reported back to the Commission, and that would be offside of this section.

187 THE CHAIRPERSON: Right. Perhaps I will move now to some of your comments about preventing bill shock and the tools to monitor and manage usage.

188 There are two ideas on the table, and they are not necessarily exclusive, but the idea of having monitoring tools, online monitoring tools, there may be some costs and technical issues associated with that, and timeliness as well.

189 There are mechanisms associated with notification alerts, when people reach certain levels, and then there are some ideas around self-set caps.

190 If I understand you correctly, you favour a default at 50, but because, in fact, some of the consumer groups that you represent may be a bit more vulnerable financially, you suggest that one could set it at a lower level.

191 Do you find that the online monitoring tools actually add, or could we just go along with notification alerts and usage counts?

192 MS LO: If I understand your question correctly, you are wondering if the pull notifications are as necessary or if the push ones are a preference?

193 THE CHAIRPERSON: When I refer to monitoring tools, they would be online, so that one could either, through a Smartphone, I guess, or on a fixed device, go and actually check where we are at in the usage level.

194 MS LO: The monitoring tools are useful. We have heard from consumers that they are useful, but they are not as effective, from what we have heard, as a cap would be, if that was available in the market.

195 We have heard a fairly strong sentiment from consumers that they prefer some kind of proactive mechanism to notify them with their handset, so the push notification, and also a cap, some ability to set a cap for additional fees.

196 THE CHAIRPERSON: The reason I am asking is because, of course, everyone would like a myriad of tools, but there are costs associated with that -- there are technologies -- and one would hate to, at the end of the day, adopt a code that actually creates costs for the service providers and, in fact, results in more costs to consumers.

197 So, in a sense, if push came to shove and you had to rank these, I take it that self-set caps and notification alerts are what are more important to you?

198 MS LO: Yes, I think that would be correct, the proactive notification mechanism.

199 As well, in the market right now, we haven't seen any offers of ability to set caps for all of the additional fees. So that is one area where the market has not evolved, to provide those tools in a way that is manageable for the consumers.

200 So, yes, if push came to shove, we don't like choosing between things that we think are useful for consumers, but we would certainly opt for push notifications, proactive notifications on approaching limits, as well as a cap.

201 THE CHAIRPERSON: You seem to take a strong position about mobile premium services, and putting the responsibility a little bit more on the service provider.

202 What is the responsibility of the actual consumer to make sure that they are not choosing things and then denying that they have ever chosen them?

203 I mean, it's -- one could suggest that some people not realizing what's the duty of a consumer to inform themselves?

204 MS LO: There's a bit of a moral hazard component here because, you know, yes, we agree that consumers must take some responsibility to ensure that they are aware of what's happening with phones and any charges that they're authorizing. But if that authorization is not obtained in a clear manner, then it -- we think it's unfair to require the customer to pay that charge and I think you can sort of see how some of that unfairness is played out. The Competition Bureau has taken a view with respect to the premium services. Our report noticed a lot of consumers who have made these complaints, and we also noticed that this is one of the most common complaints that goes to CCTS as well on the wireless service component.

205 So we do agree that consumers need to be aware when they're authorizing charges, but it seems that for premium services in particular there have been a number of challenges in ensuring that consumers are always informed when they are so-called authorizing those charges. And some of that comes from the way they're advertised. Some of that also comes from the consumer's understanding of what's included in their plan. So unlimited text message something a common feature and it's not always clear that premium text messages fall outside of the scope of unlimited text messaging.

206 THE CHAIRPERSON: So when you say that you've heard a number of anecdotes that's on page 6 of your presentation, you're saying that it's more than just anecdotes, you're basing yourself on the CCTS' --

207 MS LO: We hear a number of complaints from the CCTS. And our report -- when we speak to the anecdotes, that's referring to the report that PIAC completed last year on premium text messages.

208 THE CHAIRPERSON: When reading this, one might get the -- you mentioned at the beginning of your -- we're trying to get the right balance, the right -- the sweet spot. Reading these comments on page 6, one might conclude that you're actually trying to shift the burden more onto the service providers and that they bear the risk. Is that a fair reading?

209 MS LO: For premium services, yes, these are third party charges. They often show up on the bill as a line that reads "Third party charges". They don't describe necessarily where the charge is coming from, which company it is. The customers that we've spoken with spend hours on the phone trying to get from their service provider details about which -- you know, what company that these charges are coming from. And some of the customers we've spoken to have been very frustrated in trying to obtain any of the evidence that they would need to dispute the charge.

210 So we're basically asking for a scheme, in our view, that aligns with the 1-900 service -- sorry, the 1-900 charges that exist for landline. So this would in effect put the onus on the service provider to prove that the charges were actually authorized. If they cannot prove that, then they must waive the charges.

211 We've also noticed for premium services in particular sometimes the charges are not high and they're not -- we're not talking necessarily hundreds of dollars, although sometimes we are. A lot of the times the charges may be $5, $10, 15. So there is an element of fatigue on how much effort it takes by a single consumer to dispute a charge. At some point they're being told by their service provider, you know, do all these things and then come back to us and we'll talk. And we're talking a lot of time before they can potentially seek resolution.

212 THE CHAIRPERSON: Okay. Let's now turn to terms of contract, and here my first question is about the beginning of the contract. And I take it you're of the view that there should be a cooling off, a buyer's remorse type of provision. Am I reading that correctly, that that's your position? Okay. I saw some question marks in the faces across the way. Is that a unilateral issue? I can see a situation where somebody purchases a device and subscribes to a service and finds out that in fact where they live the service just doesn't reach -- the network isn't there and there's all kinds of difficulties. That's an objective sort of situation. Are you thinking, in terms of cooling off or buyer's remorse, a more wide sort of an application? Is it in fact a unilateral decision that a consumer might make and say, look, I've thought about it and 15 days later or 10 days later, whatever the term is I've changed my mind?

213 MS LO: Yeah, we think it certainly does align. We would want to see a cooling period embodied in the Code and we recognize that a lot of consumer protection legislation that exists provincially will address and mandate cooling off periods for certain situations that they understand to be pressure sales. And we would agree that this would fall into one of those. So it is an important right that a consumer must have in order to assess whether the service is actually something they're comfortable with. Because we're talking about a very long-term contract as well, a 15 day cooling off period would be appropriate.

214 MR. LAWFORD: We thought that this particular provision did a very good job of striking about the right balance and that's why we agreed with it. Rescission rights are pretty standard in consumer protection and that's what this is. Fifteen days is probably long enough to try out most services in your example. I would hope that the consumer would try out the voice feature in the location they intend to use it.

215 The only fiddling perhaps you could have there would be some kind of extension for people with disabilities, who might take longer to try out all the features or have special needs. But apart from that, 15 days, a certain number of minutes, I'm sure the carriers will tell you, is probably they don't want someone having 14 days worth of phone time on the network and just handing back the phone after 15 days. But apart from those reasonable limits, I think 15 days is probably a pretty good period for people to have a pure rescission right.

216 THE CHAIRPERSON: See, I understand in certain circumstances you give where there's an objective inability to use -- it's almost a fundamental breach, isn't it? That there's a fundamental breach that you can't -- you're not even receiving if you can't connect to the network or whatever. I mean, in contract terms it seems to me that that's -- there's an objective reason. Am I to take it that you're taking the position that without reason one could unilaterally pull out? Is there not a risk of abuse?

217 MR. LAWFORD: Again, when you're talking moral hazard, what -- you're usually balancing it off against something else. And part of the thing that you're not hearing when you think about it, well, is it the customer's responsibility, well, there is this situation, like, with blank spots where wireless coverage is bad. And in the store they'll -- the agent has no idea, will often talk and say, oh, yeah, sure, it'll work where you are no trouble, but they don't know for sure. So who's going to bear the risk? And this is all about who bears the risk. So we're saying in the early days, when the company is quite genuine about supposedly satisfying the customer and getting them the right plan and getting them into the right phone and all that stuff, they should bear that risk for that short period of time. And, yeah, the consumer doesn't have to give any reason, and the reason why is it's more appropriate that the carriers bear that risk.

218 MS LO: And I would say that the limit that currently exists in that provision is sufficient to ward off any concern about abuse because it does say that there -- I believe that there are some conditions around how much the consumer can use within the cooling off period in order to exercise that cooling off period.

219 THE CHAIRPERSON: Indeed in terms of how much they're using it, but it doesn't seem to frame unilateral decisions. I'm not sure if somebody -- but just an extreme example, somebody would decide, well, in the end I would rather go to the other device that another carrier has or I got a better price and they just return it, without any objective reasons that the original contract could not be fulfilled for technical objective reasons. It seems a bit unilateral.

220 MR. LAWFORD: The only way, I think, to address that would be to go back to 1.2, it has to be in the contract, and then you have to start specifying things like and it has to work for voice and it has to work for data, and start specifying chapter and verse about what the consumer must get or else they can then rescind. Is it not just easier to say that during the opening few weeks a consumer can rescind? It's not a long period. As long as they don't overuse the network, we'll set, you know, some reasonable amount of network usage in there. It's a much more practical way of solving that problem. I think that you'd create a lot of confusion and difficulty and fighting over what's fundamental to delivering the service.

221 MS LO: If I may also, sometimes -- and I understand that the Code will address the clarity of contracts, but the consumer may not have the opportunity to read whatever they're presented with even if it is clear and shorter, that's what we're hoping, but the consumer may not have the point -- an opportunity to review all of that at the point of sale, as well as all of the related policies, like fair use, et cetera. So the 15 days is reasonable to give the consumer an ability to not only test out their service and the ability to use it but also to review their interest in entirety and ensure that they're comfortable with everything they are consenting to.

222 THE CHAIRPERSON: Okay. Now, in terms of renewals, the draft code spoke about sending prior notice at 90, 60, and 30 days. Do you have any concern that that's excessive? We hear a lot of people concerned about getting too much spam and -- or do you think one needs actually 90, 60, and 30 days for people to focus?

223 MR. LEGER: It seems to us that that kind of notice is reasonable. We bear in mind that these contracts are typically fairly long term, number one. So the customer has been under contract for three years. He or she is now getting a notice 90 days before the end of the contract, that, well, you should maybe start thinking about what you're going to want to do at the end of that contract.

224 To the extent that there are opportunities to consider a number of factors, including what else is available in the marketplace, it seems to us that those types of notices or reminders, I guess is what they are, are a good thing and service providers themselves should probably be comfortable with this because they'll want to be reminding their customers that, you know, your contract is coming to an end and here are opportunities for you to think about again what the options are.

225 So we don't see this as a form of excessive, I guess, harassment of the customer. Quite to the contrary. It's an opportunity for the service provider to remind the customer and to start thinking about how they want to, you know, position the next period of service to the customer, and it provides the customer a reasonable time to evaluate his or her options.

226 THE CHAIRPERSON: And notwithstanding the fact that your proposal, as I understand it, is, Option 1, slightly modified again, so at one point it ceases to be Option 1, but that it would actually -- one would need to expressly opt in at the end of a fixed term contract.

227 MR. LAWFORD: No. What we're trying to say, I think, is during the term of the contract when you get the call saying we have this new plan, whatever, whatever, if you, at the moment, make any kind of noise or don't say anything, often you find yourself signed up to what you thought was a new feature and you were actually renewed for a three-year term. That's what our added sentence is trying to get at.

228 So if, during that term, somebody tries to pull that stunt on you, you have to explicitly consent to a new three-year contract. You get the contract and then you go forward because you've given express consent.

229 If it gets to the end of the term -- say you've got a three-year contract, and we do want it to roll month to month --

230 THE CHAIRPERSON: You mentioned -- okay. So I understand that a little clearer now -- more clearly.

231 Early device upgrades is something we've heard a great deal about, which it happens to be cases where somebody gets a device upgrade and it has the consequence of extending the contract, according to the terms of the contract. Granted, not everyone may be aware of the details of it, but they presumably had agreed to this sort of doing -- way of doing things.

232 Do you think that -- sorry?

233 MR. LEGER: That aspect is quite important. The device upgrade without the customer understanding that a three-year -- a new three-year contract came with that is something that consumers -- and I think you've seen this in the comments that have been submitted to the Commission -- the consumers find quite -- in many cases, quite objectionable.

234 THE CHAIRPERSON: Right. And it's precisely why I was going to ask you the question. Is that something, device upgrades, that needs to be -- as something that's occurring with inadvertent, in a sense, extensions of term contracts, fixed-term contracts -- is that something that we should maybe drill down and specify more clearly?

235 MR. LAWSON: I'm not sure. We thought that the added sentence we were putting here would effectively take care of that, but if you're going to do belt and suspenders, then it might be something to consider.

236 MS LO: I would add that the host of provisions that the Code has at the front end on, you know, describing the contract and the personalized information summary requiring that to be provided, I would expect that a service provider going forward, if they wanted to offer a customer a device upgrade, would present them with a new personalized information sheet that explains again the device subsidy for that new device, all that warranty information that needs to be in the personalized information summary, and that also would state the end of the new contract and walk that through so the customer understands at that point the device subsidy is actually a three-year -- a new three-year contract on that day.

237 THE CHAIRPERSON: Right. The reason I'm asking about the upgrade to devices is there seems to be -- and seems to be no end of it -- new devices being introduced, and that's fine. It's great. It offers new offerings.

238 And there is obviously a great deal of appetite for a portion of the marketplace to get the new devices, and that seems to cause -- it's at that point there seems to be some frustration. And that's why I was wondering whether that particular issue required a little bit more light to be drawn out as opposed to -- we've heard cases where individuals, for instance, in a group plan, they change one number in the plan and that gets rolled over.

239 I mean, that's -- that would be odd except, you know, when you have a university student, I guess, changing calling areas. But the upgrade of the devices is one that occurs a great deal and is perhaps of greater concern?

240 MR. LAWFORD: If it's something the Commission would consider as a separate section, it may be smart. We'll put some thought towards it, certainly, for our written comment.

241 THE CHAIRPERSON: But I'm asking whether you're hearing that from those that you represent.

242 MS LO: Yes, absolutely. It is unclear to people when the contract is extended -- or sorry, renewed with a device upgrade, so that would be a key point.

243 THE CHAIRPERSON: Okay. Now, terms of contract. Length.

244 Perhaps I read your original submissions less -- and I didn't understand them, but I didn't get the feeling that you were against three-year terms. But this morning, clearly you are taking that position.

245 Perhaps I misread. Doesn't matter. Now you're -- it's a dynamic process, and you're now taking that position that you think we should limit it to two years. Is that correct?

246 MR. LEGER: We've -- from the outset in our comments, we've expressed a preference for a two-year or at least the ability for customers to be -- to have greater choice in terms of the terms -- the contract terms in terms of contract duration that are offered.

247 Now, we look around and we look at other jurisdictions and we see that three-year contracts appear to be somewhat unusual, I guess to say the least. And we then look at our own work, the research that we've done, and we look at the flexibility that Canadian service providers, or at least the incumbents, appear to be offering to their potential -- actual or potential subscribers. And we basically see it boils down to pretty well three years or, you know, basically cash up front.

248 And we believe that more flexibility is needed in this respect, and the customers seem to be saying that. It's a fundamental element of providing more dynamism to the marketplace.

249 MR. LAWFORD: And I just add, the bundling makes this complicated as well because most of the bundles services, internet and -- and television bundles, the other services are all two years, but this wireless stuff is always an extra year. So it's sort of like dragging you along and making it difficult to leave your bundle. And so consumers are frustrated in that sense.

250 You know, the -- if -- another thing to keep in mind, if you will, as well is that we don't know at this stage what other provisions will be in the Code, so if all the best things that we see in this Code come through for termination and for caps and notifications and all this thing, it takes away a lot of the sting of a three-year contract because you can leave after two years, four months. You know exactly how much it's going to be. And if there's a unilateral contract change, for example, you can leave with your phone and you're good.

251 That takes a lot of sting out of three-year contracts but, you know, we have to be responsive to the people who have said in the online consultation and otherwise that two years is too long.

252 Why they're saying two years is too long is what the interesting question is. Is it because the devices don't tend to last more than two years and don't make it to three years? Is it because they're stuck in a bundle with other things for two years but their phone goes longer?

253 If we got everything else in the Code, maybe some of the sting would be out of it, but we're not at the -- we don't know what will be there yet, so we're responsive to the public comments on the two-year issue.

254 THE CHAIRPERSON: And you have -- you raised exactly the questions I was about to ask you as to why do you think -- because it does seem to be a trend out there that consumers that are participating on our online comments are preferring two-year contracts or would rather prevent us -- they would want us to prevent three-year contracts which, as you pointed out, is the practice in some foreign jurisdictions.

255 We have to be careful, of course, people who participate on online activities like that may not be representative of the broader class. You know, for instance, your coalition does represent maybe groups that don't have that perspective.

256 Do you have anything to help us understand why, in light of the technology or the -- you know, do, in your view, devices break down after two years of use? Does it depend on the use, or is it just the normal refresh cycle of the device industry?

257 MS LO: We don't have any evidence as to why consumers' devices don't seem to be last past two years, but we do note that, of course, the manufacturer warranty that's offered is often restricted to the first year.

258 Now, that aside, we have read the public comments. Obviously, we understand there may be some limitations as to the representative of that. And we wouldn't -- we haven't taken the position that three-year contracts should be prohibited, but we would like to see options evolve on the market to offer two years. And we just simply don't see that now.

259 And when they did exist in the market, there was really no logical point for a consumer to take a two-year contract because the device subsidy didn't seem to line up. I was really only saving, you know, $10 on the full price of the phone and then I didn't really get a discount on the rate, so if you did the math on how much I would pay for the phone plus my monthly rate for the duration of the contract, it didn't really make sense for consumers.

260 So it really pushed the consumer to the three-year contract and didn't, in their view, offer a reasonable offer -- reasonable option to have a shorter contract.

261 So we would like to see the two-year evolve somehow.

262 THE CHAIRPERSON: I understand that. Help me with something I'm struggling with, and we all are up here, is on the one hand, we want to give more choices to consumer, and yet there are a number of advocates in this proceeding that are saying the first thing to provide more choice is to remove the choice of a three-year contract.

263 And I'd like to see your perspective on this.

264 I would have thought that for certain lower-income consumers, the ability to have a three-year contract actually provides more access to them because it's a way to, in a sense, finance the device.

265 MR. LAWFORD: Yeah, we're sensitive to that. And a certain portion of customers do well with three-year contracts, but then they also get into the cycle of -- it's kind of like loans -- of having to take an X loan from the same carrier over and over and over again.

266 But what's not being provided, as Janet pointed out, is for those that would be quite happy to pay a little more up front and yet know they're getting out of their contract after two years, that's just not developing in the market.

267 How would you get there? I mean, you could try to be creative. We've kicked around ideas such as if you offer three -- you could stipulate, CRTC, if you offer three-year contracts you must also offer a two-year option or a one-year option based on this amortization scale that we're going to put in for -- hopefully put in for termination fees. That's an idea.

268 We didn't come out and support it in our remarks because we're leaving room.

269 And maybe I'm not giving much guidance for you to develop something, but that's -- we are sensitive to folks that do well by the three-year plan, but it has some issues. But we just don't see the two-year and one-year developing without a little push.

270 THE CHAIRPERSON: Okay. So it really depends on the global situation.

271 MR. LAWFORD: Yeah. And as I pointed out on my other remarks, if -- there are a number of elements in the Code which take the sting out of a three-year contract if they are there.

272 THE CHAIRPERSON: Okay. But I take it that I'm reading you correctly in your hesitation that in fact for certain individuals three-year contracts is an advantage that we should be -- we should hesitate or not jump too quickly in removing that choice from consumers of being able to have a three-year contract if other things could be improved.

273 MR. LAWFORD: I mean, theoretically, I suppose, if phones lasted longer and you didn't -- and your needs weren't going to change for 10 years there could be 10-year contracts developed, I suppose. But, frankly, it's a little bit difficult to say that that's going to develop.

274 Yes. I'm just saying, yes, we like the fact that some consumers do well by three-year contracts but the other shorter ones are not developing, we think, because of the factors which we have given you about bundling and so on and so forth.

275 THE CHAIRPERSON: It's how it's marketed in the marketplace.

276 MR. LAWFORD: Yeah.

277 THE CHAIRPERSON: Okay.

278 Let me now turn to the Personalized Information Summary which right from the beginning in your original proposal back in December you provided -- I think at the time you termed it a Critical Information Summary and you have seen what we -- the Working Document proposal.

279 Globally, is it the right content? Should things be added or removed?

280 MS LO: We're very happy with the first draft of it. At the back of the chart that we provided the Commission with this morning we also added a couple of additions where we would like on the Personalized Information Summary.

281 THE CHAIRPERSON: Okay.

282 MS LO: Those are highlighted in yellow, so just addressing the duration of the warranty, one.

283 Two, clarity around what the total monthly costs will be if the contract is renewed on a month-to-month basis.

284 And then, finally, it would be great if the Personalized Information Summary directly pointed to the Code as well as CCTS as a redress mechanism.

285 THE CHAIRPERSON: Okay. Well, I'll pick up on that because that was a question as to whether or not the Code should be referenced in this document.

286 Is there not a risk, as good as the Code will be, to overwhelm the consumer with paper or, you know, references to websites? I mean, we can have the contrary. It's fine to give lots of information but we could overwhelm the marketplace as well with paper.

287 MS LO: We understand that risk. We certainly don't want to go there.

288 That said, if we are presenting the Personalized Information Summary because we think that at minimum this is what every consumer will read when they sign a contract, then a reference to a Code as well as their mechanism for recourse if they don't think this aligns with their rights is necessary in the Personalized Information Summary.

289 And we noted our idea for the Critical Information Summary, as submitted in our comments, comes from Australia and in Australia they require the ombudsman to be required in that critical summary.

290 THE CHAIRPERSON: Okay. And I take it -- well, maybe it's a question: How standard should these Personal Information Summaries be from one company to the next?

291 I would have to compare from one -- should it be standardized to the point where you could basically from one carrier to the next except for maybe branding and trademarks and logos of that sort that they should actually be the same?

292 MS LO: Apart from the various ways they might have set up their business and their marketing, we do think that these core ways of expressing these concepts should be universal amongst providers.

293 That is really important because, as you say, we would like to see a market in which consumers can go to a provider, get a summary of the contract they would be expected to sign, take that away, go to another provider, see what they could get and do that cost comparison to see which provider will best meet their needs.

294 And maybe it'll turn out on comparison that the monthly costs is not comparable. Maybe it'll turn out that the coverage map is not comparable and that is ultimately what makes the decision for the consumer.

295 But it is really important if we are going to lock consumers into long-term contracts that before they do so they understand and can compare everything in the marketplace.

296 THE CHAIRPERSON: Okay. It's been suggested that some people think Canadian consumers should be getting a paper copy. Others have suggested you should have this authenticated digital copy.

297 Your views on this?

298 MR. LAWFORD: I'd say our thinking has evolved a little bit.

299 We had originally proposed in our comments that it should be paper for the reason that consumers tend to hold on to paper and they will have some physical evidence. They could -- I don't know -- crash their computer or lose all sorts of things as well. We thought of all those ideas and then for a lot of consumers as well that just prefer paper.

300 But the Code section as written now requires that if a customer wants a paper copy they can get one at no charge. So we think that covers a large portion of people who just would like a paper copy and as long as it's clear to them that they can ask for that and there is no charge, I think we're fine.

301 We have heard from carriers and seen their submissions that it's very expensive for them to set up paper printing situations and if the customer requests an electronic copy in particular, then they don't feel they should have to also give them a paper copy if the customer is fine with an electronic copy.

302 Our concern is that the whole contract is in that electronic document, not, "Here is your contract. Oh, and follow this link to find the rest of your contract". That is what we find very offensive.

303 So your contract at the moment, the terms of service are here and the various policies there and the rest of the contract is there and maybe even a different part of it's here, and then they change something on the website because they are allowed to and that affects your contract and you have no idea what your contract is.

304 We'd like one document authenticated, if you wish, to say: This is the contract. I have some evidence of it.

305 THE CHAIRPERSON: And so, in a sense, we aren't necessarily being prescribed by paper but that choice should be available. I take it that you --

306 MR. LAWFORD: The choice should be available to ask for a paper copy.

307 THE CHAIRPERSON: Okay.

308 MR. LAWFORD: And other formats for folks with accessibility needs at no charge.

309 THE CHAIRPERSON: And do you foresee -- we've talked about the standard-looking or near standard-looking Personalized Information Summary. Do you see this being a document before it becomes contractual that it would be remitted with the clients so that they can shop around and compare?

310 MS LO: Yes. We think that it should act as an offer: What I am providing you or what I, as a carrier, am committing to potentially provide you with and our best plan as discussed.

311 Because it drives the customer to seek the plans that best meet their needs that they would like to guarantee for the duration of the term.

312 THE CHAIRPERSON: All right. Now, I'm going to bring you back to the issue.

313 If that in fact is what's occurring, and maybe you even have the view that that should be mandated, but if people are getting these terms ahead of actually making the contract, why do we still need these clauses about buyer remorse other than for really technical reasons?

314 If they are actually having the information ahead of time, getting the summary, this will be the essence of your agreement and they can take it away and think about it, why should we -- there is a paternalism that worries me here that we, on top of that we have to protect them, make them free even though they may not want to be.

315 MR. LAWFORD: I follow your train of thought. However, I think it really does -- the rescission right really does line up with problems with the way it works in practice, you know, and in theory and practice there is a difference.

316 The offer is like theory but taking your phone home and trying it out is practice. If it doesn't work whatever is written on the piece of paper that's what the rescission right is meant to cover.

317 THE CHAIRPERSON: But you always give the example of a technical impossibility.

318 MR. LAWFORD: And there is always, I suppose, a moral hazard that the customer just sees a better offer two days later and goes and switches, sure. And I'll just flat out say to you, that's the risk you take with the rescission right. It's one we're quite happy to live with.

319 THE CHAIRPERSON: Okay.

320 All right. Let's move to privacy. This has been a subject and I'm trying to -- you know, it's hard to keep up with a very dynamic hearing where positions are changing as we go. Interesting.

321 The Office of the Privacy Commissioner suggested that the Code exclusively make references to PIPEDA. Do you have views on this? I know PIAC and other organizations have been involved in privacy issues. Do you have views?

322 MR. LAWFORD: I think it would be sensible to add a reference to the actual Act and I can see why the Privacy Commissioner is concerned because even today, you know, people don't know that they can complain to the Privacy Commissioner about what's going on.

323 But our concern always at PIAC is sort of from the other side and that's that the Commission keep up its privacy jurisdiction which is different from PIPEDA and way better in some circumstances. And that's why our addition to this privacy component is to refer to confidential customer information which is like calling records and such that may or may not be something that PIPEDA deals well with and the Commission has special rules on.

324 But I follow the Privacy Commissioner wanting to have a reference to her Office and the Act that is actually, if you will, reflected in most of that Code section without our addition.

325 THE CHAIRPERSON: Again, here we are struggling because you know here we want to have clarity in contracts and we keep throwing in more and more. I mean, this contract is going to be a foot long, a foot high if we print it, if we keep adding things.

326 MR. LAWFORD: Well, I guess the Privacy Commissioner -- I don't know. I'll let them speak to it in their written or if they're coming. I don't think they are.

327 But I can see where they're coming from and I see your point as well. What's in that section is effectively what's in the Act, but I can see why they would be uncomfortable that no one got a reference to them. It's coordinating to redress mechanisms so there will always be a little overlap.

328 THE CHAIRPERSON: Let me now talk about -- ask you some questions about security deposits. Your original submission was very concerned about the current policies being discriminatory against low income individuals and those without established credit.

329 So if I'm looking at your position now are you generally satisfied that what we're putting forward is meeting your needs?

330 MR. LAWFORD: Yes.

331 THE CHAIRPERSON: Other than the specific records issues that you originally raised.

332 MR. LAWFORD: Right. Yes, we're generally content with it because it does mirror largely the wireline deposits and disconnections codes.

333 So the service provider has to give you reasons why they are asking for a deposit and then I'm assuming the customer can say those aren't good reasons and try to reason or argue with the carrier. Usually they don't have much leverage but in any case -- and that they should review that every six months for example to make sure that the reasons are still there.

334 So if they required a security deposit from me and I've been meeting my bills quite diligently ever since then, I don't see why they should continue to hold it after six months.

335 So we're pretty content with the wording that's there. However, we did want to make sure that the CCTS monitored as a separate complaints category anything under security deposits so that if there were an issue you would be flagged to it pretty soon.

336 THE CHAIRPERSON: Okay.

337 So, the three-month cap deals with your issue of discriminatory practices for low income?

338 MR. LAWFORD: Again --

339 THE CHAIRPERSON: At one point, you know, I understand you're trying to defend the interests of a number of consumers and you represent sometimes lower income consumers in that group, but the fact of the matter is companies have a legitimate interest as well to make sure that people pay their bills.

340 MR. LAWFORD: Sure. And I would like to see some companies taking more of a chance with certain customers and maybe developing that as a business model, but it does get a little tenuous to say that that absolutely has to be mandated.

341 That's why, again, we're asking that if there's complaints about consumers saying, well, I was asked for the full price of the phone and $500 as well, that that's excessive, and then if Mr. Maker passes that up the chain in his report that that would come to your attention.

342 THE CHAIRPERSON: Okay. Which leads to my questions on disconnection. You mentioned the fact that on security deposits it was quite similar as what was occurring on the wire line side of things.

343 Should that be -- because, as we know, more and more Canadians are using wireless as a substitution -- should that be a guiding principle to us, that to the extent possible what happens both in terms of security deposit and disconnection practices that we should be trying to align those?

344 MR. LAWFORD: That's exactly our submission. We did a lot of good work in CISC on the deposits and disconnections code and I believe it's functioning fairly well.

345 The main principle is the one that we kept quoting in our comments which is potential consequences to the consumer of disconnection are far more serious than any pecuniary loss to the carrier in most cases and that disconnection is extremely serious, and because a large and growing number of consumers are using only a wireless phone, they should have the same rights to not be disconnected as a wire line customer.

346 THE CHAIRPERSON: And capping reconnection fees as well?

347 MR. LAWFORD: Reconnection fees.

348 THE CHAIRPERSON: Yes.

349 MR. LAWFORD: Yeah, should be a reasonable amount.

350 THE CHAIRPERSON: What evidence do you have on the need to cap reconnection fees?

351 MR. LAWFORD: I have some evidence if I go dig in the files when we did the work on the Deposits and Disconnections Code of largish fees being asked for after a disconnection.

352 As I recall, the fight in that particular committee was with certain carriers who weren't originally ILECs who may have had policies that were more aggressive on that and they eventually came around to a reasonable limit on reconnection fees.

353 THE CHAIRPERSON: So, for instance -- okay, so maybe you'll have a chance to follow up on that in your written comment if you have that evidence.

354 MR. LAWFORD: Yes, please.

355 THE CHAIRPERSON: On the one hand -- and maybe your position has evolved, but I took it that your original position was you wanted the wire line code to be applied with amendments.

356 Again, to one point, you know, when you say I agree, but I want something different, you're not quite agreeing. And, so, you've talked about capping reconnection fees, no disconnection while there may be a complaint before the CCTS, three-hour reconnection. I mean, that's not the standard and yet earlier you were saying you wanted it standardized.

357 MR. LAWFORD: Sure. And then the Code came out after the comments.

358 THE CHAIRPERSON: Okay.

359 MR. LAWFORD: So, you've come up with a provision which we can live with, is effectively what we're saying.

360 THE CHAIRPERSON: Okay.

361 MR. LAWFORD: And if we review the deposit/disconnection Code on both sides in the future, then we'll make those submissions.

362 THE CHAIRPERSON: Perfect. I just wanted to make sure that I understood that your position had in fact evolved on this point and that's good, so that we, as you said in your opening remarks, focus on working on something that's common to all.

363 I move now to -- let's see. Been at this for a while. I have a few more questions and we're not going to be...

364 Okay. Why don't we take-- it's 10:30, we'll take a short break until 10:45, if that's okay with you.

365 Thank you.

--- Upon recessing at 1030

--- Upon resuming at 1045

366 THE SECRETARY: Order please. A l'ordre, s'il vous plait. Nous allons être prêts à recommencer.

367 THE CHAIRPERSON: Thank you.

368 So, I've got just a few other questions and then other Panel members will have questions, no doubt.

369 And my next question deals with amendments, and here I'm going to make a distinction between prepaid and not prepaid.

370 So, with respect to prepaid -- well, first of all, I take it that your view is that prepaid obviously should be covered by this and you've mentioned, and others have mentioned, a notion of key or material elements to prepaid contracts and I was hoping you might be able to help us decide what are the key or material terms of a prepaid contract, in your view?

371 MR. LAWFORD: One of the things that struck us as odd with prepaid, of course, is that the little cards don't put the rate you're paying for voice on or data and it seems to me that's a very fundamental thing and that is what is also being aimed at in the term -- sorry, post paid, the post paid requirements that said, well, here's your price for this, here's your price for that. Why can't you do that and brief me, why can't you tell me what my voice minutes are going to cost?

372 And perhaps some of the carriers will come up here and say, well, they adjust it monthly or daily or by the minute, for all I know, but that to me seems to be a term, how much is my voice minutes going to cost, how much is my data usage going to cost on this prepaid card, that should be a term that's specified.

373 Also, the expiry date for purchases --

374 THE CHAIRPERSON: Right.

375 MR. LAWFORD: Yeah, of the -- sorry, of the cards.

376 THE CHAIRPERSON: Well, I'll get to that in a second. And for non-prepaid, in your submission, page 7, you talk about certain key terms of the contract should never be unilaterally changed.

377 MR. LAWFORD: Mm-hmm.

378 THE CHAIRPERSON: At the top of the page there. Again, key terms. What are you exactly referring to when you talk about the key terms?

379 I take it here you're talking about not necessarily prepaid?

380 MS LO: That's right. In this context, we are referring to unilateral changes to fixed term contracts and, in our view, key terms would be what is set out in the Draft Code under 1.2, so the issues that must be addressed by the contract.

381 THE CHAIRPERSON: Some unilateral changes might be to the benefit of the consumer; what do we do with those, like a lower rate?

382 MS LO: Yeah, we noticed that in the Draft Code, the Code appeared to be fairly neutral in its treatment of changes, so it didn't want to make a value assumption as to whether a Code is beneficial to the consumer or not.

383 We think that if you offered a beneficial change to the consumer, they would consent to it, and I don't think that our scenarios that we saw through them have eliminated that possibility.

384 So in that way, it wouldn't be a unilateral change, it would be a beneficial change and the consumer can decide if it's beneficial for them or not.

385 THE CHAIRPERSON: Okay. So whether it could be argued to be beneficial or not, your view is one has to -- it can't be unilateral if it's a key term, one has to opt into it?

386 MR. LAWFORD: Yes.

387 THE CHAIRPERSON: Which probably simplifies my question, because I know some other parties -- and you might want to get ready for this one -- are saying that if it's to the benefit of the consumer you should do it. But sometimes it could be a package of things, some things to up, some things go down, and I was wondering how we were going to do that.

388 But in your view, to avoid all that, you just say consent on key terms?

389 MS LO: Yes. We think that when you put something in -- if the Code said a positive change for a consumer is allowable, then the service provider -- it leaves it open for the service provider to define their change as positive where a consumer may see it as negative.

390 So, for example, a service provider could say, we're giving you more minutes, it will cost you a little more, but we're giving you more minutes and that's a good thing on balance. So a customer might disagree if they don't actually need those minutes.

391 So "positive" is sort of up for definition and by ensuring that there is consent you don't need to deal with if it is positive or not.

392 THE CHAIRPERSON: Okay.

393 Now, I'll get to the point you just raised about prepaid and the expiry date of that. I take it your position is Option 2 on D1.3, which is that there should be no expiry date on --

394 MR. LAWFORD: That's absolutely correct. We think that the expiry of minutes is abusive.

395 THE CHAIRPERSON: What if it's very clear on the card? I mean there is a liability, a pending liability for the carrier there that they have to carry, from an accounting perspective, for a number of years, not knowing is somebody is going to use the leftover credits on there.

396 MR. LAWFORD: The same liability is faced by any retailer with prepaid cards under provincial legislation.

397 THE CHAIRPERSON: But by the same token, recently the Minister of Finance on prepaid credit cards suggested one year from activation.

398 MR. LAWFORD: That's credit cards.

399 THE CHAIRPERSON: I'm going back to -- I know it's just a proposal right now but the point is, you know, simplicity will help a dynamic marketplace and if it's unlimited in one place and one year in one place and a year and a half in another place, I'm afraid, you know, depending on what market you're in, whether it's prepaid credit cards or prepaid phone cards, why unlimited in this particular instance? Why would we do that in this case?

400 MR. LAWFORD: We preferred Option 2 because it more accords with consumers' expectations. They feel that they are buying minutes on the network and it's like to them -- we believe that consumers think that's like buying a gift card. It's like I have paid for it and I should get to use that money whenever it suits me.

401 And if there are technical challenges carrying credit balances, carrying phone numbers forward, that's for the companies to factor into their prepaid service.

402 And I imagine your next question will be, well, won't that raise the price of prepaid cards?

403 THE CHAIRPERSON: That's a good question.

404 MR. LAWFORD: Possibly.

405 THE CHAIRPERSON: Why don't you answer that one?

406 MR. LAWFORD: Possibly, but, you know, it's -- the benefit to consumers from the, I'll call it confiscation of minutes after a set period, I think consumers find extremely offensive. So we are going with Option 2.

407 THE CHAIRPERSON: I understand that but do you have any evidence as to how fast people are actually using them? Because I mean, there may be issue if we set -- for instance, it's a year or two years, whatever, you set a date and that's the standard. It might align with what actual practices are out there.

408 MR. LAWFORD: It might well, and I'm afraid we don't have that research.

409 THE CHAIRPERSON: Okay. That may be a question we will be able to ask other participants.

410 On enforcement you're obviously looking to the CCTS to provide administration. In your oral presentation you talked about these groups or classes of customers being able to do collective complaints.

411 I need to understand a little bit more the nature of your concern because it was my understanding that one could have a collective complaint and I would just like to understand your position.

412 MR. LÉGER: As we understand the CCTS' rules, in order for a group of customers -- I'll call them -- to originate a complaint, they still need to be identified as individuals. That's at least our reading of what we understand to be the rules of procedure or process of the CCTS.

413 Now, the harm we see with this -- and we have cited as an example the 30-day termination interval that a number of carriers were imposing -- is that, you know, for three successive years CCTS comes back and says, well, we've been handling a number of complaints, we've actually awarded some decisions to complainants, and lo and behold, the next year, same complaint, basically same report back from CCTS, and then the third year same report back from the CCTS.

414 So we look at that and we're wondering, well, okay, so what is the impact of the CCTS' decision in those instances? There are complaints that are being handled and we have to think that the benefit to the carrier of not responding or not changing the practice outweighs whatever cost or embarrassment or -- well, whatever cost results from the complaints.

415 Now, we see the current rules -- which, again, as we understand them, require the complaint to identify the complainants -- to place a fairly high threshold in order for the CCTS to be able to address these situations and particularly in situations that we think are systemic.

416 And the 30-day interval was a good example. It was a common and firmly held practice by the carriers that they would do this with all of their customers. So there's no doubt that there were large numbers of customers that were impacted by this. And then when the comments came in as part of this process, we saw that there were quite a few complaints about this.

417 So all that to say -- and I realize it's a bit of a roundabout story here -- but all that to say that we feel that providing CCTS greater flexibility to address these types of systemic issues is needed.

418 Again, in order to -- you know, when a practice is found to be problematic, how many decisions should CCTS have to issue before carriers finally start to think, well, maybe we need to rethink our position here?

419 And in this case it simply wasn't happening. It also wasn't even happening when we went to the Commission. We filed a complaint in December 2011, we're now in February 2013, and only very recently did the carriers suddenly think, well, maybe we should give up on this 30 days. And a lot of process has gone through over that. You know, basically CCTS has been complaining about this since I think it's 2009. So we're now in 2013.

420 THE CHAIRPERSON: So would it be similar -- it's not identical, far from it -- to a situation a bit like we have in class actions, that currently John, Mary and George can be named complainants, but, I don't know, Anne, who has not been part of that named group, is not benefitting from that unless she actually does a complaint, and what you're suggesting is that somehow the CCTS could provide a remedy or some action in their ministration of the Code that applies to a non-named individual as part of a group collective complaint; is that correct?

421 MR. LAWFORD: Yes.

422 THE CHAIRPERSON: And you think that's the appropriate place to be doing that as opposed to the Commission?

423 MR. LAWFORD: The Commission was available for the 30-day complaint that Jean-François mentioned and I would hope it would still be there for applications brought by a group like ours for example, but the CCTS is on the ground and can take these things more quickly.

424 We're suggesting that that idea be explored because it may be more efficient to do it at that level than to always be coming to the Commission with applications, and if we were able to bring it there it might be a better way to approach the issue.

425 THE CHAIRPERSON: Okay. We will be able to ask questions a little later on to the CCTS when they are appearing.

426 The question mark I have in my mind right now is the difference between perhaps broader policy decisions as opposed to a mere -- well, not mere, I don't want to undermine it, but an administration of a Code and a practice if we start having broad -- people who don't complain suddenly having rights. It seems a bit odd, don't you think?

427 MR. LAWFORD: I think that if they have the same issue it's not odd at all. So somebody should get back $9.95 for some overbilling. And we know there are 100,000 other customers who didn't complain, it seems that they all deserve $9.95. So that's where we're aiming at.

428 THE CHAIRPERSON: Right.

429 MS LO: We also note that there's a number of scenarios where there may not be a billing or a monetary component attached for it. So, for example, if a service provider, God forbid, does not send a personalized information summary to their customers, are we going to rely on that complaint escalating all the way to CCTS to realize that that service provider is not doing that component of the Code even though there's no monetary remedy arguably for the customer at the CCTS end?

430 So you're really relying on an individual consumer to take a breach all the way to the end, which can be a very time-consuming and complicated and frustrating process.

431 So we think that the efficiencies in the group could help solve and ensure that there is an -- basically ensure that there is an incentive for the carriers from the get-go to implement every aspect of this Code.

432 THE CHAIRPERSON: Okay.

433 MR. LÉGER: And, also perhaps an ability -- I'm sorry -- an ability on the part of the CCTS to convey a message to more than, you know, the one carrier involved with the one complaint if, as part of its investigation, CCTS comes to the conclusion that this is in fact a broader problem.

434 THE CHAIRPERSON: Indeed, but it reminds me a lot -- and by analogy, I was raising the class action situation where how you are a part of the class is actually articulated somewhere, in the rules of procedure somewhere, and it doesn't just apply to anybody who had a contract with a carrier. It would apply, you know, to similar facts, similar circumstances, similar situations, or else -- anyways, it seems like something that we need to develop a record on in the course of this week and afterwards, so it would be good so we know exactly what we are getting into if we are following up with your proposal.

435 MR. LAWFORD: Yes, I think that's sensible.

436 THE CHAIRPERSON: Okay.

437 Now, on implementation I clearly understood your call that we have to implement as quickly as possible all aspects of this. Others of course have suggested that certain implementation aspects will take time to phase in and we will test that because one has to presumably put in certain practices, certain updates in business and software and informatics and all that sort of thing. So we have people in the range of implement now, not soon enough to 24 months and of course we will have to look at that.

438 But from your perspective, if we were going to slice it and say what two -- and I hearken back to my original comment of actually getting to success in a tangible way within a period of time -- what would you do as Phase 1 as the most critical issues?

439 MR. LAWFORD: It's a little difficult for us to say this is what can be done in terms of what carriers capabilities are, that's why we are sticking to saying the whole thing at a future date, ideally 6 months or less, what you select.

440 MR. LEGER: I think there is an interrelationship here between two aspects of this thing and number one is the implementation date and number two is the grandfathering issue. I know you have approached it as two separate issues, but we think that there is a certain interconnection between the two.

441 Now, the idea of a Phase 1, Phase 2, Phase 3 conceptually perhaps has some promise, but I guess we look at this whole exercise and we say: Well, the Commission has come to the conclusion that market forces were not delivering, I guess, a set of terms and conditions that are appropriate to reflect the needs of consumers. And we have a number of instances, I guess the 30-day termination notice case is perhaps the most obvious because we went through it, but where there is clearly a problem there.

442 I guess it's awkward for us to suggest to the Commission: Well, you know what, consumers should live with this problem for two years, but this one they should live with for a year.

443 Contractually we wonder, even for the carriers, whether this is doable, because they are going to be facing a situation where they are explaining -- or their marketing services where they are going to have a stepped process of implementing a variety of measures and we think: Geez, this is a recipe for chaos and confusion.

444 If we are going to have a set of rules, Commission sets a date and that's when the new set of rules comes into effect. And there is no challenge there with -- you know, I mean all these things -- the terms in a contract often they are like gears, like if you affect this one you change this one, well, that will have an impact on this other one and we see the intellectual work that would need to go in to make sure that there aren't any unintended consequences in this type of stepped approach is a genuine challenge.

445 So at the end of the day we understand that this is quite a fundamental change in the marketplace, the coming into place of this Code, but in terms of the alternatives it seems to us that this is possibly the most manageable way of doing it, even though it may not appear at this point to be that.

446 THE CHAIRPERSON: Yes. So your view is, while recognizing that there may be implementation timelines that say you can't just snap your finger and it's done tomorrow, we will have to test how long that will take with our discussions with the carriers as this proceeding keeps going, but you are saying we should just, at whatever reasonable timeframe -- I think you mentioned 6 months, but we will see if that's doable -- then the whole thing switches over to the new reality.

447 MR. LAWFORD: Yes.

448 THE CHAIRPERSON: Okay. That's good. That's clear. I'm not sure it's practical, but it's clear. We will have to test that a little later on.

449 So those are my questions for now and I'm going to turn to my colleagues to see if -- okay, Commissioner Molnar first, please. Thank you.

450 COMMISSIONER MOLNAR: Thank you.

451 Good morning. Just a couple of questions.

452 I noticed in your reply that you had been supportive of the notion of separating the device from the wireless service contract and I didn't hear you speaking of that today.

453 Have you changed your mind on that?

454 MS LO: Sorry. Separating the components?

455 MR. LAWFORD: In the reply.

456 COMMISSIONER MOLNAR: Right. So you would have separate contracts for your device or handset and your actual wireless service?

457 MR. LAWFORD: That's a longer term development which I think is a little bit difficult to structure through this Code right at the moment, but we are supportive of the idea and I suspect certain other parties will say that should be developed somehow.

458 But yes, stepping a little bit away from it at this point. Ideally a market would develop for the device that would be free and open and not -- you wouldn't always be getting them from your carriers and you would be able to walk over with your device to another carrier and get a plan that would fit. It's maybe a couple of steps ahead of where we can go with this Code. I think that's what we are saying.

459 COMMISSIONER MOLNAR: So let me ask you then, if you think it's a couple of steps ahead, what future steps are you seeing?

460 MR. LAWFORD: Well, firstly you have to have termination fees handled. So at least, if you will, letting people change a contract before three years; the next step is unlocking so I can move to another carrier. Consumers get in the habit of unlocking their phone and then switching with this reasonable termination fee, then the market starts to work.

461 Then I think device sellers would start taking a chance on making big orders of phones. At the moment, Bell, Rogers, TELUS are going to order 100,000 of these, 200,000 of those. If I were a retailer I wouldn't want to go up against those folks that seem to have kind of a lock on the market. So I'm thinking that those two rights for example would help lead us there eventually, but I'm not sure we could snap our fingers and do it overnight. Some others might have a different view.

462 COMMISSIONER MOLNAR: So it would be your expectation if we put in some of these safeguards that would enable a more competitive and easier churn, if you will, that that sort of situation could develop just through the real competitive marketplace without any intervention?

463 MR. LAWFORD: Well, I never say there will be no intervention in the future, that's not good for us, but it's possible and it's something you would want to watch to see if it develops, sure.

464 COMMISSIONER MOLNAR: Okay. Thank you.

465 My other question relates to your position on unlocking. You suggest that it should be unlocked on day one and I just wonder, could you explain to me what the benefit is -- or what would be the need to unlock your phone on day one while you were under an arrangement to have service from a provider?

466 Is there some benefit?

467 MR. LAWFORD: Sure. I buy my iPhone on Friday, know I'm going to -- I'm going to the United States on Saturday and I would like to use a SIM card in the United States, but I can't do it if it's locked so I would call the carrier the same day and unlock it. But it could come locked. The carriers could order thousands or hundreds of thousands of phones at the unlocked rate and then for the few customers who immediately ask to have it unlocked, they would unlock it and they get their reasonable unlocking fee, everyone is happy.

468 COMMISSIONER MOLNAR: Okay. Thank you.

469 THE CHAIRPERSON: Madam Poirier...?

470 COMMISSIONER POIRIER: Yes. I would love to continue on that topic of lock and unlocking cellular phones.

471 Do you believe that the wireless carriers usually ask for devices to be locked before they get it or do you think that manufacturers could provide them with unlocked handsets?

472 MR. LAWFORD: We are non-experts. We don't order hundreds of thousands of phones.

473 COMMISSIONER POIRIER: Okay. You don't know.

474 MR. LAWFORD: I won't say we don't know. We have heard that there are arrangements for buying these things in large numbers and that you get a different price when you buy a whole bunch locked than when you buy them unlocked. Why that is I don't know but, in any case, that's the extent of our knowledge on this --

475 COMMISSIONER POIRIER: Okay.

476 MR. LAWFORD: -- and we see in other jurisdictions that phones are either ordered to be unlocked or it is developed that they are unlocked very soon.

477 COMMISSIONER POIRIER: Yes. So it's something we should ask them, because they might have to pay to lock them and then the consumer has to pay to unlock them, so I was wondering if you had an idea of that.

478 MR. LAWFORD: The only thing we have heard second hand is that they may be cheaper for the carrier to take, say, a shipment of iPhones locked, but if they ask Apple for the same size shipment of unlocked phones, it's more expensive.

479 COMMISSIONER POIRIER: Okay. So in some countries I'm sure you're aware that locking handsets is forbidden. For example, we have Chile, Columbia, Singapore, maybe Israel and the Competition Bureau also supports that way of doing things.

480 So wouldn't it be simpler to sell only unlocked cellular phones for the best for the consumers in Canada?

481 MR. LAWFORD: I guess we are going to say yes, in an ideal world it would be. We had some concerns that handset costs would go up or not be offered in Canada right away because those are excuses -- whether they are right or whether they are true or not -- that we believe the carriers would give and we will let them speak to that, but that when they ask for unlocked for example there is a concern unlocked phones will be trafficked from Canada to the United States and other concerns such as that. And for that reason and maybe some other anti-competitive reasons they lock them and they are cheaper locked.

482 COMMISSIONER POIRIER: Yes, okay.

483 But if we distinguish on the bill the device subsidy from the service, wouldn't it make a difference and help to unlock all cellular phones in Canada? Because people would have to pay their subsidy -- they would have a specific contract on that matter -- and pay separately for services. So it could make it easier to unlock cellular phones, don't you think?

484 MR. LAWFORD: Yes, I think it could. Whether we can go there or you can go there, I don't know.

485 COMMISSIONER POIRIER: Yes. It would have an impact on the business model of the industry, naturally.

486 MR. LAWFORD: Yes, and we don't know a lot about that, but I think it would.

487 COMMISSIONER POIRIER: Yes, and for that reason you are --

488 MR. LAWFORD: We are being a little careful, in the sense that those consumers that really want to unlock will be able to do so, but right away, and at a very reasonable fee. So we think that it is a good middle ground.

489 COMMISSIONER POIRIER: Okay. That is your preference.

490 The second topic -- and it's my last one, Mr. Chair -- is about the length of contracts. Again, in the U.S.A. there is a limit, contracts don't last more than two years. It is forbidden.

491 In Europe it's the same thing, no more than 24 months for contracts for consumers.

492 The guarantee only lasts one year, and most consumers prefer to keep their cellular phone only for two years, because they want to change the device.

493 So I am surprised that you are supportive of a three-year contract; maybe for the exception of consumers who might prefer a better deal for three years.

494 Most of the complaints we received were related to contract terms, so I am really surprised at your position.

495 MR. LAWFORD: It is one of those things where we are, again, trying to advocate for all consumers, and as we pointed out, some lower income consumers might benefit from the three-year contract.

496 So, yes, there is a little bit of a conflict. We see the tidal wave of concerns.

497 Some of the concerns about three-year contracts have to do with other things which will be fixed by the code, as written. That is part of our position.

498 The other thing, too, is that we really want this code to lead to offers in the market of two years, or one year, that are sensible, and at the moment the pricing plans are not for two-year and one-year. Either they are not available or, for the better phones, they are just not offered at any kind of reasonable subsidy amount.

499 So we would like to see that develop.

500 If you need to go as far as stipulating that if you offer a three-year plan you must also offer two-year and one-year versions that are amortized on the same device scale, I am just saying that was one thing that we discussed internally and you might want to consider.

501 That's as far as I can go.

502 COMMISSIONER POIRIER: Do you believe that the carriers will offer interesting two-year term contracts if we don't forbid three-year contract terms?

503 MS LO: I would hope that wireless service providers who have read the record of this hearing would have heard consumers very loud and clear that there is a very open demand for two-year contracts that they are not currently meeting.

504 So that is something that we are willing to let the market serve, if we can give them some flexibility and a little bit of encouragement to get there.

505 COMMISSIONER POIRIER: Okay. Previously they had a voluntary code. Did they comply with that voluntary code?

506 MR. LAWFORD: I don't think that a lot of consumers knew about the voluntary code, and I think that Mr. Maker would be better placed to say whether they were following it or not.

507 But, with industry codes, there is always some backsliding, I think.

508 But this wouldn't be an industry code, this is going to be a CRTC code.

509 COMMISSIONER POIRIER: Yes. So they didn't comply with the voluntary code. They didn't adhere to it, most of them. They didn't inform the consumer about it, but you believe that they will provide consumers with a two-year contract.

510 MR. LAWFORD: No, we are saying that if all of the elements in this code that deal with, say, termination fees, notification caps -- that do all of the things that take the sting out of having a three-year contract -- I can leave after two years and one month and I am not going to pay $900. If you know it is only going to be $62, that takes a lot of the sting out of being on a three-year contract, and if you can take your device with you because it is unlocked -- and, and, and -- all of these other things.

511 So we are quite enamoured with the whole package of the code, and we think that the three-year issue is a lot of pent-up rage on the part of consumers who, quite understandably, didn't work through all of these other possible things to fix their situation.

512 COMMISSIONER POIRIER: Okay. This is my last question, because I wanted to add something about handicapped people.

513 We will have a presentation from MAC, and they suggest that the companies should provide à la carte services to make sure that those people who are handicapped can get better services.

514 Do you support that?

515 MR. LAWFORD: I think we do. They have expressed to us the same concern, that customers with certain abilities might need only certain features, and they end up having to buy everything.

516 And, of course, it is an affordability issue and a usability issue, and is it discrimination, yes or no.

517 So, yes, I think that we would like to see the details, but we are generally supportive, yes.

518 COMMISSIONER POIRIER: So the draft code that we have would also go in the same direction as the seven requests made by MAC, Media Access Canada?

519 MR. LAWFORD: As I understand their position, we are generally content with it, and we would like to see the details.

520 COMMISSIONER POIRIER: Thank you very much, Mr. Chair.

521 THE CHAIRPERSON: Commissioner Duncan, please.

522 COMMISSIONER DUNCAN: Thank you.

523 Good morning. I have a question, and it is kind of a detailed question, I guess, in regards to Section D 3.3, the calculation of the early termination.

524 Part of it may be that I am not understanding it, but it seems to me -- and I guess we will just go through my questions one-by-one, but it seems to me that Option 1 would result in less of a penalty than Option 2, because the way I read Option 1, it is referring to the post paid.

525 So somebody is under a contract, they are paying every month, and it says that the early termination fee cannot be more than the amount of the device subsidy, applied toward a device subsidy each month, as set out in the contract, multiplied by the number of full months remaining on the contract.

526 So you don't have to pay -- to me, that seems to be a reasonable amount, you just have to pay what is left for the device.

527 Do you agree with that? Have I interpreted that correctly?

528 MR. LAWFORD: Yes, I think so, but we had some concerns with --

529 COMMISSIONER DUNCAN: I know you mention that it covers more scenarios, this section in Option 2.

530 MR. LAWFORD: Yes.

531 COMMISSIONER DUNCAN: Let me go into, then, my concerns about Option 2. It starts off dealing, first of all, with a fixed term of service for a customer who has received the device subsidy, the economic incentive: "...that the cancellation fee may not exceed the sum of the price of the services provided up to the cancellation date."

532 So assume that I am a customer two years into my contract. To me, "may not exceed the sum of", that first thing, is 24 months times the amount I have paid, because it says "may not exceed the sum of the price of the services provided up to the cancellation date."

533 MR. LEGER: You have already paid that, right?

534 COMMISSIONER DUNCAN: This is just talking about the cancellation fee.

535 MR. LAWFORD: I think we understood that as being -- the month started on the 1st and you cancel on the 17th. You have to pay your service up to the 17th because you have used the phone until the 17th of the month, not that the penalty could be the amount up to that month.

536 The services are billed each month. So you have cleared the balance for last month's services and now you are 17 days into a 30-day month, so it is the 17 days that is referring to that you have to pay. You don't get free service for 17 days.

537 I think that's what that is.

538 COMMISSIONER DUNCAN: Okay. So it might be clearer, then: "...the monthly service provided up to..."

539 MR. LAWFORD: Maybe it would be clearer.

540 COMMISSIONER DUNCAN: Okay. And then it goes on to say: "...and any remaining economic incentive..."

541 In the next scenario, the customer who did not receive an economic incentive, it says: "...will be the sum of..."

542 And that term, "will be", also applies to monthly term service -- both scenarios there. They use "will be" instead of "may not exceed".

543 Do you have any concern there?

544 I just don't know why the wording is not consistent.

545 MR. LAWFORD: That's right, and I think that we do have concerns with it not allowing the carrier to charge less.

546 If it's "up to" or "shall not exceed", then we are much happier than if it is "shall be", this amount is the whole penalty.

547 I would like to see carriers offer less, if they want to keep you.

548 COMMISSIONER DUNCAN: Okay. So, for consistency, and the reason that you have just suggested, you would prefer "may not exceed."

549 MR. LAWFORD: "May not exceed."

550 COMMISSIONER DUNCAN: And I know that you have already addressed the $50.

551 Okay. That's fine, then. Thank you.

552 THE CHAIRPERSON: Thank you very much. Those were our questions.

553 We will take a five-minute break. Thank you for your presentation.

554 MR. LAWFORD: Thank you.

555 THE CHAIRPERSON: We will take a five-minute break to allow the next panel to set up, which will be the wireless association.

--- Upon recessing at 1121

--- Upon resuming at 1128

556 LA SECRÉTAIRE : Je vous demanderais de prendre place, s'il vous plaît. Please take your seats.

557 LE PRÉSIDENT : A l'ordre, s'il vous plaît. A l'ordre. Order please.

558 LA SECRÉTAIRE : Alors, Monsieur le Président, we will now hear the presentation by CWTA, the Canadian Wireless Telecommunications Association. Alors, je comprends que monsieur Lord va commencer la présentation. S'il vous plaît, monsieur Lord, présentez vos collègues aux fins du dossier. Vous disposez de 20 minutes.

PRESENTATION

559 M. LORD : Merci beaucoup. Bonjour, Monsieur le Président, mesdames les conseillères, monsieur le conseiller, collègues de l'industrie, confrères et consours, panélistes et utilisateurs des services sans fil, en bref, bonjour Canadiennes et Canadiens. My name is Bernard Lord and I am the President and CEO of the Canadian Wireless Telecommunications Association.

560 CWTA represents virtually all of the major companies in Canada's wireless telecommunications ecosystem. Our members include wireless service providers, handset manufacturers, builders of network, infrastructure and numerous other companies that develop and produce products and services for the industry and for consumers.

561 I am delighted to be here today to assist in the development of a national code for mobile wireless services that will bring many benefits to Canadians from coast to coast. I would first like to thank the Commission for establishing this important consultation process. As the chair is aware, CWTA has been an advocate and instigator for a national code for some time now and fully supports the commission's effort to bring a national code to formation.

562 Before continuing with my remarks this morning, I would like to introduce:

563 - Jim Patrick, CWTA's Senior Vice President;

564 - Kurt Eby, CWTA's Director of Regulatory Affairs; and

565 - Caitlin Carrol, Manager of Research and Analysis.

566 Très peu de personnes auraient pu prédire il y a 10 ans que la puissance du sans fil allait transformer de manière si profonde la vie des Canadiennes et des Canadiens. Non seulement dans notre manière de communiquer entre nous, mais bien dans chaque aspect de notre quotidien, à la maison, au travail et partout ailleurs.

567 En outre, il est évident aujourd'hui que le sans fil est devenu un moteur principal de l'économie et de la culture canadienne. Au Canada, nous sommes des mordus du sans fil. En fait, nous sommes reconnus comme étant des chefs de file mondiaux pour l'adoption des téléphones intelligents et des tablettes.

568 CWTA recently released a report that quantifies the economic impact of the wireless industry in terms of GDP, investment and employment to Canada. The report found that Canada's wireless industry is of critical importance to our country's prosperity by generating 43 billion dollars for the Canadian; and this was in 2010.

569 The report also determined the wireless industry supported more than 260,000 jobs in that same year. Wireless service providers have invested more than 30 billion dollars to bring the fastest and most robust networks to Canadians. In 2010 alone, the industry deployed 2.5 billion dollars in capital expenditures.

570 Wireless enhances our productivity and our prosperity. It connects businesses with their employees and customers, keeps families and friends in touch with each other and provides Canadians easy access to more information than ever before.

571 Les télécommunicateurs continuent de construire et d'élargir le réseau pour répondre à cette demande massive de la part des consommateurs pour les appareils sans fil et services Internet sans fil. La population canadienne s'attend à pouvoir profiter des avantages de l'accès, de la vitesse et la fiabilité des services sans fil partout et en tout temps.

572 Aujourd'hui, plus de 26 millions de Canadiennes et Canadiens disposent d'un téléphone mobile ou d'un appareil sans fil. Un nombre qui continue d'augmenter de manière significative année après année. Cette demande poursuivra sur sa lancée au même rythme vu que les Canadiennes et les Canadiens ont de plus en plus recours aux communications sans fil au travail et à la maison.

573 As I mentioned earlier, Canadians are among the world's fastest adopters of smart phones and tablets. For this very reason, a national code for wireless services is essential to ensure that all Canadian consumers have access to all the information they need to make informed decisions about the wireless products and services that are best for them.

574 It is also extremely important for wireless service providers to provide clear and consistent information to consumers and to ensure they not only meet, but exceed their obligations to customers.

575 Les gouvernements, les télécommunicateurs, les entreprises et surtout les consommateurs sont tous des parties intéressées à l'objectif que nous visons dans ce processus de consultation. Je tiens à remercier le Conseil d'avoir conçu une ébauche de code pour les services sans fil qui facilitera les échanges qu'il aura avec la population canadienne et ceux que nous aurons aujourd'hui.

576 Il est clair que le Conseil a tenu compte de plusieurs des éléments mis de l'avant par les consommateurs et par l'industrie. Pour sa part, l'industrie soutient fermement la grande majorité des éléments qui composent le projet de code élaboré par le Conseil.

577 Je voudrais maintenant prendre quelques instants pour aborder certains éléments précis du code et formuler des commentaires visant à faire en sorte que le code ouvre la voie à des avantages optimaux pour les consommateurs canadiens du sans fil.

578 In the written proceedings of this hearing, CWTA submitted a suggested code. Our code was based on the principles embodied in the measures found in the Québec Consumer Protection Act and augmented to provide clarity, remove ambiguity and to address the Commission's stated concerns.

579 The drafting of each clause in CWTA's proposed code was also guided by two objectives. One, that telecommunications policy direction to use -- and I quote -- "Measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet policy objectives." And two, the Commission's own conclusion that -- and I quote -- "Consumers need additional tools to better understand their basic rights as well as their service provider's responsibilities with respect to mobile service in order to participate in a competitive market in an informed and effective manner" -- end of quote.

580 We are pleased to see that the Commission's draft code and the options it provides in most cases responds to these two objectives. The Commission's draft code in this proceeding also made clear that the industry and consumers largely want the same outcome. To that point, CWTA recently met with our colleagues at the Public Interest Advocacy Centre. And I want to commend them for their appearance this morning. It's never easy to go first and they did an outstanding job.

581 And we are pleased to report that we agree on many aspects of the Commission's draft code. Specifically, we agree that the majority of the clauses with some cosmetic amendments or clarification in some cases are ready for inclusion in the final wireless code. The clauses which CWTA and PIAC generally agree include:

582 1) the establishment of one overriding national wireless code of conduct;

583 2) the application of the wireless code to all service providers to both fixed and monthly services, to services in bundles and to so-called distance contracts or contracts made over the phone or online;

584 3) the designation of the CCTS as the administrator of the code;

585 4) the use of clear, easy to understand language in all agreements;

586 5) the disclosure of privacy policies and changes to privacy policies;

587 6) the right of consumers to cancel their service at any time. The moment that cancellation is received by the service provider, the limitation of cancellation fees to the remaining value of the device subsidy and automatic renewal of expired contracts on month to month basis only;

588 7) advertised prices that include the total amount the consumer must pay for the services on a monthly recurring basis and the providers will not charge for a device or services the consumer has not expressly purchased;

589 8) that service providers will immediately cease billing for mobile premium services at a customer's request;

590 9) the clauses related to warranties and repairs;

591 10) the rules for requesting and returning security deposits; and

592 11) and how the Wireless Code should be promoted, reviewed and evaluated.

593 L'ACTS soutient également les dispositions du Code au sujet des appareils perdus ou volés, ainsi que la proposition que soient soumis au Code uniquement les nouveaux contrats.

594 With respect to the Code's provisions concerning pre-pair services, CWTA supports the Commission's proposal to limit the application of the Code to disclosure requirements for pre-paid cards and certificates and not to extend other rules clearly designed to apply to post-paid models to pre-paid services.

595 Je voudrais maintenant prendre quelques minutes pour aborder quatre aspects précis du Projet de Code élaboré par le Conseil qui pourraient, à notre avis, être modifiés afin de mieux correspondre aux objectifs énoncés par le Conseil pour cette instance, tout en le rapprochant des instructions.

596 First, the Commission's draft Code suggests it could co-exist with existing provincial legislation governing consumer contracts. CWTA strongly maintains that the objectives of the Telecommunications Act, the provisions of the Policy Direction, not to mention wireless subscribers, would best be served by a single set of federal regulations, not today's patchwork of different provincial laws, regulations, guidelines and interpretation bulletins.

597 We strongly encourage the Commission, as the federal regulator, to implement a single national Wireless Code that supersedes any current or future provincial legislation in this area. A Code that co-exists or overlaps with provincial legislation will provide no clarity to consumers with respect to their rights or service providers' obligations. On the contrary, multiple pieces of legislation will muddy the waters further.

598 The federal government has a responsibility for telecommunications, full stop. Parliament and the Courts have been very clear on this question dating back to the days of the telegraph.

599 Second, the element in the Commission's draft Code governing changes to contract terms could provide greater benefit to consumers by more clearly communicating the customer's rights to make changes in addition to the services -- the service provider's right to make changes. More so than any other element of the Code, the rules governing changes and the way they must be reflected in service agreements must clearly communicate the customers' -- the consumers' basic rights and the service provider's responsibilities.

600 We agree with the Commission's proposal that those elements that can be changed must be specified in the contract. However, as drafted, it is not clear where the consumer can request any changes.

601 CWTA strongly submits that the Code should enact a requirement for all wireless contracts to clearly state which elements of the contract can be changed by the service provider or the consumer.

602 Simply put, under CWTA's draft Code, the only things that could be changed by the service provider are those elements that can be changed or cancelled by the consumer. We recommend that contracts clearly state which services the consumer agrees to lock in for the term of the contract, these are then the "fixed" services, and which services the consumer decides to keep on a month to month basis so they can be changed or dropped at any time. These are then "optional" services.

603 CWTA further supports the CRTC's proposal that any changes initiated by the service provider to optional services have to be preceded by 30 days' notice.

604 We note that the CRTC's Code includes a section on cancellation rights in the section on contract changes. We submit that this is redundant, as there is a separate section dealing with cancellation rights and early termination fees.

605 Respectfully, we don't believe it adds anything to the Code to create a separate right of cancellation specific to contract changes when the consumer can already cancel at any time for any reason.

606 Notification and usage tools.

607 Third, the Commission's draft Code -- excuse me -- would require a comprehensive suite of mandated notification and capping services to ensure consumers are warned when they approach and cut off when they reach pre-set service limits.

608 The CRTC's draft Code identifies a number of potential notification and alert options that service providers would offer to help subscribers manage their usage, and we support all of these options. However, we believe that they should be just that; options.

609 CWTA agrees that service providers should be required to offer tools to enable consumers to monitor and manage their usage of the voice, data, text and roaming. And we believe that any of the options proposed by the CRTC Code could be employed to fulfil this obligation.

610 In fact, if experience in other countries and even here in Canada is any guide, it is our expectation that many carriers would offer multiple notification and alert options to gain a competitive advantage.

611 However, mandating that each carrier must enable all of these notification limits in requiring them to cut off consumers' service when they hit a minimum level would be an unprecedented imposition on Canadian wireless subscribers. This does not exist, to our knowledge, anywhere else in the world.

612 At a time when commercial electronic messages are the subject of a separate regulatory process, this requirement would see a wireless subscriber with a plan that includes voice, text, data and roaming services receive up to 12 notifications per month and a customer who was unaware of the mandated $50 default cap could lose service at a very critical time.

613 The full suite of notification and capping services that would be required under the CRTC draft Code is counter to the Commission's own stated objective for the Code as well as the policy direction.

614 Mandatory opt-out features, by definition, are not tools. They are requirements that limit a consumer's option. And while consumers have clearly indicated an appetite for usage monitoring and management services, we submit that a suite of mandatory notifications and caps is not, and I quote, "efficient and proportionate to their purpose", and interfere in the operation of a competitive market forces. Plus, anyone who wants to ensure that they do not exceed a given level of spending on wireless services has the option today through pre-paid service.

615 Mandating the application of pre-paid business model to a post-paid service removes service options for consumers.

616 Our carrier members will appear before you throughout the week, will expand on the additional range of notification, capping and feature restricting services, many of them already offered in response to consumer demand for these types of options.

617 Not only will these providers be robbed of the competitive advantage they have invested in to establish these options, they would most likely have to amend their current notification system to comply with the requirements of the Code.

618 En quatrième et dernier lieu, je voudrais aborder la question du déblocage d'appareils sans fil.

619 Chaque client du sans-fil devrait être clairement informé des options ou du potentiel de déblocage avant de se procurer un appareil. Toutefois, nous ne croyons pas qu'il devrait y avoir une règlementation uniformisée entourant le déblocage. Le moment où un appareil peut être débloqué dépend souvent de considérations techniques et commerciales, et représente un aspect important du marché de concurrence.

620 En fait, le déblocage d'appareils représente un facteur concurrentiel tant pour les fournisseurs de services que pour les fabricants d'appareils, et on le voit de plus en plus.

621 Le blocage d'appareils est également l'une des raisons pour lesquelles les fournisseurs de services peuvent offrir à un coût initial faible ou nul des appareils qui en coûterait autrement plus de 500 dollars.

622 Le Conseil a reçu des réponses aux demandes de renseignements qui décrivent les diverses politiques de déblocage, que ce soit fournir tous les appareils débloqués, débloquer sur demande pour aussi peu que 10 dollars, ou encore débloquer une fois que l'appareil a été complètement remboursé par le consommateur.

623 Nos membres télécommunicateurs pourront aborder l'impact potentiel du déblocage obligatoire après 30 jours proposé par le Conseil. Certains d'entre eux offrent déjà ce service parce qu'ils y voient un facteur concurrentiel. Toutefois, l'ACTS maintient que d'imposer un règlement omnivalent au sujet du déblocage est inutile.

624 In conclusion, CWTA is pleased that we can come before you today with a very positive message. We join consumer advocacy groups in supporting the majority of the Commission's proposed Code provisions.

625 We are able to support them because the Commission listened to Canadians, it listened to service providers and it tabled a first-class Code that deserves to be the single standard for all consumers no matter where they live from coast to cast.

626 I want to be clear, we are not seeking a Code that strikes a balance between the interests of the industry and consumers. We are seeking a Code that balances market forces and regulation for the greatest benefit of all consumers.

627 A competitive and robust marketplace thrives when consumers have access to information, high quality services and choice. With a small number of amendments and clarification, the Commission will have achieved this balance through a Code that provides the tools and options that consumers demand and that provides flexibility for service providers to respond to new innovations and new business models.

628 Thank you again for the opportunity for CWTA to participate in this consultation. Jim, Kurt, Caitlin and I will be more than pleased to answer any of your questions that you would have at this time.

629 Merci.

630 LE PRÉSIDENT : Merci beaucoup, Monsieur Lord et vos collègues.

631 Madame Molnar va poser les questions.

632 COMMISSIONER MOLNAR: Good morning. And I note it's just morning, so I'm going to begin just asking a few questions of clarification and then perhaps, if the Chair allows, we'll break for lunch and continue after.

633 I want to begin by just understanding your position today relative to the positions you've placed on the record in the past.

634 Have you changed your position on any elements from what you've put on the record in your submission and reply?

635 MR. LORD: Our position is reflected with the last filings that we sent to you.

636 COMMISSIONER MOLNAR: And if I understand what you have just noted, you support the proposed code that was placed out for comment, with the exception of issues related to notification, unlocking, changes to contracts, and there was a fourth, I think.

637 MR. LORD: Unlocking was the fourth one.

638 COMMISSIONER MOLNAR: Unlocking, notification, changes to contracts.

639 MR. LORD: Oh, and coexistence with provincial legislation.

640 COMMISSIONER MOLNAR: Okay. That's right. Okay.

641 MR. LORD: As -- sorry.

642 COMMISSIONER MOLNAR: The other thing I just want to clarify, having gone through your comments here, you noted that you were aligned with PIAC on many elements of the Code and you included in that, "Service providers will immediately cease billing for mobile premium services at a consumer's request."

643 MR. LORD: Yes.

644 COMMISSIONER MOLNAR: This morning we heard PIAC saying that they feel it's the responsibility of the service provider to prove consent. Do you support PIAC's position on that matter?

645 MR. LORD: We believe that the consumer also has responsibility as the provider, and this is a mutual contract, this is a mutual agreement for premium services. And consumers that decide that they want a service, they pay the carrier for that service. And if they say I don't want the service, they did not provide the service, there is a transaction, there is a record of transaction that the carrier can provide.

646 COMMISSIONER MOLNAR: So the carrier has a record of the transaction --

647 MR. LORD: Yes, they do.

648 COMMISSIONER MOLNAR: -- and it can be the accountability of the carrier to prove that transaction, to prove they have express consent through that transaction?

649 COMMISSIONER MOLNAR: The carrier have a copy of that transaction and can provide that copy of transaction.

650 COMMISSIONER MOLNAR: Okay. Thank you.

651 I'm going to begin just a few general questions here before we get into the guts of the Code. Just beginning on the Code itself, the Code is talking about fixed and monthly pre-paid and post-paid. And from your comments here, I take it that you believe that's an exhaustive list of all mobile service options available to customers today? That would cover all arrangements in the marketplace today?

652 MR. LORD: To our knowledge it would, yes.

653 COMMISSIONER MOLNAR: What about pay in advance monthly services? Where do you see those as fitting? Do you see those as pre-paid services or do you see those as monthly services?

654 MR. PATRICK: Those would be pre-paid services by definition.

655 COMMISSIONER MOLNAR: You would see that as a pre-paid service?

656 MR. PATRICK: Yes. If I -- could you repeat the question just to make sure I've got it? It was pre-paid monthly services you spoke about?

657 COMMISSIONER MOLNAR: I said pay-in-advance monthly services.

658 MR. PATRICK: Oh, I --

659 COMMISSIONER MOLNAR: I mean, there's many of those out there now.

660 MR. PATRICK: I think anything pay-in-advance would fall under our recommendations pertaining to pre-paid.

661 COMMISSIONER MOLNAR: Okay. And just clarify for me one more time, if you could, your recommendation regarding pre-paid.

662 MR. PATRICK: We've got a number of areas where we think the Code would apply in pre-paid, in a pre-paid scenario, and a number of cases where it wouldn't. It's quite a detailed chart. I might ask Kurt to go into it in more detail; he's done a lot of work on this. But by and large we think -- and we've seen this in every province that's gone down this road. Every province starts their process by saying, well, we assume everything we do will apply to both pre-paid and post-paid, and there's always a process of going through clause by clause and saying, for example, a requirement that advertising contain a -- or display a minimum monthly balance, it doesn't apply in a pre-paid scenario. That's a post-paid rule. It's designed to -- for post-paid arrangements.

663 So the comparative we've got, and I'll be happy to leave it behind or file it as part of our March 1st comments, we go through the Code and actually detail which elements and which options of the Commission's draft code we think would apply in a pre-paid scenario and which wouldn't.

664 COMMISSIONER MOLNAR: Thank you. And can you just confirm that that listing that you have, and you'll file it in the past, is based on the premise that consumers of pre-paid services deserve equivalent rights and protections as post-paid customers.

665 MR. PATRICK: Well, of course.

666 MR. LORD: Yes.

667 COMMISSIONER MOLNAR: Yes. Okay.

668 MR. EBY: It is, yes.

669 COMMISSIONER MOLNAR: So your listing will only exclude where there is not -- where it's simply not applicable due to the nature of a post-paid service?

670 MR. EBY: Exactly, yes.

671 COMMISSIONER MOLNAR: And could you just -- I'm sorry, would you just say to me again your example as it relates to advertising.

672 MR. EBY: Right. Well, I believe the Commission's Code creates, and this is just one example, a requirement that monthly advertising display a minimum monthly cost for service. A minimum monthly cost in a pre-paid scenario is moot. You've paid upfront, this is the amount of service that you can use. It's not going to be billed later on a monthly basis or any other, you've pre-paid it.

673 MR. LORD: Jim.

674 MR. PATRICK: If I may, a lot of the pre-paid models are not on a monthly basis at all. I mean, you could be paying for a term that's six months in however many minutes. So you can't determine what a minimum monthly cost would be in that scenario.

675 COMMISSIONER MOLNAR: Okay. So I would invite you, when you come back with this, to think clearly about the monthly pay-in-advance models which in fact do have a minimum monthly cost and add-ons to that that you would purchase on a monthly basis, as well as to consider really how -- you know, how this Code could apply to all the different arrangements that are out there.

676 MR. LORD: We will. If I can just add as well we want to make sure the consumers benefit from the choices they have now and we'd hate to see anything proposed in the Code that would eliminate choices for consumers or make the choice for the consumer. I think it's important to highlight the distinction between providing tools and information for consumers for them to make choices versus having rules and regulations that make the choice for them.

677 And when you look at what's happening in the pre-paid world and the post-paid world, they are receiving the same service but they are different types of business models, and some aspects of the Code that clearly apply to a post-paid world do not apply to a pre-paid world.

678 COMMISSIONER MOLNAR: Yes, I understand and I think that's the benefit of having you provide us that information. Once again, looking at the different arrangements because some of the pay-in-advance models that are out there right now really don't look that much different than a month-to-month post-paid arrangement. So I don't think we want to limit their protections, right? I mean, if we lump pre-paid as one simple grouping of services, I'm not sure that that really works with what's in the market today and can evolve.

679 MR. LORD: We'll be happy to provide the information, yeah.

680 COMMISSIONER MOLNAR: You know, you've said yourself and we're very cognizant of the notion that we don't want to limit through this more than necessary what could either be available in the market today or develop over time. Having said that, neither do we want to limit someone's rights and protections simply by looking at things at too high of a level.

681 MR. LORD: And if I can add, and we'll be more than happy to provide the information, it reflects the fact that consumers do have a lot of choices already and they can take a post-paid option, they can take a pre-paid option depending on what they want, and they can set limits themselves. We talk about certain camps, and I'm sure the questions will come up, but, as I mentioned in my remarks, a consumer that is concerned by how much they will pay can prepay in advance to limit their -- themselves, and we think all those options are important to have and we wouldn't want to see anything that would limit those options. So we'll be happy to provide the comparison listing.

682 COMMISSIONER MOLNAR: Thank you.

683 Can I ask you, to your knowledge, speaking of the options, do you know if there are fixed term contracts available today that don't include the device as part of the fixed term? And I'm not just suggesting that you can pay upfront and get the fixed term price but at a different price than with the device. Are those options available today?

684 MR. EBY: Yes, I believe so. I'm fairly confident that they do.

685 COMMISSIONER MOLNAR: They're common?

686 MR. EBY: I said I'm fairly confident that they do exist, yes.

687 COMMISSIONER MOLNAR: Maybe to help me at some point you could tell me where those options exist.

688 MR. EBY: Well, I think our carrier members will be able to provide the details as to what options they provide. And our -- obviously in our association different members offer different options, different programs, different plans, and they'll be able to provide the details of that.

689 COMMISSIONER MOLNAR: Fair enough. And as we go through these questions, at any time where the question is better answered by the particular members, as you know, they're all coming before us, so we'll just -- I don't want to put you in a situation where you're having to answer where your members are not in alignment on any issue, so...

690 I think one -- if I understand right, one issue where your members aren't in alignment, or at least it appeared from your code, is this whole notion of the economic incentive and that it is somehow different than simply a device subsidy, and I wondered if you could just explain that to me a little better. How you make the distinction between a device subsidy and an economic incentive, and whether that distinction actually is significant in this Code as we're looking at it.

691 MR. EBY: We actually -- it would -- I guess that -- the answer to that would be it would depend on what would come out of this Code. As it's drafted here, it pretty much pertains to the -- it is just the device subsidy. Using economic incentive wouldn't -- would have allowed for some kind of marketplace where you could offer a service incentive that would be part of a -- used in some kind of termination formula, but as it stands now that's -- it looks -- that's not really what we're proposing anyway. So we think the term "device subsidy" is more straightforward. And if that is the only incentive that could ever be required to be paid back, then that's what would -- we would use.

692 MR. LORD: If I can add to that. Some carriers will provide different incentives. Like, it will be on a subsidy to the device. You sign up now, you may get three months of free voicemail. You may get some other advantage. You can get a 50 or 75 dollar voucher for peripherals or accessories for your phone and that is an economic advantage that is provided to the customer that is not directly related to the device subsidy. However, when it comes time to calculate the early termination fee, we understand and we support a formula that is based on the subsidy of the device.

693 COMMISSIONER MOLNAR: Thank you. That was important to me to understand because it very -- it is quite confusing and, you're right, there's all kinds of incentives, whether you provide, you know, free activation or six months of data for half price or whatever it is. So that in here is nothing that a consumer would ever have any responsibility as per your proposal to pay back in any way?

694 MR. LORD: No. The -- we accept that the early termination fee would be calculated on the subsidy of the handset, while understanding that there is a difference between the two.

695 COMMISSIONER MOLNAR: Okay. I'm going to ask this to your members but I'll ask you as well. It turns out, when I was just looking at some of the plans offered by some of your members, they're very, very complex in how they define their economic incentives. You know, complex by design, I would suggest, but ... So there's a device savings recovery fee. There's an additional device savings recovery fee. You have others who have taken the difference between the device total cost from payment and separate it into a device fee -- or a device credit, a data credit, and agreement rebate. So just to be clear, when we're talking about the economic incentive that's discussed within this, it is the entire difference between the upfront cost of a device and what the customer has paid? Is that right?

696 MR. EBY: That is right, yes.

697 COMMISSIONER MOLNAR: Regardless of whether they break that subsidy into three or four or 10 different elements when they're talking to the customer? We're talking about the whole amount and that's it?

698 MR. EBY: That the whole amount is the device subsidy? Is that -- that's the question? Yes.

699 COMMISSIONER MOLNAR: Okay. I'm prepared to come back after lunch, Mr. Chair, if ...

700 THE CHAIRPERSON: That's good. Just for clarification, the -- we'll take a break now, but the additional information that you offered in answer to provide, we'd want that for the 22nd of February. That'll be the practice generally for those listening and those in the room. So that people making comments, this is for additional undertakings, which I take it that was the nature of that discussion with Commissioner Molnar, should be provided by the 22nd of February and not on the 1st of March because the 1st of March people should be able to comment on the full record. So additional information should be provided by the 22nd of February. And if for some reason anyone in the room at one point is asked to provide undertakings that they can't meet the 22nd of February, please you'll have to make your case, but we're going to assume that's the default date. Is that okay? Okay. Thank you.

701 So we'll take a break. We'll come back at 1 o'clock to resume questioning of this panel.

702 Thank you very much.

--- Upon recessing at 1203

--- Upon resuming at 1302

703 LE PRÉSIDENT : Donc, à l'ordre, s'il vous plaît.

704 On va reprendre avec... Madame la Secrétaire, il n'y a pas d'annonces préliminaires?

705 LA SECRÉTAIRE : Non. Merci.

706 LE PRÉSIDENT : Non. D'accord.

707 Commissioner Molnar, please.

708 COMMISSIONER MOLNAR: Well, now, it's good afternoon.

709 What I'd like to do is I'll just go through my questions in the order of the draft Code just to keep some order to this.

710 Again, with the application in provinces with similar legislation, you say that a Code that codes us with provincial legislation will provide no clarity to consumers.

711 Can you tell me first, do you believe based on the record of the proceeding and the draft Code that's in front of us -- would you believe that the Code that's being proposed here would satisfy the requirement that both the content of the Code and the enforcement mechanisms are as good or not better than provincial protections that are in place today?

712 MR. LORD: Well, without anticipating exactly what will be in the Code, I'm of the belief that a national Code would meet those requirements, that it would be as good or better.

713 And I certainly believe it would be better in the sense that all Canadians would have the same expectation, the same knowledge, access to the same tools and we would have the same rules from coast to coast. That in itself makes it better.

714 And it also makes it better because it reduces cost. It was mentioned here today before; it's been mentioned on other occasions every layer of regulation you add adds cost. And eventually that cost is paid by someone and that someone usually ends up being the consumer.

715 So we feel having one set of rules across the board best serves the consumers because it provides clarity and certainty and also reduces cost.

716 COMMISSIONER MOLNAR: Okay, thank you.

717 And I understand we have only a draft Code at this time.

718 MR. LORD: Yes.

719 COMMISSIONER MOLNAR: And so we need to look at what it may be. But it may be some of the options put forward in the draft Code today.

720 MR. LORD: Yes.

721 COMMISSIONER MOLNAR: Do you see anything in the options in front of us today that would lead you to believe that this Code wouldn't be equivalent or of a greater standard than the provincial legislations?

722 MR. LORD: Not fundamentally, no. There may be some minor differences, keeping in mind that some provinces and the legislation that's been adopted and existing in certain provinces have some differences among themselves. That's why we think having a national Code is a better solution.

723 We are of the view, and I have expressed and I want to certainly reaffirm that view, that as the national regulator I think it's important for the CRTC to exercise this jurisdiction and take the space.

724 COMMISSIONER MOLNAR: We understand your position.

725 Can you tell me -- you've mentioned that there are costs to layers of regulation and having multiple legislations. Do you have any estimates of what those costs are?

726 MR. LORD: Well, again, depending on exactly what is adopted, our carriers that actually experience this through their own business can give you more details of the costs they've had to pay to meet regulations and legislation in different provinces.

727 But I think it's undeniable that when you add the difference then carriers need to change their billing system. They need to change how they operate and that can be different from one province to the next and that simply adds complexity and costs.

728 I don't have the estimates of those costs here today. I don't.

729 COMMISSIONER MOLNAR: I just want to push a little bit, here.

730 MR. LORD: Yes, please.

731 COMMISSIONER MOLNAR: Because I think it's very important this element. Certainly, it is to your industry.

732 If our Code includes all of the elements that are addressed within the provincial codes and perhaps in some cases provides additional protections, how is it that there would be additional costs for the members -- for your members to comply with both our regulatory requirements and those of the provinces if ours are equivalent or supersede or exceed those requirements?

733 MR. LORD: Well, they can be different and we can only look at what's been done in provincial legislation already. But we cannot anticipate what will come in the future.

734 Other provinces have talked about bringing their own provincial legislation and have decided not to do it because they are hoping that the CRTC will adopt -- and of course we are on track to adopt a national Code.

735 But someone could get elected in a provincial legislature and decide: You know what? Politically this would be very popular. Let's adopt a different code with different rules and try to force it on the industry and consumers because they see things differently.

736 And then you're left with a situation where carriers and consumers have to wonder, well, which code applies? Which regulation applies? Which legislation applies? And that can be different.

737 I think it's much clearer for the benefit of consumers and the providers that there is one set of national rules and it's clear that these are the national rules.

738 And I applaud the Commission for wanting to review these rules. That gives it the fact of life that we need to make sure that we continue to adapt and meet the needs of consumers and not create new burden on the industry that prevents innovation.

739 So the fact that the CRTC is saying, "We want to adopt a Code. We are going to measure the efficiency and the effectiveness of this Code and if there is a need to change it, we will" for us that is by far a better solution than trying to coexist with current and future provincial legislation."

740 COMMISSIONER MOLNAR: And under that basis, that this is a Code designed to improve customer satisfaction and provide the customer with greater rights and protections and that it is a Code that will be modified as needs arise, do you believe that minimizes your future concern?

741 Because it sounds to me like you have a future concern versus a current concern about it coexisting with provincial legislation. As long as we keep this up and address the needs of the industry, the potential that a province may step in.

742 MR. LORD: I want to be clear and I'm glad you have given us the opportunity to clear that.

743 I am concerned with coexisting with current provincial legislation and I am concerned with future coexisting -- coexisting in the future with unknown provincial legislation.

744 We think it serves everybody to have one clear set of rules. So there is no guessing. There is no trying to explain to a consumer when they show up at the kiosk, "Well, this is your provincial code. This is the CRTC Code."

745 One is different but which one is better? Sometimes it may not be a question of which one is better. They may just be different. And so a consumer will decide, well, for me I want this one.

746 Let's have one set of rules. We think that is by far better.

747 And if there is -- if I will leave you with one thought, I really believe that it is the role of the CRTC to occupy the space. I think it's important under the Constitution. Responsibilities have been outlined for the federal government versus responsibilities outlined to provincial government that it is the CRTC's -- not only the option but I believe it's the duty of the CRTC to occupy this space now.

748 COMMISSIONER MOLNAR: So if we're going to occupy the space we have to fully address the issues.

749 MR. LORD: Yes.

750 COMMISSIONER MOLNAR: So here is an issue that touches on provincial legislation and that's what some provinces would say are gift cards, the pre-paid cards and the expiry of those cards. As you know, a lot of comments have been put forward suggesting that prepaid cards should not be allowed to expire.

751 MR. LORD: Yes.

752 COMMISSIONER MOLNAR: Could you provide your position on that?

753 MR. LORD: Absolutely, and we're glad you're raising that question. That question was raised in the different provinces where they did adopt legislation.

754 And our position is, first of all, there is no expiry date as to when you can activate your card. But the service once it is activated then there is a period of time for which you have the service.

755 That is very different than a gift card you get from any outlet whether it's a restaurant or Chapters or anybody else, Future Shop, the Keg, whatever you want. Someone has paid them a $100 and you get a $100 gift card in return. There is no expiry date on that.

756 But when it comes to wireless service you can get a card. Once you activate and you initiate that service you have so many minutes, so many texts, so much data and a period of time.

757 The best analogy to understand this is renting a car. If you go and rent a car for the weekend and they tell you when you rent the car, "You have the car for 1,000 kilometres and three days, Friday, Saturday and Sunday" there is an -- it expires at the end of Sunday and you need to bring the car back.

758 It's the same type of service. Sometimes what is mistaken is that people simply buy minutes or texts or data. They actually buy that and they buy access to the network for a period of time. That's the expiration date that is on the card. It's not when you activate it. It's once it's activated it's there for a period of time.

759 Jim, do you want to add to that?

760 MR. PATRICK: Well, we've had this discussion province by province, one by one. It's important to note that as every province has started their process they have all started from the premise that these prepaid minutes should not expire. And as they've all looked at the realities, rather than the perceptions of the business model, when they've looked at the realities, they've all concluded that it would be inappropriate to try to require those prepaid accounts delivered through prepaid cards to remain open for ever.

761 Part of that consideration comes back to the business model. Like Bernard said, if I rent a car, whether I'm behind the wheel with the engine running or whether it's in my driveway, I have access to that car for three days.

762 If I activate my prepaid card, whether I am making calls or receiving calls, send or receiving texts, I have access to that network for that period of time.

763 I think the other consideration that's played into the provinces' determination that cards -- prepaid cards should be exempted from any gift card regulations, it's the consequences of trying to force a change on that model.

764 Every time somebody who had 30 seconds of time left on a card decided it would be easier to buy a new card than to top up their existing card, that person would now have two phone numbers, and if they did it again they'd have three phone numbers, and before too long you're looking at millions of phone numbers being -- you know, lying in drawers and under couch cushions and things with 30 seconds of time associated with them.

765 I think we'd be looking at more area codes more often if you allowed these prepaid accounts to remain open for ever with any amount of time on them, 30 seconds, five minutes, whatever.

766 And too, the most fundamental difference between a prepaid card and a gift card, if I walk into Chapter's, I'm giving Chapter's an interest-free loan for a hundred dollars and they're giving me an IOU for a hundred dollars in the form of a card.

767 If I want access to the goods associated with that transaction, I've got to bring the card with me, they swipe it and I get to take the books and go home.

768 There's no value loaded onto a prepaid wireless card. The card just provides the terms and conditions, the pin number and the phone number. Often there's no card at all, some companies just give you a cash register receipt with the information on it.

769 I don't have to swipe that card every time I want to make a phone call, it's not a loan to the company, it's an access code that says, you will have access to this phone number for 90 days or 900 minutes or whichever comes first.

770 And, like renting a car, if at the end of the three days I've only used a third of my prepaid kilometres, I don't get to keep the car for ever until I get around to using the remaining two-thirds of those prepaid kilometres.

771 If we try to impose that model onto prepaid wireless cards, you'd be looking at a lot of wasted phone numbers which would have a pending and mounting liability over time.

772 COMMISSIONER MOLNAR: Outside of the issue of the phone numbers, are there other impacts on the business model for prepaid that would be impacted if we were to address the expiry date?

773 MR. LORD: Well, you have the impact of the liability must be carried and it's a fundamental change to the business model because the service that is purchased is not just the voice minutes or the number of texts or the data, it is in fact the access to the network.

774 And I can have a device that is turned on. So, I activate my card, my device is turned on, I don't receive a call, but I know if my son or my daughter wanted to reach me because they would be in trouble, they could; so the fact that they don't call indicates that I have the service but it's not registered its minutes or text or data, they just didn't call, but if they wanted to call they could.

775 So, you have access to the service even when you're not texting, even when you're not talking, even when you're not sending data or receiving data.

776 And that's what's fundamentally different than any other type of gift card, it's the service you get is there for the period of time that it's activated.

777 And if there's anything that can be done is to make sure that consumers realize and know and they have the information when they activate the card that they activate the card for so many minutes or text or so on, but it's for a period of time once it's activated.

778 There's no expiry date to activate it. Once you activate, then the clock starts ticking.

779 COMMISSIONER MOLNAR: Fair enough. And you just touched on that if there's anything that could be done because we accept -- and I do accept that, you know, a prepaid card is the cost of access for a period of time as well as some kind of a usage bucket.

780 It doesn't appear from the record of this that all consumers understand that model at all and, so, it leads you again to maybe the other part of this Code which is ensuring consumers are well informed so that they can make reasonable choices with all information.

781 Clearly, if consumers are purchasing these, they're not purchasing these under the conditions that you are telling me exist with these cards, or there's a large percentage of consumers who don't understand those conditions.

782 And, so, what is it that should be done about that? There's application of the Code potentially. Are there other things that you can do as an industry to address this issue?

783 MR. LORD: Well, the whole issue of making sure consumers have the tools and the information they need to make the choices that they want to make and that they understand that the choice that they're making is actually the one that's being made, we fully support, and if there's something specific with regards to this part of the business model, making sure that it's clear on the document that they get or rolled into those ideas, but I think that is very different than trying to modify or change the business model that exists.

784 And I think it's important for all of us, including consumers, to realize what is that business model; and it's access to the network with a bucket of usage.

785 COMMISSIONER MOLNAR: Okay. I'm going to move on to the issue of the content of the wireless Code, clarity of the contract terms and conditions.

786 You didn't talk this morning and I didn't see in your own Code any comments as it regards the personal information summary.

787 Can you comment on whether you believe that's a useful and important part of this Code and, if so, is there anything in the Code, like, does it have the right content? Is there more than necessary, something missing, where are we on that?

788 MR. EBY: Yeah, we do think that's a useful tool. We think that people should know what they're signing up for before they sign up for it. We think that's reasonable and would be very helpful and would, you know, help avoid a lot of confusion.

789 We don't think this should be a requirement, that every carrier should have to print this off and present this to every potential subscriber before they get it. We don't think every subscriber wants to be taken through this, we think some know better what their rights are and they understand it. So, I don't think it should be all encompassing.

790 As to what should be in it or shouldn't, I think, you know, we'll hear through this process, but a lot of the rights surrounding -- I mean, what are the services you're signing up for, what is the monthly recurring cost and what are your rights and carrier rights with respect to changes would be the most important.

791 If there's an ETF involved or a device subsidy, that also would be an important aspect, you know, even things, at the top your name and phone number and stuff, I don't -- that doesn't necessarily need to be part of this.

792 I mean, this is to explain what you're signing up for. So, as simple as possible would be good, but again, we don't think there should be a requirement on every carrier and every transaction.

793 COMMISSIONER MOLNAR: Can you be more specific? If you think that it doesn't need to be all of this, are there certain things within the proposed personal information summary that you think, besides the name, are either unnecessary or a problem of some sort to your industry to provide to customers?

794 MR. EBY: I don't -- not necessarily that it would be a problem, I just don't know that every consumer wants to be taken through all of this information.

795 COMMISSIONER MOLNAR: So, it would be optional?

796 MR. EBY: Yes.

797 COMMISSIONER MOLNAR: And the reason is because consumer's -- optional, not for the consumer, but I think you said consumer or carrier. So, it would be optional for the carrier whether or not they wanted to provide this information to a customer, a potential customer, because this is provided before.

798 MR. EBY: Well, we support every consumer getting this information before they sign up and we stand for that, and we think the carriers have the flexibility to do that the way they want and the consumers can decide if they're getting information presented to them in the way they like, but to prescribe a fixed summary such as this one, we don't think that's necessary.

799 MR. LORD: If I can add to that. The consumer has -- we want to make sure the consumer has the right to get that information, absolutely.

800 We don't think that every consumer will ask for that information. You may have gone in to buy a phone for your daughter and a month later you go in to buy a phone for your son, you ask the same salesperson, you have the same kiosk, are the conditions the same as last month? Yeah, it's the same package. You don't necessarily want to spend another 15 minutes going through the same situation that you went through a month before, you're just happy to proceed, buy the phone, activate the phone, use the phone and go on with your life.

801 And so making sure that that information is accessible and available by the consumer, absolutely, whether it has to be -- I don't think it should be prescribed that it has to be on an 8x11 piece of paper with 10-point font and so on, I think that's too much prescription.

802 COMMISSIONER MOLNAR: Fair enough. So, you're not concerned -- and I heard you, so sometimes a consumer may not be interested in this information. The problem is, who gets to choose? It is the consumer's right, we would suggest, to have this information to make an informed choice, so it would be the consumer's right to choose whether they're looking for information.

803 If they're looking for information about the plans and services, this is all the information they get, whether you write it in 10-font, 12-font is not the issue, but this information should be made available in a clear and concise manner to every customer, and you agree with that?

804 MR. LORD: Yes, but I think --

805 COMMISSIONER MOLNAR: And in a clear and concise manner?

806 MR. LORD: Yes.

807 COMMISSIONER MOLNAR: And I'm sure you have looked at wireless contracts.

808 MR. LORD: Absolutely, more than once.

809 COMMISSIONER MOLNAR: Well, I've looked, but I honest -- I can tell you right now, I can't understand them.

810 MR. LORD: And the -- so, the answer to your question is one hundred percent yes, the consumer wants this information, the consumer has access to this information.

811 COMMISSIONER MOLNAR: You made the point that a customer's rights to make changes to the contract should also be part of this Code.

812 Is that more than semantics here, like, what would that do to the Code that we're proposing here?

813 MR. LORD: You know, in a way it is -- you could consider it somewhat semantics, it's a wording choice and a calculative one, an intentional one. We had proposed a taxonomy where a fixed term service could not be changed during the fixed term and a monthly term service could be changed with 30 days notice because it was on a month-to-month basis based on the right that with that monthly service the consumer, they have not committed to take that for a certain period of time at a certain price and they're able to cancel it entirely. They could go from a 500-text-a-month plan to a 250-text-a-month plan if they so choose.

814 And so where we had brought out the different wording was more in response to the option 2 that you had presented and so we think it captures the same thing in a different way, taking your option but just specifying that -- letting the consumers know, here are the items that could be subject to change but also the ones that you're allowed to change.

815 And that would cover down the road obviously. If you signed up for a voice and data plan and after three months you called in and said, I want to add a text package on month-to-month, that again would fall under the same window.

816 MR. LORD: It could be additional roaming packages, different options that the consumer decides to take or not take. In essence, it's also the difference between what are fixed elements of the contract and what are optional elements of the contract.

817 COMMISSIONER MOLNAR: Okay. Your Code proposes that contract changes that are positive or neutral in nature could be changed at any time and that the WSP may notify the consumer. Do you still agree with that proposal?

818 MR. LORD: Yes. For instance, if you're signed up for -- let's give an example. If you're signed up for voicemail and it's at $5 a month and the carrier decides it's now $4 a month, well, we think that should be okay.

819 If it goes from $5 to $6, then that's not okay unless it was an optional service, but it's one you signed up for from the start.

820 So if it's a change that benefits the consumer, they can do it. If the consumer decides, no, they want to pay more, well --

821 MR. PATRICK: A good example are data caps, which before smartphones hit the 3G and 4G level they were typically smaller, and with devices that consumer more bandwidth they have tended to go up and they have tended to go up even for people who had signed up for smaller plans. So now the person is paying the same amount but they have a higher data cap. We think that should be permitted within the contract.

822 COMMISSIONER MOLNAR: I'm glad you used the example of data caps because staff have provided me an example of data caps that I want you to consider.

823 Here's the scenario. Assume customers are subscribed to a grandfathered 1-gigabyte data plan with tethering. The carrier now offers an unlimited data plan at the same price as the grandfathered plan but without tethering included. Customers that don't use tethering would consider the new plan to be a positive change while customers that use tethering would consider the new plan to be a negative change.

824 So how would a carrier deal with this difference? How would they know if this is a positive or negative change?

825 MR. LORD: In that specific example, there is more than one thing that is changing. It's not just the cap that is changing but the fact that you can tether or not. So that is a significant change that, as you mentioned, can go either way.

826 In that specific example I think the carrier would have to talk to the consumer before making the change. It's not just increasing the cap. We're saying those that can't tether, you now can do it. You're changing two things and that's why I think the example is not a simple one.

827 COMMISSIONER MOLNAR: Fair enough. I think that's the nature of this service, it's not simple. It's complex.

828 MR. LORD: I agree with you and I think the other thing is it is more complex now than it was before and one thing I did not mention earlier but I think it's important noticing -- taking note of, I should say, is the fact that the types of services that Canadians have access to today are fundamentally different than what they were five years ago, 10 years ago or 20 years ago, and I'm sure many of us remember that first phone we had.

829 I remember that first one I had was this big box and I'd carry it in my car and I thought it was great. I could phone, it was $1 a minute, but that's all I could do. There was no voicemail, there was no -- that's it. There was no text, there was no data.

830 And now we can do so many more things with our devices and what most people carry are now portable computers that give them access to the Internet, plus they can talk and text with it. And so the devices have changed. Even though we still call them mobile phones, they're very different than what was sold 15-20 years ago.

831 And there's been a quick and fast evolution in this industry and there's been a quick and fast evolution of the different packages and options and everybody has had to learn through this: the carriers, the consumers and now the regulator.

832 And I think one of the reasons why we believe having a Code is helpful is this will hopefully provide clarity and make sure everyone has the information they need to make those choices.

833 And the industry has evolved in different ways. Now, I'm not suggesting that we adopt a Code and regulation that prevents innovation and prevents different packages. Let's just make sure the consumers have the information they need when they make those choices.

834 But it is a fact that these services that we get today and Canadians get and consumers get are very different than what was available before and they get a lot more for less compared to what it was before.

835 COMMISSIONER MOLNAR: Yes, fair enough. I'm off topic here for a little bit but I just want to make the pitch that, as you pointed out, it's rapidly evolving, there's new uses, new applications, and so where the industry seeks to make it more complex than necessary, it makes it harder for customers.

836 So to the extent that the industry sought to make this as easily understandable to customers who are adopting these new technologies and, you know, addressing data caps and so on for the first time, it would be a better solution and I'm not sure that that has necessarily been the approach of your industry, to be honest.

837 MR. LORD: There may have been circumstances where things were not as good as they should have been and I think we recognize that. And I can tell you from talking and listening to our members, they have been talking and listening to their consumers as well and they know that they need to change how they do certain things, and they have, and that's part of the evolution as well.

838 Yes, on one hand, consumers are learning what data caps are and what's a gigabyte and how many text messages and so on and what's the impact of streaming live TV on your mobile device. People are learning that.

839 At the same time, providers are learning how to explain that and sell that to consumers and they want to do it in a way -- and we've heard certain things. I think one thing needs to be said. Members, our members and people that provide these services want to keep their customers happy, period. They do and they want to make sure they are informed because the last thing they want is to lose a consumer to a competitor and they compete ferociously for market share.

840 So that will continue and that needs to continue for the benefit of the consumer. Ultimately, what serves the consumer best is a competitive marketplace with some regulation, as we're proposing, to make sure consumers have the information. That's what will serve consumers best from coast to coast.

841 But I agree with you that there have been instances where it wasn't perfect and where some of our carriers and members needed to change the way they behaved and how they explained, and they have and they will. We've seen some of those changes and I think you can expect more changes to come.

842 COMMISSIONER MOLNAR: Thank you. As I mentioned, I was off topic there, but I'll get back on topic now.

843 Going back to the issue of changes to contracts, your proposed Code suggests that the price, term and volume of a monthly term service can be changed at any time provided the customer receives at least 30 days notice prior to the change taking effect but without the right to refuse the change on the part of the customer or to change that contract without penalty.

844 MR. EBY: Well, they can change that service. Our Code dealt very specifically with the individual services because there's obviously -- you can talk about the contract, but really the contract is all of the individual services and those can often be subject to different terms and possibly different promotions and different lengths, and particularly, you know, the difference between fixed and monthly, and monthly being a service where the customer has the flexibility to alter it or drop it, and that's -- again, to go back to your question earlier about our language, it was more than just, I guess, semantics because it's embedding that principle in the Code, that if the customer can't change it, then the carrier cannot change it. I mean that was the principle that our Code was based on.

845 COMMISSIONER MOLNAR: But your Code is based on the notion that there is a contract, there is an arrangement whereby certain of the components, the service elements, will be provided on a fixed-term basis, certain of the service elements may be provided on a monthly basis, but it's all part of the same service arrangement.

846 If you're the customer, you know, whether you choose voicemail on a fixed basis or a monthly basis, you want voicemail. So if you're changing this price on 30 days notice and the customer is not happy with the price and they want to go somewhere else, they can't.

847 MR. EBY: Well, under this Code, they would be because they could pay out the remaining device subsidy and they could exercise that right to cancel at that time.

848 But you're right, you might -- this provides the flexibility because yes, if you can -- if you know you want voicemail for three years and you get a promotion to lock in at that price for three years, you could take it. You could say, I might not want voicemail next year, I might not want it three months from now, I might only need it on a minimal basis, same with a text plan or anything like that.

849 So it gives you the flexibility to say these are the only things I want for the three years. Here's some things I may want to change. I don't know if I need 500 texts a month. I might want to alter that service.

850 MR. LORD: If I can just add to that.

851 COMMISSIONER MOLNAR: Yes.

852 MR. LORD: Just to give another analogy, if you go to buy a new car and you have a deal for the car and the salesman says, do you want satellite radio, it's $1,000 today if you want satellite radio hooked up to your car, and you say, I'm not sure, I'm going to pass on the satellite radio.

853 If you come back three months later and you decide I want satellite radio, it may not be the same price because you didn't buy it at the time that you bought your car. If you buy it at the time you buy your car it's $1,000 and you have it.

854 And some of these services are the same thing. If you decide you don't want an optional service from the outset for the duration of the contract but you only want the option to add it on on a go-forward basis from month to month or for three months at a time, then those options are available to consumers as well.

855 And there is one thing that I think when we look at all of this, we presume, as it was in the Code, that there will be an early termination fee, a simple early termination fee available for consumers.

856 And if there is one beauty with this Code, it makes it easy for consumers to cancel at any time, and we agree with that. They can cancel, pay off the handset subsidy, move on. They can tell the provider: You know, I don't like your service any more, here is the handset subsidy, this is how much I owe, I'm leaving. There is no additional penalty, there is no complication, there is no -- it doesn't take three hours to calculate how much it is, you pay what you use, you pay the handset subsidy and you move on.

857 That will provide a lot of flexibility for consumers and I believe will also provide incentive for carriers to change their behaviour, and ultimately that is the best thing you need for a marketplace. So we support that. It's clear.

858 I think any discussion we have has to keep that in mind, that that supersedes anything else. The same when we talk about -- I'm sorry to go off track a little bit, when we talk about the length of contract. If a customer can decide after two years, "I'm out of here", does it really matter if they sign for three, two or one? They can leave at any time.

859 COMMISSIONER MOLNAR: Okay. Thank you for that. I understand what you're saying, if you're not happy with your service provider it may be easier to move, but the best would be to have a good relationship with your service provider.

860 Now, one of the other options that you have provided, or another condition you have relates to pay-per-use services and your Code suggests that for these services the price may be changed at any time without notice.

861 Now, I'm thinking of something and tell me if I'm wrong, but I'm thinking of something like picture messaging. What is the justification for saying these prices can be changed at any time without notice? They are services used by the customer of the service provider under which there is a contract, so how is it they can be changed without notice?

862 MR. EBY: Again, it would go to whether or not there was an agreement in place when you signed the contract that that would be the price of that service for the three years or the two years or whatever. That's the principle.

863 COMMISSIONER MOLNAR: But that's not actually what I'm asking.

864 I mean unless you want to fix the price of picture messaging for three years that's not normally the way it goes.

865 So for any pay-per-use service, why is it appropriate that a service provider may change the price without notifying its customers in advance? It's only charging that price to its customers and it will be -- you know, those customers will be made aware after they have used it.

866 MR. LORD: Your point is well taken on the notification. And perhaps that is a section that we need to review.

867 The principle that we adopted throughout the Code is the fact that if you sign up for a service and it's part of the fixed elements of the contract and it stays fixed for the duration of the contract; if you don't sign up for it and it is optional, then it can be changed by the carrier, it can be changed by the consumer.

868 But your point on the notification is a good one and after hearing it I think it's one that we would need to change and modify.

869 COMMISSIONER MOLNAR: Thank you for that. We thought so too, so that's great.

870 MR. LORD: I caught that on.

--- Laughter

871 COMMISSIONER MOLNAR: Moving on to the issue of contract cancellation, you have just mentioned that you support the option where the full cancellation fee, the entire cancellation fee is the cost of any outstanding device subsidy; correct? So if there is no device subsidy, no cancellation fee?

872 Is that your position?

873 MR. EBY: Sorry, not entirely. We used the Québec model, that was what we put forward, which would have the if you owned the device, but you were in a fixed term service, there was the cancellation fee in that model where it was 10 percent of the remaining monthly amount or $50, whichever is less.

874 COMMISSIONER MOLNAR: So explain to me why that's fair? If I have been under contract, I have paid my device, or if I have paid the device upfront and chose to go into a contract, why should I pay a fee that those who had the industry subsidize the device not pay?

875 MR. EBY: Well, the principle behind it being that that would better incent service providers to offer you a promotion that was for a fixed duration in exchange for knowing that they would have your business for a certain amount of time, but the extent of that, it's different than the device subsidy that raises a question.

876 MR. LORD: This section of our Code comes from the legislation in Québec and also it's based on the fact that there is a mutual agreement between the consumer and the provider of the service and understanding that with this Code and the steps that are taken the consumer will have the information that they need to make their decision. They will have made an informed decision. They will have made an informed decision to sign up for a period of time.

877 The understanding is that in the Québec legislation it was one or the other so if there is a device subsidy left you pay what's left on the device subsidy; if there is no device subsidy then you pay this minimal amount.

878 COMMISSIONER MOLNAR: I understand that's from that legislation.

879 Could you tell me, do you think there is any specific circumstances where that should not apply? I'm thinking for example of customers who have experienced significant service problems for example or they are terminating for a cause, if you will, or do you believe that should apply in all circumstances?

880 MR. LORD: Well, outside the Code there are other ways that consumers can protect their rights and if, for instance, they sign up for a service and it's not what they expect and they don't get satisfaction from a Code, courts are still there to provide relief, if they need it.

881 But in most cases in reality, I don't think -- I don't think the CRTC would want to -- that we would want to have a national code that starts thinking of all the options of everything that can go wrong and regulate everything even if it's not a problem. In situations like that, in most cases they are resolved. If it's a question that you are not getting the service you expected or the coverage area is not what was on the map, you return your handset. Plus, if there is a cooling off -- if there is a cooling off period, well, you have the period to figure that out.

882 Keeping in mind that the beauty of this Code and what we are trying to achieve that we fully support is making sure consumers have the information to make their decision.

883 So it should reduce the number of surprises, it should make it -- we should have less dissatisfied customers and we actually think that is one way to measure the effectiveness of a Code and hopefully we will have a chance to talk about that as well.

884 COMMISSIONER MOLNAR: Just following up on your comments on the cooling off period, do you support the notion of a cooling off period, and particularly as it has been outlined in this Draft Code?

885 MR. PATRICK: Yes, we agree with it as it's outlined in the Draft Code.

886 COMMISSIONER MOLNAR: Thank you.

887 I want to give you the opportunity to discuss the issue of when phones are lost or stolen.

888 Some have suggested that they should be able to leave their contract if their phone is lost or stolen, some have suggested that they should have the right to downgrade their plans when phones are lost or stolen.

889 Do you have a position on that?

890 MR. PATRICK: We believe if you apply the early termination fee that is proposed if they lose their phone or its stolen, or they lose it for whatever reason, they can leave at that moment and pay the amount that they owe on the phone.

891 So I think it's fairly straightforward and it takes care of most of the other options and types of problems we can come up with.

892 You provide that option to consumers, they have the option. So if they lose their phone, it falls in the toilet, they don't want the same plan, they don't want the same phone, they have a responsibility for their device, they pay what's owed on it and they can walk away and start fresh and start new.

893 COMMISSIONER MOLNAR: Fair enough.

894 Moving back to your proposed Code, section 8.4 says that:

"Upon cancellation the consumer must pay for the services provided by the service provider up to the effective cancellation date and any other charges established by the agreement." (As read)

895 What would that mean, "any other charges established by the agreement"?

896 MR. EBY: Some of our carrier members can speak to that, but it more any additional legal obligations that might have been involved, but it was not -- you know, it would not allow for the application of any type of additional fee or anything like that.

897 COMMISSIONER MOLNAR: It wouldn't allow for any additional charges?

898 MR. EBY: Not to add on to any type of additional ETF or anything like that, yes. And again, our carrier members could address that.

899 COMMISSIONER MOLNAR: Yes. I will ask them, thanks.

900 MR. EBY: Sure.

901 COMMISSIONER MOLNAR: Yes, for sure.

902 I want to ask you about a proposal that was put forward by one of your members and supported by a number of parties and that is the notion of separating the service and the device, putting them into separate contracts, basically breaking the link between those two within the industry.

903 What is your thought on that?

904 MR. LORD: Well, we think that's a very good option and those that want to offer that option can do it. We don't think it should be mandatory because some consumers prefer the other option of having them tied and depending on the business model you can't separate them. There are options in the marketplace where the handset costs and the service costs are tied and that's how they provide the package that they provide and consumers want that choice, but if consumers want another option and some of our members want to offer a separate contract for the handsets and for the service, we think that's a great option and it should be provided.

905 But we go back to our basic principle that we don't think a Code should eliminate options that are existing now in the marketplace. We should not eliminate choices for consumers for the sake of trying to protect some other consumers. Let's make sure we inform consumers to make their choice, let's not eliminate the choice.

906 COMMISSIONER MOLNAR: Fair enough.

907 And I do think you have answered this question, but I will ask it. So you don't see anything in this Code that would preclude any of your members from offering that type of an option in the marketplace?

908 MR. LORD: No.

909 COMMISSIONER MOLNAR: Okay. Thank you.

910 Let's talk about contract length. If you just tell me that you don't want us to limit choices available in the market today, you need to come up with a second answer.

--- Laughter

911 COMMISSIONER MOLNAR: As you know, many, many, many people have said that three years is too long, and it's longer than the life of the device, and they are requesting that the service life be limited to two years.

912 So let's start, and maybe you could tell me why, in your view, customers choose three-year contracts.

913 MR. LORD: There can be various reasons why consumers choose three-year contracts. One of them is, it is the contract that gives them the best price for the most sophisticated phones.

914 I will not repeat my answer from the previous question, but I would like it added to the record.

--- Laughter

915 MR. LORD: Let's take a look at this industry and compare it to other industries. We have used a few car analogies, let's look at cars.

916 In this room, and if you go to different places across Canada, you stop at a mall and you look at people and what device -- first of all, virtually everyone has one, some have two.

917 What type of devices do they have?

918 You will find in the Canadian marketplace that a lot of people have the most sophisticated, most advanced phones available in the market.

919 If you go to the same shopping mall and you look at the parking lot, they are not all driving the most sophisticated, fastest, most expensive cars.

920 The way that three-year models -- what the longer contract has done is, it has made these most sophisticated phones available to more people. We see it in the marketplace, and that is a very good reason why a lot of people decide to take that option.

921 We have also -- and Caitlin will be able to provide more details on it -- we have looked at what is the impact in other markets. I have heard others say, well, in other countries they do this, in other countries they do that.

922 Take it from the premise that we don't think we should eliminate an option that exists. There has been some negative impact to limiting three-year contracts to two, and some adverse impact on pricing.

923 Caitlin has done some research.

924 Do you want to provide us with some answers?

925 MS CARROL: Yes. I would like to share with you an example, a situation that has been unfolding in the U.K. since they banned their three-year contracts.

926 It all started about May 2011, when the contracts were banned. Months later, fees started to increase on fixed-term contracts. As a quid pro quo to two-year limits, carriers can increase fees on fixed-term contracts by the RPI, which is the Retail Price Index, each year.

927 So they are allowed to increase it a certain amount every year, as long as it is within the guidelines.

928 So all of the carriers started increasing their fees. They all jumped on board.

929 In January 2012, Ofcom launched a review into the fairness of some contract terms, kind of saying, "We are going to look at this," and the carriers kept increasing their fees.

930 In October 2012, Ofcom announced plans for a consultation to look into all of these fixed-term price increases.

931 Prices still continued to increase. Ofcom received more than 1,600 complaints from consumers over the span of just a few months, and they are now in a consultation, which started January 3rd, and it will continue until March 14th. So they are trying to figure out what they are going to do when it comes to carriers increasing their fees.

932 As an example, to show that a two-year contract isn't necessarily more beneficial for the consumer than a three-year contract, I would like to provide a Canadian-American example.

933 Take, for instance, the price of a Samsung Galaxy S III 16 GB device. Everybody probably knows of this device. You can get that device in Canada on a three-year contract, on most networks, for $99. That same device in the U.S., on a two-year contract, so a year less -- the lowest you can get it at is $199, which is double the price, and it can go as high as $279.

934 So, when you think about it, days to dollars, Canada provides better value with three-year contracts.

935 COMMISSIONER MOLNAR: I think it is anticipated that if three-year contracts were replaced with a maximum of two, there would have to be a change in pricing.

936 MR. LORD: The other point, which should not be lost, is, yes, there will be an impact on pricing, absolutely, but not just on the device. For the life of the agreement, three-year contracts often end up being a better deal, and it's the reason why Canadians pick those contracts.

937 I trust Canadians, and I trust consumers to make good decisions, and they make the decision that is best for them.

938 Again, I think it would be wrong for us, collectively, to impose a choice in a code that eliminates that option for those consumers.

939 COMMISSIONER MOLNAR: Fair enough, and I will be asking some of your members, as they come forward here, as well, but where we say that consumers pick those options -- I have paid quite a bit of attention to the offers around the new BlackBerry 10, and I didn't see any offers for two-year contracts.

940 You either pay for it outright or you go on a three-year contract.

941 So I don't know if it is fair to say that consumers have picked the three-year contract. They have chosen not to pay outright.

942 Am I wrong? Did I miss where all of the two-year contracts are?

943 MR. LORD: You can ask the carriers and they can tell you the different options they provide, the different packages, but they exist in the marketplace. They are different, and the situation can be different for different handsets. There are some handsets that seem to be available only with three-year contracts in the marketplace, but that can change.

944 If everybody in the country decides that they want a two-year contract, or an 18-month contract, they can get that option.

945 And keep in mind -- I want to go back to this point, which is very fundamental. A consumer can end at any time. After two years they can end the contract. So whether they got the subsidy over three years or two years or one year, they can end at any time.

946 After 18 months they decide, "I'm done with this," they pay off the subsidy and they move on with the same carrier or they move on to another carrier, but they have that choice.

947 That is why I think the key element, the cornerstone of the code, is the early termination fee. It deals with a lot of these things of length of contract.

948 The consumer can decide -- they may sign for three years, and after 17 months decide that 17 is my lucky number, I am ending this contract, I will pay off the subsidy.

949 And if we understand that there is a subsidy for the device, and we understand that a subsidy for a device on a two-year contract would be less than a subsidy for a three-year contract, then we don't gain anything by eliminating that choice for consumers. There is nothing to be gained, and the only thing that we achieve is that we eliminate one of the most popular choices that are out there.

950 COMMISSIONER MOLNAR: Okay. Thank you.

951 I want to talk about early device upgrades. Certainly, if it's not commonplace in the market, it exists. It is kind of a natural process to give an early device upgrade, and by doing so fix people into another long-term contract.

952 Could you tell me why our wireless code should not explicitly address the issue of early device upgrades?

953 MR. EBY: We think it should -- just to the point that we are trying to make -- if and when that happens, that the consumer taking the device upgrade understands the terms and conditions surrounding it.

954 And we think that they want to understand the terms and conditions surrounding everything, so we think it is covered there.

955 COMMISSIONER MOLNAR: The terms and conditions being that after -- let's assume that my experience is that every two years you can upgrade your device. It kicks in another three-year contract, but every two years you can upgrade your device for free.

956 Under that sort of situation, what the customer needs to know is, you can either pay your early termination fee at the end of those two years and go off and sign a new contract, you can choose to retain your old device and continue to pay the same monthly fees, or, if you take this upgrade, you are locked into a three-year device.

957 A service provider would have a responsibility for laying those options out to the customer, or the customer just needs to be informed?

958 MR. LORD: The customer needs to have the information.

959 And what you have just described is the beauty of having three-year contracts. What you have just described --

960 COMMISSIONER MOLNAR: I didn't hear beauty when I was talking about it, so --

--- Laughter

961 MR. LORD: Please allow me to explain.

962 You are suggesting that after two years you can upgrade your device and you don't have to pay an early termination fee. One of the three choices that you provided to that customer would be to pay the early termination fee and walk away, or get a handset with no money down and a new three-year agreement.

963 The customer, in that specific situation, in exchange for an agreement for a new contract, a new three-year period, gets the benefit of the early termination fee that they did not pay, because you talked about a three-year agreement after two years.

964 COMMISSIONER MOLNAR: Right.

965 MR. LORD: And we agreed that, under the formula, after two years, if that same customer wanted to walk away, they would have to pay the remaining 12 months of that agreement. Instead of paying that, that is waived, and it is waived in exchange for a new period.

966 The key element here -- and I think what you are asking, and correct me if I am wrong -- is, should the customer know that once they sign up for a new device, they are entering a new three-year period.

967 The answer is, absolutely, yes, they need to know that. They need to be informed, they need to know. It needs to be an informed consent for a new period of time, absolutely.

968 COMMISSIONER MOLNAR: So it would trigger all of the elements of information we are talking about here, including providing them the personal information summary, laying out their new objectives, or new obligations, and so on.

969 It is all triggered again.

970 MR. LORD: Yes, with the caveat of what we said earlier, that if the consumer asks --

971 COMMISSIONER MOLNAR: But you don't want to give it to them.

972 MR. LORD: Yes.

973 COMMISSIONER MOLNAR: But a consumer doesn't have to ask for it, right? I mean, they may not know that a personal information summary is available.

974 MR. LORD: It has to be made available.

975 Our premise -- and I have said it, but I want to be crystal clear. We believe that the consumer must be informed, has to have the information, and allow the consumer to make the choice.

976 COMMISSIONER MOLNAR: Thank you.

977 I want to move on to clarity of advertised prices.

978 There's been some discussion about unlimited plans and, in fact, how in some situations unlimited plans are not actually unlimited, they're limited by fair use policies or other policies. Do you have any problem with precluding using the term "unlimited" within advertising unless it's truly unlimited, with no restrictions?

979 MR. PATRICK: We think if you use the word "unlimited" it should mean unlimited, with no restrictions.

980 COMMISSIONER MOLNAR: Thank you.

981 Moving on to notification of additional fees and tools to manage usage. You have noted that what the Code proposes is an unprecedented imposition. So I assume that you're not very happy with what's been proposed as it regards this. And I take -- you know, having read the record and seeing what was submitted by your members, they would all say that what they're doing is fully satisfying customers, except that customers are not saying they're fully satisfied. So that's the problem that -- you know, the dilemma that we're faced with.

982 So, first of all, I'd like to have you -- on page 5 of your opening remarks, I want you to explain for me what you meant when you said that, "... a customer who was unaware of the mandated $50 default cap could lose service at a critical time." What were you meaning by that? Obviously -- well, obviously I take it from your comments that you do not support the notion of capping overage fees?

983 MR. LORD: That's correct, we don't. We don't support a mandatory cap. We don't support a forced cap on consumers. The specific example could be, for instance, having a teenager of mine that went on a trip and if there would have been a 50 dollar cap and we would not have taken that off, his phone would stop working while he was away and I wouldn't want that to happen. That to me would be the worst circumstance and I'm sure a lot of other people feel the same way.

984 And I think there's a bit of -- there's a bit of overkill here on notification and caps. I think there -- you can create a situation where there's notification fatigue from the consumer. Every second day getting a different notification, is it the same one as the day before, was that one on text, or this one on voice and the next one is on data and where am I on roaming? And it's like fire alarms that go off every day, eventually they don't work.

985 And I think making sure that consumers have access to the information on their usage, yes, absolutely. If some of our providers and some of our members want to provide these alerting mechanisms, good for them and that could be some way to differentiate themselves in the marketplace. And if you are a consumer and you're looking for that, then you can shop around and you can go to carrier A and say I want 12 notifications a month, and they'll say we provide that. Good, I'm signing up with you. And you go to the other one, they say, no, we only provide four, or we only give you the tools to do it. I say, well, sorry, provider B, I'm going with provider A. But let's not force everybody to live through the same thing and have the same thing. That's not how a good functioning market should work. And that's why we think that asking every carrier to provide notification for all of the different options is just too many notifications.

986 On the cap, we simply don't support the cap.

987 COMMISSIONER MOLNAR: You don't support a cap at any level?

988 MR. PATRICK: We've -- fundamentally we agree with your overall approach. We think the consumers need the tools they need to make informed choices. We don't think we should be making those choices for consumers. What's been proposed in the Code is not a cap at any level. It's a mandatory opt out across the board 50 dollar cap for everyone unless they take steps to change that. Bernard used the example of his son. I travel often to the States. As drafted, if I hit $50 with my roaming as drafted, anything that could result in me incurring additional charges. So now I've hit 50 with my roaming. I forgot to call and take that off my account before I left. Now I can't use voice, now I can't use text, now I can't use data. I don't think that's to the benefit of the consumer. Giving them the option of setting a cap for themselves is to the benefit of the consumer.

989 COMMISSIONER MOLNAR: Okay. Thank you. So that would be your position, that consumers -- and I think that's what PIAC proposed this morning as well, that PIAC -- or consumers should be provided the opportunity to set the cap at the level that they desire. So you would support that?

990 MR. LORD: We would not support that it be mandatory for every carrier to provide it. We support that those options could be in the marketplace and consumers would have the choice to know when they shop around. And with all the information, we're providing them with the personal information sheet that they get if they want it and they ask for it, then they know I get notification or I don't get notification.

991 And the other thing to keep in mind for those that are really concerned with how much they pay, there are other options in the marketplace and you can select a prepaid service that exactly establishes how much you will pay before you start. You pre-pay it and that's the amount you can use. And when you reach the cap, it turns off. And that's the beauty. The marketplace has already responded to that need by providing that option in the marketplace.

992 Now, some would say, well, we want the pre-paid option into a post-paid marketplace, but those options are different. And if you really want to limit yourself, I want to pay $50, you get a pre-paid account and you can do that. We think forcing this on carriers and forcing this investment is not the best investment to provide the best service to Canadians.

993 COMMISSIONER MOLNAR: I'm going to choose to move on, rather than argue whether or not pre-paid is actually the option that should be made available to all consumers who may once a year go to the States. Anyway, I'll move on to unlocking wireless devices.

994 We heard this morning that PIAC thought perhaps devices were offered to suppliers, to the WSPs cheaper if they're locked versus unlocked. Do you know anything about that?

995 MR. LORD: We don't have the -- that detailed information, but our carriers would have that information.

996 COMMISSIONER MOLNAR: Okay. Yeah, I'll ask them.

997 I'm going to go through these questions. And if I should move them to the carriers, just go ahead and let me know.

998 Do you know if unlocking by a third party would impact device warranties?

999 MR. PATRICK: In many respects it can void it. Imagine if I have a blender and I open the blender and replace a part, I have a third party replace a part. Well, the manufacturer has tested that device, it's been proven to work under certain circumstances, certain configuration of equipment, and I've just changed the configuration of that equipment. I think it's natural that it would void the warranty.

1000 COMMISSIONER MOLNAR: And just to be clear, your position is unlocked -- they should be unlocked but the when and at what price and under what conditions is part of the competitive market? Is that your position?

1001 MR. LORD: Exactly.

1002 COMMISSIONER MOLNAR: But they should be unlocked --

1003 MR. LORD: Well --

1004 COMMISSIONER MOLNAR: -- at some point for consumers?

1005 MR. LORD: -- if consumers want that option and the -- the consumers should have the option to shop for a carrier -- a device and a carrier that will provide that option, but we don't believe it should be mandatory.

1006 One thing I want to raise here with regards to unlocked phones is the whole issue of handset security and handset theft. And as we were working on that file to bring about a campaign to make sure consumers had the information they needed to protect themselves from handset security -- from handset theft and lost handsets, one thing we came across when we were talking to law enforcement agencies, they were asking us why are handsets unlocked. And they felt it would be better if all handsets would be locked to make it harder for people to steal a device and then use it on a different network. And our response to that, as well as it is today, that is an option and is an option that should be available for consumers that want that option, to unlock the device.

1007 COMMISSIONER MOLNAR: Okay. Thank you.

1008 I'm going to move on to the issue of disconnection. Do you know if your members would be prepared to accept the CCTS disconnection code?

1009 MR. EBY: Well, the disconnection code was not an aspect of the code that we filed, as you know. It's not something that we've gone through in detail with our members. I think it's something that each of the members will have to speak to on behalf of their own companies. It's not clear to us we have a common industry-wide position on what disconnection codes, if any, should be in the wireless code.

1010 COMMISSIONER MOLNAR: Okay, fair enough. I'll ask them.

1011 Moving on to implementation. You've suggested that the code may need to be implemented in stages and even perhaps at different times for different carriers and for different elements of the code. If this type of an approach was to be accepted, how would consumers know when the code applies?

1012 MR. EBY: Well, as we did submit, that different carriers are at different states of readiness and may require different amounts of time. And if there were certain aspects that were to come in at different amounts of time, our recommendation would be if there was -- if it was phased in different aspects, that it never be phased in based on the individual carriers, that phase one be met by all carriers at once, phase two be met by all carriers at once. So it's the same protection for everyone, not, you know, you have different rights because you have carrier A versus carrier B.

1013 COMMISSIONER MOLNAR: And so it would be promoted at the different stages, is that the notion? What would you see your organization do to promote this code?

1014 MR. LORD: Well, there's different things we have done in the past to promote different aspects of industry programs and we'd be willing to look at what steps we can take as the voice of most carriers, if not all carriers, of to making sure that it's known to the public, to consumers that this code exists. There's different ways we can do that. So whether it's through PSAs, whether it's through advertising, we'd be willing to take part. We understand we'll have a role to play in making sure that this code is known to the public. And we want it to be known. I don't want this to be lost. We want this code to be enforced from coast to coast. We want this to be the code and we want to make sure people know about it because we think it will help us reduce the number of complaints. Because people will then know clearly what their rights are and what their own obligations are. And when I say "people", it's consumers and carriers alike.

1015 COMMISSIONER MOLNAR: Thank you.

1016 Once again I'm going off topic, but in 2009, I think it was, you put in place a voluntary code which I guess, based on where we are today, perhaps wasn't as effective as you'd hoped.

1017 What do you see doing differently this time with this Code and promoting it and -- you know, with your members and ensuring your members are following and promoting with the public and so on?

1018 MR. LORD: Well, first of all, we did bring out our Code in late 2009, so just over three years ago. And, really, the Code has been respected and followed by our members. But the Code was not as complete as what is being discussed here today.

1019 The reason it wasn't as complete is there are certain things we just did not talk about or could not talk about. We did not feel that we could talk about early termination fees among ourselves. Then we'd have the Competition Bureau after us.

1020 And so it's no, there's certain things we didn't talk about.

1021 So what's being discussed today is more complete than what was -- than the voluntary Code that we put in place.

1022 There are some key elements that are found in that Code, the simple language, the easy to understand. I would add the fact that our Code, we mentioned -- we identified the CCTS as the body to enforce our own Code, so we fully agree with the proposal that the CCTS be the body to enforce this more complete national Code.

1023 COMMISSIONER MOLNAR: Thank you.

1024 I need to go back to the issue of implementing the Code for just a minute and get your view on how it should apply to existing contracts. And if you don't believe it should apply, how can we ensure that existing consumers, you know, get similar protections in some way?

1025 There's an awful lot of consumers right now under contract.

1026 MR. LORD: We -- we've simply believe that once you set a date for the implementation, that's the date that takes effect, and it takes effect for new contracts going forward. And that is the position that's been adopted in all provincial legislation that have dealt with this situation and it's a -- we feel it's a simple and straightforward application of the law, that it's -- you apply things on a go-forward basis, not retroactively.

1027 And there's things -- carriers on their own can decide to change if they want, if they want to adapt, if it's easier. But the fact is, the date of implementation, the date that is set by the CRTC is the date that it comes into force and it's on an on-going basis, go-forward basis with new agreements.

1028 COMMISSIONER MOLNAR: So just so I understand, and we've had some of the -- of your members saying this could take a year or more to implement, so it takes a year to implement and a customer is signed up to a three-year contract, so those folks would be without the protections of this Code until, if I do my math, '13, '14 -- until 2017.

1029 MR. LORD: The implementation period, as any implementation that you set, will start. And it starts at that moment.

1030 The benefit of the Code is the fact that the Code will be known. It will be out there. And the consumer will have that information with them.

1031 In some cases, if it's closely aligned to what's in place in the Province of Quebec, then it's very easy for those carriers that already operate in the Province of Quebec to implement the Code throughout. But at the same time, I think it's clear -- you have to realize, some of our members are new members. Some are just launching their networks now, and they're launching their networks and now we're imposing new regulations on them. They need time to adapt.

1032 If consumers are smart, they'll be well informed, they'll know this Code is in existence or it's coming and I'm sure they'll be looking for the same benefits that's in the Code even though it may be not be enforced.

1033 COMMISSIONER MOLNAR: Okay. My final question.

1034 How would you see -- or what do you see are the most important elements to assessing and reviewing the effectiveness of this Code?

1035 MR. EBY: Well, I mean, just at the base level -- and this was discussed this morning. But if we're looking at complaints -- and we've submitted this as well.

1036 You know, at the most base level, if you looked at total complaints and complaints that were upheld as, you know, it was -- under investigation, there was found to be a violation of the Code.

1037 And if we think -- the objective of the Code is both to put in place some new responsibilities for the carriers and some new rights for the consumers. And so one metric would be how many complaints were upheld, how many violations of the Code actually took place. And we would want those to go down, and we would want those to be zero as quickly as possible.

1038 At the other end, another goal is that -- is to provide consumers the tools and the understanding of how the market works. And so ideally, over time, the total number of complaints as a percentage of the total number of wireless subscribers should go down as well because a lot of the complaints, if they are not upheld, they could be as a result of some level of consumer misunderstanding or something like that.

1039 So that would be the second that we would want to go down.

1040 And then just general awareness, we submitted that we do think that some qualitative surveys could be done, satisfaction surveys, and we could define various metrics that I -- we think would probably prove that the Code is successful and that people are aware of the Code that we could track over time.

1041 MR. LORD: And just to reiterate, we agree with the objective of having a metrics to measure success. We think it's important and we propose some ways to measure it. We propose some elements of the metrics.

1042 If it's different than this, then we'll certainly adapt, but we think this is the best way to do it. It's simple, it's straightforward and would give us the tools that we need, collectively, to see did we get this right or not. And if we're back here sitting in the same place three years from now discussing the same thing, then we'll know the answer is now. But hopefully, that won't be necessary and we'll have the measurements to show that the number of complaints have gone down and, more importantly, the number of complaints that have been upheld have gone down.

1043 COMMISSIONER MOLNAR: I promised that was my last question, so thank you for answering my questions and I'll pass it back to our Chair.

1044 THE CHAIRPERSON: I have a few questions, and then I'll ask my colleagues if they have any.

1045 On unlocking, you said it's a marketplace solution. Who's offering, at this time, unlocked phones that aren't CDMAs?

1046 MR. EBY: I don't -- from what was filed, I don't believe any of the carriers are offering unlocked phones, but they all have -- there are -- there's a variety of unlocking policies once you have the phone.

1047 THE CHAIRPERSON: You see, that's where I'm having difficulty with your approach saying, well, let the market. The market's not working.

1048 Are you making the point that if somebody wants that now that the market will deal with it?

1049 It's a very theoretical market. If nobody's there doing it now, that means it's not working.

1050 MR. LORD: No, today you can go out and get your phone unlocked, some of the phones --

1051 THE CHAIRPERSON: But with -- but keeping your warranty, for instance. Who's offering that now?

1052 You're saying the carriers will offer that choice --

1053 MR. LORD: Yes.

1054 THE CHAIRPERSON: -- in the marketplace.

1055 MR. LORD: Yes.

1056 THE CHAIRPERSON: Who is offering that now?

1057 MR. LORD: We don't sit around a table and say, "Who's doing what? Rogers, are you offering this plan? Telus, are you offering this?"

1058 What we've read is what they've said in the press. You're going to have to ask, I'm afraid, each of them what they offer and what they don't offer.

1059 THE CHAIRPERSON: Okay, we'll do that. Thank you very much.

1060 I had hoped that the Association speaking on behalf of the Association knew what their members were doing on a policy issue, but I guess that's not the case.

1061 MR. LORD: On some commercial issues, we don't discuss with our members what they do.

1062 THE CHAIRPERSON: Okay. Even though that's just a factual issue whether they do or they don't.

1063 Are you aware of the position of the Competition Bureau with respect to this proceeding?

1064 MR. LORD: Well, I've read what they submitted last week, yes.

1065 THE CHAIRPERSON: Do you have any views about their perspective on unlocking devices?

1066 MR. LORD: I can repeat everything we've said today, but I -- our position has not changed based on what the Competition Bureau has stated.

1067 THE CHAIRPERSON: Okay. And you have nothing to -- any detailed evidence to provide to counter their conclusion that it would actually help a more competitive marketplace to favour unlocking of phones free of charge?

1068 MR. LORD: We have nothing to add at this point, and if we feel we should, we certainly will before the end of the proceedings.

1069 THE CHAIRPERSON: Well, it's up to you. I mean, what you --

1070 MR. LORD: Yeah. No, no.

1071 THE CHAIRPERSON: -- want to provide is your decision.

1072 MR. LORD: And I appreciate the opportunity you're giving us. I think we said what we needed to say on unlocking phones and the fact that it is an option that is available currently in the marketplace. We want it to remain an option.

1073 THE CHAIRPERSON: How about Competition Bureau also made a few comments about long-term contracts, specifically:

"Long-term contracts may harm competition where they foreclose access to customers for rival service provider."

1074 They've actually considered the point here that it might have an effect on prices, but they go on:

"The Bureau's submission, has, in fact, considered the issue of long-term prices and, nevertheless, the Bureau supports measures to omit contract length and to ensure that consumers maintain the ability to move from one service provider to another."

1075 Views?

1076 MR. LORD: Well, on that specific point, as I've said earlier, the fact that an individual will be able to terminate their contract at any time and pay the remainder of the handset subsidy that has not been paid really takes care of that issue. And that's whether it's three years, two years, one year, six months. It doesn't really matter the period of time.

1077 And I'm not sure if the Competition Bureau, when they filed their statements, if they considered the early termination fee as a key component of the marketplace.

1078 Once you have that in place and it's clear and everybody understands what the early termination fee is, it really takes care of the length of the contract.

1079 THE CHAIRPERSON: I believe they did, and that's why they said a better solution would be to actually address this.

1080 MR. LORD: Well, we, on that point, disagree with the Competition Bureau. We don't think it is the right solution to take away a choice that is very popular among consumers and one the consumers may still want to take advantage of. And we believe that there will be negative impacts of taking away the three-year contract option for consumers that will lead to higher prices for handsets.

1081 And I can't see how that would help Canadians by deciding that, suddenly, we're going to make handsets less affordable, less accessible by making them more expensive.

1082 THE CHAIRPERSON: Right. Pre-paid cards. You had discussion with Commissioner Molnar for a while here on pre-paid cards, made an analogy to car rental contracts. I'm not sure that was the best analogy because it seems to me that's an area where the legislator had to get involved quite -- in detail to make sure that people who rented cars actually knew what they were getting into when they were renting contracts. But in any event, that's the analogy you chose.

1083 Do you have any actual details on -- you were saying that you're only getting time, access time to a network plus buying a bundle of access minutes to certain services?

1084 Do you have any evidence to provide to us at which rate are people getting to the end of the time period they had access before running out of minutes?

1085 MR. LORD: I don't. We don't have that information.

1086 THE CHAIRPERSON: Do you think your members would?

1087 MR. LORD: Our members would certainly have information on their own customers, yes.

1088 THE CHAIRPERSON: If I were to ask you if you knew how that future liability is accounted for in the books of companies? That would be also a question I'd have.

1089 MR. LORD: I think it's best to ask the question to the carriers.

1090 MR. PATRICK: If I could just add one point?

1091 It didn't come out in our earlier discussion but I think it's important to remember that the majority if not all carriers will allow a customer to roll those minutes over into a longer -- into a new prepaid period if they do it before the end of the original period.

1092 THE CHAIRPERSON: Personal Information Summary, are they part of the contract in your view?

1093 MR. EBY: Well, we think most of that information that sets out what should be concluded in the contract.

1094 THE CHAIRPERSON: So you wouldn't say that it -- what if it was contradictory, a contradiction between the summary and the longer, small font? Which --

1095 MR. EBY: Well, we wouldn't -- I mean, we wouldn't accept that.

1096 THE CHAIRPERSON: Sorry, I don't understand.

1097 MR. LORD: The Personal Information Sheet would have precedence over the contract.

1098 THE CHAIRPERSON: And how do we establish that?

1099 MR. LORD: Through the Code.

1100 THE CHAIRPERSON: Okay.

1101 It's my understanding when you were exchanging about the Personal Information Summary, granted if you had just rented -- bought a phone or done a contract the day before you might not have it re-read, but you seemed to suggest that it wouldn't be offered to everyone. Did I misunderstand?

1102 MR. LORD: The offer is there. The information has to be made available to the consumer.

1103 If the consumer decides that he doesn't want a paper sheet or a digital copy, he just wants to get on with purchasing the device, accessing the service and using the device, we don't think that the Code should stand in the way of the consumer wanting to have a seamless, enjoyable experience or buying that device.

1104 But the information has to be made available, yes.

1105 THE CHAIRPERSON: And there may be a box to check: I don't particularly want this one described to me.

1106 MR. LORD: Sure.

1107 I think it's been said by others and we have certainly experienced this as well, in the desire to making sure contracts are simple, straightforward and short, if you have too many things that consumers have to go through and too many groups and too much information, you end up with the opposite situation.

1108 And we've seen that specifically in one province where some of our carriers have a three -- one sheet of paper that folded into three normal sheets of paper transformed into a 50-60 page contract because of the regulations that were brought in.

1109 So I think we all have to strike that balance between making sure that we provide the key information that the consumer needs to make the choice without overburdening the consumer with too much information and contracts that ended up being far longer than they should be.

1110 THE CHAIRPERSON: Granted. And I asked some questions to that effect earlier.

1111 But by the same token you're not suggesting these are freely negotiated agreements? They are often take it or leave it arrangements and therefore it's not exactly the sort of arrangement, you know, negotiating how much I'm going to buy a particular item that's quite unique.

1112 MR. LORD: Well, I wouldn't describe them simply as take it or leave it agreements. There are options that the consumer can select and they can pick options that they want or not want based on the different options that they decide is best for themselves and their family.

1113 But I agree with you that they're not negotiating the whole extent of every clause of the contract.

1114 THE CHAIRPERSON: It's only within the choices that are available.

1115 MR. LORD: Sure.

1116 THE CHAIRPERSON: And oddly enough, they seem to be similar from one carrier to the next, those that offer similar types of business plans, right? It's not a lot of differences that you can't really have huge amount of options. They all pretty much look the same.

1117 MR. LORD: Well, there are differences in the marketplace and there are lots of choices in the marketplace. And if the market moves in a certain direction, if someone leads the way with offering more minutes or more time or more data, others won't want to be left behind and they'll adapt their offers accordingly.

1118 It's a very dynamic marketplace, a very competitive marketplace and they work -- the carriers and providers, they fight very hard for every market share that they have and want to keep.

1119 So there may be options that look similar because the marketplace is going in certain directions. But, at the same time, if you look at the range of options that are out there, they are not identical from one carrier to the next and there are all sorts of different options available in the marketplace.

1120 THE CHAIRPERSON: But some of the consumers are telling us they are quite different than what's being offered in other jurisdictions.

1121 MR. LORD: Other jurisdictions being other countries?

1122 THE CHAIRPERSON: Yes.

1123 MR. LORD: That may be the case, but we have a very dynamic marketplace here in Canada that compares favourably in terms of access of networks, quality of networks, penetration, pricing. It compares favourably with what you will find in other OECD countries.

1124 THE CHAIRPERSON: Commissioner Molnar asked you what success looks like at the end. You started to give an answer and you talked about the number of complaints being -- is that the only indicia that's resolved complaints or unsuccessful complaints? Is that the only indicia of success?

1125 MR. LORD: Well, no. I think success is more customers using more devices and more data and more services than before. And in some instances, in most cases, we have that now.

1126 But in terms of metrics of measuring success, having fewer complaints is one.

1127 Having fewer upheld complaints is another one that we feel should be included.

1128 Kurt, I think you had a third one that you had mentioned?

1129 MR. EBY: Just general awareness of the Code and general --

1130 MR. LORD: Okay.

1131 MR. EBY: -- other ways to measure consumer satisfaction. It's been mentioned, you know, that somehow more people changing more providers more often is a measure of success. Obviously, that's not necessarily the case if your own provider is doing everything --

1132 THE CHAIRPERSON: Okay. I was going to ask you that.

1133 Why is ability of a dynamic marketplace is not -- the fact that people churn from one carrier to the next is not an indicia of success?

1134 MR. EBY: It could be. But it also could not be.

1135 I mean if other people are offering great things and my carrier is matching them and calling me up and saying, "I want to give you this so you don't leave" and I stay there, then I think that's a measure of success as well.

1136 So churn in itself, I don't know that that is necessarily a measure of success of the Code.

1137 THE CHAIRPERSON: Would you be able to provide us some more detailed ideas of what we should be measuring --

1138 MR. LORD: Sure.

1139 THE CHAIRPERSON: -- in terms of performance measures in the future on the Code?

1140 MR. LORD: Sure, we can add that to our final comments before -- do you want that before February 22nd?

1141 THE CHAIRPERSON: Yeah, can you do it for the 22nd of February?

1142 MR. LORD: Sure, absolutely. Absolutely.

Undertaking

1143 MR. LORD: Can I just add that the churn in itself is not a reflection of a successful marketplace or a quality marketplace. The fact that consumers decide to stay with a carrier can be a sign of very healthy relationships that they have with that carrier and the fact that they want to maintain. They are satisfied with the service and that's why they stay with that service.

1144 I wouldn't want us to fall into the trap that we somehow have to generate churn to demonstrate we have a successful marketplace.

1145 THE CHAIRPERSON: Right. I take your point. But it was also possible that the absence of churn is a consequence of people feeling trapped in their agreements.

1146 MR. LORD: It could be a possibility but I think it would be jumping to a conclusion to believe that that is the only reason.

1147 And once --

1148 THE CHAIRPERSON: It gives you a chance to correct the record then in your submissions.

1149 MR. LORD: Well, I think, if I can add, once people are clear on their rights and their obligations and you have an early termination fee that is clearly understood by consumers that's all you need. Because once you have that if they want to leave in turn they can. If they want to stay because they're satisfied they can and they'll know exactly what that is. They'll know what their obligation is.

1150 I don't think we should set in advance -- and that's the point I'm making -- that we should set in advance that we need a certain level of churn to demonstrate we have a healthy marketplace. I don't think that's -- I don't think that's how we should measure success.

1151 THE CHAIRPERSON: As I said, then there is an opportunity for you to actually provide some measures --

1152 MR. LORD: Thank you for that opportunity.

1153 THE CHAIRPERSON: -- that actually do indicate that we have a dynamic marketplace.

1154 Commissioner Duncan has some questions for you.

1155 COMMISSIONER DUNCAN: Good afternoon. I'd like to just follow up on the question I asked earlier of PIAC with regards to the wording, the suggested wording on the termination fees.

1156 And so listening back to your presentation, the wording in D3.3 seems to be very complicated because you're suggesting that all you would pay would be the remaining subsidy on the device.

1157 So I'm just wondering if you agree that the wording could be much simpler and if you would want to undertake to give us more simple -- simpler wording.

1158 MR. EBY: Yeah, I agree. And I think where the -- if the contract must stipulate what the ETF looks like or as the Personal Information Summary has said this is what it would be after one year, two years, three years then, you know, that's providing the information that people really need the most.

1159 COMMISSIONER DUNCAN: Okay. And just on that point there, you would extrapolate if you wanted to disconnect after 18 months, not one, two or three?

1160 MR. EBY: Yes, of course.

1161 COMMISSIONER DUNCAN: Okay, because there was something that was said earlier. John Lawford, I believe, said that with the penalty, I guess, of the costs of the device on a two-year contract didn't seem to equate to the same as on a three-year contract.

1162 I'm just wondering if there is a need for us to make sure that if there is a two-year contract option that that price is amortized over two years, the same price.

1163 MR. EBY: Well, as Bernard said, I think the ETF as written takes care of that on its own. I mean, it's basically applying -- that suggestion is like applying the ETF kind of upfront. You know it's the same depreciation value to get to two years with the ETF as is. You can still maintain that flexibility.

1164 You might even get a better service offering if you take the three year deal even if your intent is to exit after two years. So I understand that. But we think it's built in.

1165 COMMISSIONER DUNCAN: Okay. And I agree with that. Thank you. I understand.

1166 And what about the point that was in your submission that if there was no economic incentive and the cancellation will be the sum of the price of the services provided up to the effective cancellation date -- that's gone -- obviously you have to pay for anything you owe for services received but the lesser of $50 or 10 percent.

1167 And Commissioner Molnar may have asked you that, but if you don't mind I just didn't -- are you intending that that would still apply or there would be no charge?

1168 MR. EBY: Yeah, we still have that written into the Code that we have drafted based on the Quebec legislation.

1169 COMMISSIONER DUNCAN: But irregardless of it being somewhere else, what is the reason for it?

1170 MR. EBY: Again, it's set in cases where you've bought the phone upfront and the carrier is offering you a promotion in return for expecting you to be their customer for two years.

1171 I believe it was -- you know, in Quebec it was they weighed the balance of, on the one hand, the device subsidy which can be very high, and then, on the other hand, this other amount, and they decided not to apply both in the case where a device was subsidized.

1172 MR. LORD: And if I can add, it's also accepting the fact that there is a mutual relationship between the consumer and the provider of the service, and taking into account that the consumer will be well informed before making that decision, and if they decide to eliminate -- but there have been some other incentives other than the handset subsidy that have been provided. We felt it was reasonable compensation.

1173 COMMISSIONER DUNCAN: Okay. Thank you very much.

1174 Those are my questions, Mr. Chair.

1175 THE CHAIRPERSON: Madame Poirier?

1176 COMMISSIONER POIRIER: I'll ask my question in French. So if you need translation, please use it.

1177 Concernant le déverrouillage, M. Lord, il y a un argument que vous avez apporté que j'ai de la difficulté à comprendre, c'est celui de la sécurité pour les appareils volés.

1178 A moins que j'aie la mémoire courte, l'ACTS a informé la Commission que ses membres vont s'abonner à une base de données qui permettra d'éviter la réactivation des téléphones déclarés perdus ou volés sur n'importe quel réseau canadien, et, en théorie, vous nous avez dit que ça devrait commencer à s'appliquer au mois de septembre prochain.

1179 Alors, je ne comprends pas, à ce moment-ci, pourquoi vous défendez encore sur le plan de cet aspect-là, qui est celui de la sécurité, le fait de vendre des téléphones qui doivent être verrouillés.

1180 M. LORD : Vous avez entièrement raison sur les annonces que nous avons faites, et notre organisation et nos membres, on travaille pour atteindre les dates qu'on s'est fixé. On va les atteindre.

1181 Même que je souhaite être en mesure d'annoncer d'autres améliorations au système, qu'on a prévues, qui vont donner d'autres options aux consommateurs. Je ne veux pas les annoncer aujourd'hui parce que ce n'est pas à cent pour cent là, mais on ajoute déjà... avant même que notre système soit mis en place, on est en train de prévoir d'autres améliorations.

1182 Je le mentionnais non pas pour un élément... Je le mentionnais parce que c'est quelque chose qui nous avait été soulevé, et ce n'est pas l'argument principal que j'avance sur ça. Je dis simplement quand on parle de déblocage que oui, c'est une option qui doit être offerte aux consommateurs mais qu'on ne doit pas nécessairement appliquer la même option à tous les fournisseurs de service.

1183 CONSEILLERE POIRIER : Sauf que vous êtes d'accord avec moi que l'argument de la sécurité ne tiendra plus à partir du moment où il y aura cette règle?

1184 M. LORD : Ce que je dis, c'est que nous avons pris d'autres mesures... Je suis d'accord avec vous que nous avons pris d'autres mesures pour traiter de la question de la sécurité, et nous, on est d'avis que ces mesures-là vont aider les consommateurs à être bien informés de comment se protéger et quoi faire en cas de vol ou de perte d'appareil.

1185 CONSEILLERE POIRIER : Parfait!

1186 Un deuxième argument qui était invoqué dans votre document était le fait que les technologies étaient différentes.

1187 M. LORD : Oui.

1188 CONSEILLERE POIRIER : Il y avait avant, je dirais, beaucoup la technologie du GMA, je pense...

1189 M. LORD : Oui.

1190 CONSEILLERE POIRIER : ...et SMG maintenant, qui est celle plus utilisée, avec des upgrade, avec des améliorations. Maintenant, c'est la nouvelle technologie qui est utilisée. Ce n'est plus vrai, sauf dans certains secteurs au pays au niveau géographique ou sur des vieux téléphones, que le fait de verrouiller était un avantage effectivement nécessaire à cause de la technique. Il me semble que ça ne tient plus dans la nouvelle génération de téléphones.

1191 M. LORD : L'information que j'ai est différente, et si vous m'accordez le temps, je vais vouloir la vérifier, puis on l'inclura dans nos commentaires avant le 22.

1192 CONSEILLERE POIRIER : Oui.

1193 M. LORD : Mais je crois que même dans les réseaux, même si on parle de réseaux similaires, ce n'est pas garanti qu'un téléphone va fonctionner sur un autre, mais je vais le vérifier.

1194 CONSEILLERE POIRIER : Oui.

1195 M. LORD : Donc, je vais le vérifier avec les gens qui sont spécialistes de la technologie, puis on va vous fournir la réponse avant le 22.

1196 CONSEILLERE POIRIER : Parfait! Vérifiez-le donc à deux niveaux : celui de la géographie, mais celui aussi des nouveaux appareils qui sont vendus et sur le fait que ce ne sont maintenant, à mon avis là, selon l'information que j'ai, seulement les plus vieux modèles qui ont effectivement des problématiques au niveau technique.

1197 Alors, pour moi, il ne reste qu'un seul argument là qui tient parmi les trois arguments que vous avez présentés pour ne pas permettre d'avoir des téléphones qui sont déverrouillés.

1198 Alors, je me demandais, et j'ai posé la question ce matin : Quand vos membres commandent des téléphones, est-ce qu'ils doivent exiger qu'ils sont verrouillés ou est-ce que les fabricants les fabriquent en étant verrouillés au départ?

1199 M. LORD : Je vous suggère de demander cette information-là directement aux fournisseurs.

1200 CONSEILLERE POIRIER : Parfait! Merci.

1201 M. LORD : Eux ont l'information.

1202 CONSEILLERE POIRIER : Donc, vous ne connaissez pas le coût de déverrouiller un appareil?

1203 M. LORD : Non. Moi, je n'ai pas cette information-là.

1204 CONSEILLERE POIRIER : Alors, on posera la question à qui de droit. Merci beaucoup.

1205 Mon deuxième sujet. Vous préconisez une seule règle à travers tout le Canada. Un de vos membres, qui est Québecor, ne fait pas de même. Il est complètement en désaccord avec votre approche. Ils seront devant nous vendredi.

1206 Ils préféreraient qu'il y ait une forme de suspension des règles dans les provinces qui voudraient bien en faire la demande. Ils présentent cet argument, et je ne veux pas les résumer. J'espère que vous serez à même de les commenter dans vos réponses.

1207 Mais ils donnent, entre autres, comme exemple que PIPEDA, c'est la preuve qu'il peut y avoir une coexistence possible entre le fait qu'il y ait une règle qui vienne de l'organisme fédéral qui réglemente en fait un secteur et le fait que, quand même, des provinces puissent décider, je vais dire, de opting out ou de suspendre une législation.

1208 D'ailleurs, ils expliquent bien qu'il y a six lois provinciales, cinq cadres législatifs, et que ça fonctionne avec l'organisme qui s'occupe de la protection des renseignements personnels et des documents électroniques.

1209 Alors, en quoi votre approche est justifiable quand on sait qu'on peut faire autrement avec un cadre législatif assez similaire?

1210 M. LORD : Premièrement, je vais laisser chacun de nos membres élaborer leur propre position si elle est différente de la nôtre, et le fait que nous mettons de l'avant une position, que ce soit sur ce sujet-ci ou une autre, ne veut pas nécessairement dire que c'est complètement unanime dans l'ensemble de nos membres.

1211 Ça arrive parfois qu'on avance des positions qui ne sont pas unanimes mais qui sont consensuelles. Donc, il y a un consensus qui a été établi, sans toutefois être purement unanime. Il y a une différence entre les deux.

1212 Sur la question de la compétence fédérale, pour nous, c'est un enjeu de compétence fédérale, et nous sommes d'avis que c'est le gouvernement fédéral qui a la responsabilité et la compétence dans le domaine, et que le fait que le CRTC va développer un code national, doit prendre un code canadien, ça doit avoir préséance sur les autres lois provinciales qui ont été adoptées.

1213 Sinon, ça peut mener à une confusion, ça peut mener à une différence des critères, et si on laisse ça tout simplement déterminer lequel qui est mieux pour le consommateur, ce n'est pas toujours évident lequel qui peut être mieux pour le consommateur.

1214 CONSEILLERE POIRIER : Oui, mais je trouve ça drôle que vous me disiez ça, alors que depuis le début, vous dites que le consommateur est intelligent...

1215 M. LORD : Oui.

1216 CONSEILLERE POIRIER : ...sait où aller pour prendre son avantage.

1217 M. LORD : Oui.

1218 CONSEILLERE POIRIER : Alors, le consommateur, s'il est intelligent, il va comprendre peut-être qu'au Québec, il est mieux de suivre le code ou les lois du Québec, et ailleurs, il est peut-être mieux de prendre le code.

1219 Alors, dans ce sens-là, pourquoi ne pas laisser libre choix au consommateur, que vous qualifiez d'intelligent depuis le début?

1220 M. LORD : L'argument que vous avancez est intéressant, sauf que la situation peut arriver avec une compétence qui est conflictuelle, et nous sommes d'avis qu'il est mieux d'avoir des règles claires.

1221 Si on force les fournisseurs de service à s'adapter à différentes règles, et là, on parle simplement de la situation... vous parlez simplement de la situation entre le Canada et possiblement une loi québécoise, mais il peut y avoir la même chose en Nouvelle-Écosse, à Terre-Neuve, en Ontario, au Manitoba, même au Nouveau-Brunswick, et caetera.

1222 Puis là, on va forcer les fournisseurs d'adapter et d'avoir des systèmes qui s'adaptent à toutes les différentes règles. On fini par imposer des coûts additionnels qui sont passés au consommateur, et c'est le consommateur qui finit par perdre.

1223 CONSEILLERE POIRIER : Alors, sur ce dernier argument que vous dites de passer les coûts au consommateur, on dirait que vous faites un lien direct avec l'augmentation des règles et c'est le consommateur qui va payer.

1224 Moi, ce que j'ai lu et beaucoup entendu dans cette audience à ce moment-ci, c'est que les consommateurs disent, on n'en a pas assez pour notre argent. Peut-être que les compagnies doivent aussi absorber une partie des coûts de mieux desservir leur clientèle avec un code.

1225 Ne pensez-vous pas, tout en supportant le fait que nos entreprises doivent être compétitives, doivent être profitables, qu'à ce moment-ci, puisque l'industrie semble être allée assez loin d'un côté qui a choqué les consommateurs, qu'elle ne devrait pas aussi absorber une partie des coûts pour les déchoquer?

1226 M. LORD : Le coût de la réglementation va être absorbé par les entreprises, comme ça été le cas dans certaines provinces, mais il n'y a pas de besoin de créer plusieurs niveaux de réglementation qui ajoutent des coûts additionnels. Si on fait ça, on ne règle aucun problème.

1227 CONSEILLERE POIRIER : On l'a réussi au Québec. Ça se fait actuellement.

1228 M. LORD : On ajoute.

1229 Si vous imposez à des fournisseurs de service de s'adapter à un code canadien, s'adapter à un code québécois, s'adapter à un code de la Nouvelle-Écosse, terre-neuvien, manitobain, et caetera, vous ajouter des coûts, et je ne vois pas comment ajouter des coûts de réglementation aide n'importe quel consommateur au Canada.

1230 Ça ne doit pas être là l'objectif, et c'est pour ça que nous, on est devant vous ici, et j'aimerais rappeler qu'on a été les premiers à vouloir un code canadien parce qu'on pense que, finalement, le consommateur sera beaucoup mieux servi par un code canadien et non 14 codes, un pour chaque province puis un du gouvernement fédéral. Ça serait la pire des situations.

1231 CONSEILLERE POIRIER : Et la suspension possible, qu'est-ce que vous en faites à ce moment-là, la suspension, telle que proposée par Québecor, de dire dans une province, on pourrait décider de suspendre le code canadien pour permettre la libre application des lois provinciales qui ont cours dans le domaine des contrats, par exemple?

1232 M. LORD : Nous, on préfère que les Canadiens d'un océan à l'autre soient assujettis aux mêmes règles et au même code et aux mêmes solutions, et on croit que c'est une meilleure option.

1233 Je comprends, et puis les gens de Québecor pourront vous faire part de leur propre point de vue. Mais, pour nous, c'est mieux d'avoir un code canadien qui s'applique d'un océan à l'autre et qui traite tous les consommateurs canadiens de la même façon, surtout que c'est un domaine de compétence fédérale.

1234 Si on parlait d'un domaine de compétence provinciale, comme je l'ai déjà fait ailleurs dans un autre moment, je vous dirais des choses différentes, mais on parle ici d'une compétence constitutionnelle fédérale, et c'est pour ça que le CRTC doit adopté un code et que le code doit avoir primauté sur les lois provinciales, parce que c'est une compétence fédérale.

1235 CONSEILLERE POIRIER : Et étant un ancien politicien, vous comprenez bien ce que vous dites concernant votre position en regard de la position du gouvernement du Québec qui a été présentée ici dans le cadre de cette audience. Vous êtes conscient que ce que vous demandez va à l'encontre de ce que le gouvernement du Québec demande?

1236 M. LORD : Oui. Oui, je suis conscient de ça et je suis conscient aussi des avis juridiques qui ont été déposés devant la Commission et d'autres qui ont été préparés avant et sur d'autres sujets similaires, qui ont été très clairs que c'est une sphère de compétence fédérale, et lorsqu'on parle d'une sphère de compétence fédérale, si le gouvernement fédéral décide d'agir, et le régulateur, le CRTC décide d'intervenir et d'agir, ça doit avoir préséance.

1237 Et moi, je suis d'avis que lorsqu'on parle de compétence fédérale, le gouvernement fédéral doit assumer ses responsabilités, doit assumer ses obligations constitutionnelles et doit aussi les protéger.

1238 Si c'est une sphère de compétence provinciale, je vous dirais que les provinces ont préséance et doivent les protéger aussi.

1239 CONSEILLERE POIRIER : Vous comprendrez que je ne vais pas entamer ce débat-là aujourd'hui.

1240 M. LORD : Ça me ferait plaisir de le faire, mais je ne crois pas que c'est la place.

1241 CONSEILLERE POIRIER : Non. Je vais m'arrêter là. Je suis allée le plus loin que je pouvais. Merci beaucoup.

1242 M. LORD : Merci.

1243 THE CHAIRPERSON: Commissioner Simpson.

1244 COMMISSIONER SIMPSON: Thank you very much.

1245 Just one question or one line of questioning, I'll be brief.

1246 It's been said that consumers are increasingly attached to their devices, Smartphones, and so much so that they're placing an increasing amount of that attachment to the communication, a social -- or the social side rather than the communication side of the device.

1247 The question is this. If your industry is struggling with a nice problem to have, which is increased usage of their networks and that usage has a cost and as usage goes up it forces you to have to review and recalibrate what those costs should be, and on the consumer side, as we work on the Code to try and level the playing field and somehow get the needle to the middle on the understanding of the contractual relationships and their costs, I'm still not satisfied that the consumer doesn't have a responsibility that goes with this, but they don't know that.

1248 So the question is: Do you think the industry, as you wrestle with the good side of the problem, has a need much like the liquor industry, the automobile industry to educating the consumer as to their consumption habits, not to the detriment of your business, but to the benefit of the consumer's understanding of their role?

1249 MR. LORD: I think you're raising a very valid point in that collectively, that includes us, but collectively we have to do a very good job and better job at making sure that consumers understand what they're using.

1250 And, as I said earlier today, we've gone a long way from those phones where you'd use the phone and it was a dollar a minute and that's all you could do and it was clear and cut and simple.

1251 A lot of people now, you know, certainly when I look at my own two teenagers, they buy those devices, if they speak four minutes per month on their devices, it's because I have called them for four minutes, they don't use it as a phone anymore.

1252 And the consumption habits of consumers has changed and they're not the same for all groups of consumers.

1253 We've done research that shows there's a clear difference in the age group 18-35 and those that are 55 and older, 55 and older tend to use their phone more for voice, some text, very little data; 18-35, they use it for data, text and some voice.

1254 And, so, we can't lump -- there isn't one consumer out there that's identical, they're different, they're different in different age groups, different demands and that's why the marketplace needs to adapt its offerings to satisfy the different types of consumers.

1255 And this evolution, fortunately, I don't think will end today and I don't think any one of us want it to end today, what we see that is clear is the consumption for data will continue to increase.

1256 Some of our networks in Canada today, consumption for data is growing at a rate of five percent a week. There's a recent study that came out of Industry Canada that projected it will increase by more than nine times in the next five years.

1257 So, consumers are getting more, a lot more and we need to make sure that they understand they're getting more, they're consuming more data. When you use your new device and you can stream live HDTV on your device, that consumes more data than sending a text, yay, how's it going? It's not the same thing. So, most consumers -- I think a lot of consumers understand that, some may not realize that.

1258 And I agree with you, if that's what you're suggesting, that we as an association and as an industry, we have role to play in making sure that consumers understand that.

1259 COMMISSIONER SIMPSON: I'm just not satisfied -- my concern is that promoting the Code, we use the term prescriptive, you used it several times today. You know, you can put vitamin in front of somebody, but that doesn't necessarily mean they'll take it, and putting the Code in front of somebody doesn't necessarily mean they'll read it.

1260 So, I'm asking or challenging your industry as to whether you'd be interested in making some kind of a commitment to -- well, the expression that I use a lot is the lottery organization that says, "Know your limit, play within it", and I think it comes to the issue of understanding -- the consumer understanding what they've gotten into, it's not just a regulatory bargain, it's a relationship between, you know, vendor and consumer.

1261 And I'm really interested to hear your views on your responsibilities.

1262 MR. LORD: Yes. We believe and we started out with a voluntary Code because we felt that collectively we needed to do a better job and that dealt with some elements but not all elements and we saw provincial legislation popping up left and right, we realized there has to be a better solution than 13 different sets of rules, let's have one set of rules.

1263 And we were part of the -- we were the instigator of this proceeding and a National Code because we think everyone will gain from having consumers and carriers that clearly know what their obligations and responsibilities are.

1264 And it goes both ways, there is a mutual relationship, it's not just one having to provide the other. Let's not become the nanny state and tell the consumers, you don't have to worry about anything, the government will take care of you.

1265 Well, I don't think we want to get to that situation, and that's why I said earlier this morning, what's really important with this Code is striking that balance between a vibrant competitive marketplace with some regulation, let's not go overboard.

1266 Do we -- does our association and our members have a responsibility to do more, to provide more information to the public? My answer to that is yes, and we've already started on a series of initiatives and as a group we're talking about other initiatives that we can initiate, and this could very well be one of them.

1267 I said earlier today, do I feel that we will have a responsibility in promoting the Code and its existence? Absolutely yes. Absolutely.

1268 THE CHAIRPERSON: Thank you very much. Those are my questions.

1269 M. Lord et votre équipe, merci beaucoup.

1270 On va prendre une pause jusqu'à 3 h 10. Merci.

--- Upon recessing at 1454

--- Upon resuming at 1511

1271 LE PRÉSIDENT : À l'ordre, s'il vous plaît. Merci. Nous allons entendre maintenant l'Union des consommateurs.

1272 LA SECRÉTAIRE : C'est bien ça, monsieur le président. Est-ce que tout le monde pourrait prendre place, s'il vous plaît?

1273 THE CHAIRMAN: Excuse me. Order, please. Merci.

PRESENTATION

1274 MME LAMBERT-RACINE : Donc, bonjour à tous. Je suis Sophie Lambert-Racine, analyste en matière des télécommunications pour l'Union des consommateurs.

1275 Je vais vous présenter, dans le temps qui nous est alloué, quelques-unes des observations d'U.C. concernant l'ébauche du Code présenté par le Conseil récemment.

1276 Nous avons de très nombreux commentaires au sujet du présent Code. Nous avons certains éléments de fond à présenter; d'autres consistent en des propositions de reformulation en vue de clarifier certains aspects.

1277 Puis que le 20 minutes qui nous est accordé était malheureusement nettement insuffisant pour vous faire part de l'ensemble de nos arguments plusieurs éléments sont expliqués plus en détail dans un annexe joint au présent document, mais ces renseignements-là vont également être déposés dans le cadre des observations écrites qui ont été annoncées ce matin.

1278 Donc, tout d'abord, je tiens à préciser que même si l'ébauche du Code ne constitue qu'un document de travail et non une prise de position officielle du Conseil sur ce que sera le Code, nous regardons d'un bon oeil certaines suggestions relatives aux services pré-payés, les avis relatifs aux frais supplémentaires et les outils de surveillance et de gestion de l'utilisation qui nous apparaissent, dans chacun des cas, des pas dans la bonne direction.

1279 Nous croyons, en effet, que certaines initiatives mentionnées dans ce document pourraient aider à réduire les frustrations des consommateurs en matière de service sans fil.

1280 Nous avons, évidemment, pris connaissance de la mention RA-4 qui indique que le Code doit être interprété en faveur du consommateur et ne doit en aucun cas l'empêcher du bénéfice d'une autre loi.

1281 Nous avons manifesté certaines préoccupations dans nos observations précédentes concernant l'inclusion au Code de dispositions touchant les questions contractuelles qui sont de compétence provinciale. Un Code touchant ces questions doit absolument, d'après nous, faciliter et améliorer les recours des consommateurs et élargir la gamme des moyens dont ils disposent pour régler leurs litiges.

1282 L'intervention du CRTC ne doit pas avoir pour effet de lancer des guerres de compétence ou de validité constitutionnelle qui mettrait en péril l'efficacité de l'encadrement applicable au télécom. Le fait que le Code mentionne la cohabitation avec les lois provinciales existantes va dans ce sens.

1283 La mention de loi plus avantageuse nous semble par contre problématique puisqu'elles semblent vouloir établir une hiérarchie et elle ouvre la porte aux contestations.

1284 Qu'est-ce qui constitue un avantage qui permettrait l'application d'une loi provinciale? Que faire dans les cas où les protections, mais non les recours ou les remèdes s'équivalent?

1285 La coexistence constituerait l'option la plus intéressante pour les consommateurs qui continueraient de disposer de recours en vertu du Droit civil tout en profitant d'un code qui permet des recours faciles et accessibles pour régler certaines disputes avec leurs fournisseurs.

1286 Afin d'éviter toute vélléité de hiérarchisation, le Code doit plutôt affirmer clairement qu'il ne peut en aucun cas être interprété comme ayant préséance sur les Lois provinciales.

1287 Passons aux dispositions proprement dites, reconnaissons qu'une ébauche reste une ébauche. Même si sur le fond plusieurs aspects s'avèrent intéressants pour les consommateurs, plusieurs points méritent précision.

1288 Nous profiterons du temps qui nous est accordé aujourd'hui pour vous souligner les passages qui, selon U.C., mériteraient certaines modifications. Nous soulignerons également les choix qui nous semblent les plus intéressants lorsqu'une alternative est proposée et nous suggérerons certaines précisions pour les question qui ne nous semblent pas suffisamment détaillées.

1289 L'Article 6, notamment, porte sur l'application du Code sur les services sans fil ou contrats conclus à distance. L'obligation pour ce type de transaction de faire parvenir les modalités complètes nous semble incontournable comme moyen de protéger adéquatement les consommateurs afin d'éviter les quiproquos avec leurs fournisseurs des services,

1290 Comme le Code prévoit une annulation possible en cas de non-réception des modalités, il faudrait songer à dissocier le délai d'annulation de la date d'une réception qui n'aura pas eu lieu en le fixant, par exemple, à 45 jours de la date de la conclusion du contrat ou à 30 jours de la date à laquelle le consommateur constate que le service ou le prix ou autre n'est pas conforme au contrat.

1291 Comme les contrats à distance sont souvent payés par carte de crédit ou autrement, au moyen de l'acceptation, le Code devrait préciser que le commerçant a l'obligation de rembourser tous les montants qu'il pourrait avoir perçus et prévoir une méthode qui permette aux consommateurs d'être remboursés, i le fournisseur est récalcitrant, comme l'a fait, par exemple, le Législateur québécois en prévoyant la rétro-facturation.

1292 C-1; concernant l'administration et l'application du Code, nous avons plusieurs commentaires.

1293 U.C. comprend que le CPRST continuera à se charger des tâches de première ligne, soit de recevoir les plaintes des consommateurs et de trouver des solutions aux problèmes qu'ils rencontrent avec leurs fournisseurs de services.

1294 Le Code constituera ainsi en quelque sorte un outil supplémentaire à partir duquel le CPRST pourra évaluer la conformité des pratiques aussi bien que des contrats des fournisseurs de services, un outil que le CPRST devrait incidemment pouvoir invoquer d'office et non seulement quand une plainte porte sur le Code.

1295 Le CRTC surveillera les tendances générales du marché et interviendra si des pratiques qui ne sont pas conformes au Code deviennent systématiques.

1296 Nous comprenons de cela que le CRTC considérera en quelque sorte que le Code comme un ensemble de conditions de services et que c'est dans cette optique qu'il étudiera les comportements et qu'il sévira, au besoin, contre les délinquants. Cette approche que nous préconisons lèvera en fait tout soupçon sur les vélléités du CRTC de se substituer aux autorités provinciales chargées de l'application des Lois de protection du consommateur.

1297 La suggestion que les fournisseurs de services devront présenter un rapport au CRTC démontant qu'ils se sont conformé au Code est parfaitement justifié dans cette approche.

1298 Pour détecter les situations de non-conformité générales, le CRTC devrait également exercer une veille qui ne se limite pas aux données relevées par le CPRST. Le CRTC devrait, par exemple, se prévaloir sur une base régulière de son pouvoir général de surveillance en vérifiant le respect des conditions imposées aux fournisseurs par le biais du Code.

1299 Si nous n'avons pas de nouveau commentaire concernant la nature des remèdes que peut offrir le CPRST, nous avons toutefois des réserves concernant la méthode de dépôt de plainte au CPRST.

1300 Nous nous opposons à l'exigence faite au consommateur de contacter systématiquement son fournisseur avant de contacter le CPRST. Comment s'assurer que la plainte a été résolue dans le meilleur intérêt du consommateur et que les exigences du Code ont été respectées?

1301 Peut-on réellement s'attendre à ce que tous les consommateurs de services sans fil maîtrisent parfaitement le Code dès son entrée en application ou qu'ils soient bien disposés à traiter avec le fournisseur avec lequel ils ont un litige, sachant qu'un tiers indépendant peut les informer et intervenir?

1302 C'est aussi cette connaissance du Code par le consommateur que semble présumer le Code quand il parle d'une plainte au sujet d'une question relative au Code.

1303 C'est au sujet d'un litige avec un fournisseur que le consommateur devrait s'adresser généralement au CPRST et c'est à ce dernier qu'il deviendra le plus souvent, d'après nous, déterminer la pertinence d'appliquer le Code à une plainte donnée.

1304 Nous croyons qu'il devrait être prévu que le consommateur puisse déposer une plainte au CPRST sans que l'obligation de contacter d'abord son fournisseur ne constitue une condition d'ouverture à ce recours.

1305 Les données récoltées au sujet de l'application du Code par le CPRST ne seront sinon que fragmentaires et ne permettront pas d'obtenir d'indication exacte si le nombre de plaintes portées au CPRST est réduit du fait de cette obligation.

1306 D-1.2; point particulier abordé dans le contrat. Nous ne nous entendrons pas ici sur ce point, mais plusieurs suggestions sont en annexe, donc à la fin du document.

1307 D-1.3; pour ce qui est des services prépayés, nous avons évidemment une préférence marquée pour l'option 2. Les services prépayés peuvent s'avérer une solution avantageuse pour les petits consommateurs de service sans fil ou les consommateurs à faibles revenus.

1308 Le fait d'interdire les dates d'expiration au crédit acheté leur permettra d'éviter les situations fâcheuses où les crédits achetés sont perdus ou d'éviter que le consommateur ait à en racheter mois après mois pour ne pas perdre ce qu'ils ont déjà payé, un supplément dont ils n'ont plus besoin.

1309 Pour les modifications apportées au contrat par les fournisseurs de services, on remarque toutefois... on remarque ici une omission. Aucune distinction n'a été prévue entre les contrats à durée déterminée et indéterminée.

1310 Aucune distinction n'a non plus été prévue entre les éléments essentiels ou déterminants qui doivent faire partie d'un contrat par rapport aux éléments accessoires.

1311 L'option présentée propose la possibilité pour le fournisseur d'indiquer au contrat les éléments pouvant faire l'objet de modification sans nuance à ce qui a trait à la nature des changements pouvant être apportés.

1312 Nous suggérons que soit ajoutée une disposition prévoyant que les éléments déterminants du contrat ne puissent en aucun cas être modifiés dans le cours d'un contrat à durée déterminée.

1313 Les éléments déterminants ne pouvant être modifiés par un fournisseur seraient notamment la nature du bien ou du service, le prix du bien ou du service ou la durée du contrat.

1314 Pour toute modification aux éléments déterminants qui réduisent l'obligation du commerçant et augmentent celles du consommateur, ce dernier doit avoir la possibilité de mettre fin à son contrat et ce, sans avoir évidemment à payer quelque frais de résiliation que ce soit s'il avise son fournisseur au plus tard 30 jours après l'entrée en vigueur de ces changements.

1315 D-2.2; nous supportons avec quelques réserves le principe proposé concernant les modifications aux politiques de confidentialité et d'utilisation équitable, toutefois nous suggérons quelques précisions en annexe.

1316 Évidemment, s'il y a des changements importants prévus à la politique d'utilisation équitable, le consommateur devrait disposer des droits que nous avons suggérés à l'Option D-2 puisque ces changements pourraient avoir un impact sur la nature du service offert. Nous reviendrons plus loin sur ces politiques.

1317 D-3.1; pour ce qui est des annulations ou des résiliations, nous supportons, bien entendu, le principe. C'est au consommateur qu'il revient de choisir la date de la fin du service. Nous croyons que l'Option 1 est préférable, que l'annulation doit être effective à partir de la date d'envoi de l'avis ou à celle qu'indique le consommateur.

1318 Néanmoins, la date de transmission de l'avis est, selon nous, la meilleure formulation puisqu'elle garantir que tous les modes de communication soient autorisés. La difficulté pour le consommateur de vérifier la date de réception ou la réception en elle-même devrait justifier le rejet de cette option.

1319 D-3.3; calcul des frais de résiliation anticipés. L'Option 2 détaille de façon plus précise le calcul des frais qui peuvent être imposés en cas de résiliation. Cette option, malgré sa complexité, a l'avantage d'éviter le flou qui affecte l'Option 1.

1320 Néanmoins, l'Option 1 indique que les seuls frais de résiliation applicables sont calculés en fonction de l'appareil subventionné plutôt que de l'incitatif économique retenu à l'Option 2.

1321 La prise en compte du prix de l'appareil subventionné permettant, contrairement à celui des incitatifs économiques, un calcul. Un lien objectif aussi imparfait soit-il, c'est cet élément seul qui devrait être retenu pour le calcul des frais de résiliation.

1322 Il serait, en effet, absurde que le fournisseur puisse exiger des frais pour un service qu'il offrait gratuitement et qu'il considérerait comme un incitatif économique, mais qu'il n'offrira justement plus vu la résiliation du contrat et pour lequel rien ne dit que le consommateur aurait opté si des frais y avaient été liés.

1323 Dans tous les cas, nous ne voyons pas la pertinence d'indiquer que le consommateur doit payer les frais pour l'ensemble des services fournis jusqu'à la date d'annulation. Selon nous cela relève de l'évidence et cette mention pourrait être exclue afin d'alléger le texte et éviter la confusion chez le consommateur.

1324 Payer les services consommés ne se constitue pas une pénalité.

1325 D-3.4 ; pour le renouvellement automatique du contrat, l'Option 1 nous semble la plus satisfaisante et la plus simple puisqu'elle permet des avertissements systématiques peu importe la longueur du contrat.

1326 D-4.3 ; nous sommes bien conscients de l'état du marché actuel. Nous sommes par contre aussi conscients du sens de certains mots. Nous nous opposons sans réserve à l'utilisation du terme « illimité » pour qualifier un service qui comporte en effet des limites telles qu'elles soient.

1327 Nous sommes heureux de constater que le Bureau de la concurrence partage cet avis sur cette question. Le fait d'interdire formellement l'usage de ce terme pour des services qui sont ou qui peuvent être limités nous semblent une issue préférable pour le consommateur et la seule option logique : l'explication par le commerçant des limites applicables à un service illimité ne nous semblant pas répondre à cette condition.

1328 Cela dit, les politiques d'utilisation équitable, même si elles peuvent servir à imposer des limites à un service illimité, mériteraient certainement d'être précisé afin de fermer définitivement la porte et d'arbitraire inacceptable.

1329 D-5.1 ; avis relatif aux frais supplémentaires.

1330 Nous saluons la proposition de standardiser la production et l'envoi sans frais d'avis d'utilisation par messages textes, une pratique qui n'est pas systématique à tous les fournisseurs de services mais qui mérite d'être plus répandue.

1331 Cependant nous avons indiqué dans nos observations initiales que ces avertissements devraient également être disponibles par d'autres moyens même si nous maintenons notre position à ce sujet, nous considérons que la proposition faite va dans la bonne direction.

1332 Nous suggérons que tous les avis d'utilisation indiquent le pourcentage d'utilisation restant et non la quantité restante.

1333 Dans le cas des données, une indication de méga-octets ou giga-octet seulement est à éviter puisque certains consommateurs peuvent avoir de la difficulté à comprendre en quoi consistent les différentes unités de mesure utilisées par l'industrie.

1334 L'utilisation du pourcentage pour indiquer la proportion utilisée, en plus d'indiquer le nombre de méga-octets ou giga-octets restants nous semble une approche satisfaisante.

1335 De plus, lorsque l'utilisateur atteint 100 p. cent de sa limite d'usage, un mécanisme devrait être prévu pour récolter le consentement du consommateur concernant l'imposition de frais excédentaires avant de poursuivre la fourniture du service demandé.

1336 D-5.2 ; outils de surveillance et de gestion d'utilisation.

1337 Nous supportons tout à fait qu'ils soient rendus obligatoirement disponibles les outils de surveillance et de gestion d'utilisation indiqués au Code.

1338 Nous avons quelques propositions pour bonifier les outils prévus. L'outil de surveillance de l'utilisation doit fournir une information à jour exacte et en temps réel.

1339 Le fournisseur devrait également rendre disponible une application mobile qui permet de faciliter l'accès à cette information ou d'en gérer l'utilisation.

1340 Capacité de fixer un plafond pour les factures mensuelles.

1341 La proposition dans le Code nous semble très intéressante et devrait être prévue par défaut sur l'appareil. Nous avons quelques suggestions de modifications en annexe.

1342 Capacité de restreindre les fonctions à la demande.

1343 Nous croyons que l'exigence selon laquelle le fournisseur désactive par défaut les services de données sur un appareil fourni à un consommateur non abonné à un forfait de données est insuffisante.

1344 Dans un contexte où le marché semble être enclin à inclure des données par défaut dans un nombre important de forfaits, cette exigence ne s'appliquerait qu'à une quantité limitée des clients.

1345 De plus les limites mensuelles peuvent facilement être atteintes si le consommateur ne prend pas connaissance de certaines notions de base notamment le fait que des données peuvent être transférées même s'il n'utilise pas consciemment son appareil.

1346 Nous croyons que tous les consommateurs qui se procurent un appareil intelligent doivent être avisés par le fournisseur de cet état de fait au moment de l'achat.

1347 Accès aux données devraient désactiver par défaut sur tous les appareils. Et les fournisseurs devraient seulement activer les données après l'achat si le consommateur a expressément mentionné qu'il souhaite accéder immédiatement à Internet via le réseau mobile de son fournisseur.

1348 D-6.1 ; il nous semble parfaitement logique que le commerçant qui vend une garantie et qui en recoupe certaines autres dont le consommateur bénéficie déjà gratuitement, mentionne à ce consommateur l'existence et la portée de ces garanties afin que le consommateur puisse évaluer correctement ce pourquoi il paye.

1349 C'est pourquoi le commerçant a, en vertu de la UC, l'obligation d'informer le consommateur aussi bien sur les garanties du fabricant que sur la garantie légale.

1350 Nous proposons que le Code retienne aussi cette approche.

1351 Nous considérons que les exigences ci-dessous concernant la suspension des frais de service lors des réparations ne sont pas suffisamment sévères.

1352 Point 2 ; la suspension des frais pour les services devrait être effective dès lors que l'appareil est couvert par une garantie compris la garantie légale.

1353 Point 4 ; si la réparation requise n'est pas couverte par la garantie nous considérons quand même qu'il serait injuste de forcer le consommateur à payer pour des services ne reçoit pas entrer d'avoir à payer pour la réparation.

1354 En somme nous considérons que si un appareil brisé est potentiellement couvert par une garantie légale et que le consommateur sollicite les services de son fournisseur pour la réparation, il serait logique que soient suspendus les frais pour les services qu'il ne peut recevoir pendant la réparation de son appareil.

1355 Nous suggérons donc la suppression de cette condition qui désavantage indûment le consommateur.

1356 D-7 ; déverrouillage.

1357 Nous supportons le fait que l'ébauche du Code propose de réglementer le déverrouillage des appareils.

1358 Nous applaudissons également les positions du Bureau de la concurrence à ce sujet et abondons dans le même sens.

1359 Le déverrouillage devrait être non pas un droit pour les consommateurs mais une obligation pour les entreprises.

1360 Tous les appareils vendus après la mise en application du Code devraient déverrouillés par défaut.

1361 Pour les appareils pour lesquels la subvention est arrivée à une fin ou qui ne sont pas subventionnés, mais qui ont été achetés avant l'application du Code, la méthode offerte par le fournisseur pour déverrouiller l'appareil devrait dans tous les cas être gratuite et le déverrouillage ne devrait jamais influencer la validité des différentes garanties offertes.

1362 Pour terminer, UC a remarqué la présence de définition suite au résumé personnalisé de l'information.

1363 Il est difficile d'établir si ces définitions servent seulement à expliquer le résumé personnalisé et le contenu du Code ou si ces définitions devront également être utilisées obligatoirement dans la production des résumés personnalisés et si ces définitions devront être utilisées pour la rédaction des contrats.

1364 Si l'un des objectifs du Conseil est d'assurer la disponibilité de l'information claire pour les consommateurs dans le billet de termes uniformes dans le résumé personnalisé, ils devront également être utilisés tout autant dans les contrats à défaut de quoi une forme de confusion risque de se maintenir.

1365 Dans tous les cas, vu la multiplicité des termes employés au sein de l'industrie, ne serions entièrement ouverts à l'idée d'imposer une standardisation du vocabulaire pour faciliter la compréhension des consommateurs de tout acabit.

1366 Ceci conclut nos commentaires pour l'instant et les suggestions concernant certains éléments qui devraient d'après nous être modifiés au Code. Je vous invite à nouveau à prendre connaissance du document complet dans lequel vous trouverez notamment la nouvelle formulation proposée pour l'ensemble des articles pour lesquels nous suggérons quelques corrections.

1367 Je suis maintenant disponible pour répondre aux questions.

1368 LE PRÉSIDENT : Merci beaucoup.

1369 Juste pour clarifier les définitions à la fin de l'avis public étaient surtout pour aider les gens à comprendre l'avis public.

1370 Donc, si vous avez des propositions à faire par rapport à des questions pour une utilisation plus large, vous aurez à le faire.

1371 MME LAMBERT-RACINE : O.K.

1372 LE PRÉSIDENT : Mais c'était vraiment pour aider les gens à bien comprendre notre avis public.

1373 Alors la conseillère Poirier aura des questions pour vous.

1374 CONSEILLÈRE POIRIER : Bonjour.

1375 Vous est une des rares représentantes venant du Québec qui, en plus, représente l'Office la protection du consommateur qui... Non? Vous représentez...

1376 MME LAMBERT-RACINE : Pas tout à fait. Nous c'est...

1377 CONSEILLÈRE POIRIER : L'Union. Oui, mais qui représente l'application de la Loi de Protection du consommateur.

1378 MME LAMBERT-RACINE : Oui.

1379 CONSEILLÈRE POIRIER : Et donc, qui a l'expérience de ce que c'est que d'intervenir dans ce secteur-là.

1380 Alors sûrement que mes confrères et consoeurs auront aussi beaucoup de questions.

1381 Mais d'abord, je veux vous remercier parce que le document que vous venez de nous présenter est un document très, très poussé qui fait des suggestions précises. Et, il est clair que je ne reviendrai pas sur toutes les recommandations que vous faites parce qu'il y a aussi une partie de mot que vous voulez échanger.

1382 Mais globalement, est-ce que vous maintenez les mêmes positions que vous avez adoptées jusqu'à présent dans les deux premiers documents que vous avez présentés au CRTC dans le cadre de cette instance? Où, est-ce que vous avez changé certaines positions que vous aviez au préalable?

1383 MME LAMBERT-RACINE : Pour certains points mineurs, notre point de vue a peut-être évolué dans certaines directions. Mais dans l'ensemble, nos positions restent les mêmes pour les questions principales de ce qui a été présenté dans nos mémoires.

1384 CONSEILLÈRE POIRIER : Et les choses sur lesquelles vous avez changé, vous dites, c'est mineur.

1385 Pouvez-vous nous les identifier ou est-ce que c'est vraiment très mineur?

1386 MME LAMBERT-RACINE : C'est pas des changements. C'est peut-être des précisions notamment pour ce qui est des notifications aux consommateurs pour les avis d'utilisation.

1387 C'est certain qu'on a précisé nos positions par rapport à ce qui a été présenté dans l'ébauche du Code. Donc, on trouvait que ce qui a été présenté était très intéressant dans l'ensemble, puis...

1388 Donc, c'est pour ça que nos observations se sont peut-être développées un peu.

1389 Donc, c'est en fonction du nouveau matériel qui a été présenté.

1390 CONSEILLÈRE POIRIER : Je ne sais pas si vous étiez ici pour les présentations qui ont précédé, si vous avez entendu les points de vue autant de PIAC que de la CWTA.

1391 Est-ce que vous, de votre côté, vous maintenez qu'il devrait y avoir un seul Code qui pourrait être suspendu au Québec? Je pense c'est votre position?

1392 MME LAMBERT-RACINE : C'était pas tout à fait notre position.

1393 En fait, nous dans la mesure du possible, ce qu'on souhaite, c'est une coexistence.

1394 Donc, il y a plusieurs éléments au Code qui sont très, très intéressants pour les consommateurs donc, de l'ensemble du Canada incluant les consommateurs du Québec. Et le fait de suspendre l'application du Code au Québec, selon nous se serait pas avantageux.

1395 Plusieurs consommateurs québécois utilisent déjà par exemple les services CPRSC qui est une méthode de règlement des conflits qui est intéressante pour tous les consommateurs. Puis, on voudrait pas limiter les recours des consommateurs du Québec avec une suspension.

1396 CONSEILLÈRE POIRIER : Donc, vous êtes pour la coexistence, parce que le consommateur serait gagnant en bout de piste.

1397 MME LAMBERT-RACINE : Oui.

1398 CONSEILLÈRE POIRIER : Il y a dans la Loi de Protection du consommateur, je pense, certains secteurs dans lesquels il n'y a pas vraiment de défense, je vais dire, des droits des consommateurs. Je pense par exemple, forfait illimité. C'est pas quelque chose qui est traité dans la Loi de Protection du consommateur.

1399 Le déverrouillage non plus n'est pas traité.

1400 MME LAMBERT-RACINE : Non, le déverrouillage n'est pas traité.

1401 CONSEILLÈRE POIRIER : Et, il y a d'autres choses comme les services mobiles à suppléments, les outils de surveillance et de gestion d'utilisation.

1402 MME LAMBERT-RACINE : Tout ce qui se rapproche, c'est ces outils-là, en fait. Ça se rapproche beaucoup plus de la compétence du palier fédéral en fait pour les questions relatives aux télécommunications.

1403 Donc effectivement, sur ces questions là spécifiques, il n'y a pas de réglementation prévue à la LPC.

1404 Ce qui dans LPC, c'est surtout les éléments relatifs au contrat.

1405 CONSEILLÈRE POIRIER : O.K. Donc, complémentarité, parce que vous dites au Québec, nous on va s'occuper sur la base de la réglementation dont le gouvernement du Québec dispose les contrats. Mais avec le Code fédéral, vous venez ajouter des éléments...

1406 MME LAMBERT-RACINE : Oui.

1407 CONSEILLÈRE POIRIER : ...qui ne sont pas là et qui peuvent protéger. Donc, complémentarité, c'est ce que vous recommandez.

1408 MME LAMBERT-RACINE : Oui, tout à fait.

1409 Puis dans l'ensemble, le Code il n'y a pas de contradiction avec ce qui est déjà prévu par les lois provinciales.

1410 Donc, on voit qu'il y a une certaine compatibilité qui est très envisageable puis très intéressante de dire que nécessairement, il faut avoir une seule règle dans l'ensemble du Canada.

1411 On ne croit pas que ce soit nécessairement l'approche est plus appropriée.

1412 Si les fournisseurs de services sont si inquiets du fait de devoir appliquer plusieurs lois provinciales avec un Code fédéral en plus, la méthode pour régler le problème est assez simple. Ils n'ont qu'à se conformer aux pratiques les plus sévères de chaque réglementation, puis le problème va être réglé.

1413 D'ailleurs, cette suggestion-là, c'est pas nous qui l'avions nécessairement mentionnée en premier. Ça vient en fait d'une entreprise privée. Je crois que c'était Mobilicity qui l'avait mentionnée en premier.

1414 Donc si ça vient de fournisseurs de services c'est peut-être la preuve que c'est quelque chose qui est tout à fait faisable. Puis que la raison pour lesquelles les conditions qui sont applicables au Québec n'ont pas été uniformisées à l'ensemble du Canada, c'est peut-être justement parce qu'il y avait des avantages pour les fournisseurs de services.

1415 CONSEILLÈRE POIRIER : Par contre, monsieur Lord tantôt nous disait que les consommateurs vont être mêlés. C'est mieux d'avoir un seul Code plutôt que peut-être en avoir quatre, cinq. Parce qu'on sait qu'en plus du Québec, l'Ontario a un projet aussi du côté de la législation. Et il y a d'autres.

1416 Le Manitoba, déjà, applique aussi certaines réglementations.

1417 Est-ce que vous pensez que le consommateur va être capable de comprendre tout ça, va être capable de voir où est son intérêt? Où s'il va être mêlé s'il y a l'application de deux réglementations?

1418 MME LAMBERT-RACINE : Au Québec, on a déjà l'Office de la Protection du consommateur qui peut recevoir des plaintes du citoyen.

1419 Il y a le CPRST qui agit déjà au Québec. On a déjà plusieurs voies pour régler les différents problèmes d'un secteur des télécommunications.

1420 La confusion, il n'y a pas nécessairement de confusion. Les deux, en fait, ont des missions différentes. Les recours qui sont apportés par chacun de ces organismes-là sont différents.

1421 Donc, si les consommateurs ont quelques questions au sujet des recours qui seraient plus avantageux pour eux, ils n'ont qu'à se renseigner auprès des organismes concernés.

1422 On ne croit pas qu'il y a un risque de confusion qui justifie le fait d'invalider certaines lois provinciales.

1423 CONSEILLÈRE POIRIER : O.K. Alors, si un consommateur vous appelle disant « j'ai un problème », vous pourriez être à même de dire, en fonction du problème « Oui, on vous recommande d'aller à tel endroit » plutôt que de le régler au niveau de l'Union des consommateurs?

1424 MME LAMBERT-RACINE : Bien en fait, c'est certain que nous, dans le cadre de notre mission, ça arrive parfois que des consommateurs nous contactent directement. Et ça peut arriver que, justement fonction de leur problème, on peut faire des suggestions personnalisées. C'est pas notre mandat premier de répondre aux plaintes de première ligne.

1425 Mais, il y a certainement plusieurs organismes, soit des groupes de consommateurs ou organismes gouvernementaux qui peuvent offrir cette information-là qui est assez simple à prodiguer en soi.

1426 CONSEILLÈRE POIRIER : Quel a été l'impact de l'implantation de la Loi de la Protection du consommateur au Québec? Est-ce que ça a eu pour effet d'augmenter le nombre de plaintes? Est-ce que ça a eu pour effet d'augmenter les prix pour les consommateurs?

1427 MME LAMBERT-RACINE : On n'a pas vu d'impact significatif pour ce qui est des prix quand les réglementations ont été implantées. Il y avait cette menace-là qui m'a été soulevée par certains acteurs de l'industrie que le coût serait refilé aux consommateurs.

1428 Si je ne m'abuse, je me trompe peut-être mais je crois que tantôt le champ de la CTS ont indiqué que dans le cas de certaines lois provinciales dans le coût a été absorbé par les fournisseurs de services. Donc, il n'y a pas eu d'impact significatif. On a vu aucune différence dans les prix qui ont été... dans les prix des services de télécommunications consommateurs.

1429 Les impacts n'ont été que positifs. Donc, et les conditions pour la résiliation des contrats pour les modifications de contrat, pour le renouvellement de contrats se sont améliorées.

1430 Par contre pour ce qui est des statistiques quantitatives, ça, j'ai pas nécessairement de données à ce sujet-là. Mais selon ce qu'on entend, il y a peut-être moins d'histoires d'horreur, certaines histoires qu'on voit encore dans le reste du Canada qui ont lieu au Québec.

1431 CONSEILLÈRE POIRIER : Je comprends pas votre dernier point de vue. C'est l'inverse.

1432 MME LAMBERT-RACINE : Je vais reformuler.

1433 CONSEILLÈRE POIRIER : Oui.

1434 MME LAMBERT-RACINE : Il y a certaines questions contractuelles qui sont encore problématiques dans le reste du Canada qui ne le sont beaucoup moins, en fait.

1435 CONSEILLÈRE POIRIER : O.K.

1436 MME LAMBERT-RACINE : Au Québec.

1437 CONSEILLÈRE POIRIER : Donc, en regardant le Code que nous présentons, qui n'est pas finalisé bien sûr, de votre point de vue, cela devrait-il avoir un impact sur le prix que paient les consommateurs? Parce qu'on va un petit peu plus loin que ce que le Québec a fait.

1438 Et on a entendu dire que, peut-être les consommateurs devraient payer si on va trop loin.

1439 MME LAMBERT-RACINE : Pour certains points, c'est certain que dans le Code il y a des propositions de réglementation pour les aspects qui sont traités dans les lois provinciales.

1440 Maintenant, de savoir si ça, ça va avoir un impact négatif sur le prix des services, est-ce que le prix des services de télécommunications va augmenter? Je suis un peu septique face à cette théorie-là. Parce que dans les faits, si on baisse les frais de résiliation, il y a aussi... Si on amène des réglementations plus intéressantes pour le déverrouillage des appareils, les barrières à la mobilité, vont être beaucoup plus basses. Les consommateurs vont pouvoir changer de fournisseur beaucoup plus rapidement.

1441 Puis évidemment, ça va peut-être en fait avoir un impact positif. Si les consommateurs peuvent changer de fournisseur plus facilement, peut-être que les fournisseurs vont être incités à bonifier les services qui sont offerts.

1442 CONSEILLÈRE POIRIER : Ça va forcer un petit peu plus de la compétition.

1443 Et quand on force la compétition, ça peut baisser les prix. C'est votre point de vue.

1444 MME LAMBERT-RACINE : Oui.

1445 CONSEILLÈRE POIRIER : Parfait.

1446 Je vais aller dans des questions un peu plus systématiques. La durée des contrats, est-ce que de votre côté, vous avez un point de vue -- les organismes de ce matin privilégient qu'on laisse le choix au consommateur que le contrat de trois ans est souvent choisi par les consommateurs parce que c'est lui qui offre le meilleur taux pour eux.

1447 Par contre, il y a très peu de popularité des contrats de deux ans, un an.

1448 Quel est votre point de vue là-dessus?

1449 MME LAMBERT-RACINE : En fait, on a des buts similaires à ce qui a été présenté ce matin.

1450 On n'a pas une position par exemple qui réclame l'annulation des contrats de trois ans.

1451 Ce qu'on croit, c'est que si les frais de résiliation se limitent pour le consommateur à payer la valeur résiduelle de son téléphone, donc, il y a une certaine mobilité qui est acquise. Et en fait, il faudrait voir simplement si on peut appliquer un peu comme ce que disait le PIAC ce matin, si on applique plusieurs dispositions, si on applique le Code tel quel en ce moment, peut-être que les améliorations qui vont être apportées vont être suffisantes pour satisfaire les consommateurs.

1452 Parce que c'est vrai qu'en ce moment, on a vu sur les forums du CRTC que la question des contrats semble frustrer plus d'un consommateur.

1453 Mais nous, ce qu'on dit là-dessus, c'est tant que les frais de résiliation se limitent en fait à la valeur résiduelle du téléphone, ça peut améliorer la situation définitivement.

1454 CONSEILLÈRE POIRIER : Et pour les frais de résiliation, je remarque que vous suggérez l'Option 2 dans le D-3-3.

1455 Pourquoi la meilleure, de votre point de vue? Qu'est-ce qu'elle a comme avantages? Elle est un petit peu plus longue, mais plus claire?

1456 MME LAMBERT-RACINE : Pour les frais de résiliation, notre position est peut-être un peu mitigée, parce qu'en fait, l'Option 2 a l'avantage d'être plus claire.

1457 Donc, pour tous les scénarios, on a quelque chose qui est prévu, une option qui est prévue pour calculer les frais de résiliation.

1458 L'Option 1 semble avoir un certain avantage. C'est qu'elle semble supposer, selon la compréhension qu'on en a, qu'en fait, les seuls frais qui peuvent être appliqués dans une résiliation de contrat, sont liés à la valeur de la subvention de l'appareil.

1459 Dans un cas particulier, dans l'Option 2, il y a des frais de résiliation qui sont appliqués même s'il n'y a aucun appareil subventionné dans le cadre du contrat.

1460 Donc, notre position est mitigée. L'Option 2 a l'avantage d'être plus précise. Mais l'Option 1, si elle veut vraiment dire que les seuls frais de résiliation sont liés à la valeur de la subvention, elle est très intéressante elle aussi.

1461 CONSEILLÈRE POIRIER : Alors, ça serait une proposition un peu plus hybride...

1462 MME LAMBERT-RACINE : Oui.

1463 CONSEILLÈRE POIRIER : ... qui vous satisferait.

1464 Seriez-vous à même de nous l'écrire d'ici la fin des demandes qu'on a d'arriver avec une proposition claire?

1465 Monsieur le Président, est-ce que ça pourrait être quelque chose pour le 18?

1466 LE PRÉSIDENT : Le 22.

1467 CONSEILLÈRE POIRIER : Le 22, on est mêlés dans nos dates. On en a plusieurs, le 22 février.

1468 Est-ce que vous pourriez arriver avec une rédaction qui résumerait un peu plus votre pensée, qui pourrait nous éclairer à ce niveau-là?

1469 MME LAMBERT-RACINE : Pour le...

1470 CONSEILLÈRE POIRIER : Le D-3-3. Les frais de résiliation. Vous voulez combiner le 1 et le 2. J'apprécierais de voir ça. Ça pourrait être intéressant.

1471 MME LAMBERT-RACINE : On peut le faire, oui.

1472 CONSEILLÈRE POIRIER : Parfait. Merci beaucoup.

1473 Concernant les services prépayés, vous allez du côté de l'Option 2.

1474 MME LAMBERT-RACINE : M'hmm.

1475 CONSEILLÈRE POIRIER : Alors, l'Option 2, si j'essaie de la retrouver, c'est... devrait interdire l'expiration des crédits prépayés? Est-ce que c'est ça?

1476 MME LAMBERT-RACINE : Oui.

1477 CONSEILLÈRE POIRIER : Un peu comme les cartes-cadeaux?

1478 MME LAMBERT-RACINE : Oui. Donc, c'est ça. Pour l'instant, dans la Loi sur la Protection du consommateur, il y a une certaine exception qui s'applique aux cartes prépayées.

1479 Si le CRTC, en fait, est prêt à appliquer un Code qui met fin à cette exception-là, ça c'est quelque chose qu'on trouve très intéressant. Donc, il y a un avantage certain pour le consommateur de ne plus avoir de date d'expiration.

1480 Il y a plusieurs intervenants qui l'ont indiqué, je crois, dans le cadre des instances. C'est ce qu'on constate nous aussi sur le terrain.

1481 Il y a beaucoup de consommateurs à faibles revenus. Souvent, quand ils sont de mauvais crédit, les services prépayés, c'est peut-être une des dernières options qu'ils ont. Donc, d'éviter de leur imposer le fardeau d'avoir à racheter des crédits à chaque mois. C'est quelque chose, c'est une option très intéressante pour nous.

1482 CONSEILLÈRE POIRIER : Cependant, je pense que les fournisseurs des services sans fil nous disent que ça pourrait geler un grand nombre de numéros de téléphone qui seraient peut-être pas utilisés, qui ferait en sorte que des téléphones qui ne sont pas utilisés, ces numéros-là ne sont pas disponibles pour le marché.

1483 Vous ne voyez pas un peu le balancier qui a un effet négatif? Ou c'est pas quelque chose à laquelle vous avez réfléchi?

1484 MME LAMBERT-RACINE : Cette information-là, précisément? Est-ce qu'on doit la prendre en considération dans le cadre des réglementations? Faudrait y réfléchir.

1485 Mais moi, à priori, j'ai pas l'impression. Il doit certainement avoir une solution technique qui permet de régler ce problème-là qui empêcherait l'expiration des cartes prépayées.

1486 CONSEILLÈRE POIRIER : Les factures surprises, est-ce que ça existe encore beaucoup au Québec avec la Loi de la Protection du consommateur et les directions que vous avez prises?

1487 MME LAMBERT-RACINE : En fait, pour les services sans fil, par leur nature, sont assez complexes. On a plusieurs... c'est des appareils très multifonctionnels.

1488 C'est certain qu'il y a encore une certaine confusion pour ce qui est de la facturation. On entend des histoires que les gens comprennent pas toujours. Comment les données sont calculées? Comment ça a été traité sur la facture? Comment ça se fait, par exemple, qu'une application qu'ils auraient téléchargée arrive à une limite de donnée qui n'est pas exactement la même que l'outil qui est fourni par leur fournisseur de services sur leur compte d'usager.

1489 C'est certain qu'il y a une confusion qui persiste. C'est lié, en fait, à la complexité du produit, malheureusement.

1490 CONSEILLÈRE POIRIER : Une des choses que vous êtes un des rares à suggérer, puis c'est peut-être pas directement relié au cadre de l'instance. Mais, vous allez jusqu'à dire, au paragraphe 35, peut-être pour éviter les factures surprises, que l'accès aux données devrait être désactivé par défaut sur tous les appareils.

1491 MME LAMBERT-RACINE : M'hmm.

1492 CONSEILLÈRE POIRIER : C'est pas ça qui se fait présentement?

1493 MME LAMBERT-RACINE : Non.

1494 En fait, très souvent, surtout... ou en fait pour plusieurs appareils sans fil (surtout les téléphones intelligents) les données sont activées par défaut au moment où le consommateur se procure son appareil.

1495 Si c'est son premier appareil intelligent, ça peut lui prendre plusieurs jours, au consommateur, à comprendre que même pour utiliser le GPS, s'il n'y a pas de réseau sans fil d'ouvert, ça peut consommer des données. Plusieurs utilisations -- Par exemple, sur Internet, la personne va peut-être avoir un peu de difficulté à différencier les réseaux gratuits du réseau de son fournisseur, qui est payant.

1496 S'il n'a pas de données inclus par défaut dans le forfait c'est très problématique, mais même quand il y a certaines données...

1497 Là, en fait, on constate de plus en plus depuis certains mois qu'il y a beaucoup de données qui se rajoutent au forfait. Des fois, c'est des limites qui sont assez basses, qui sont faciles à dépasser. Donc oui, on croit qu'on devrait désactiver les données par défaut pour que les personnes les activent elles-mêmes au moment où elles souhaitent les utiliser, parce qu'effectivement, il y a beaucoup de mauvaises surprises, là. De ce qu'on entend, le fait que les données soient activées par défaut, c'est loin d'être tous les consommateurs qui sont au courant de ça au moment où ils achètent un téléphone intelligent.

1498 CONSEILLÈRE POIRIER : D'ailleurs, il y a plusieurs employeurs qui le font, qui l'exigent de leurs employés. C'est désactivé au départ pour être certain de ne pas se retrouver avec une facture trop élevée.

1499 Donc, vous êtes aussi d'accord avec une période de regret après achat?

1500 MME LAMBERT-RACINE : Oui. Donc, nous, on est satisfait par la proposition.

1501 CONSEILLÈRE POIRIER : Quelle durée devrait-elle être?

1502 MME LAMBERT-RACINE : La proposition, dans le cas de--

1503 CONSEILLÈRE POIRIER : Vous convient?

1504 MME LAMBERT-RACINE : Oui.

1505 CONSEILLÈRE POIRIER : O.K. Parfait.

1506 Bon. Allons-y maintenant avec le déverrouillage. Ça a été un sujet de discussion important aujourd'hui. Et de votre côté, vous supportez le fait que les téléphones devraient être vendus déverrouillés?

1507 MME LAMBERT-RACINE : Oui, tout à fait. Un peu comme le bureau de la concurrence l'a indiqué, le déverrouillage, en fait, ça peut être perçu comme une barrière à la mobilité. Si ça doit avoir des impacts...

1508 C'est sûr que, de ce qu'on a entendu, certains fournisseurs semblent indiquer que le déverrouillage peut avoir un impact sur le prix des appareils. Bon... on aimerait ça avoir cette démonstration-là, premièrement. Deuxièmement, ce qu'on considère, c'est que si on enlève... si l'appareil devient déverrouillé par défaut et qu'en fait, puisque c'est déverrouillé par défaut les gens n'ont pas besoin de payer pour déverrouiller leur appareil, on stimule encore en fait la concurrence, selon nous. On augmente la mobilité des consommateurs.

1509 En ce moment, le prix que certains fournisseurs chargent pour le déverrouillage des appareils, ça peut quasiment ressembler à des frais de résiliation cachés. Donc, on croit que... Est-ce qu'il y aurait seulement des impacts négatifs sur le prix, suite au déverrouillage? Peut-être pas.

1510 Si les consommateurs sont capables de passer d'un fournisseur à l'autre plus facilement, peut-être que ça va avoir un impact sur le prix des services.

1511 CONSEILLÈRE POIRIER : Mm'hmm.

1512 Est-ce que le verrouillage est important au niveau de la sécurité des téléphones cellulaires? Est-ce qu'un téléphone verrouillé, s'il est volé, est mieux protégé qu'un téléphone qui est déverrouillé, de votre point de vue?

1513 MME LAMBERT-RACINE : On ne voit pas de... Je ne vois pas de lien de corrélation direct. De toute façon, comme on l'a indiqué tantôt, on va avoir des outils bientôt pour les consommateurs, pour les aider en cas de vol de téléphone. Donc, je ne crois pas que ce soit un argument valable.

1514 CONSEILLÈRE POIRIER : Allons-y avec le résumé personnalisé. De ce côté-là, je ne me rappelle pas dans votre intervention quelle était votre position. Je ne pense pas que vous en ayez beaucoup parlé... Oui?

1515 MME LAMBERT-RACINE : En fait, on est ouvert à l'idée. On trouve ça très intéressant pour le consommateur d'avoir un résumé personnalisé, avec une information ni plus ni moins résumée du contrat. Les gens, en ce moment, c'est certain qu'ils ont un peu de difficulté à comprendre ce qui est inclus au contrat, surtout vu le fait que d'un fournisseur à l'autre, des fois les termes employés pour un même service diffèrent. Donc, il y a un certain niveau de confusion.

1516 Si on peut avoir un document avec une vulgarisation satisfaisante, on n'a aucune raison de s'y opposer. C'est très intéressant pour tous les consommateurs.

1517 CONSEILLÈRE POIRIER : Est-ce que ça devrait être obligatoire ou le consommateur pourrait le demander au besoin?

1518 MME LAMBERT-RACINE : Dans l'état du marché actuel -- Là, je dis ça de façon spontanée parce qu'on n'y a pas réfléchi de façon élargie, mais je crois que ça devrait être quelque chose d'obligatoire dès le départ.

1519 Donc, si le consommateur n'a pas besoin du résumé personnalisé, il a juste à se référer à son contrat, mais selon ce qu'on entend, en fait, ça serait quelque chose qui serait pertinent pour la majorité des consommateurs. Donc, le prévoir par défaut avec le contrat, ça semble être une issue plus intéressante.

1520 CONSEILLÈRE POIRIER : Êtes-vous en faveur d'une copie papier du contrat, une copie papier, aussi, du résumé personnalisé, parce que du côté du Québec, on parle souvent de copie papier ou de courriel? Dans le cadre d'un code national, vers quoi iriez-vous, quelle serait votre tendance?

1521 MME LAMBERT-RACINE : Nous, ce qu'on veut, en fait, c'est que le consommateur ait accès immédiatement à l'information de son contrat, immédiatement... Qu'il ait accès immédiatement au résumé personnalisé de l'information.

1522 On avait amené une suggestion, par exemple, pour les contrats conclus à distance. Je crois que c'est dans l'annexe. Donc, il faudrait prévoir dans tous les cas, au moment où un consommateur arrive à la conclusion de... arrive en fait avec un nouveau contrat, il devrait avoir accès à cette information-là au moment de l'achat. Nous, ce qu'on craint, c'est que par exemple, si on permet les copies électroniques, un consommateur se présente dans un magasin, fasse une nouvelle entente avec un fournisseur de service et que, par exemple, le fournisseur lui indique que l'information va lui être envoyée par courriel.

1523 Sur le coup, le consommateur n'aura peut-être pas d'objection, mais peut-être qu'il ne consultera pas son contrat, contrairement à s'il l'avait eu au format papier au moment de l'achat. Donc, nous, c'est notre priorité. Donc, selon la façon dont le contrat est conclu, il doit y avoir accès immédiatement.

1524 CONSEILLÈRE POIRIER : O.K. Donc, une copie du contrat puis une copie aussi du résumé personnalisé?

1525 MME LAMBERT-RACINE : Oui.

1526 CONSEILLÈRE POIRIER : À moins que le consommateur dise « je ne le veux pas »?

1527 MME LAMBERT-RACINE : Si le consommateur ne le veut pas, je dirais spontanément « il peut toujours le mettre au recyclage », mais...

1528 CONSEILLÈRE POIRIER : O.K. C'est assez clair. Merci beaucoup.

1529 Je vais continuer avec la rétroactivité de l'application du code. Au Québec, il me semble que quand la nouvelle réglementation a été adoptée -- en juin 2010 je pense...?

1530 MME LAMBERT-RACINE : Mm'hmm.

1531 CONSEILLÈRE POIRIER : ...on a commencé à l'appliquer uniquement à partir de ce moment-là et on ne l'a pas fait de façon rétroactive. Qu'est-ce que vous pensez qu'on devrait faire, du côté du code que nous préconisons? Est-ce qu'on devrait l'appliquer de façon rétroactive (et si oui, sur quels éléments) ou si on doit l'appliquer à partir du moment où il sera adopté?

1532 MME LAMBERT-RACINE : On croit que la rétroactivité... En fait, je ne suis pas juriste, je ne rentrerai pas dans les technicalités, mais il semble y avoir une certaine complexité dans une application des réglementations de façon rétroactive. Nous, ce qu'on suggère, c'est que pour les contrats à durée indéterminée, qu'il y ait une application du code à partir du moment où le... Par exemple, quand le code entre en application, lorsque le cycle de facturation du fournisseur se termine, là, on commence à appliquer le code Donc, grosso modo, un mois après l'application du code.

1533 Ça, ça peut déjà permettre de régler certains problèmes d'application avec des contrats qui prennent un certain temps à se terminer.

1534 CONSEILLÈRE POIRIER : Alors, donnez-moi un exemple. Si j'ai un contrat de... il me reste deux ans avec une compagnie. Et à partir du moment où je reçois ma nouvelle facture, le mois après l'application du code, il pourrait s'appliquer sur mon contrat?

1535 MME LAMBERT-RACINE : Ce qu'on dit pour l'instant, c'est que pour les... En fait, comme je vous dis, il y a certaines technicalités que je ne pourrais pas expliquer pour l'instant, mais pour les contrats à durée déterminée, ça serait peut-être plus facile d'appliquer le code à partir du moment où ce contrat-là se termine.

1536 Par contre, si ce contrat-là est modifié pour en fait le remplacer par un autre contrat, là on applique le code.

1537 Donc, si le contrat de deux ans, par exemple, au bout de six mois on décide de le changer pour autre chose, là, on entre le code en application.

1538 CONSEILLÈRE POIRIER : Vous ne trouvez pas ça injuste pour des consommateurs qui auraient signé un contrat de trois ans la veille de l'application du code, d'être obligé d'attendre deux ou trois ans avant de profiter des avantages du code?

1539 MME LAMBERT-RACINE : C'est certain que c'est frustrant. Ce que je répondrais spontanément, c'est que la meilleure issue pour le consommateur ça serait de modifier son contrat pour qu'on puisse en fait appliquer la nouvelle réglementation plus facilement.

1540 CONSEILLÈRE POIRIER : Donc, il pourrait y avoir un renouvellement plus rapide des contrats qui pourrait être exigé ou c'est quand ça viendrait à terme seulement?

1541 MME LAMBERT-RACINE : Bonne question. On va y réfléchir.

1542 CONSEILLÈRE POIRIER : Réfléchir, oui. J'aimerais ça avoir votre point de vue avec une réflexion, peut-être.

1543 MME LAMBERT-RACINE : Oui.

Undertaking

1544 CONSEILLÈRE POIRIER : ... parce que ça créerait deux catégories de citoyens pendant peut-être jusqu'à trois ans : des citoyens qui sont protégés par le code et d'autres qui ne le sont pas. Ce serait intéressant d'avoir votre point de vue de ce côté-là, O.K.

1545 Vous avez eu à faire sûrement une partie de la promotion de la nouvelle Loi de la protection du consommateur et vous avez eu aussi à vous assurer qu'elle est bien comprise par les citoyens. Quelles sont les meilleures façons de faire comprendre cette nouvelle loi-là et est-ce que d'être donné directement au consommateur quand il achète un appareil... est-ce que de le retrouver uniquement sur un site Web... comment on peut en faire la promotion?

1546 MME LAMBERT-RACINE : Bonne question. Spontanément, je dirais que ce qui serait une façon simple de régler cette question-là, c'est de s'assurer qu'on ait des ressources pour informer les consommateurs.

1547 Par exemple, si on offre une copie du code à tous les -- À partir du moment où le code entre en application, si on offre une copie du code fédéral à tous les consommateurs, et bien que si jamais ils ont des questions, si jamais il y a des éléments qui sont flous, qu'ils contactent une personne pour confirmer s'ils comprennent bien le code. Parce que c'est certain qu'on peut essayer de le vulgariser au maximum, mais nous, ce qu'on croit c'est que si un document... si le code est en fait parfaitement complet à l'avantage du consommateur et qu'il est vulgarisé, numéro un, bien si on doit faire un choix entre un code le plus complet possible et le code le plus accessible possible, on choisirait la première option.

1548 CONSEILLÈRE POIRIER : Est-ce que d'envoyer le consommateur sur un site Web serait suffisant? Est-ce que les citoyens consultent les sites Web?

1549 MME LAMBERT-RACINE : Certains consommateurs pourraient se renseigner eux-mêmes, mais de s'attendre à ce que tous les consommateurs comprennent du jour au lendemain ce qui est inscrit dans le code dans son ensemble, surtout pour les frais de résiliation, ça serait intéressant d'avoir des ressources de première ligne pour--

1550 CONSEILLÈRE POIRIER : Mais les consommateurs ont quand même une responsabilité aussi?

1551 MME LAMBERT-RACINE : Oui. Ils ont une certaine responsabilité. Il y a plusieurs éléments qui peuvent être compris facilement, mais pour les éléments plus complexes, donc, de prévoir des ressources, ça pourrait être intéressant.

1552 CONSEILLÈRE POIRIER : Certains nous disent que ça serait important pour le CRTC d'implanter son code le plus rapidement possible. Il y en a qui parlent de quatre semaines, d'autres vont jusqu'à six mois. Et quand je pense à l'application du « Bill 60 », dans vos documents, vous dites que cela a pris jusqu'à deux ans à vraiment implanter toutes les conditions de la Loi de la protection du consommateur...

1553 MME LAMBERT-RACINE : Hum, hum. Oui.

1554 CONSEILLÈRE POIRIER : Alors, qu'est-ce que vous nous suggérez? Est-ce qu'il faut aller vite ou bien peut-être implanter certaines règles petit à petit et se donner jusqu'à deux ans, parce que vous dites que mieux vaut y aller lentement, mais sûrement?

1555 MME LAMBERT-RACINE : C'est certain qu'il faut faire attention si on veut y aller rapidement, il ne faut pas bâcler le travail. Évidemment, ce n'est pas le cas présentement. Il y a plusieurs éléments intéressants, mais on croit que le Code devrait être appliqué dans son ensemble, donc tout en un bloc pour éviter justement la confusion des consommateurs.

1556 Si ça doit prendre plus que six mois, eh bien, ça prendra plus que six mois, mais on croit que la façon la plus simple d'entrer ça en application c'est d'éviter qu'il y ait, par exemple, quatre ou cinq phases d'entrée en vigueur.

1557 CONSEILLÈRE POIRIER : Vous avez parlé dans vos documents d'exercer une forme de vigie et aujourd'hui vous revenez un peu sur ça, des données pour s'assurer qu'on a suffisamment d'information sur l'application du Code et son impact.

1558 Pouvez-vous êtes le plus précis, si possible, sur de quelle façon... la façon qu'on pourrait envisager de voir l'impact de l'application du Code?

1559 MME LAMBERT-RACINE : En fait, c'est certain que comme on l'a suggéré, je crois que dans le Code il était suggéré que le CRTC, en fait, vérifie quelque temps après l'application du Code si les fournisseurs de services se sont conformés aux pratiques qui sont mentionnées dans le Code obligatoire.

1560 On croit en fait qu'on ne devrait pas le faire qu'une seule fois. Ça serait bien de le faire de façon régulière, donc de s'assurer qu'il n'y ait pas de « dérapement » sur le marché. Donc, des vérifications qu'on va faire au départ, on devrait le faire de façon régulière.

1561 Là, les outils précis de vérification, ça, il faudrait peut-être réfléchir un peu à cette question-là.

1562 CONSEILLÈRE POIRIER : O.k.

1563 MME LAMBERT-RACINE : On va voir de quelle façon le Code se développe puis avec la version finale on verra qu'est-ce qui doit être vérifié comme...

1564 CONSEILLÈRE POIRIER : Parfait. Il me reste quelques questions seulement, monsieur le président.

1565 Dans votre paragraphe 15, vous dites que le consommateur devrait d'abord aller au CPRST quand il a une plainte à formuler plutôt que d'aller voir directement son fournisseur de service sans fil. J'ai bien compris?

1566 MME LAMBERT-RACINE : Ce n'est pas nécessairement ce qu'on dit. En fait, par défaut, il y a beaucoup de consommateurs qui, quand ils ont un problème avec leur facture ou avec leur service en général, ils vont appeler leurs fournisseurs, c'est leur réflexe.

1567 Nous, ce qu'on dit, c'est que pour que leur plainte soit entendue au CPRST, pour s'assurer que le Code soit correctement appliqué et qu'on ait des statistiques satisfaisantes au sujet de l'application du Code, le consommateur devrait avoir la liberté de faire un ou l'autre. Donc, s'il veut contacter son fournisseur, qu'il le fasse, mais s'il y a vraiment des bonnes raisons de croire que le Code n'a pas été respecté, ce serait pertinent qu'il puisse contacter le CPRST pour les aviser pour au moins qu'on ait des statistiques satisfaisantes à ce sujet-là.

1568 CONSEILLÈRE POIRIER : Mais vous ne pensez pas que c'est plus efficace pour le consommateur d'aviser d'abord son fournisseur de service sans fil, de tenter de régler le tout et si c'est réglé, bien ça évite de la « papasserie ». On n'est pas là uniquement pour garder des données quantitatives. On est là pour s'assurer que le consommateur est satisfait.

1569 Alors, s'il est capable de répondre à son besoin directement avec son fournisseur de service sans fil, pourquoi devrait-il aller au CPRST?

1570 MME LAMBERT-RACINE : S'il peut le régler, s'il veut le régler avec son fournisseur, qu'il le fasse. Si, pour des raisons « X », par exemple dans le cas où un client, ça fait cinq fois qu'il a des problèmes de facturation avec son fournisseur, pourquoi est-ce qu'il aurait encore à appeler son fournisseur pour essayer d'avoir une correction et que la correction ne s'applique pas ou s'applique mal le mois suivant, il devrait plutôt avoir la liberté de porter plainte au CPRST s'il est tanné de contacter son fournisseur.

1571 Donc, ce qu'on dit, ce n'est pas nécessairement qu'on veut augmenter les paperasses, qu'on veut que le consommateur aille directement au CPRST, mais si on veut s'assurer que le Code soit correctement appliqué, on ne peut pas nécessairement se fier uniquement aux fournisseurs, se fier nécessairement à eux pour que, à partir du moment où le consommateur porte plainte, le règlement qu'il y a avec le consommateur soit nécessairement conforme avec le Code. On n'a pas de garantie que ça va nécessairement être le cas.

1572 CONSEILLÈRE POIRIER : Hum, hum.

1573 MME LAMBERT-RACINE : Puis on n'a pas de documentation puisque si le consommateur n'appelle pas le CPRST, on n'a pas de façon de vérifier si l'entente qu'il a conclue avec son fournisseur est à son avantage.

1574 CONSEILLÈRE POIRIER : Je veux revenir sur les notifications. Tantôt, monsieur Lord nous a dit qu'on devrait laisser aller les libres forces du marché en ce sens que si un consommateur veut choisir un fournisseur de service sans fil, qui offre des notifications, il n'aura qu'à en choisir un qui le fait. S'il veut en prendre une compagnie qui a d'autres avantages, mais qui ne l'offre pas, c'est son libre choix.

1575 De votre côté, est-ce que vous pensez qu'on doit obliger les fournisseurs de service sans fil à envoyer des notifications pour éviter qu'ils dépassent les limites d'utilisation des données qu'ils ont?

1576 MME LAMBERT-RACINE : Je crois que monsieur Lord a indiqué aussi que l'usage des données est de plus en plus populaire. La demande est énorme pour ces services-là sur les appareils sans fil. Dans cette optique-là, en fait, oui c'est pertinent d'avoir des avis obligatoires parce que c'est des services qui par défaut sont assez complexes.

1577 Par exemple, certaines fonctions pour lesquelles le consommateur -- je prends un exemple, là -- par exemple, les messageries photos et vidéos, les messageries multimédias. Dans certains cas, dans certaines circonstances, des frais de transmission de données pourraient s'appliquer. Le consommateur n'en sera pas nécessairement conscient.

1578 Si on a des avis en fait pour le prévenir, ça peut l'aider effectivement à faire un meilleur suivi de son utilisation parce que les services, comme je dirais tantôt, sont tellement diversifiés et de savoir qu'est-ce qui consomme des données, qu'est-ce qui n'en consomme pas. C'est très difficile particulièrement pour un consommateur qui vient de s'abonner à un service sans fil.

1579 CONSEILLÈRE POIRIER : Est-ce qu'un avis est suffisant? Est-ce que deux avis, trois avis -- il faut quand même pas prendre non plus le consommateur par la main dans tout -- qu'est-ce que vous jugez le plus efficace comme notification?

1580 MME LAMBERT-RACINE : La proposition qu'il y a dans le Code, donc je crois que c'est à 50 pour cent, 80, puis au moment où il atteint sa limite, selon nous, c'est des balises satisfaisantes donc.

1581 Puis on croit que non seulement c'est pertinent, mais si tous les fournisseurs de service ont les mêmes systèmes pour les avis, ça va aider un consommateur. Donc, qu'il change d'un fournisseur à l'autre, il peut s'attendre à avoir les mêmes services d'avertissement. Donc, ça va l'aider à faire un suivi de son utilisation.

1582 Et il faut aussi prendre en considération que même si on a des outils imposés dans le cadre d'un Code de service sans fil, ça ne veut pas dire que, par exemple, si un fournisseur veut faire plus que ce qu'il y a dans le Code pour garder un avantage comparatif par rapport aux autres, il peut le faire. Si on a des outils prévus au Code, ça nous garantit que peu importe le fournisseur, le consommateur va avoir un minimum de protection.

1583 CONSEILLÈRE POIRIER : Donc, ça laisserait quand même de la latitude à chacun des fournisseurs de service sans fil de dire: Moi, je vous en offre encore plus, je vous en offre dix notifications si vous en voulez, mais, nous, ça serait de s'assurer qu'il y a un minimum et, à votre avis, ce n'est pas un élément de différentiation qu'il devrait y avoir entre les fournisseurs de service sans fil.

1584 Si on demande au moins un minimum de trois, ils devraient tous avoir ça et ceux qui veulent en faire plus en font plus.

1585 MME LAMBERT-RACINE : Exactement. De toute façon, tel que c'est proposé dans le Code, les consommateurs peuvent désactiver ces options-là. Donc, si jamais ils deviennent habiles à un point tel que ces outils-là ne sont plus pertinents, ils n'ont qu'à désactiver la configuration.

1586 Nous, on a eu beaucoup de... on entend beaucoup d'histoires, surtout pour les nouveaux consommateurs de service sans fil qui ont des factures absolument surprenantes dans les quatre chiffres dans certains cas parce qu'ils ne savent pas comment utiliser leur appareil.

1587 Avec des outils comme ça, on évite les histoires d'horreur, là, c'est certain, surtout avec le plafond qui est suggéré de 50,00$.

1588 Avec ça on a la garantie que le consommateur, s'il n'a pas choisi le bon service en fonction de son utilisation, il va pouvoir le changer rapidement.

1589 CONSEILLÈRE POIRIER : Et ma dernière question, pensez-vous qu'on devrait inclure les petites entreprises dans le Code? Là, pour l'instant, on inclut uniquement les consommateurs en terme d'unités, mais il y a des petites entreprises.

1590 Je pense que du côté de la Loi de la protection du consommateur, vous englobez tout le monde ou vous n'englobez pas les petites entreprises?

1591 MME LAMBERT-RACINE : Bon, pour l'instant dans l'abc, à ma connaissance les petites entreprises ne sont pas incluses.

1592 CONSEILLÈRE POIRIER : Elles ne sont pas incluses, hein, il me semble, oui.

1593 MME LAMBERT-RACINE : Bonne question. On peut réfléchir à cette question-là, mais puisque ce n'est pas les principaux consommateurs qu'on représente, on n'a pas poussé la question plus loin.

1594 CONSEILLÈRE POIRIER : Vous le ferez si vous le jugez important. C'est juste qu'il y a certains intervenants qui ont dit: pourquoi on n'a pas inclus les petites entreprises, ce serait une bonne idée.

1595 Alors, j'aurais bien d'autres questions, mais je vais laisser monsieur le président et les conseillers poursuivre s'ils le souhaitent.

1596 Merci beaucoup, madame.

1597 LE PRÉSIDENT : Pour clarifier, nous avions proposé qu'il s'applique aux petites entreprises.

1598 CONSEILLÈRE POIRIER : Ah! bon, O.k.

1599 LE PRÉSIDENT : Il y a beaucoup de détails, là, dans tout ça.

1600 CONSEILLÈRE POIRIER : Oui, oui, oui. C'est moi qui ai oublié.

1601 LE PRÉSIDENT : Mais d'ailleurs, il y en a certains, j'ai remarqué que certains intervenants... Mais pour le reste, j'avais d'autres questions, mais comme d'habitude, je pense que madame Poirier regarde mes notes parce qu'elle pose les questions que j'aurais posées, donc c'est bien.

1602 J'en ai une seule, par contre.

1603 MME LAMBERT-RACINE : Hum, hum.

1604 LE PRÉSIDENT : Je sais que vous n'êtes pas accompagnée de votre avocat donc si vous vous sentez mal à l'aise d'y répondre, ça va, mais lorsqu'on parlait de la mise en oeuvre du Code, mettons qu'on dit, on va en parler aux fournisseurs, là, combien de temps que ça va prendre pour mettre en vigueur les pratiques et les systèmes informatiques, mais mettons qu'on choisit, je ne sais pas, six mois, juste comme hypothèse. Ça va prendre dix mois, ça se peut que ça prenne plus de temps, mais disons six mois. Après cette période-là, il y a toujours des nouveaux abonnés qui s'abonnent à de nouveaux services et à ceux qui ont déjà des services, il y a des amendements qui arrivent à ces contrats-là de temps à autre.

1605 Pourrait envisager un système d'une fois que le Conseil déclare que le Code est en vigueur, mettons dans six mois, qu'il commence à s'appliquer à tout nouveau contrat et à tous les amendements de contrat? Est-ce que vous voyez un inconvénient de procéder de cette façon-là?

1606 C'est vrai qu'il y aurait une inégalité dans le marché, mais avec le roulement de la période de temps, tout le monde serait rattrapé.

1607 MME LAMBERT-RACINE : Donc, à partir du moment où un consommateur modifie son contrat, le Code s'applique à...

1608 LE PRÉSIDENT : Que le consommateur ou le fournisseur de service modifie le contrat parce que ça aussi c'est une possibilité?

1609 MME LAMBERT-RACINE : Bien, c'est une option tout à fait envisageable puis qui est intéressante.

1610 LE PRÉSIDENT : Vous ne voyez pas une confusion possible dans le marché parce que pendant une période de transition, il y a certains consommateurs qui pourront bénéficier du Code et d'autres qui ne pourront pas.

1611 MME LAMBERT-RACINE : C'est certain qu'il risque d'avoir une certaine période qui va être un peu plus complexe pour l'application du Code. Malheureusement, on n'a pas de solution miracle pour ça, mais évidemment, si on peut penser à des idées comme ça pour s'assurer qu'à partir du moment où un contrat est modifié, que le Code soit entré en application, effectivement c'est une idée intéressante.

1612 LE PRÉSIDENT : O.k. Peut-être que c'est quelque chose sur laquelle vous pourriez réfléchir, comme d'autres d'ailleurs qui vont nous soumettre des commentaires un peu plus tard.

1613 Je ne crois pas qu'il y ait d'autres questions pour vous. Comme d'habitude, c'était très clair et je vous remercie aussi. Votre tableau nous aide beaucoup à suivre un dossier qui est en évolution constante. Donc, je vous remercie beaucoup pour votre présentation et pour votre présence.

1614 Donc, il est 1613, nous allons prendre une courte pause d'à peu près cinq minutes tout simplement pour permettre au prochain panel de se présenter. Merci.

--- Upon recessing at 1613

--- Upon resuming at 1423

1615 LE PRÉSIDENT : Bonjour. D'un extrême à l'autre. We had one person at the panel and now we have two tables worth, so welcome. I will ask you to go ahead and, as usual, to identify for the transcript the members of your panel.

PRESENTATION

1616 MR. WOODHEAD: Thank you, Mr. Chairman and Commissioners. My name is Ted Woodhead, TELUS' Senior Vice President, Federal Government and Regulatory Affairs. My colleagues and I are pleased to have the opportunity to talk to you today about the mandatory code for wireless services.

1617 With me today, from my right to left, are:

1618 Anne-Marie LaBerge, Vice President, Brand and Marketing Communications;

1619 Brent Johnston, Vice President, Mobility Solutions;

1620 On my left, David Fuller, Chief Marketing Officer;

1621 Next to him, Kevin Banderk, Chief Koodo Officer, and next to Kevin;

1622 Arleen King, Vice-president, Mobility Client Operations.

1623 We are also accompanied by colleagues from our marketing, legal and regulatory departments who are seated behind us.

1624 Prior to our appearance, we sought and received the permission of the Hearing Secretary to append a chart -- which I believe is much like the previous witness' -- to the text of our opening statement. It contains our detailed comments on each provision of the Draft Code and in case we don't get time to speak to each one. I think it will be of assistance to other parties and to the Commission.

1625 THE CHAIRPERSON: Just to be clear, we actually find these presentation documents very useful for us to manage the discussion, so there is no problem with that.

1626 MR. WOODHEAD: Very good.

1627 THE CHAIRPERSON: They are a presentation document, not additional evidence or comments.

1628 MR. WHITEHEAD: Very good.

1629 As you know, TELUS welcomes this proceeding. We have listened already to our customers and changed many of the things about wireless contracts that they told us they don't like. To the extent that many of the comments filed by consumers to date relate to poor service, restrictive contracts, and locked phones for example, you will hear how TELUS and Koodo have "changed the game" over the last four years by putting customers first.

1630 So while we support the Code, we urge the Commission to avoid unintended consequences by keeping these three considerations in mind:

1631 One, consumers shouldn't end up worse off as a result of this process. We fear that some of the more prescriptive and counterintuitive proposals in the discussion draft would result in less consumer choice, whereas we should be encouraging more creativity and choice.

1632 Two, don't regulate competition out of the market. Rather, leave room for different business models, service innovation and competitive differentiation. We note that several of the innovations that we have brought to the market, such as the Koodo tab, would have been prevented under some of the proposals in the Draft Code.

1633 Third, don't put unnecessary costs and complexity into the industry. They have real consequences, not least, in our case, the opportunity cost of diverting resources from the Customer First changes that we have already made and have planned.

1634 When we proposed this kind of proceeding, we did so because we wanted to avoid the inefficiencies and significant complexity of having to comply with different rules in different provinces and the resulting negative consumer impacts. We are a national service provider and we don't want to pass through the unnecessary compliance costs that result from an inability to merchandise and deliver products and services on a national basis with a uniform customer experience.

1635 As the legal opinion announced by PIAC/CAC/COSCO this morning demonstrates, telecommunications services are subject to exclusive federal legislative and regulatory jurisdiction. The CRTC is the single, national, specialized regulator of telecommunications in Canada -- one of the defining hallmarks of Canadian communications law as compared to that of the United States for example. Our view is that once the CRTC has acted to regulate the aspects of consumer wireless service covered by the Code, the field will have been occupied, for constitutional law purposes and there will be no room for provincial regulation of wireless services.

1636 We, and many other parties, hope that the outcome of this proceeding will be to establish authoritative federal regulation of consumer wireless contracts. If all we have accomplished at the end of this process is to set, at a point in time, a minimum standard that merely makes the existing problem worse, we will have failed. In that regard, we endorse the legal opinion referred to by Mr. Lawford of PIAC/CAC/COSCO this morning.

1637 However, given the limited time available to us in our presentation today, my marketing colleagues will focus on the major substantive issues in the Draft Code from the perspective of those who live and breathe it as reality in Canada's highly competitive wireless market.

1638 I will now turn it over to Dave Fuller, TELUS' Chief Marketing Officer.

1639 MR. FULLER: Good afternoon.

1640 At TELUS, we are on a company-wide journey to put Customers First in everything we do, and we know it's working. For example, last year when the volume of complaints handled by CCTS went up year-over-year by 35 percent across the telecommunications industry, driven mainly by wireless issues, wireless-related complaints about TELUS went down by 17 percent. The CCTS tells us that so far this year our complaint volumes are only about a third of what CCTS would have expected based on our market share.

1641 We can do better, we must do better, but we are on the right track.

1642 You may have seen our Customer Declaration found at the end of this document in some of our marketing materials. It states that at TELUS we are not perfect, but we are working hard to listen to our customers and give them what they want, and that includes being fair and transparent in all aspects of our relationship with our customers. Here are some examples of the changes we have made over the past few years in the area of wireless contracts and services, most of which have led the wireless industry in Canada:

1643 First, on clear and simple pricing and contracts, we were the first national carrier to eliminate system access fees on new plans in 2009 and we didn't replace it with another fee. We then completely rewrote and updated our standard service terms last year in a simple, easy-to-understand format that we believe meets the "plain language" requirement in the Draft Code.

1644 Further, we have drastically reduced the number of available rate plans to reduce complexity and confusion for our customers, and last year we eliminated activation fees for new phones and upgrade fees for renewals.

1645 On the topic of early termination fees, we were the first national carrier to do away with early termination, the traditional early termination fee, that was based on a set amount, such as $20, multiplied by the number of months remaining in the term and often subject to a minimum amount such as $100.

1646 Instead, we replaced it with an approach that has a simple and transparent device balance under which the customer has a device balance based on the actual subsidy provided when they activate. This device balance declines at a linear rate throughout their contract term and if this declining device balance is paid off at any point the customer can upgrade to a new device or even leave TELUS for another provider. Consistent with this approach, TELUS for some time has also allowed unlocking of phones, either in-contract or out-of-contract.

1647 In many cases, this new approach has reduced the amount that customers would have to pay in leaving TELUS by almost 40 to 60 percent.

1648 On our nationwide policy today around changes in contracts, our policy is that if we were to make a change that increases our customer's obligations or reduces ours, the customer could "walk away" without paying any cancellation fees or even their device balance. Like any service business, from time to time we need to change general terms of service and sometimes rates for services that are not subject of the term commitments. When we do so, we give 30 days' advance notice.

1649 In our view, this approach -- which is essentially that set out in Option 2 in section D2.1 -- reflects the most workable balance between the consumer's expectations of rate certainty and the service provider's need to change non-contracted rates and terms from time to time. Only changes that increase the customer's obligations under the contract, such as an increase in rates to which the carrier and customer have made term commitments, should trigger this exceptional cancellation option.

1650 Finally, on the topic of tools to monitor and manage usage, we already offer an extensive range of online tools, mobile applications and text notifications that provide customers the ability not only to monitor their usage and spending, but to manage their accounts and the array of valuable services that they can enjoy with their wireless device.

1651 It was, therefore, no surprise to us that these were amongst the most frequently complained-about issues in the public comments because we had already heard those complaints and acted on them in the past few years.

1652 I hope that during our short time with you today we will be able to tell you about all the other things we are doing to be fair and transparent in the way in which we serve our national customer base of over seven million wireless connections.

1653 I will now turn it over to Anne-Marie LaBerge to talk about some of the positive aspects of the Draft Code.

1654 MS LaBERGE: Thank you. I will now continue in French.

1655 Nous sommes conscients de la difficulté qu'a représentée pour le Conseil la tâche de dépouiller les nombreux commentaires soumis dans le cadre de cette instance et d'en tenir compte dans la version préliminaire du Code.

1656 Nous estimons que le travail accompli constitue un excellent début et nous supportons en particulier les éléments suivants.

1657 Premièrement, le Code s'appliquera aux services fournis aux consommateurs par la totalité des fournisseurs de services sans fil.

1658 Deuxièmement, le Code sera géré par le CPRST, avec le soutien du CRTC en cas, peu probable, de non-respect systémique de la réglementation, comme TELUS l'a recommandé.

1659 Troisièmement, il ne sera pas requis de fournir dans tous les cas une copie papier du moindre document, et ce, en reconnaissance du fait que seuls quelques clients ont besoin de copies papier ou souhaitent en obtenir. Les clients doivent donc avoir le choix de demander ou non de telles copies.

1660 Quatrièmement, les clients doivent avoir la possibilité de déverrouiller leur appareil moyennant des frais raisonnables pour pouvoir, par exemple, utiliser une carte SIM locale lorsqu'ils se trouvent à l'étranger.

1661 Cinquièmement, nous sommes favorables à l'idée d'un « résumé personnalisé de l'information. » En réalité, nous fournissons déjà un tel résumé dans le cadre de notre Entente de service client.

1662 Sixièmement, nous convenons que les clients doivent avoir la possibilité de résilier leur contrat de services sans fil quand ils le souhaitent, à condition d'acquitter le prix des services fournis jusqu'à la date de résiliation et le solde des incitatifs économiques qui leur ont été accordés.

1663 Cela dit, nous insistons sur un fait: la résiliation doit prendre effet à la date de réception de l'avis de résiliation par TELUS, et non à la date de son envoi par le client, car il arrive souvent qu'un tel avis soit d'abord communiqué par le biais d'un autre fournisseur de services et que nous n'en soyons pas informés, sous la forme d'une demande de portabilité du numéro de téléphone du client. Donc, la seule façon pour nous de le savoir, c'est de voir que notre numéro a été pris par un autre fournisseur.

1664 Et finalement, même si nous convenons que le Code doit s'appliquer aux services prépayés, nous sommes inquiets de la proposition du Conseil concernant l'expiration des crédits achetés aux fins desdits services prépayés. Ça été discuté ce matin. J'aimerais élaborer un petit peu.

1665 À TELUS, aucune date d'expiration n'est associée aux crédits achetés, mais non encore activés. Or, l'option 2 prévue par l'article D1.3 évoque l'interdiction d'imposer une date d'expiration pour, je cite, les « crédits achetés pour l'utilisation des services prépayés. » Si le Conseil entend par là interdire l'expiration uniquement des crédits achetés, mais pas encore activés, nous sommes d'accord : TELUS respecte déjà cette interdiction. En revanche, si le Conseil entend par là interdire également l'expiration des crédits activés, alors nous y serions fortement opposés.

1666 Actuellement, à TELUS, les crédits achetés aux fins des services prépayés n'expirent que si le client cesse d'utiliser nos services. Compte tenu de la nature même des services prépayés, seul le réapprovisionnement régulier de son compte par le client nous permet de savoir qu'il entend maintenir son compte actif.

1667 Tant que le client réapprovisionne son compte en achetant de nouveaux crédits -- ce qu'il doit faire au bout de 30, 60 ou 365 jours, dépendamment de la carte qu'il a achetée, du type de carte qu'il a achetée -- les crédits non activés n'expirent pas et demeurent utilisables en tout temps. Le client peut les utiliser soit pour l'usage régulier de son service sans fil, ou s'il le désire, pour acquitter le prix d'un forfait ou des options de son choix.

1668 Si le client ne réapprovisionne pas son compte quand il le faut, nous suspendons son compte, sans le résilier. Nous accordons dans ce cas au client un délai de grâce de 90 jours pour réapprovisionner son compte. Pendant ce délai, et ça, c'est important, nous donnons quatre avis au client --après un, sept, 20 et 60 jours -- afin de prévenir la situation.

1669 À l'expiration de ce délai, en l'absence de réapprovisionnement, nous considérons le compte comme étant abandonné et réattribuons le numéro de téléphone correspondant. À ce point, nous prenons pour acquis que le client ne veut plus utiliser nos services ou qu'il n'en a tout simplement pas de besoin. Nous procédons ainsi parce que les clients des services prépayés ne nous appellent que très rarement dans le but d'annuler leur numéro de téléphone. Ainsi, de nombreux numéros resteraient assignés sans fin à des comptes inactifs.

1670 Comme Ted l'a souligné, nous avons d'autres commentaires à formuler sur des points précis de la version préliminaire du Code, mais le temps nous manque, comme à tout le monde d'autre, pour vous les exposer. Je vous invite donc à vous reporter au document détaillé que nous avons déposé aujourd'hui.

1671 Mon collègue Brent Johnston va maintenant aborder certains aspects de la version préliminaire du Code qui, en dépit de bonnes intentions, nous préoccupent.

1672 MR. JOHNSTON: Good afternoon.

1673 As you have heard, TELUS is absolutely committed to fairness and transparency in our relationship with customers, and we have, in fact, already implemented many of the requirements of the draft code.

1674 There is even more that we want to do, but some proposals in the code would divert attention away from those higher impact initiatives. Indeed, our entire strategy is based on the principle that being customer focused is simply good business.

1675 We see it working in our industry-leading churn and customer satisfaction levels amongst national carriers.

1676 We continuously strive to make improvements for our customers, but given competing demands, the reality is that it takes time and a careful balancing of resources.

1677 We try to focus our efforts on those that would be the most responsive to customer needs. When we look at some of the proposals in the draft code, we worry that we will end up being forced to invest in high-cost, lower impact changes that will leave us with less opportunity to do other things.

1678 To that point, I am going to focus on the proposals in Section D.5, for notifications and spending caps, some of which we feel do not respond to high-impact customer needs.

1679 First, local and long distance voice and text notifications: At TELUS, we already provide what we believe are the most comprehensive usage and additional charge notifications of anyone in the industry. We have developed these capabilities to help our customers manage their usage and understand when additional charges may apply.

1680 We also have a robust usage dashboard available to our customers, both online and as a mobile application, that tracks their data, voice and SMS usage in close to real time.

1681 When we designed these systems, we quickly learned that it made sense to provide these proactive notifications in the case of data usage, but not voice or text.

1682 As my colleague Arleen King can tell you, the reason is that data charges, especially those incurred outside the country, are what typically lead to bill shock, not voice or text.

1683 Voice and text usage notifications would be difficult to build and, in fact, impossible in some cases to provide on a real-time basis.

1684 For example, in the case of calls made while roaming overseas, the necessary call detail records are not often delivered to us by the foreign carrier until well after the charges have been incurred.

1685 Further, even if possible, we believe that voice and text notifications provide little benefit to consumers for four reasons.

1686 Text services and, increasingly, voice services on most higher-end plans are often provided on an unlimited model that does not lead to additional charges, which eliminates the need for usage notifications.

1687 Domestic voice services are often rated differently, depending on the day or time of day -- think of free evenings and weekends -- and also based on the number dialled. We offer favourites and family calling plans.

1688 This would make it extremely difficult to administer any sort of real-time notifications.

1689 When it comes to local and long distance voice calls, we find that customers intuitively understand when they have made a lot of calls in a month, and rarely fail to understand such charges.

1690 When it comes to data charges, however, customers find it much less intuitive. Sometimes an application running in the background on their Smartphone is sending and receiving data without them knowing it.

1691 Typical data usage volumes at home can be very expensive when travelling in some parts of the world.

1692 This is what leads to bill shock, and why we focused our notification efforts on data and roaming usage.

1693 Lastly, we proactively reach out to customers who frequently go over their standard usage allowances to offer them more appropriate plans to help them save money and ensure that they remain satisfied with TELUS.

1694 So, instead of developing text notifications, we have focused on data-related notifications. Our experience is that the volume of complaints and credits related to domestic data usage is double that of domestic voice, which is low, while the volume related to international data is six times as large.

1695 We have had significant success with our system of notifications and blocks for international data roaming, which I will speak to in a moment. Our level of credits related to international data has been cut in half, and it is our goal to make our way to parity with domestic levels.

1696 Bill shock is both expensive for TELUS to deal with, due to customer calls and credits, and even more damaging, drives poor customer experience and churn. So we are absolutely with you on the spirit of this section, but we urge you to consider the opportunity costs of diverting resources to voice and text-related notifications, which we know would be a high-cost, lower impact initiative that would take us away from more high-impact customer friendly ones.

1697 Keep the required notifications to data and roaming, where they do the most good.

1698 Spending caps: Closely related to the issue of notifications is that of spending caps. The implementation of such caps is subject to the same challenges as notifications. Further, we feel that this proposal is unnecessarily prescriptive and would turn out to be more of a negative for consumers than a positive.

1699 The reality is that consumers who want a strict limit on what they spend on wireless services every month already have the option of prepaid service. Customers who choose prepaid service have complete control over their monthly spend, while other customers can choose post-paid plans that do not arbitrarily limit their ability to use wireless services as they choose.

1700 For customers on post-paid plans, our view is that so long as the carrier is providing adequate notifications of when additional data or roaming charges might be incurred, then there should be no need to impose spending caps on all services.

1701 We also suggest leaving room for competitive differentiation in this regard. As I mentioned earlier, in our experience, U.S. and especially international data roaming are where consumers face the greatest risk of bill shock, and where we face the greatest risk of having to eat some of those costs in the form of bill credits.

1702 To help our customers protect themselves from big bills upon their return home, we not only send data roaming usage notifications to customers travelling anywhere outside of Canada, but for the consumer customers travelling outside of Canada and the U.S., we also block data usage at certain thresholds, depending on the country, and ask the customer, by text message, to confirm that they want to continue data roaming.

1703 When they get home, we send them another text message, summarizing their out-of-country usage.

1704 To achieve the right balance between being helpful and annoying, our international data blocks kick in at the $200 level, and continue at various thresholds thereafter.

1705 While this is another example of how TELUS already does what the code is intended to achieve, that does not mean that we agree that post-paid spending caps of any kind ought to be imposed on the whole industry, especially on domestic services, given the wide availability of prepaid options that serve exactly the same purpose.

1706 MR. FULLER: As Ted mentioned off the top, we urge you to be sensitive to the possibility of unintended consequences from intrusive regulation, especially requirements that would conflict with consumer preferences and require significant systems development work.

1707 For example, as Brent discussed, a mandate on all carriers to provide real-time voice notifications could result in carriers moving en masse to unlimited nationwide plans, if they conclude that the cost and complexity of systems compliance would just be too high.

1708 That might sound good for consumers at first blush, but would certainly lead to higher prices at the low-cost entry level of our rate plans, because it would no longer be possible to offer lower priced, limited usage plans to consumers who do not need unlimited nationwide calling. There are certain customer segments, some of them have been mentioned today, that simply do not need an unlimited voice plan, such as teenagers, who communicate primarily by texting, or people who keep a phone mainly for emergency purposes. Such low-cost, consumer-friendly plans would, in effect, be regulated out of the market.

1709 MR. WOODHEAD: I hope that listening to my colleagues has given you an idea of how we are approaching this proceeding. While we support much of what is in the draft code, at least in principle, we also have serious concerns about what is doable and where good intentions could actually result in annoyed customers because of suspended services and increased costs.

1710 I would like to make three final points regarding the implementation date, application of the code to existing contracts, and the need for another round of comment on the wording of the code, which I believe has been resolved this morning.

1711 Regarding implementation date and scope, we are confident that you will hear from just about every carrier who comes before you that for elements of the code that require new systems development work, much more than six months would be required for implementation, especially if multiple significant systems changes have to be made at the same time.

1712 Regarding whether the code should apply to all existing contracts or only new contracts, we strongly urge the Commission to avoid attempting to impose the code on existing contracts. To do so would be enormously disruptive and costly, and may not even be legally feasible.

1713 Finally, given the significance of every word in the code -- and I will just dispense with this piece. I think that if people take the opportunity to review the side-by-sides, plus the further round of reply, I think we are in good shape.

1714 And I know that everybody agrees that the words, the actual words of the code, in both languages, is entirely key to the proper operation of this.

1715 With that, we look forward to the discussion with you this afternoon in helping the Commission arrive at a balanced, practical and consumer-friendly code that will apply uniformly from coast to coast, and we would be happy to answer your questions.

1716 THE CHAIRPERSON: Thank you. The appendices that you and others have provided are tremendously useful. As you mentioned, though, language is important, and we have to come down both in English and French. Is it your intention to provide a French version of this?

1717 MR. WOODHEAD: We are going to provide a French version. I'm sorry, but we will do that by the 22nd date.

1718 THE CHAIRPERSON: Okay, the 22nd. That would be a good guidance for others as well. If they could do that, that would be tremendously useful. So Commissioner Duncan will have some questions for you.

1719 COMMISSIONER DUNCAN: Good afternoon. So I have many questions and probably some of them you've already addressed. What I did is I went through the draft code that we circulated in the Dash-3 and attempted to match it up with the code that you had originally suggested. So now we have another piece of paper. But at any rate, I think -- I thought maybe we could finish by 6:30. That was until I saw the size of your table, but at any rate we'll see if we can do -- we can do about the best of that.

1720 So, first of all, I'm going to start with the -- I have two questions before I get into the order in the document, and I wanted to start with talking about the contract length. And I'm just wondering what term -- what length of terms of contracts TELUS offers.

1721 MR. WOODHEAD: I'll pass it over to Dave.

1722 MR. FULLER: Yeah, so Brent and Kevin can help me out. So we today offer -- in our current market plan is a combination of 37 month and 12 month contracts on TELUS brand. Koodo operates under a completely different kind of approach, which is called a Koodo tab, where you get a 150 dollar tab against -- which just basically offsets the subsidy in a particular device, and then that tab pays down as a percentage of whatever your annual monthly amount is. So they're -- by definition they're -- you know, the subsidy is paid off at variable levels, variable number of months depending on what your usage was and, youknow, what actually the tab started out at.

1723 But in the case of TELUS brand, our biggest brand, it's -- we have some on 36 month and some on 24 months. It just depends on the amount of subsidy. In other words, how expensive the device is. Whether --

1724 COMMISSIONER DUNCAN: Some on -- did you say some on 24 months? Thirty-six and 12 I thought you had said.

1725 MR. FULLER: Sorry, I misspoke. I hear Brent saying that, 36 and 24 months. Two years and three years.

1726 COMMISSIONER DUNCAN: Okay. Oh, you do. Okay, all right.

1727 MR. FULLER: Yeah, two years and three years.

1728 COMMISSIONER DUNCAN: All right. That's great then, thanks. So the concerns that we're hearing about 24 months we can apply to TELUS then? You're --

1729 MR. FULLER: Well, we do have -- we certainly have -- so basically the most expensive devices, I think, like, an iPhone 5 or a Galaxy 3, they would be on a 36 month term. Lower cost devices you can get, youknow, very good smartphones today for, youknow, $300 or so, they would be on a 24 month, a two year. And it just -- youknow, our view was keeping them all on a three year contract when the actual device is not that expensive did not make sense because basically the subsidy pay down, for lack of a better word, can happen over a much shorter period of time.

1730 COMMISSIONER DUNCAN: So I was interested in the comments that you were making in your presentation that the price of the device is amortized over -- on a declining balance?

1731 MR. FULLER: Correct. Yeah.

1732 COMMISSIONER DUNCAN: And so your customers are aware of that?

1733 MR. FULLER: Oh, yeah, we -- it's -- we have a whole working approach up front with a whole checklist where we walk them through and we explain what the device balance is going to be upfront. Basically what the total device cost is, what our investment is, the subsidy, that's your device balance. And then it's just, youknow, if it's a 36 month contract, you divide by 36 and it decrements by 136 every month over the three years.

1734 COMMISSIONER DUNCAN: So it's not a declining balance, it's over 36 months?

1735 MR. FULLER: No, it's a declining balance. So, like, if I can give you an example, say the device balance shorts off at -- let's say it's a 460 dollar phone and you pay $100 upfront, $99, then your device balance would start at $360. So it will decrement by $10 every single month. So halfway through it'll be $180. With only a year left, it'll be $120.

1736 COMMISSIONER DUNCAN: So it's divided equally then?

1737 MR. FULLER: Right. So it just keeps going down. It's very simple and easy to explain and to understand.

1738 And it -- youknow, if I can give you a bit of history, what we actually found was -- and this is why I actually think the whole debate of two years or three years contracts, if you have this device balance approach that we have, is a bit of a moot point because we used to actually offer all of our devices on a one year, two year, or a three year term.

1739 So you would go into the store and you'd see the phone. And again, if I can just use an example to make it easy. The three year price might have been zero dollars; the two year price would have been a hundred dollars, and the one year price would have been $200 upfront, right? And then -- but that was when we had termination charges, the $20 a month for -- youknow, and we decided that a much more customer friendly and intuitive and easy to understand kind of fairer concept was just this device balance, this declining device balance because people understand that if, youknow, we put money in upfront and they want to leave halfway through the contract, they should be able to pay that out, much like a car lease, and go to another provider or upgrade anytime if they want.

1740 Interestingly, after we launched this device balance, we still had this one, two, and three year options, price options in the market, but what we found is prior to introducing the declining device balance the majority of our customers chose the three year option because they wanted the lower upfront price. After we introduced the device balance, not surprisingly customers are smart, the number of folks choosing the three year shot through the roof. It ended up being, like, above 95percent, or about 90percent.

1741 And the reason why is because they looked at it and said even if my intent going in is I only want to keep this device for two years, why would I get -- pick your two year term and give you the hundred dollars upfront in the example I gave you? I might as well just pay zero dollars now; my device will decline, and by the time, youknow, one year is left it'll be a hundred dollars, I can give you the hundred dollars that -- youknow, if I chose the two year term I'd have to give you now, I can give it to you at the end of two years and you guys have fronted me the money upfront. So what happened is they all ended up choosing the three year version, and so we ended up taking the one and two years out of the market just because it was -- youknow, had a lot of complexity upfront, youknow, trying to explain it.

1742 So in effect you can choose whatever-- with the declining device balance, you can choose to have whatever term of contract you want, right? The device keeps declining. You can choose after 21 months to upgrade and many of our customers do, youknow. So we found that a lot of our customers choose to basically upgrade early and, youknow, move on to a new device. Okay.

1743 COMMISSIONER DUNCAN: So now I am confused because it seems to me the declining balance and amortizing the cost of the device over the three years or two years is the same thing. It's not? You're saying people moved from the-- to the declining balance from three years? Is that--

1744 MR. FULLER: No. Perhaps I shouldn't have explained it that way. What I'm saying is we offered upfront-- we used to offer upfront basically three prices for you to pay when you went in to buy your device, a one year price, a two year price, and a three year price, and obviously the three year price was the cheapest that-- the one year price was the most expensive. Once we put the device balance, people realized that basically we were just moving around when you paid the amount of the subsidy.

1745 COMMISSIONER DUNCAN: Okay.

1746 MR. FULLER: You could defer it if you wanted. So they increasingly just always chose the three year term even if their own internal intent was to only keep the device for 18 months or 24 months. Because they looked at it and said why would I give you a hundred dollars upfront and pick a two year declining, youknow, balance.

1747 COMMISSIONER DUNCAN: I understand now. So--

1748 MR. FULLER: Right. Do you see what I mean? They just said I'll wait and I'll give you the hundred dollars that I would give you now, I'll give it to you in two years and then I'll upgrade.

1749 COMMISSIONER DUNCAN: But if somebody wanted to do that, you'd let them?

1750 MR. FULLER: Yeah.

1751 COMMISSIONER DUNCAN: If they wanted to.

1752 MR. FULLER: Yeah. Oh, yeah, they can do it anytime they want.

1753 COMMISSIONER DUNCAN: If they want. Okay.

1754 MR. FULLER: They can do it three months in.

1755 COMMISSIONER DUNCAN: So you-- I presume then that you track the complaints that you get at your organization and I would then conclude from what you've said that the complaints we're hearing through this process wouldn't pertain to TELUS--

1756 MR. FULLER: Dropped away like an--

1757 COMMISSIONER DUNCAN: -- with respect to --

1758 MR. FULLER: -- an order of magnitude. So Arleen can talk to it because she runs the team that handles all of these complaints. But prior to moving to device balance, we had lots and lots of escalations. People would phone in and they would want to -- most of the escalations actually were not so much that they wanted to leave TELUS but they wanted to upgrade to the new phone. Like, the latest iPhone had come out and they wanted to get it. And we were like, no, sorry, you've got, like, 12 months left in your contract, you have to wait, right? And that caused constant escalations. After we introduced this device balance concept where you could just upgrade anytime you want or leave us, the number of escalations - and Arleen - dropped, like ... Arleen, yeah.

1759 MS KING: We saw a significant decrease. We also increased our accessibility to escalate at the same time and we saw a decrease of 30percent fairly quickly after that.

1760 COMMISSIONER DUNCAN: Okay. So I don't think then I'll ask any more questions. It's clear to me on contract length that it seems to be that you have it in hand.

1761 The-- with respect to the regulatory regimes, no point in asking a question on that either because you've indicated that you supported the position put forward by John Lawford this morning, that he'll be filing a legal opinion. Okay.

1762 So now that I'm going to switch to just following along on the document in Dash-3 and I'll try to or you can just interject where you've made a change. And I see that some of them I didn't have any questions on. You've added some clarifications too. So I'll just go to the ones I have questions on. If you think there's something that I should note about the ones I'm not asking, you could just interrupt; otherwise, we'll read it in the course.

1763 So on the pre-paid and post-paid services, the Wireless Code applies equally to pay-as-you-go and other pay-in-advance services, and to post-paid services. And you're saying, I understood in your comments, that the code shouldn't apply to existing contracts. That's actually the next... Okay, now, first of all--

1764 MR. WOODHEAD: We-- our position is that it should apply to both pre-paid and post-paid.

1765 COMMISSIONER DUNCAN: Okay. Fine. Okay.

1766 MR. FULLER: Yeah, it's just there are significant aspects of the code that only make sense against post-paid, as was discussed this morning, but-- and, youknow, so it almost-- there almost needs to be, youknow, for lack of a better word, two separate codes or sections of it, some that apply to pre-paid and some that apply to post-paid, but we can see why you would want a national code for both.

1767 COMMISSIONER DUNCAN: For both, okay. So would you see it being two separate documents or just one? That may be easier for customers.

1768 MR. WOODHEAD: My view would be that we would prefer that you go with option 1. Pre-paid and post-paid are both covered by the code, but there are elements obviously of the code that don't relate to pre-paid and, therefore, wouldn't apply to pre-paid, things like device balance or other types of things. But they're-- anything that is relevant to pre-paid in the code would apply to the code.

1769 COMMISSIONER DUNCAN: And so would you be prepared to submit then, as John Lawford - I'm going to call him "John Lawford" instead of the acronym that he asked us to use in morning - would you be prepared to submit a list of the items that you feel it should apply to and not apply to?

1770 MR. WOODHEAD: Yes, we can do that.

1771 COMMISSIONER DUNCAN: All right. Thanks.

1772 So then the next one gets into the-- just a quick question on the-- actually, I have two questions on this. On A5, "The Wireless Code applies equally to wireless services purchased separately [and] as part of a bundle ..." And, okay, that's fine, you agree with that. And you make the point that the code takes precedence over inconsistent terms, which I didn't find consumer friendly. I don't really understand. So I'm just wondering what you had-- were thinking of in that. So if you wanted to look at your contract, that was section 1, paragraph 2, where you say--

1773 MR. WOODHEAD: Are you referring back to the one that we provided in evidence?

1774 COMMISSIONER DUNCAN: Yes. Yeah.

1775 MR. WOODHEAD: Okay.

1776 COMMISSIONER DUNCAN: Appendix A, yeah. And it's the first sentence in the second paragraph --

1777 MR. WOODHEAD: If you just bear with me for a second, I'll pull that up.

1778 COMMISSIONER DUNCAN: Sure. Thanks.

--- Pause

1779 MR. WOODHEAD: Yes. Sorry about that. And you're referring to which?

1780 COMMISSIONER DUNCAN: To the first sentence:

"The Code applies to wireless services within a bundled telecommunications services package, taking precedence over any inconsistent terms."

1781 And I just note that's something that has to be -- I didn't understand what it would -- could it maybe be made clearer?

--- Pause

1782 MR. WOODHEAD: The intent there was simply that to the extent that any terms in the contract are inconsistent with elements of the Code, the Code would prevail. So it would supersede any inconsistent term in the contract.

1783 COMMISSIONER DUNCAN: Oh, okay. Okay. So we could just change the wording a bit to accomplish that?

1784 MR. WOODHEAD: Yes.

1785 COMMISSIONER DUNCAN: Okay. So, this morning again, Mr. Lawford mentioned that -- or at least I understood him to say that there are instances where people buy bundles and some of the services they buy in a bundle have a different length of service. So I assume, say it's television for example, he might have meant that expires after two years but the wireless applies after three.

1786 My understanding was -- well, no. I'll just let you answer the question. Are there differences or can you just cancel your television when you want?

1787 MR. WOODHEAD: I would probably pass to Dave or Brent what our bundled offers are currently with wireless in, but obviously, the wireless portion of that bundle, this Code would apply to.

1788 So we've established that, but did you want to know what kind of contracts we offer for high speed or --

1789 COMMISSIONER DUNCAN: I understood his point was that consumers are disadvantaged, they're sort of locked in because this part of their bundle is tied in for three years and other things can terminate after two.

1790 MR. JOHNSTON: Yes. If I may. If I'm understanding correctly, we would view the contract for wireless as being separate to the wireless service. So it would be -- you know, the device balance would -- process would undergo over the 36 or 24 months or what have you.

1791 And let's say you also were in a contract with your high speed, we'll often provide, for example in Western Canada, a free laptop if you take high speed with us, and in lieu for that consideration you might enter a two- or a three-year contract also.

1792 We then will have bundle pricing that will apply that says if you take more services with TELUS you'll get an incremental discount for the more services you take.

1793 I would say that those two contracts run independently of one another, and the bundle, if one were to terminate, say, for example, wireless in this case, the bundle discount associated with that incremental service would fall away.

1794 COMMISSIONER DUNCAN: If you terminated your other --

1795 MR. JOHNSTON: One or the other. If you terminated the wireline service, Internet in this case, the incremental bundle discount from having that incremental service would also fall away.

1796 COMMISSIONER DUNCAN: Okay.

1797 MR. JOHNSTON: But the actual contracts are separate agreements and one would not override the other or incur additional obligation because one was longer than the other.

1798 COMMISSIONER DUNCAN: Okay. So a consumer who disconnects, I don't know what --

1799 MR. JOHNSTON: Let's take --

1800 COMMISSIONER DUNCAN: -- they do lose the advantage because they broke up their bundle?

1801 MR. JOHNSTON: Yes. Let's take an example of someone who's in Western Canada and chooses to move to Eastern Canada. In Western Canada where we are the ILEC, we would have, you know, say, for example, home phone, television and Internet, and that might -- let's say the Internet, as I mentioned, was contracted on a term. They then cancel that because they're moving to Toronto and we don't offer those services.

1802 They would lose the bundle discount associated with having more services with us, but the wireless contract they could port with them and would be independent of whatever relationship was there on the Internet side.

1803 COMMISSIONER DUNCAN: All right. At least I understand.

1804 MR. WOODHEAD: So to put it another way to what Mr. Lawford was discussing, I think, was he was worried that when you got into a bundled arrangement where there were differing terms of contracts you would try and get out of the -- that you would somehow not be able to get out of the wireless contract.

1805 But as we previously discussed, because -- with the device balance you can buy yourself out of that at any time in any event, bundled or not, and, you know, you could take the service, cancel and walk away with it.

1806 COMMISSIONER DUNCAN: Okay. Thank you.

1807 Now, on the distance contracts, and I think that you've moved that or something. I think I saw it just briefly. But I'll go ahead and ask my question here and we can pick it up later.

1808 I just had a quick glance at this. I think -- yes, you've eliminated A6 because you've included it in D5. But let me ask the questions as I see them and you may have addressed them anyway.

1809 So TELUS' wording in section 3 of your contract:

"The Distance Contract is made in the place where the Customer resides."

1810 This statement tends to be intended for clarification. Would "is agreed to" instead of "is made" be more customer-friendly, consumer-friendly?

1811 And, you know, maybe this is all for naught if we do send out another draft at the end for final wording, but I'll ask you now because we could perhaps include it in the draft in the most advantageous way.

1812 So you say "where it is agreed to" as opposed --

1813 MR. WOODHEAD: We say that:

"The Distance Contract is made in the place where the Customer resides."

1814 Perhaps I'll ask Mr. Finta if there's any magic in the word "is made to" -- or the clause "is made to" as opposed to "is agreed to."

1815 COMMISSIONER DUNCAN: Thank you.

1816 MR. FINTA: No, "agreed" would be fine.

1817 COMMISSIONER DUNCAN: Okay. All right. Thank you.

1818 So the next point along sort of the similar line. You limit the differences to the essential terms communicated as opposed to the wording proposed, which says:

"If the Service Provider ... sends terms..."

1819 Which I would read to mean include all the terms.

1820 So do you agree with the language proposed on this?

1821 MR. WOODHEAD: I'm sorry, Commissioner, so you're referring to:

"The Service Provider must send the complete terms of the Distance Contract..."

1822 That was in our submission of December 4th?

1823 COMMISSIONER DUNCAN: Yes.

1824 MR. WOODHEAD: And you're comparing that to --

1825 COMMISSIONER DUNCAN: But then you go on to say:

"...must send [the consumer] the complete terms ... within 15 days..."

1826 If not or if the Service Provider sends terms that conflict with the terms agreed to initially, the Consumer may cancel the Contract without incurring any additional fees.

1827 But that's not quite what you said, I don't think, because you limit the differences to essential terms communicated.

1828 In your section 3 you say, about the fourth line up from the bottom of that paragraph:

"If the Service Provider does not do so, or sends terms that conflict with the essential terms..."

1829 But what's proposed here is all terms would be under consideration and I didn't see anywhere where "essential terms" was defined, I don't think. You don't have -- clearly at any rate.

1830 MR. WOODHEAD: I see where you're finding this.

1831 COMMISSIONER DUNCAN: Yes.

1832 MR. WOODHEAD: So you're wondering really why we have inserted "essential terms," meaning there are non-essential terms.

1833 COMMISSIONER DUNCAN: Exactly. Yes. And you can think about it, you don't have to answer right now.

1834 MR. WOODHEAD: I think that we could talk about that in our comments --

1835 COMMISSIONER DUNCAN: Okay.

1836 MR. WOODHEAD: -- if we may.

1837 COMMISSIONER DUNCAN: So February 22nd then?

1838 MR. WOODHEAD: Well, that was more of an undertaking, I believe. We would do it probably on --

1839 THE CHAIRPERSON: The March date, which I've misplaced.

1840 MR. WHITEHEAD: -- March 1st.

Undertaking

1841 COMMISSIONER DUNCAN: The March date then. Okay.

1842 MR. WOODHEAD: Is that correct, Mr. Chairman?

1843 THE CHAIRPERSON: Let me find it.

1844 COMMISSIONER DUNCAN: I think it is.

1845 THE CHAIRPERSON: It's March 1st, that's correct.

1846 COMMISSIONER DUNCAN: Okay, that's fine.

1847 And the next one is a similar type of thing, I guess. The proposal states the contract can be cancelled within 30 days of having received the complete terms of the contract, but TELUS had used the expression "within 30 days of its formation," which is, I think, two different things and I just wondered if --

1848 MR. WOODHEAD: My reading of that -- and perhaps Mr. Finta can add -- it would be that we have two weeks to send you the complete terms and then you have two weeks to agree or disagree to them and send it back to us. But maybe Mr. Finta has something to add.

1849 MR. FINTA: Well, the original formulation covers the point that was raised by the representative from Option consommateurs, is that if the contract is not sent, there must be some provision for its cancellation. So that was in our original proposal, which closely mirrors what you find in consumer protection legislation.

1850 When we were commenting on the CRTC Code, we thought we would stay closer to what the proposal of the CRTC was, which possibly misses some of the elements in the consumer protection legislation.

1851 COMMISSIONER DUNCAN: Okay. Well, I have your explanation. If you have anything else you want to add in your March 1st comments, you can put them in there. At least we have that.

1852 And the other thing is that you used the term "cancellation indemnity," which doesn't seem to be consumer-friendly, and we're using "termination fee or other penalty." I take it you would have no objection to that?

1853 MR. WOODHEAD: We wouldn't have an objection to that.

1854 COMMISSIONER DUNCAN: Okay.

1855 So now, I just want to switch here to something else.

1856 MR. WOODHEAD: Incidentally, in fairness, we just filed the thing but some of this is taken care of, I think, in the document we filed today.

1857 COMMISSIONER DUNCAN: Yes.

1858 MR. WOODHEAD: But carry on.

1859 COMMISSIONER DUNCAN: Okay. Thanks. It's hard enough to absorb it all without doing it right here on the fly.

1860 I want to talk about buyer's remorse and you have a 30-day buyer's remorse policy, which is more generous than I understand Bell and Rogers.

1861 MR. WOODHEAD: I'm sorry, where are you referring to that, Commissioner?

1862 COMMISSIONER DUNCAN: I understand that you have in these Distance -- within 30 days of having received the complete terms -- now, where did I read --

1863 MR. WOODHEAD: You're still in "Distance Contracts"?

1864 COMMISSIONER DUNCAN: I am, yes.

1865 MR. WOODHEAD: Yes. Yes.

1866 COMMISSIONER DUNCAN: Yes.

"Provided the Customer returns any goods received..."

1867 There's no cancellation indemnity within the 30 days?

1868 MR. WOODHEAD: That's correct.

1869 COMMISSIONER DUNCAN: Right. Okay.

1870 MR. WOODHEAD: But specific to distance contracts.

1871 COMMISSIONER DUNCAN: Yes.

1872 MR. WOODHEAD: Yes.

1873 COMMISSIONER DUNCAN: So some of the other parties, Bell and Rogers I understand theirs is 15 days and a 30-minute policy, maximum 30 minutes that you've used, and I'm just wondering -- we're just wondering if this is a significant competitive advantage, is it a differentiating factor or just --

1874 MR. WOODHEAD: There are very few actual distance contracts entered into but, I mean, the 30 days is sort of just a common, you know, sort of timeframe for that.

1875 COMMISSIONER DUNCAN: So there are very few distance contacts entered into?

1876 MR. FULLER: Hardly any, yeah. Almost all of our devices are bought in a store, right.

1877 COMMISSIONER DUNCAN: Okay.

1878 MR. FULLER: People go in and, you know, want to look at them. They want to talk to a rep so, you know, either in retail or in our own dedicated stores a vast, vast, vast majority.

1879 COMMISSIONER DUNCAN: So 5 percent might be distant?

1880 MR. FULLER: Well, I don't -- Brent, what's distance? What would be online contracts? It's not even 5 percent, is it?

1881 MR. JOHNSTON: No.

1882 MR. FULLER: No, it's like 1 or 2.

1883 MR. JOHNSTON: Yes.

1884 MR. FULLER: We can follow up with you on that.

1885 COMMISSIONER DUNCAN: Yeah, I just was wondering the magnitude --

1886 MR. FULLER: It's single digits for sure and below 5, well below 5, right.

1887 COMMISSIONER DUNCAN: Okay.

1888 MR. FULLER: It's different than the the wireline business, right. The wireline business many of the contracts are done over the phone, like people phone into our call centre.

1889 COMMISSIONER DUNCAN: Yes.

1890 MR. FULLER: But in the case of wireless almost everybody wants to see the device that they're going to get and talk to a rep beforehand.

1891 COMMISSIONER DUNCAN: Okay.

1892 MR. WOODHEAD: Commissioner, just to be clear on this 30 days again because I don't want to confuse buyer's remorse with what we're talking about here, this is where in a distance contract we send the customer the information and it doesn't accord with what the customer thought it was going be, the 30 days -- within the 30 days they can return the product or whatever with no termination or no indemnity or cancellation fee.

1893 COMMISSIONER DUNCAN: Okay. So, in some --

1894 MR. JOHNSTON: So that's separate from that agreement in a store.

1895 COMMISSIONER DUNCAN: Okay.

1896 MR. JOHNSTON: I just want to differentiate those two environments and one would be called buyer's remorse in the store and this would be, you know, that related to distance contracts.

1897 COMMISSIONER DUNCAN: So how is it applied in a store for a contract?

1898 MR. WOODHEAD: 15 days.

1899 COMMISSIONER DUNCAN: 15 days.

1900 MR. WOODHEAD: 15 days, yeah.

1901 MR. JOHNSTON: The difference being that if you order it online and do it, you know, remotely then we need to give more time because people are transacting, you know, through the mail and things like that. In a store it's 15 days.

1902 COMMISSIONER DUNCAN: Okay. So I still if I go into a store and buy it and I get home for whatever reason I want to cancel it, I have 15 days to do that, just so that I understand.

1903 MR. FULLER: No, to be clear about how it works, so there is a device 15 days' buyer's regret or remorse. So you can come back within the 15-day period and get another device, okay?

1904 The contract itself, though, is still in force. You can just -- like say you got an iPhone and you get home and you decide that you really like that hard keyboard on your BlackBerry. You can, you know, come back and say, "I'm going to get -- I'd like to replace this and get a BlackBerry instead".

1905 COMMISSIONER DUNCAN: Okay.

1906 MR. FULLER: So it's device-based.

1907 COMMISSIONER DUNCAN: Okay, all right.

1908 MR. FULLER: The way we approach -- you know, for instance the discussion was this morning around, you know, I get home and I find out I don't have coverage, if you phone us within the first couple of days after you have gotten home and said, "I've got a coverage problem and whatnot" then that gets escalated through to Arleen's team and we waive the contract.

1909 MR. JOHNSTON: Yeah, it's termed an activation in error and there are minimum commitments. So if you used more than -- I may get this wrong -- 15 minutes of usage on your phone then you have to use less than that and then it will be deemed an activation in error, subject to Arleen's team verifying.

1910 COMMISSIONER DUNCAN: Okay. Thank you. That helps. Okay, I understand that. Okay.

1911 So now with the implementation, many of these things you have in place but there will be other providers perhaps that don't have them all in place and so the Code is suggesting within six months, and that's assuming that what we're asking here ends up being something that you can manage within six months, I guess.

1912 That's a very difficult thing to ask you. So how do you think that should be worded? Let me phrase it that way.

1913 MR. FULLER: Yeah, it's a difficult thing to answer, as you said, because it completely depends on what specific element you're asking.

1914 You know, I think the reality is elements of this need to be phased in. Things that are policy changes that we can implement fairly quickly in many cases, as you pointed out, we've already done. So frankly, we're not fussed about how long it takes to -- you know, how long you want to implement it at all because we've already put them in place.

1915 Where we run into problems with the six-month timeline is if it requires significant system changes. Just, you know, in a telco world our systems are very complex and cumbersome as you would know.

1916 Generally, we have release windows. We only have four a year and we usually do code lock on whatever that release window is like upwards of six months in advance.

1917 So if it's a very significant systems change like for instance real-time voice notifications would be then there is no way we could get it done in six months, right? There is just too much work and just by the time we would phase in the system changes it would take longer than that.

1918 But I think there is only -- you know, there is very few provisions in the Code, at least the draft Code that you guys have come up with that you know run into significant system requirements. The vast majority of them don't.

1919 COMMISSIONER DUNCAN: So then, six months might be reasonable then?

1920 MR. WOODHEAD: For those items that don't require major complex system changes, yeah.

1921 MR. FULLER: As an example, to use a real example, things like if you end up keeping in something around a cap and a cut-off that's going to require significant systems work, right? That's going to be difficult to do in six months.

1922 MR. WOODHEAD: Real-time voice alerts, that's another one.

1923 MR. FULLER: Yeah.

1924 COMMISSIONER DUNCAN: So perhaps the thing to ask you to do then is to give us an indication of which ones those would be a problem because --

1925 MR. FULLER: Yeah, we could easily do that.

Undertaking

1926 COMMISSIONER DUNCAN: Yeah. I think that with some explanations as to why it would be.

1927 And the previous --

1928 THE CHAIRPERSON: Just on that, that would be for the 22nd of February. And if you can't do it in six months you should indicate what time it would take, not to say you can't do it in six months. We need to --

1929 MR. FULLER: That's fair.

1930 THE CHAIRPERSON: Okay?

1931 MR. FULLER: Yeah.

1932 THE CHAIRPERSON: Thank you.

1933 COMMISSIONER DUNCAN: A previous party, Sophy Lambert-Racine, she mentioned that she felt it would be very confusing for customers if it doesn't all happen at once.

1934 MR. WOODHEAD: I mean, from my perspective, I couldn't comment on whether that's true or not but, for example -- I'll give you an example.

1935 Even though in the United States some carriers agreed to not real time voice alerts, they had up to 18 months for that particular activity. And is it more confusing for customers? I don't know.

1936 But the fact of the matter is that this kind of work can't be done in a network and IT billing environment in those timeframes. And we'll identify and give some estimates of times.

Undertaking

1937 COMMISSIONER DUNCAN: My next question applies to the implementation as it applies to existing contracts. I'm just wondering why we couldn't have a clause that said the Code would apply to the extent possible to contracts signed before the Code comes into effect.

1938 So as I understand it, there are features of the service that people get that are fixed that don't change like the device that you have. But there might be other things that you're using that there may be points that would benefit you as a consumer.

1939 MR. WOODHEAD: Well, for example, there are elements, things like the device balance that we put in place into the November 2010. There are contracts entered into since November 2010, pre-existing contracts that would have that feature, things that are in this Code, and there are a number of them that we already do. Those people would already have the benefit of that.

1940 Contracts that pre-dated that we wouldn't have the information necessarily available to us to even calculate the device balance anymore.

1941 So I think as a practical matter you're correct. To the extent that you comply already with these elements of the Code for existing contracts they would continue to run.

1942 But as a -- and you've heard this already and I don't want to take up your time with it, but I mean as a general matter, as people have said, none of the provinces have even proposed or implemented as the case may be, that these things go backwards, that they apply retroactively.

1943 There are arguably rate elements to some of the proposals here that, you know, I just think that that there is legal questions around that and I don't think that we need to do it. You know, over time a very large number of customers at day one would be captured given the run rate in the industry and over time everybody would be captured.

1944 I appreciate -- don't get me wrong. I appreciate the sentiment that it should apply universally but there are legal -- valid legal reasons why that -- and, frankly, practical reasons why that isn't a good approach to take.

1945 COMMISSIONER DUNCAN: Okay, thank you. I'll leave it. Some of my colleagues may want to question that further. Thank you.

1946 I just wondered. We had a provision. You don't make any comment. You agree with -- in your section 18 it seems to me you agree with the C1, the administration and enforcement of the Wireless Code.

1947 But I wonder if you had any comment on the point that service providers will be required to file a report with the CRTC that demonstrates how their practices comply with the Wireless Code within one month of the Code coming into force. Is that practical from your point of view?

1948 MR. WOODHEAD: Yes.

1949 COMMISSIONER DUNCAN: It is. Okay. Thank you.

1950 And section 2(f) on your proposal, the monthly rate for each of the associated costs or the monthly costs if the rate is calculated on a basis other than a monthly basis. Can you just tell me what that means?

1951 It's like my car. I just get in the car and I drive it. The cell phone I just use it. So I'm just not familiar with all of this stuff.

1952 MR. FINTA: Well, there are some costs that aren't specified on a monthly basis. So this is the wording that was taken from the Quebec legislation.

1953 COMMISSIONER DUNCAN: So those would be like unit costs people pay?

1954 MR. FINTA: Could be unit costs, yes.

1955 COMMISSIONER DUNCAN: Okay, all right. Thanks.

1956 So just in 2(i) you refer to "regular price" whereas we're referring -- or the Draft that's been proposed in (f) is referring to the retail price.

1957 Is there a difference between retail and regular? This may be a translation if you took it from Quebec. I don't know.

1958 MR. FINTA: Well, the regular price has more extensive legal connotations, it's a standard that's used in competition law, for instance. But the retail price can be a particular price in a retail outlet.

1959 COMMISSIONER DUNCAN: So then, reading 2(f) as proposed, do you agree with retail as opposed to regular?

1960 MR. FINTA: 2(f)?

1961 COMMISSIONER DUNCAN: Yes, and device cost.

1962 MR. WOODHEAD: 2(f) of...?

1963 MR. FINTA: I don't see retail price in 2(f).

1964 MR. WOODHEAD: 2(f) of the -- of our --

1965 MR. FINTA: The new one.

1966 COMMISSIONER DUNCAN: In the draft brief.

1967 MR. FULLER: Sorry, which one?

1968 COMMISSIONER DUNCAN: 2(f) in the Dash-3 proposed draft.

1969 MR. WOODHEAD: Make sure we're looking at the right article.

1970 MR. FINTA: It would be a better word, regular would be a better word.

1971 COMMISSIONER DUNCAN: Okay.

1972 MR. WOODHEAD: Ordinary price.

1973 COMMISSIONER DUNCAN: Okay. So, we'll take that under consideration then when we're looking, legal can have a look at that too. Okay.

1974 MR. WOODHEAD: Sorry. Just so we can make sure we're looking at the same document that you're looking at, can you specify --

1975 COMMISSIONER DUNCAN: I will.

1976 MR. WOODHEAD: -- because I want to make sure that we're giving you the correct response.

1977 COMMISSIONER DUNCAN: Okay. I will do that. So, mostly I'm taking my questions based -- starting with your proposal versus the Dash-3, but I will make sure.

1978 MR. WOODHEAD: Versus...?

1979 THE CHAIRPERSON: The working document.

1980 COMMISSIONER DUNCAN: Dash-3, yes.

1981 THE CHAIRPERSON: Which was issued under a notice that had a Dash-3.

1982 MR. WOODHEAD: Dash-3, okay.

1983 THE CHAIRPERSON: Sorry, CRTC lingo.

1984 COMMISSIONER DUNCAN: Okay, sorry. I also was wondering, in your document in 2(j) you refer to the description of "any service offered as a premium", and then if you drop down to -- actually ahead of that, 2(i) you refer to "goods sold or offered as a premium" as opposed to this section here which refers to services; (j) actually refers to services, (i) refers to goods sold or offered as a premium.

1985 And there is no dictionary with your document, so I'm not clear as to what the distinction is.

1986 MR. FINTA: The distinction between (i) and (j)?

1987 COMMISSIONER DUNCAN: Yes.

1988 MR. FINTA: In the original submission?

1989 COMMISSIONER DUNCAN: Yes.

1990 MR. FINTA: (i) refers to goods, so physical devices.

1991 COMMISSIONER DUNCAN: As in the phone?

1992 MR. FINTA: The phone.

1993 COMMISSIONER DUNCAN: Yes.

1994 MR. FINTA: And (j) refers to the services, so you could have unlimited local calling for three months or something like that.

1995 COMMISSIONER DUNCAN: All right. Thank you.

1996 Could you just explain to me maybe on this point about prepaid credits, I understood from your presentation that people only lose their prepaid amount if they've already activated the service, and I understand -- I guess in conjunction with Mr. Lord's comments I understand why that would be, so that's fine, I'm okay with that.

1997 MR. FULLER: Yeah, if I can just maybe explain a little bit more behind, you know, why that's a particular problem for us in the prepaid space.

1998 So, as he said when you buy a card, you know, you buy a $20 prepaid card, you can put that in a drawer and not activate it for, you know, two years and then pull it out and activate it.

1999 Once you've activated, the reason the minutes have to expire is because you've used it to now top up your account, add minutes to the account. The only reason -- like, as long as you do something that ensures that that account is staying active, like add more minutes to it or utilize the device and draw down the minutes, then we'll keep, you know, the minutes alive, right, we'll keep topping it up and we have customers with, you know, very high balances because they, you know, kept it active with top-ups every single month for many years.

2000 COMMISSIONER DUNCAN: And so, if I left it in the drawer, what happens?

2001 MR. FULLER: That's the problem we have is that in a prepaid world they don't actually ever phone us and cancel. In a post-paid world, because you have an ongoing liability, people phone up and say, I don't want this any more.

2002 In a prepaid world they never cancel. So, the vast majority of prepaid subscribers when they decided to leave Telus and go to someone else or no longer use the device, we never find out about it.

2003 The only way we can actually find out about it if you haven't used the device or topped it up or used the minutes within a pre-set period of time, and the industry standard, you know, according to kind of accounting principles is 90 days, we deem you to have churned out, right. And, you know, say okay, well, we haven't heard from, you know, Brent in 90 days, he hasn't used his phone in 90 days, that's the point at which we cancel.

2004 If those minutes were -- you know, had to be kept around for ever, we would have to hold that number for ever and we would never have any idea of actually how many active subscribers we had, right.

2005 So, that's the, you know...

2006 COMMISSIONER DUNCAN: So, just I guess the question might follow out of that is if 90 days is reasonable?

2007 MR. FULLER: It is -- you know, I know it's been a standard for a very long time. And I will tell you, I think someone asked the question this morning, you know, do subscribers understand and know that. I will tell you the vast, vast majority of them by the time we de-activate them at 90 days, more than 90 percent of them have a balance of zero. Like, they have used all their minutes before they put it in the drawer, right.

2008 So, most of them must know that, you know, because there's very few foregone minutes, for lack of a better word, that have been activated.

2009 MR. JOHNSTON: I think -- sorry, go ahead.

2010 The other thing to add I believe in this regard is just, we very much want to keep them as subscribers, we aggressively notify them --

2011 COMMISSIONER DUNCAN: Yes.

2012 MR. JOHNSTON: -- post the beginning of their 90-day period when things start to expire to ensure that, you know, are you really leaving? Could you please top up, we'd really like if you topped up and also telling us if you want to be a subscriber or not.

2013 Arlene has, I think, the specifics, but, you know, there's every I think week or two --

2014 MS LABERGE: One, seven, twenty, sixty.

2015 MR. JOHNSTON: Yeah, one, seven, twenty and sixty days after they enter the 90-day period we're text messaging them and trying to contact them to ensure that they're in fact wanting to leave.

2016 COMMISSIONER DUNCAN: So then -- and I believe you mentioned that in your --

2017 MS LABERGE: Yeah.

2018 MR. WOODHEAD: Right, yeah.

2019 COMMISSIONER DUNCAN: So, in this instance here you agree with option one in the proposed document, because option 2 says:

"The service provider may not apply an expiry date to the credits purchased." (As read)

2020 MR. WOODHEAD: Yes, that's correct.

2021 COMMISSIONER DUNCAN: Okay, thank you. And I guess -- I mean, obviously it sounds like you've done a great job on paying attention to your customers, so -- but the Code is for everybody. So it helps, yeah.

2022 So, the next one, personalized information summary, and I just wonder if you think it's satisfactory, the information that's there? Do you have suggestions of things that might be added or removed, or...?

2023 So, the personal information summary was presented with the extra notice, the Dash-3 notice, a consultation.

2024 MR. WOODHEAD: We are generally satisfied. We have some clarifying wording that we filed today --

2025 COMMISSIONER DUNCAN: Okay.

2026 MR. WOODHEAD: -- with you.

2027 COMMISSIONER DUNCAN: We'll look. Okay.

2028 MR. WOODHEAD: It's quite minor.

2029 COMMISSIONER DUNCAN: And as far as --

2030 MR. FULLER: Just to be clear though, like, we provide a summary like that today, it's almost exactly the same as yours, so...

2031 COMMISSIONER DUNCAN: Already today?

2032 MR. FULLER: Yeah, yeah.

2033 COMMISSIONER DUNCAN: Okay.

2034 MR. FULLER: So, we're fine with it. I mean, the part of clarifying comments are around, you know, it really only applies to post-paid, the information. So, as long as it's a post-paid summary we're fine with that and, you know, just some definitions of should be part of the contract or not.

2035 COMMISSIONER DUNCAN: So, just --

2036 MR. FULLER: But we totally understand and agree that a summary like that should be provided.

2037 COMMISSIONER DUNCAN: So, picking up on the conversation earlier today then, is that something that is automatically given to the person that comes in the store and buys it, or do you say, would you like it? How do you do that?

2038 MR. FULLER: Yeah, not only given but, you know, one of our, you know, one of the things we measure our retail reps on is not only did they give it to them, did they walk them through it and make sure they understand it.

2039 MR. WOODHEAD: That was the checklist that Dave was referring to earlier.

2040 COMMISSIONER DUNCAN: And how do you know that the rep went through it?

2041 MR. JOHNSTON: You know, one can never know of the millions of transactions that occur every year, so I'll just preface my response to that.

2042 At the same time we do surveys of all of our retail outlets and ensure -- we sort of ask the new subscriber or the existing subscriber, did in fact that retailer and that retail rep take you through -- the thing is one of the checklist points that we have with what we call our Smart Start Program in our stores and so, imperfect, but an attempt to follow up and ensure that these standards are being followed.

2043 COMMISSIONER DUNCAN: Do you do surveys on a random basis of all of your outlets?

2044 MR. JOHNSTON: Yes, our exclusive stores, so Telus stores and to a lesser extent our retailers as well, but where we have somewhat less control over their behaviours, but certainly our Telus branded stores nationally, both our dealers and our corporately owned stores we survey as much as we can without the burden of perhaps, you know, not surveying all of them because our customers do get inundated at times with various customer surveys.

2045 COMMISSIONER DUNCAN: And do you agree with Mr. Lord's point, I think earlier today, that the information sheet would have precedence over the contract if there was a difference?

2046 MR. McTAGGART: Commissioner Duncan, if I could, on this point one of the comments that we make is that to avoid duplication or multiplicity of paper, what we would like to be able to do, which is similar to what we do now, is to make the personalized information summary what appears at the start of our standard contract.

2047 That's more or less what we do now. Someone comes into a store and wants that kind of a summary, we print off what we call a dummy contract so that they're getting the summary.

2048 So we wouldn't want to have to do the personal information summary as a separate document.

2049 COMMISSIONER DUNCAN: I see. So it's the beginning of your document. That's your suggestion?

2050 MR. McTAGGART: We think that's the most efficient.

2051 COMMISSIONER DUNCAN: Okay. All right.

2052 MS KING: If I could just add around how do we track if that actually happens in stores, we also have a mystery shopper program where we actually go in and measure that, as well as we measure our escalations into our call centre where people are claiming they were not walked through that at the time of the sale.

2053 COMMISSIONER DUNCAN: Okay.

2054 MR. FULLER: And then the store managers are measured on how well they do on that survey, those spot audits.

2055 COMMISSIONER DUNCAN: I was wondering, the next thing is:

"A permanent copy of the contract and all related policies are to be provided prior to the start of the service."

2056 Which you are obviously doing.

2057 The paper copy of the contract, so then everybody gets a hard copy in the store?

2058 MR. WOODHEAD: Yes.

2059 COMMISSIONER DUNCAN: Your distance contracts, they would be the only exception and they are very small and very few you said.

2060 MR. WOODHEAD: Yes, that's right.

2061 COMMISSIONER DUNCAN: Okay. So I was just wondering, would it be possible for your customers -- so you are two years into your contract and you want to look at your contract, you wonder what you agreed to or what the terms were or whatever, you don't know where your piece of paper is, is it possible for you to be able to go in when you are looking at your bill to pay it online and bring up your contract?

2062 MR. JOHNSTON: Unfortunately, that is not available at this stage. It is one of those things, as I mentioned earlier, on the list of things we desire to do at reasonable expense.

2063 One of the things that we have now, it's unfortunate, all of our contracts are paper-based and so we don't have an electronic. They are stored in paper form, but there is significant time to go retrieve them. It is on a list of to-dos for us to electronically digitize those devices. We see that as a win-win for both the consumer and us and the considerable cost of storing all those and then we can't retrieve it, so it's very much in our interest and theirs to have those available and, as such, we would absolutely -- it's a huge benefit in making those available at time of a phone call so the consumer and the agent can go through what was actually agreed to and what wasn't and so that there is no lack of clarity, as well as being available online so that the customer themselves can look at what they agreed to.

2064 Our preference actually would be that we would ask that the Code kind of have this kind of flexibility in it, but rather than have the Code define that it always needs to be a paper-based contract, I think the ideal thing from an end consumer standpoint is that that contract -- maybe you print it off in the store so they have it, but I would far prefer it to be actually digitized and electronic and then stored on their device so they can find it any time, right, because it's actually on the same device that they got, right.

2065 COMMISSIONER DUNCAN: So even in that scenario the first thing that would come up when they opened it would be the --

2066 MR. JOHNSTON: The summary.

2067 COMMISSIONER DUNCAN: -- information summary.

2068 MR. JOHNSTON; Yes.

2069 COMMISSIONER DUNCAN: Okay. I understand.

2070 So I guess, from what you said, that you do have copies of the paper contracts, but it would be time-consuming to get it?

2071 MR. JOHNSTON: Unfortunately, yes. Yes.

2072 COMMISSIONER DUNCAN: Okay. So if you have a dispute with a customer and they insist, you can go back to the contract?

2073 MS KING: We can. We prefer to --

2074 COMMISSIONER DUNCAN: Well, I can imagine --

2075 MS KING: Yes.

2076 COMMISSIONER DUNCAN: Okay.

2077 MS KING: We prefer to actually settle the issue at our -- usually it's never about the contract, it's always about something else and we like to solve the issue and get to the root of the issue.

2078 COMMISSIONER DUNCAN: Okay. All right. That makes sense.

2079 Now, the section "Changes to Contracts", again, if you have changed your position and it's in this document here then don't hesitate to tell me because we will talk about that then.

2080 So it appears to me that you are agreeing with Option 2 in this section and it's section 4, but you went further in yours or it may be that I didn't understand it.

2081 But in your section in what you originally filed, your Code, the first part of it seems to mirror what is here, but then you go further. Maybe it's just the wording that's not clear to me. Any stipulation under which a service provider may amend a contract unilaterally is prohibited unless the stipulation complies with those three things. And then it goes on to say:

"However, except in the case of an indeterminate (month-to-month contract) such a stipulation is prohibited if it applies to an essential element of the contract."

2082 So if I read that, then, does that tell me that it can't be amended period if it's an essential item -- element, even for a long-term contract, fixed contract? Like the wording is throwing me off here.

2083 MR. FINTA: Yes, that's correct. The essential elements, what we -- there is some confusion about what constitutes the essential elements of a contract under the Québec legislation, so we specified in our submission -- and that mirrors what developed into the second option, D2.1 -- that the pay-per-use services, the optional services within the service agreement are not essential terms. Those are the terms that the customer can choose to use or not and those should not be subject to the prohibition.

2084 COMMISSIONER DUNCAN: Would it be unreasonable if I were to ask if you could reword this?

2085 MR. FINTA: Sure.

Undertaking

2086 COMMISSIONER DUNCAN: Just the consumer, because I found it very difficult to understand. That would be great. I guess that would come with the 22nd. It took quite a few reads before I got that that's what it meant.

2087 You also state there that:

"Any amendment of a contract..."

2088 No, here it is here.

--- Pause

2089 COMMISSIONER DUNCAN: This is also in your section 4, but you state:

"Nevertheless, an amendment made to comply with changes to applicable law or regulation is exempt from the requirements of this section."

2090 I just was curious, is it necessary to actually say that or is that an accepted -- I mean if you have a law or regulation?

2091 MR. FINTA: This was drawn from the Manitoba legislation.

2092 COMMISSIONER DUNCAN: Okay. Okay. So we will just leave it with legal to consider whether it's necessary or not.

2093 MR. WOODHEAD: I mean to some extent much of what we had here is superseded now by the draft that you put out, so we have commented subsequently on the draft.

2094 COMMISSIONER DUNCAN: Okay. Because I know that paragraph is not covered in the draft that was sent out.

--- Pause

2095 COMMISSIONER DUNCAN: Except that, you know, the way that is drafted, that Option 2, it's not clear to me that it's limited to essential -- that essential elements can't be changed. I guess it would be because you are saying they are specified, the items that are specified. Okay.

2096 MR. FINTA: Well, as I said before, we tried to stay as close to the CRTC draft as possible, considering that it had been a considered drafting of all the submissions received.

2097 COMMISSIONER DUNCAN: The CRTC draft you are referring to is the dash 3, the Notice of Consultation?

2098 MR. FINTA: Yes.

2099 COMMISSIONER DUNCAN: That is what we pulled together from what we received, it's not clearly our position.

2100 MR. WOODHEAD: Yes. So in our December 4th filing and other people filed draft codes, as we understood it, you pulled together all of the comments and came up with a draft of the Code, which we now have subsequently and others have subsequently provided refinements to.

2101 So to some extent, to the extent that we rely on the December 4th one, it is reflected now in the draft in the evidence we have just provided to you today.

2102 COMMISSIONER DUNCAN: Which we haven't had a chance to look at, okay. Thanks.

2103 Okay. So the effective date or cancellation, I noticed that you prefer "received" as opposed to "provided"?

2104 MR. WOODHEAD: That's correct.

2105 COMMISSIONER DUNCAN: And I assume that there is a legal argument for that?

2106 MR. McTAGGART: It's actually a very practical --

2107 MR. WOODHEAD: Practical.

2108 MR. McTAGGART: -- issue and that is that we don't often know when the customer has given that notification, we only know when we receive a local service request to port out a number. So it's only at that point that we know that the customer wants to leave, so we would say at that point we have received notice.

2109 COMMISSIONER DUNCAN: I think we had gotten that explanation earlier.

2110 MR. WOODHEAD: Yes. Most of those things occur through an intermediate provider so we wouldn't know when they sent it, we only know when we receive it.

2111 COMMISSIONER DUNCAN: Okay.

2112 Now, the next section is dealing with the early termination fees and we have had quite a bit of discussion about that already, including the fact of listening to what you say TELUS' practice is, is just to charge you for the balance of your economic incentive.

2113 So I'm just wondering, we have asked Mr. Lord to submit some simplified wording on that. Are you in agreement that -- for example, if you look at Option -- first of all, I'm assuming that you were supporting Option 2. Maybe I'm wrong in that. You were supporting Option 2?

2114 MR. FULLER: Yes, that's right.

2115 COMMISSIONER DUNCAN: Okay. So then there were a number of questions about that/

2116 For example "the fixed term services may not exceed", whereas in the other three categories it says "will be".

2117 And also, just looking at the fixed term services:

"...may not exceed the sum of the price of services provided up to the effective cancellation date."

2118 I just wonder if you would agree that it should read:

"...any unpaid costs for services provided up to the cancellation date and any remaining economic incentive."

2119 Or words to that effect. Because it seems to me when I read this that this would -- it may not be your intent, but the way that is written it seems to me that if I'm two years into a contract that could be the two years worth of money I have paid up to this point.

2120 MR. FINTA: Yes. We --

2121 COMMISSIONER DUNCAN: Maybe not your intention, but --

2122 MR. FINTA: Yes, we don't agree with that and our submission is marked up on the --

2123 COMMISSIONER DUNCAN: Okay. So you have changed that in your --

2124 MR. FINTA: Yes, we changed that.

2125 COMMISSIONER DUNCAN: Okay. All right. Maybe I will just --

2126 MR. FINTA: We have reduced it to a statement of the formula.

2127 COMMISSIONER DUNCAN: You reduced it to...?

2128 MR. FINTA: A statement of the formula as it would appear in the personalized information summary.

2129 COMMISSIONER DUNCAN: Okay. That's great. Thank you.

2130 And the $50 or 10 percent if there is no incentive, I assume that you feel that's still necessary for the reasons we were given?

2131 MR. WOODHEAD: There are costs that -- there are costs that we would have to incur in any event, right? Like, the commission to the sales representative and costs of early deactivation.

2132 COMMISSIONER DUNCAN: So if somebody -- if you pay a commission, you don't take any of it back if the person subsequently disconnects?

2133 MR. WOODHEAD: Correct.

2134 COMMISSIONER DUNCAN: Okay. Okay, that's great.

2135 And the question that we had here was are there circumstances where penalty-free cancellation should be permitted, but I'm assuming from your earlier comments they'd just be escalated and you would deal through that. For -- as you gave the illustration there earlier about where somebody couldn't get the service.

2136 MR. WOODHEAD: That's correct.

2137 COMMISSIONER DUNCAN: Okay.

2138 So on the renewal of service, maybe what I'll do is first ask if I'm a TELUS customer and I've been a TELUS customer for three years and my contract is about to expire and I haven't responded to your notices, you will extend my contract on the same terms and conditions as I had it or on the current?

2139 MR. WOODHEAD: The current, I would think. Month to month.

2140 MR. JOHNSTON: Yeah, on a month-to-month basis thereafter.

2141 COMMISSIONER DUNCAN: And so what happens to -- assume I had an iPhone in there. What happens to that? That's fully amortized at that point.

2142 MR. JOHNSTON: It's your phone, yeah.

2143 COMMISSIONER DUNCAN: It's your phone. So my rate would actually go down? Well, no, because -- well, it depends if you were paying for something for the device (indiscernible).

2144 MR. FULLER: The exact same terms as what you had, just continue on on a monthly basis.

2145 MR. JOHNSTON: They'd just continue.

2146 COMMISSIONER DUNCAN: That's assuming that I'm not paying any amount monthly for the phone. Because in some instances when you spoke earlier, you said you could pay a hundred dollars on your phone. Oh, no, wait a second, okay.

2147 MR. JOHNSTON: That was if -- yeah, if you were 24 months in, you may have a hundred dollars left on your device balance and it made more sense to wait and pay that at the two year mark versus upfront if you want to replicate a two year agreement. Whereas this is at the end of, say, 36 months your device balance has now reached zero and your services would simply roll over into month-to-month services on the same rate plan --

2148 COMMISSIONER DUNCAN: Okay.

2149 MR. JOHNSTON: -- to be -- for example.

2150 COMMISSIONER DUNCAN: Okay. And what percentage of your customers, do you have any idea, actually fall into that category or are most people anxious to get a new phone and they're ...?

2151 MR. JOHNSTON: You know, Dave mentioned since we've implemented the device balance we've found that more people are upgrading earlier and staying on contract than ever before, but we would say, you know, the percentage that are off contract, if you will, or on a month-to-month basis is, you know, in the 15 to 20 percent range.

2152 COMMISSIONER DUNCAN: Okay.

2153 MR. BANDERK: Just -- sorry, just to top up because I know a lot of the examples have been from TELUS and I wanted to at least one from Koodo from this circumstances. So we have the tab. What happens when that device is paid off, that tab balances down to zero. We actually start to accrue a positive tab. So we allow --

2154 COMMISSIONER DUNCAN: You start to, sorry?

2155 MR. BANDERK: To accrue a positive tab, and our tab is always on the bill so someone knows. So they can then -- if they take -- to start off with, say a device -- we tend to sell less expensive devices on Koodo. So, say, 150 dollar device. We give it to the customer for zero dollars. They start at a minus 150 dollar tab. We actually -- once that over time every month part of that tab is paid off, based on a percentage of the -- what's paid to us. When we hit zero, so in the same kind of idea as your contract ending on a fixed term contract like TELUS, we actually start to accrue a positive tab. So we actually start to give benefits to the customer that they can then leverage at some point in the future. Whenever they so choose to upgrade, they can apply that to a new device and maybe a more expensive device.

2156 MR. FULLER: It could build up to a hundred dollars. And then when you get a new device, say it has another 150 dollar tab, you start at minus 50 now instead of minus 150 because you were already at a hundred.

2157 COMMISSIONER DUNCAN: And how do they become aware that you're doing this? You send a notice?

2158 MR. FULLER: It's on their bill.

2159 MR. BANDERK: It's on their bill every month --

2160 COMMISSIONER DUNCAN: Oh, it's on their --

2161 MR. BANDERK: -- exactly what is either owing or a benefit to them is always on their bill.

2162 MR. FULLER: The answer to your original question, though, is very, very few customers just go on month to month. You know, most actually upgrade early. And if they don't, they can certainly upgrade at the end, given the advances in smartphone technologies, so ...

2163 COMMISSIONER DUNCAN: The next section dealing with the clarity of advertised prices. And I actually found that what was proposed didn't really make sense to me. The -- just let me -- I'm just going to see if you have made any changes. So I'm looking at 4.1. Yes, I see. Because it said, "Any advertisement that is incorporated by reference into a contract ...," and I see you took that out because I didn't know what that would mean.

2164 MR. FULLER: To be quite honest, we didn't know what that meant either.

2165 COMMISSIONER DUNCAN: Okay. Good. Thanks. All right. All right. So ...

2166 Just on the -- now you're proposing -- so this is the piece you gave us today. Now you're proposing that it should read the advertised price may show the pre-tax amount but the advertisement must indicate whether the advertised price excludes sales tax and government-mandated fees. So, okay, that's clear. All right. Thanks.

2167 The section 4.3, which was an unlimited plan, is added in there and I see you do have some comments on that. I was just wondering if you were in agreement or if you had any comments. So maybe you just want to elaborate on what your comment is.

2168 MR. FULLER: This was on D4.3?

2169 COMMISSIONER DUNCAN: Yes.

2170 MR. FULLER: Yeah. Our position is that any service that advertises "unlimited" is truly unlimited. And if there's some material limitation to it, then you can't call it unlimited.

2171 COMMISSIONER DUNCAN: Okay. Great. Thank you.

2172 Now, in your remarks today you talked about the notification, so I just want to just get that in front of me.

2173 THE CHAIRPERSON: Maybe I can cut in here just for a second. It was -- would it be -- are you folks planning to stay in town overnight or? Just so I know, you know, how to manage the time.

2174 MR. WOODHEAD: We'll all be here overnight.

2175 THE CHAIRPERSON: Okay. Because I know it's pretty late in the day.

2176 MR. FULLER: But hopefully we won't be here overnight, but we'll be in Ottawa overnight.

--- Laughter

2177 THE CHAIRPERSON: I get it. Because, you know, as I mentioned earlier, we're all struggling with this, the fact that you are -- it's a very dynamic process. It's -- and when you bring -- which is useful to have, and you comment sometimes it's difficult for us to keep us. So what I was going to propose is perhaps to -- I have actually some questions, some minor follow-up on some of the stuff you've already discussed and maybe we could go through that and just ask you to come back tomorrow morning so that Commissioner Duncan can continue in areas she hasn't had a chance to explore yet. If that's okay?

2178 So just in terms of follow-up, I was -- and we'll go to about 6:30 and we'll call it a day at that point. Maybe other commissioners will have questions at that point as well.

2179 Just to follow up, you discussed -- I can't remember if you called it a hidden shopper. You have quality assurance ways to make sure your workforce -- your sales force, whether branded or general, ensures that the information is provided to customers. I was wondering if you linked complaints to particular retailers or vendors? Any complaints that dealt with CCTS.

2180 MS KING: We're actually in the process of doing that.

2181 THE CHAIRPERSON: Okay.

2182 MS KING: We can actually do it at a high level, aggregated level probably by location but not to individuals, and we actually are rolling out something fairly quickly to be able to do that.

2183 THE CHAIRPERSON: Okay. That would be interesting to know because, frankly, in the end we were talking earlier about wanting to get consumers aware and I was wondering how you ensure that in fact it gets delivered. I'm sure Mr. Entwistle isn't going Undercover Boss yet, but that might be an option as well. So .. He might. Okay. Well, there's a TV show for that.

2184 Unlocking ... Unlocking. So the Competition Bureau took a position that unlocking was an important means of -- it was good to allow more unlocking and it fosters a more dynamic and competitive marketplace. Do you agree with that conclusion?

2185 MR. FULLER: Yes.

2186 THE CHAIRPERSON: Okay.

2187 MR. FULLER: And would go further to say it's not just about a dynamic marketplace in terms of, you know, not having blocks for people to move but also, you know, dealing with, you know, very expensive roaming charges when you're abroad. It enables you to, you know, buy a --

2188 THE CHAIRPERSON: It's an additional tool.

2189 MR. FULLER: -- you know, an Italian SIM and slap in a SIM. That was actually one of the main reasons why we adopted a fairly aggressive unlocking policy.

2190 THE CHAIRPERSON: Right. Help me understand because I just don't get it. I take it and you mentioned in your submission -- in your -- today your presentation that from a -- that you prefer a 90 percent period, right?

2191 MR. FULLER: Yeah.

2192 THE CHAIRPERSON: Because you're afraid to run on really popular devices and that's not surprising, that happens, people want these new devices. So help me understand. Is it the providers of the devices that are requiring you to put them out locked or is it your own --

2193 MR. FULLER: In some cases, yes. So that what we're concerned about and the OEMs, the original equipment manufacturers, are concerned about is basically arbitrage. And, you know, so the best analogy is scalping. So when -- I guarantee you if we were forced to sell only unlocked devices, you know, philosophically, as we just said, we don't have a problem with it, that's why we unlock after 90 days.

2194 THE CHAIRPERSON: Right.

2195 MR. FULLER: The only reason we require 90 days is we want basically three months of, for lack of a better word, proof of service that you've actually activated the device.

2196 THE CHAIRPERSON: Right.

2197 MR. FULLER: And then we'll unlock it and it's yours to take wherever you want. The reason --

2198 THE CHAIRPERSON: So that's the principle business reason is the arbitrage? There's nothing about --

2199 MR. FULLER: Yes.

2200 THE CHAIRPERSON: -- security, theft, or anything like that?

2201 MR. FULLER: Well, theft -- fraud is basically the overarching concern. That can come in one of two ways. Certainly, you know, it -- we're worried -- we already -- you know, for instance, with the iPhones, they're a bit like jewellery and we've, you know, seen an unprecedented explosion in, you know, armed robberies and things like that in many of our stores as gangs try to, you know, take them. If the devices were all unlocked, it would be that much more attractive --

2202 THE CHAIRPERSON: Right.

2203 MR. FULLER: -- to them, if they weren't locked. But -- so that's one concern.

2204 And then the other concern is not really security, it's -- although, I suppose, security of our own, you know, retail stores and whatnot. And then the second concern is this scalping concern, where --

2205 THE CHAIRPERSON: Right.

2206 MR. FULLER: -- I guarantee you what would happen is people would go in and buy, you know, five devices, you know, when that iPhone 5 was launched, and you would see them on Kijiji, you know, that night, right, as they sold them for an extra $300, right?

2207 THE CHAIRPERSON: Right.

2208 MR. JOHNSTON: Or in other markets where they haven't yet been launched.

2209 MR. FULLER: Right. So ...

2210 THE CHAIRPERSON: I see. Because their long strategy --

2211 MR. FULLER: That's something -- so the OEMs are most concerned about that particular use case, where someone -- you know, because they do staggered launches on these. Where someone will buy a hundred of them and ship them on a plane to, you know, a location that they have not yet launched in, right?

2212 THE CHAIRPERSON: Okay. So I'll trade you an OEM for a Dash-3, I guess.

--- Laughter

2213 MR. FULLER: Yeah.

2214 THE CHAIRPERSON: Thank you.

2215 MR. FULLER: My apologies, sorry. Our supplier partners.

2216 THE CHAIRPERSON: But it's all right. It's all right.

2217 On page 7 of your presentation you talk about your unlocking of phones around the end of the 1st. So how often do most customers actually come to you? Do you have any, you know, hard data on how much of the -- how many devices get unlocked? If you don't have it at hand, we could ask you to do it as an undertaking.

2218 MR. JOHNSTON: I don't know, but I -- we can get back to you.

2219 THE CHAIRPERSON: Yeah.

2220 MR. JOHNSTON: I can say that it's -- it would be the minority, not the majority.

2221 THE CHAIRPERSON: Okay. Maybe by the 22nd of February, that's something you could easily undertake?

2222 MR. FULLER: Easily. Yeah, we can pull the information, yeah.

2223 THE CHAIRPERSON: Yeah. That would be useful for us.

2224 What fees? Is it a standard fee --

2225 MR. JOHNSTON: Thirty-five --

2226 THE CHAIRPERSON: -- regardless of the device or is it variable depending on the device?

2227 MR. FULLER: It's $35 --

2228 THE CHAIRPERSON: $35.

2229 MR. FULLER: -- standard fee. The reason --

2230 THE CHAIRPERSON: You came to that amount based on, question mark?

2231 MR. JOHNSTON: So back -- last November we did a wholesale revamp of our fees.

2232 THE CHAIRPERSON: Right.

2233 MR. JOHNSTON: And we not only eliminated activation and swap fees or the renewal fees that we knew clients weren't very happy with, we at the same time took a look at all of our fees and we grouped them into two types. Thirty-five dollar fees, which are ones that require significant on-the-phone interaction and sort of process by our agents, and others that were smaller in nature. In fact, we wanted to encourage people to do self-serve options because those were 10 dollar fees.

2234 THE CHAIRPERSON: Okay.

2235 MR. JOHNSTON: So this one is now consistent with all of our other fees, like a transfer of ownership or other activities that require intensive call centre time that are optional, we charge $35 for as part of this blanket fee policy.

2236 MR. FULLER: And the reason we charge for it, basically two things. First of all, when you go through an unlocking process, it's not particularly intuitive. One of Arleen's reps actually has to walk you through the codes that you have to type in to actually cause the unlock, right? So it's, you know, fairly manually incentive for both us and the customer. That's the first issue. The second issue is that we actually test the full unlock process and then support the device after. So I think there were some comments this morning about, like, does it void your warranty? If you unlock the phone through us at $35, because we've gone through this testing process, it does not void any manufacturers' warranties on any of our devices, so ...

2237 THE CHAIRPERSON: Okay. So would you agree that $35 is based on a cost for you because there is some manipulation? There may be a little bit of profit in there?

2238 MR. FULLER: That's -- believe me, we didn't do it to -- you know, it's a big profit generator for us.

2239 THE CHAIRPERSON: I know, but it's mostly cost driven, right?

2240 MR. FULLER: It's mostly cost driven, yeah.

2241 THE CHAIRPERSON: Okay. Thanks.

2242 MR. FULLER: Yeah, so ...

2243 THE CHAIRPERSON: On page 3 you talk about, you know, being afraid that we over get involved on this stuff and it may prevent innovations, and you gave the example of Koodo Tab. And elsewhere in the presentation you talked about perhaps other innovations that might not have occurred. Are there any -- I get the impression that you may have other examples, that if the code as drafted in the Dash-3, the working document. Are there any other innovations that would have been prevented? You don't have to answer it now. That too could be done by an undertaking.

2244 MR. BANDERK: I can add one actually and it would come from the data notifications. So one of the things we actually have in every one of Koodo's rate plans is what we call a data saver. So it's -- instead of having a fixed bucket, because we know some consumers don't want a fixed bucket, they don't know how much data they're going to use an monthly basis, we actually have a sliding scale. So at different points. So $5 gets you so much, 10, but it fluctuates. One month you'll spend $15 on data, the next month you'll spend 5, the next month you spend zero. It becomes very complicated from a data notification period because there's no fixed bucket.

2245 THE CHAIRPERSON: So --

2246 MR. BANDERK: Because buckets fluctuate. So we're going to have to --

2247 MR. FULLER: Basically it right sizes depending on what you want.

2248 THE CHAIRPERSON: So any adaptability to the consumer demand with the code as in the current working draft makes it more difficult in certain areas?

2249 MR. FULLER: It does.

2250 MR. BANDERK: Month to month you would -- sorry.

2251 THE CHAIRPERSON: Too many mikes on.

2252 MR. BANDERK: Month to month you'd have to reset the whole IT system to fluctuate to the customer's actual --

2253 THE CHAIRPERSON: I see.

2254 MR. BANDERK: -- demand profile.

2255 THE CHAIRPERSON: Okay. Are there any other examples? Again, I could say -- do it by --

2256 MR. JOHNSTON: I would just add that -- sorry to interrupt. On TELUS we also had a similar philosophy called Data Flex. So we had flex data plans that --

2257 THE CHAIRPERSON: Right.

2258 MR. JOHNSTON: -- given a recent change in industry we no longer have but are still in our base. And so, there's the opportunity where we would have to sort of turn that off and that has been a major -- one of the major drivers of our ability to reduce those credits and the customer complaints that I was talking about --

2259 THE CHAIRPERSON: All right.

2260 MR. JOHNSTON: -- in my submission.

2261 THE CHAIRPERSON: Well, this is all great to say and there's another example, another example, but if you could do it as a set, that would be great.

2262 MR. WOODHEAD: We'll give you a complete listing.

2263 THE CHAIRPERSON: Okay. That would be great. Now, I'd like to turn to pre-paid and there's -- I understand your position is that you -- you know, that there's a date -- the period between the purchase of the card and the activation. Do you have any data or would it be too difficult for you to know how long people have -- wait before they actually activate their cards?

2264 MR. FULLER: We can take that away, but to the best of my knowledge I don't think we actually know when they buy it at the retail point of presence.

2265 THE CHAIRPERSON: Okay. Well, if there's --

2266 MR. FULLER: We only know it when they activate it, right? So ...

2267 THE CHAIRPERSON: You know when you put it out into the marketplace at the vendors, but you just don't know when it's purchased, right?

2268 MR. FULLER: Yes. Yes, that's right. We might be able to estimate, like, when we shipped the cards out and, you know, how many were activated within a certain number of periods.

2269 THE CHAIRPERSON: Yeah. Although you'd have to speculate as to which went in, which went out. You just --

2270 MR. FULLER: Unless they're serialized.

2271 THE CHAIRPERSON: Well, try to see what you can do and that you can do as an undertaking as well because I'm trying to get a sense of how this is happening.

2272 And you mentioned 90 days is your accounting rule. Is that a generally accepted accounting rule when -- in terms of treating this from an accounting perspective, the liability left on the potential minutes on the card?

2273 MR. FULLER: Yes.

2274 MR. WOODHEAD: There's a couple of things. There is an accounting issue and then there's a securities issue.

2275 THE CHAIRPERSON: Right.

2276 MR. WOODHEAD: So if we have dormant pre-paid accounts there, we are required to disclose and the investment community wants to know that when we say we have, for the sake of the argument, 10,000 pre-paid customers or a hundred thousand pre-paid customers, that in fact we have in fact those numbers because they impute average revenue per unit to those things. And if they're actually dormant accounts, you're overstating your actual situation.

2277 So typically from a fair disclosure point of view, they will groom those numbers to get rid of those dormant accounts where the person has thrown it in the glove box and forgotten about it or whatever.

2278 MR. FULLER: The 90 days is an industry accepted term. I actually don't know if it's part of GAAP. I don't imagine it is. It would -- you know, for all of the auditors that would audit tel. cos, they expect it to be 90 days. And it arose from the fact that there were some problems in other countries where service providers were basically changing their policy to manage their churn, right? Like, you could understand if you, you know, were having a bad churn quarter, you could say, hey, well, you know what, we'll make our policy 120 days and all of a sudden a lot less people need to be deactivated because they haven't used their device, right? So we've been very strict about keeping the 90 days to make sure that we have fair and transparent reporting.

2279 THE CHAIRPERSON: But you did say in the vast majority of cases, I can't remember exactly if those were your words --

2280 MR. FULLER: Yes.

2281 THE CHAIRPERSON: -- that people, by the time the number, the telephone number expires, people have used the dollars on the card.

2282 MR. WOODHEAD: Yes. It's 90-plus or more. And it's not -- just to clarify, it is not -- it's not a GAAP rule but there have been instances not only in other countries but in this country as well in the past where auditors have asked for restatements of those pre-paid numbers.

2283 THE CHAIRPERSON: I see. And on page 13 your argument is mostly that you don't want to create additional pressure on telephone number availability and that's why there's a need to recycle these phone numbers, so that we don't run out of numbers at one point. Do you have any sense of how many numbers you get to recycle this way, that you're able to reharvest?

2284 MR. FULLER: It's about -- in our case it's about 35,000 to 40,000 a month.

2285 THE CHAIRPERSON: A month? Okay.

2286 MR. FULLER: That would, you know, churn out under this rule. It fluctuates obviously, but ...

2287 THE CHAIRPERSON: Okay. That's useful actually.

2288 Notification. Page 14 you refer to I think it was mobile apps that track their data, voice, and SMS usage in close to real time. Help me understand what "close to real time" means. How close?

2289 MR. FULLER: All right. So without getting very technical about --

2290 THE CHAIRPERSON: Please.

2291 MR. FULLER: -- rating systems, most billing systems in a tel. co are batch. So what that means is we run a job, you know, overnight or on your bill cycle that basically looks back and computes your usage and calculates what your bill is going to actually be.

2292 THE CHAIRPERSON: Right.

2293 MR. FULLER: They're not real time in that they're not calculating when you're on the phone talking to someone, you know, that is one of your faves, your five favourite numbers. It's not calculating in real -- ringing up a bill in real time, right? So what we mean by "close to real time" is basically we can't tell definitively the minute that you kick over a certain bucket amount in voice or even in data, right? There is some lag effect there. It's not significant in time and, you know, it's usually in the matter of hours and less than a day.

2294 THE CHAIRPERSON: So two, three hours close enough, but data gets sucked up rather quickly. I'm trying to understand.

2295 MR. FULLER: Yeah, it's ... We'd have to check on the exact time because we're continually trying to improve that time and reduce that amount. So at one time it was actually a couple of days, but it's come down substantively from then. So we can, you know, check on the exact amount of time --

2296 THE CHAIRPERSON: Yeah.

2297 MR. FULLER: -- but it's not immediate real time. Like, if I go onto, you know, my app right now and look at my usage, it will be up to date, but, you know, maybe an hour or two out of date, right, at any given date.

2298 THE CHAIRPERSON: Right. So if you could give us, you know, what you mean by "close by" through an undertaking, that would be --

2299 MR. FULLER: Yeah.

2300 THE CHAIRPERSON: -- useful. And also an indication of with technology do you expect where is that trend? I take it it would shrink or is there a point where you can't?

2301 MR. FULLER: So data -- it's much easier to do in data --

2302 THE CHAIRPERSON: Right.

2303 MR. FULLER: -- but this data is generally flat rate usage, around -- you know, a megabyte is a megabyte. The point we're trying to get across in our submission is it's much, much more complicated and expensive in a voice world.

2304 THE CHAIRPERSON: Voice.

2305 MR. FULLER: Because the voice rating is much more complex because of things like, you know, your 10 favourite numbers, evening and weekend clocks which are often different. Sometimes they are five o'clock. Sometimes they are six o'clock at night, right.

2306 So the rating itself is a lot more complex in voice than it is in data which enables us to be able to provide real-time notifications or close to real-time notifications in data much more easily.

2307 THE CHAIRPERSON: But your point is that we may have over 100 years of experience on voice and it's more in our culture than data?

2308 MR. FULLER: It's much more intuitive, right. The reason Arleen gets far less, you know, escalations around that is just people either don't dispute it at all or when you explain to them, "Well, the reason you got this charge is you phoned someone for, you know, 45 minutes, they remember the fact they phoned 45 minutes.

2309 The problem with data is it's not intuitive at all. You can get background applications that, you know, suck down data. You tell someone they've got 50 megabytes very few people can translate that into how many emails that means, right. That's not true of voice or a text.

2310 THE CHAIRPERSON: Right.

2311 On page 19 you talk about these notifications and I think you described them being helpful. There is a possibility that it becomes annoying.

2312 Do you have any research data with your customers to back up that you think -- at what point it becomes annoying to get these balanced?

2313 MR. FULLER: So just to be clear, we think a cap is annoying.

2314 THE CHAIRPERSON: Yes.

2315 MR. FULLER: You know where it cuts you off in the middle of something. I actually don't think notifications are -- you know customers would -- I mean it's an SMS and you get --

2316 THE CHAIRPERSON: I hope so because if I recall what you do for pre-paid calls is you aggressively notify.

2317 MR. FULLER: Yes.

2318 THE CHAIRPERSON: So if they're being aggressively notified --

2319 MR. FULLER: No.

2320 THE CHAIRPERSON: -- hopefully they don't find it too annoying.

2321 MR. FULLER: No. Like, so for instance, in data we notify at 50 --

2322 MR. JOHNSTON: 50, 75 --

2323 MR. FULLER: -- 50, 75 and 95 and then thereafter at every, you know, $10 increment that you're going over.

2324 THE CHAIRPERSON: And on these caps and notifications your point is that we should focus on data and roaming. Is that correct?

2325 MR. FULLER: Yes.

2326 MR. JOHNSTON: Yes.

2327 THE CHAIRPERSON: And were we to do that is your view that that would be consistent with the Policy Direction?

2328 MR. FULLER: Well, our view is actually --

2329 THE CHAIRPERSON: Because I'm reading between the lines here and elsewhere that some people think that going beyond that would be inconsistent. I don't think --

2330 MR. WOODHEAD: We weren't approaching this from the Policy Direction. We were approaching it from what actually the problem is.

2331 And in our view the major, by far the major problems are the data and roaming. The other ones in our experience are relatively de minimis and, yet, the implementation costs for doing those far outstrip the benefit.

2332 THE CHAIRPERSON: Right.

2333 MR. WOODHEAD: And that's kind of the point. It isn't a Policy Direction argument.

2334 THE CHAIRPERSON: Okay. Perhaps I was reading that from the -- your association's perspective seemed to suggest that we shouldn't go down that road because it was somehow contrary to the Policy Direction.

2335 MR. FULLER: Yeah, I mean, we obviously -- in the case of notifications we provide them pretty extensively. In the case of caps the only place we have decided to put them on is in the case of roaming because on domestic services our view is if you want a cap you're going to gravitate to a pre-paid service.

2336 But as I think one of you had pointed out -- Candice had pointed out earlier today, that doesn't apply to roaming, right. So the reason we put a cap in place is many people would have a post-paid plan and they're happy with the post-paid plan when they're in country. But when they go abroad they want a cap. So we made a conscious decision to put a cap in place from a customer service standpoint.

2337 Do we necessarily think that needs to extend to being legislated? Well, you know, personally I view that as a point of differentiation for TELUS. I'm perfectly happy if it's not legislated because I actually like to be, you know, the most customer-friendly guy on the block.

2338 THE CHAIRPERSON: From your perspective it just makes good sense of --

2339 MR. FULLER: Absolutely, which is why we did it.

2340 THE CHAIRPERSON: -- serving your customers and clients.

2341 MR. FULLER: Yeah.

2342 THE CHAIRPERSON: Well, those were the follow-ups to the questions we had that you were discussing with Commissioner Duncan earlier.

2343 I don't know if other Commissioners have some follow-up?

2344 Oui, Madam Poirier?

2345 COMMISSIONER POIRIER: Naturally, I do have a few questions, okay.

2346 I was wondering because you're in business in Quebec too and they've applied la Loi sur la protection du consommateur with Bill 60. So I was wondering if applying that legislation was a cost for you.

2347 MR. WOODHEAD: I mean, we can pass it off to Brent.

2348 MR. JOHNSTON: Well, I think one of the more fundamental implementations of C-60 was in fact the device balance concept.

2349 It so happened that we were almost -- we implemented that in November and we had strangely thought of the concept in parallel. We were actually well on our way, given the six-month lockdown on our code, et cetera, to having had that concept baked and coded into our systems for implementation in a major release in our systems that November.

2350 So in some strange, you know, act of coincidence --

2351 MR. WOODHEAD: Confluence.

2352 MR. JOHNSTON: -- a confluence of great thinking, we were actually able to do that without incremental costs.

2353 Had we been not in compliance, I cannot say -- like, the cost of that change was not insubstantial. So had it been on an incremental decision for us we would have viewed it certainly as a significant change. But it so happened in our case that we were --

2354 COMMISSIONER POIRIER: Okay

2355 MR. JOHNSTON: -- going down the very same path.

2356 COMMISSIONER POIRIER: Yeah, but I believe it's the case of most of the companies because this morning or this afternoon with Mr. Lord, he said that all companies are moving in the direction of the Code. They are doing it presently so it means that probably it will be no cost for them.

2357 MR. JOHNSTON: In that particular case, perhaps, but I would say -- I would note the very different pace at which some organizations went after the device balance subsequent to certainly our adoption.

2358 And I would view, you know, the aggressive competition in the market on other elements actually that change which I would have expected to take not as long to be competed away in terms of an advantage for TELUS, stood for quite some time in the marketplace until our competitors matched us on that element and some until only recently so.

2359 So I take that as actually a great example of how some perhaps were very much struggling with systems implementation issues as they looked at what we had already implemented.

2360 COMMISSIONER POIRIER: Okay. So it was at no cost for your consumers implementing the Bill 60?

2361 MR. JOHNSTON: No, in fact as we would look at it, and we look at our results subsequent to making that change, it was to great benefit to our consumers, mostly around their ability to upgrade easily and to enjoy a fair and transparent contract experience with TELUS.

2362 That's why we hadn't been moving down that path independently of the C-60.

2363 COMMISSIONER POIRIER: Okay.

2364 MR. FULLER: I would note --

2365 COMMISSIONER POIRIER: Yeah.

2366 MR. FULLER: I would note, I mean, there were definitely some costs to implementing C-60 for us. Over and above the biggest one was the device balance.

2367 COMMISSIONER POIRIER: But you all absorbed them. The company absorbed them or the consumers had to pay for them?

2368 MR. FULLER: No, we don't look -- so they are all capital charges on our systems. We don't look and then go and say, okay, well, how are we going to pass this capital charge through it?

2369 I would say that, you know, if capital charges for systems enhancements that are required to meet certain regulations become significant, then the way customers pay for them is in the deferral of other things that we might be able to do, right. We have a limited capital budget. We have limited IT resources and we can only do so much for so long.

2370 So if a big project comes along that consumes a lot of resources, you know, to meet a certain regulation it means a lot of other things that we might do. Even new product launches, new services, new network launches get pushed out from an affordability standpoint, right.

2371 COMMISSIONER POIRIER: Okay.

2372 MR. FULLER: Like, if we had to spend $150 million on systems then, you know, rolling out that LTE network to the next community would have to get pushed into the next year because we can't go above a certain capital budget, right.

2373 COMMISSIONER POIRIER: Okay.

2374 MR. FULLER: So there are costs, arguably and --

2375 COMMISSIONER POIRIER: There are costs. But it's good for everybody.

2376 Okay, let's say it this way.

2377 MR. FULLER: I mean where would you --

--- Laughter

2378 COMMISSIONER POIRIER: It's on the record.

2379 MR. WOODHEAD: There is no question that there are costs. It happens that it was at an intersection in time where we were undergoing a major initiative.

2380 COMMISSIONER POIRIER: Yeah, yeah.

2381 MR. WOODHEAD: But where this becomes problematic on a much grander scale is when the next province says, "I'm going to be just like Quebec. I'm just like Quebec. I'm going to do just like Quebec."

2382 But lo and behold, it isn't just like Quebec because, as you said today, you know, a politician looks at it and says, "I want to give this little tweak to it" and all of a sudden, because it seems like a little tweak, but that can be a $40 million IT hit to the industry to try and accommodate that real tweak.

2383 And I'll just -- I would just commend to you as a way of graphically --

2384 COMMISSIONER POIRIER: But usually it's very seriously done, okay? From what I've looked at how Quebec dealt with that issue, they took a lot of time to do it. They consulted everybody and, well, nobody is out of business because of that bill.

2385 MR. WOODHEAD: Right, but that doesn't mean that it's costless.

2386 COMMISSIONER POIRIER: No.

2387 MR. WOODHEAD: You know, as I said in the opening, we are a national carrier. So to the extent -- for example, Quebecor may be more sanguine because it operates only in Quebec.

2388 But when you operate across nationally and you're dealing with 10 of these, each of which supposedly are like Quebec but are not because some of them say you have to disconnect customers at the end of their fixed term contract, it doesn't roll over month to month or because you must provide paper copies of every document, these have real consequences.

2389 COMMISSIONER POIRIER: Okay.

2390 MR. WOODHEAD: So that's I think where we are at.

2391 COMMISSIONER POIRIER: Two other quick questions because we're losing time.

2392 I just saw you linked fraud and locked handset. Okay, it's the first time I hear about it but -- yeah, officially here today.

2393 I was wondering why you prefer to lock devices because of fraud. Aren't there any other ways to fight fraud? Because to me it might be good in the viewpoint of the business but in the viewpoint of the customer, fraud it's not their business. They feel they are punished because you locked their device.

2394 So aren't there any other ways to fight fraud instead of locking handsets?

2395 MR. FULLER: I'm sure there might be but they wouldn't be as effective as locking the device.

2396 And I would go further to the point of, you know, our customers aren't complaining about the fact that the device is locked because after 90 days which is not a long period of time -- it's only three months -- we'll unlock the device.

2397 Maybe some others have not adopted that policy as aggressively and whatnot but, I mean, our view is all we ask is that it be locked for the 90 days to affect the fraud side of things and after that if you want to unlock it we'll unlock it.

2398 COMMISSIONER POIRIER: Okay. But there could be other ways. This one is the easiest one.

2399 MR. FULLER: It's the most effective by far.

2400 COMMISSIONER POIRIER: The most effective one.

2401 MR. FULLER: Right.

2402 COMMISSIONER POIRIER: Okay.

2403 MS LABERGE: Can I just add a customer benefit to this?

2404 COMMISSIONER POIRIER: Yes.

2405 MS LABERGE: You were asking what is in it for the customer.

2406 COMMISSIONER POIRIER: Oui.

2407 MS LABERGE: When there is an iconic device that launches, you know, be it an Apple or a Samsung and the inventory score -- so you can imagine that the big manufacturer, now to use the acronym "OEM", will send us, you know, a certain amount of phones.

2408 If the devices were unlocked at the time of launch, then you would have these guys walking in our store, buying all of our inventory, shipping it to a country somewhere in South America or China. What happens to the consumer is that they would not have access to these devices.

2409 So I would say that it is not a general statement for every phone, but when those very hot iconic devices where you see people lining up at stores -- and I have to tell you that we have a challenge to be able to put these phones in the hands of all of our consumers, not because of price, but because of availability.

2410 So we see this as a concern if you are looking at this on a consumer centric face, you know, to be able to give access to as many people as we can for these phones.

2411 MR. FULLER: Just to underscore the fraud point, if I can give one example, Apple, prior to the iPhone 5 launch, if you went into one of their stores and bought a device at full price and put it on a month-to-month contract, they would sell you the device unlocked. With the iPhone 5 launch, again because of concerns around arbitrage and fraud, they would only sell in one of their stores -- even if you paid full price, they still insisted that it get locked to a given carrier.

2412 So this isn't just carriers that have this view, so do our partners, right.

2413 COMMISSIONER POIRIER: Okay. And thank you very much. It helps.

2414 And my last question is related to the percentage of your consumers that reach their 50 percent usage limit, or 80 or 100 percent. Are there many of your clients reaching 50 percent, 80 percent, 100 percent? Could you provide us with numbers for voice services compared to data and roaming services, because I wonder if we are making a big fuss about sending notifications while there might be only a few consumers reaching their 100 percent limit. I don't know.

2415 MR. FULLER: Yes. So we can come back and --

Undertaking

2416 COMMISSIONER POIRIER: Yes.

2417 MR. FULLER: There would definitely be -- we send out a lot of data notifications, no question right around people getting to the 50 percentage.

2418 COMMISSIONER POIRIER: Thank you.

2419 THE CHAIRPERSON: That would be for the 22nd of February. Lots of homework for you.

2420 Commissioner Simpson has a question for you and then I will give the floor to Commissioner Molnar.

2421 COMMISSIONER SIMPSON: There has been some discussion and there will be an intervention tomorrow concerning youth, students predominantly, and individuals with disability and seniors, and this group is putting an argument forward that these groups are operating at a disadvantage for a variety of reasons, which I will be asking them about tomorrow, but I was curious on two fronts.

2422 Youth in particular seem to be higher -- again, this is my judgement -- higher users of data and texting and I presuppose that they might also be, by percentage, a group that are contributing to bill shock, either to themselves or to their parents, and I'm curious as to what provisions you have right now to prevent that from happening other than what we have heard. I'm thinking specifically on the issue of contracts, whether you operate on the basis that an individual has to be of majority consent to be able to enter into a contract and is the communication -- if a minor has a phone supported by a parent that the communication has to go to the parent as well as the kid?

2423 MR. JOHNSTON: Well, I will address the first point.

2424 MR. WOODHEAD: We don't allow contracts with minors.

2425 MR. JOHNSTON: Right. Right.

2426 But certainly on the options side I would point to three.

2427 Number one, we find among the youth in particular a disproportionate share go to prepaid. Now, we can argue that it's likely the parent's decision around wanting them to ensure control and a spending sort of envelope for their child and the control mechanisms of prepaid are very, very robust and hence that behaviour that we see.

2428 We have also seen, at the same time, a large influx of relatively low-cost Smartphones, as Dave mentioned earlier, in the $200-ish, $150 sometimes range that create viable low subsidy or no subsidy prepaid options for youth. So I think that in itself is a very major aspect of satisfying youth. And you can get text-only plans, text and data, voice text and data, so there are lots of options and highlight the control.

2429 The second is the advent of family plans in the Canadian market, so where you would allow family sharing or where the data from one Smartphone pools with the data from the other Smartphone and therefore the pooling effect naturally absorbs some of the risk of having individuals on each plan. If one goes over, the other is under, that would lead to a net under position and therefore they wouldn't go over their bucket.

2430 The third was what Kevin mentioned about the flex. So the flex plans themselves really do insulate the usage if people spike up in a given month and they soften the blow of an extreme overage situation significantly.

2431 Of course, lastly, are just all the usage notifications that we talked about in the prologue here.

2432 So yes, I do believe we have significant protections in place and that is irrespective of the contract protections that Ted mentioned.

2433 COMMISSIONER SIMPSON: So I gather you would then say that you do not see the need for a specific inclusion of measures for these groups to be part of the Code?

2434 MR. JOHNSTON: No. No, I think in fact many of these are -- in fact, the prepaid model I would again accentuate is, you know, purpose-built for that as one of the major segments within the prepaid market today.

2435 MR. BANDERK: Just on that front, I mean and that is -- we recently, to be honest, launched Koodo prepaid, actually just in August of last year, purpose-built actually for some of the segments you talked about, specifically student and youth. We had to that point unlimited text plans with no voice, fixed data buckets that you can add. So we are looking specifically at these parts of the market to offer them very specific controls and measures that meet their needs and it was purposely built for that segment actually, that youth segment.

2436 MR. FULLER: I would go further and argue that a number of the provisions that already have in the Draft Code will actually allow mechanisms to protect those.

2437 So like if I can give an example, we provide those data notifications, so the way that would work, if you had you and, say, your daughter on the same plan and your daughter was, say, 12, you would have been the decision-maker that signed the contract. The usage notifications in this case would go to the daughter's phone, though, that she was at 50 percent and 75 percent, you know, or $10 over. You wouldn't see them.

2438 But where you would see them is, we also have an online monitoring tool or a mobile app. Like I have mine and when I fire it up as the account owner I can select whichever number within my family that I want to see. So I can see my daughter, I can select my daughter's number, you know, 289, and I can look and see what has her usage been.

2439 So although I'm not getting the texts her phone is, I can look at any time in the month and see what her usage has been and whether she is over or not, right. So I think many of the tools are out there already and improving.

2440 MR. WOODHEAD: And to your point, Commissioner, I think that culls out one of the sort of interesting points of this, which is, it's not necessarily a lack of the market providing alternatives, it is perhaps a lack of information for consumers and that is something I think that as an industry everybody can do a bit better at and that's probably part of the solution here, too.

2441 THE CHAIRPERSON: Commissioner Molnar...?

2442 COMMISSIONER MOLNAR: Thank you.

2443 I would kind of like to continue the conversation of data caps, but I'm going to leave that until tomorrow since you are coming back.

2444 I did want to ask one question tonight before you leave, just in case you decide to mull it over and change your position by tomorrow --

--- Laughter

2445 COMMISSIONER MOLNAR: Hint-hint.

--- Laughter

2446 COMMISSIONER MOLNAR: I was reading the document you gave us and I'm looking at your position on disconnection and it appears that you are not supportive of applying the CCTS Disconnection Code to wireless.

2447 I read the amazing statements here, your rationale that says:

"In contrast to wireline voice services, wireless services are subject to both monthly service rates and additional amounts that vary by usage."

2448 I thought: Well, geez, you know, I worked in telecom for quite a while and if I remember long distance always varied by usage. You know, you have 900, you have directory assistance, you have lots of optional things. There are all kinds of things that vary within your wireline by usage and, yes, we have a Disconnection Code to protect customers.

2449 So I found that to be a very unconvincing argument as to why for wireless the Disconnection Code should not apply when it does for wireline and particularly, as you folks know even better than us, the amount of wireless substitution out there and a person's dependence on their wireless as their sole communications option.

2450 So it's hard to understand particularly why you are not willing to accept the CCTS Disconnection Code for wireless.

2451 I suppose your options -- you also say something here about:

"Wireless services are not anchored to a physical address that increases your exposure to fraud."

2452 Yet I don't understand that either because you still have control over the access. You may not have control over the physical device, but you still have control over the access.

2453 So I didn't understand either of your arguments, so perhaps tomorrow you either have different arguments or you agree that the Disconnection Code that protects wireline customers might also be appropriate for wireless.

2454 I could give you the night to think about it, if that's okay? I will ask my other questions tomorrow. Thank you.

2455 THE CHAIRPERSON: Okay. That's great.

2456 So tomorrow we will start up at 8:30 and Commissioner Duncan will continue on the matters that we haven't touched yet and we will keep up.

2457 Is that okay?

2458 MR. WOODHEAD: Very good.

2459 Thank you.

2460 THE CHAIRPERSON: Thank you very much.

2461 MR. WOODHEAD: Enjoy your evening.

--- Whereupon the hearing adjourned at 1835, to resume on Tuesday, February 12, 2013 at 0830

REPORTERS

Lynda Johansson

Monique Mahoney

Jean Desaulniers

Madeleine Matte

Date modified:

2013-02-12