ARCHIVED - Transcript, Hearing 12 February 2013

Volume 2, 12 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

12 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

12 February 2013

- iv -

TABLE OF CONTENTS

PAGE / PARA

PRESENTATION BY:

- v -

UNDERTAKINGS

PAGE / PARA

Gatineau, Quebec

--- Upon resuming on Tuesday, February 12, 2013 at 0831

2462   LE PRÉSIDENT : À l'ordre, s'il vous plaît. Good morning, everyone.

2463   As people take their spots, we will just continue with Commissioner Duncan, who will continue her questions.

2464   COMMISSIONER DUNCAN: Good morning. Today will be less agonizing. I have read your submission and indeed you had already answered a lot of the concerns that I had, so that's great.

2465   I just have one question on a part we had already covered and that is with respect to your recommendation on D4.3, the unlimited plans.

2466   I understand, as you had said yesterday, that if it's not truly unlimited you can't say it's unlimited and the only thing is that in your description:

"Service providers may not advertise a service as unlimited if their network management practices may result in a substantial reduction."

2467   Do we need "substantial" in there? I mean, it's in the quality of that service for the consumer. Any reduction at all, it doesn't have to be substantial, is what I understood you to be meaning.

2468   MR. FULLER: Yes. I think the reason we put in "substantial" is that if you take a -- it's meant to capture, for instance, say that you did severe throttling --

2469   COMMISSIONER DUNCAN: Did? Sorry, I missed that.

2470   MR. FULLER: Significant throttling. Say you had an unlimited data plan, but once it got above, you know, 2 gigabytes you basically throttled the network down substantially to the point where it was so slow it effectively became unusable, you shouldn't be allowed to call that "unlimited".

2471   The only reason you couldn't say -- we threw the word "substantial" in front of it is the vagaries of a data network in a wireless world are such that the speed isn't always constant, for instance, you know, if you were farther away from the tower or as more and more people load the network it slows down somewhat, right. So I think legally it's not correct to say, you know -- like all data services have some variance in their speed, right, they might slow down a bit. We put the wording "substantial" there to basically mean that if you are throttling the network above a certain amount, then you can't really call that unlimited.

2472   Robert, is that correct?

2473   MR. FINTA: Yes. There will be some network management practices that will impact the network performance, but not in a way that denies the consumer the benefit of the service.

2474   MR. WOODHEAD: It was meant to address, I think, the practical types of advertising where people are advertising unlimited, Commissioner, but then they say your service will be throttled at 5 gigs or 6 gigs.

2475   So to the extent that there is just sort of normal network management as they have referred to, we weren't trying to capture that, but I mean if you wanted an absolute you could remove "substantial".

2476   COMMISSIONER DUNCAN: It just was confusing for me. So we will take what you have said under consideration and staff will think about that, who are more knowledgeable than I am, because I still find it a little confusing.

2477   My next question -- and you will be happy to know that I'm going to leave the disconnection section for Candice. She had much more punch with her question than I would have had -- but I do have one question on F1 where I note that:

"In order to ensure the ongoing effectiveness of the Wireless Code, this Code will be reviewed in 3 or 5 years."

2478   You had originally said three years and gave an explanation for why three years would be preferred, because technology was changing rapidly, so I'm just wondering, are you just leaving it up to the Commission, needs more thought, decide after some time passes?

2479   MR. WOODHEAD: It would simply be to leave it up to the Commission's discretion.

2480   To me the simplest and most practical approach would be to do it in three years --

2481   COMMISSIONER DUNCAN: Okay.

2482   MR. WOODHEAD: -- for the reasons you just described.

2483   COMMISSIONER DUNCAN: Okay. All right. Thank you.

2484   Okay. And on the definitions -- I think I had something in there -- just two questions.

2485   Permanent copy, just some clarification.

"A permanent copy of a contract is one that may be stored and printed at any time by the consumer."

2486   But I don't know what -- I didn't look back to try to see where you were referencing that in the document, but it's my understanding at this point that as a consumer of TELUS I couldn't just print that, although that is what that says I think.

2487   MR. McTAGGART: Commissioner Duncan, this arises from section D1.5 which used the concept of "permanent copy", but there was no definition of it so we were unsure exactly what it meant. We just want to make sure that the concept of permanent copy can include an electronic copy.

2488   What I think my colleague Robert, in making this suggestion, was thinking of is trying to track the concepts in electronic commerce legislation where this concept of permanent copy has already been tackled.

2489   MR. FULLER: You are correct, Commissioner, that the permanent copy today is a paper copy, but we just want to leave it open for the fact that ideally we move to a world where that can be electronically stored, for instance on the device, and then printed off afterwards, because it will be a lot easier for the consumer to be able to find it than, you know --

2490   COMMISSIONER DUNCAN: I guess if that's your objective I'm not sure that that's what that sentence says. Because to me when I read it it just means I am a customer of TELUS, I can just call up and print that, you know, go online and print it, but I don't think I can do that.

2491   Is this at some point, yes, maybe I will be able to?

2492   MR. FULLER: You can't today, but that would be the ideal, is that you could do it.

2493   COMMISSIONER DUNCAN: Okay. So D1.5 you say?

2494   MR. FULLER: That's correct.

2495   MR. McTAGGART: And again, within D1.5 the phrase "paper copy" is also used, which suggests to us that there is a difference between the permanent copy and a paper copy.

2496   COMMISSIONER DUNCAN: Yes.

2497   MR. McTAGGART: So I take your point.

2498   What we are trying to do here is say that an electronic copy can serve this purpose but, you're right, the definition refers in the present tense to one that could printed, which doesn't describe our existing paper copy.

2499   COMMISSIONER DUNCAN: Right. Okay.

2500   MR. McTAGGART: You are quite right.

2501   COMMISSIONER DUNCAN: So do you think that it needs some fine-tuning or do you want to just recommend something?

2502   MR. McTAGGART: We will absolutely -- we will absolutely do that. Thanks.

2503   COMMISSIONER DUNCAN: Okay.

2504   MR. McTAGGART: -- we'll absolutely do that, yes.

2505   COMMISSIONER DUNCAN: Okay.

2506   The next one is on the post-paid service. I'm just reading under your comments:

"Post-paid services are made up partly of the services included in the rate plan, billed in advance and the service is used on a pay-per-use basis."

2507   But when I read the post-paid services block it doesn't refer to the pay-per-use. It says:

"Post-paid services are wireless services that may be paid for after use and upon receipt of ... and may include services for which a minimum monthly cost is billed in advance." (As read)

2508   I just wonder why you wouldn't put the pay-per-use aspect of it in that definition as well. I just thought it would make it clearer, easier to read.

2509   MR. FINTA: We thought the pay-per-use was covered in the first part of the sentence, "paid after use" whereas the rate plan, which is the bucket of minutes that you buy and pay for in advance --

2510   COMMISSIONER DUNCAN: Oh, okay.

2511   MR. FINTA: -- are paid for at the beginning of the month.

2512   COMMISSIONER DUNCAN: I guess I think of the monthly bill where people are also paying that after the fact and I wasn't thinking of the pay-per-use basis.

2513   MR. FINTA: So we bill in two parts.

2514   COMMISSIONER DUNCAN: Components, yes.

2515   MR. FINTA: The rate plan is billed in advance, the usage, the pay-per-use part, is paid at the end of the month -- or billed at the end of the month.

2516   COMMISSIONER DUNCAN: So does the customer get two bills or one bill for two aspects?

2517   MR. FINTA: No, one bill.

2518   MR. WOODHEAD: No. The concept is that you pay in advance for your monthly service. So every month when you get your bill you pay and you are paying the subscription part of your bill in advance and then on the pay-per-use basis, those would be added from the prior month --

2519   COMMISSIONER DUNCAN: Okay. I wonder if it would be better --

2520   MR. WOODHEAD: -- if there are any.

2521   COMMISSIONER DUNCAN: -- from a consumer point of view if it would be better to say pay-per-use, because I think consumer pays once a month and they don't make that distinction. At any rate, just food for thought at any rate.

2522   My last question is, I just would like to ask you about Koodo. I just wondered if you -- because I am maybe not as familiar -- I have had a little bit of a lesson this morning on what Koodo is, but I just wonder if you would take an undertaking to identify which sections of the Code would apply to a service like Koodo?

2523   MR. BANDERK: Our assumption is that all of it would apply to the service like Koodo. We offer both the post-paid and prepaid services similar to any of the other -- the majority of other brands in the wireless, so we would expect all of this to apply to Koodo.

2524   COMMISSIONER DUNCAN: So then is your service different than a service offered like for example by Public Mobile?

2525   MR. BANDERK: Public Mobile is only prepaid I believe. That's my understanding. They don't do contract terms of subsidy so our is a little bit different. We do have a prepaid service as well, but we also have what we would consider a post-paid service where we give device subsidy.

2526   COMMISSIONER DUNCAN: Okay. So then maybe the question is better: Which of the sections would apply to your prepaid service?

2527   MR. BANDERK: Same as would apply, I think, to any other prepaid service, so that there wouldn't necessarily be any differentiation I would expect for Koodo.

2528   What we can do, and I think we have said we would go through for sure -- for both brands we would go through which apply to both, which apply to post-paid and which would not necessarily apply to prepaid be given --

2529   COMMISSIONER DUNCAN: Okay. And you already have an undertaking.

2530   MR. WOODHEAD: Yes, we have an undertaking. An undertaking yesterday we gave, we would provide a list of the elements of the Code that would be not relevant to prepaid.

2531   COMMISSIONER DUNCAN: Okay. I appreciate that. And thank you for your patience.

2532   That's it for me, Mr. Chair. Thank you.

2533   THE CHAIRPERSON: I think Commissioner Molnar had some questions and you have one answer pending.

--- Laughter

2534   COMMISSIONER MOLNAR: Yes. Before I get on to my questions maybe I will give you an opportunity to answer from yesterday, if you don't mind, if you have had an opportunity to think about it and maybe explain it?

2535   MR. WOODHEAD: Sure. And we listened attentively yesterday to your question and the admonition and so we are going to try and come back on this right now with a further explanation of why we don't consider that the established PES disconnection policy is a right fit for wireless services.

2536   I think we will start with Mr. Fuller and then Ms King.

2537   MR. FULLER: Yes. So Arleen will kind of go through what elements of the disconnection policy we have concerns around as it relates to wireless.

2538   Our general problem is that this disconnection policy was written for a home phone service and there is some substantive differences between a home phone service and a wireless service and Arlene will go through that.

2539   One suggestion we had that we could do is for the 20 second.

2540   There are certainly some elements of what you have in Option 1 that we have no concerns with whatsoever applying to our wireless service so we could come back with some more specifics around the disconnection wording that is in here that could apply versus couldn't, right.

2541   Right. Arleen, do you want to go through what the kind of key differences are?

2542   MS KING: Absolutely.

2543   You know, our view is that the wireline policy was designed in a particular context and that it really is very different from wireless.

2544   A couple of elements such as in wireline if a service provider disconnects you, you actually have to move to get other -- to get another connection you would have to move. You can't just go to the Walmart and pick up a prepaid phone.

2545   If your wireline is disconnected you don't have access to 9-1-1 services whereas on your cell phone, even if your cell phone is disconnected, you do have access to 9-1-1 services.

2546   As well, when you look at the wireless customer base, their monthly amounts due are three times higher than those of wireline. When you think of the upfront investment also that we put forth in subsidizing the handsets, a very valuable handset that walks out the door of the store right away on the first day, so our credit requirements, if we were not able to collect aggressively on that front, would be impeded for sure.

2547   And I would say that in our -- if you don't meet the credit standard as well, you can also go to prepaid service.

2548   So we have done some fairly innovative things I think that Kevin will talk to in a few minutes, but we have been able to provide highly subsidized, very good handsets to credit challenged or people with -- students or new immigrants to Canada that have no credit history. We have been able to do that by using our technology and taking an innovative approach.

2549   But make no mistake, we don't want our customers disconnected, we want them using our service and we feel that having the ability to use our technology is an innovative approach and that we feel that it's very different from wireline and there are many options for our customers to be able to have service and for us to actually use suspension of terms to be able to -- if we have to resort back to old credit policies or kind of old-school policy when we have highly subsidized devices like that, we would eventually be putting -- you know, in the past we would have big deposits demanded when you took on a contract or ended up increasing the credit requirements of our customers before we were able to give them service.

2550   Kevin, do you want to provide a little bit of explanation of how we have been pretty innovative, especially with Koodo?

2551   MR. BANDERK: Sure. So I mean one of the things we still owe the Commission is some of the ideas and innovative ideas that we probably wouldn't have been able to given some of that.

2552   We have a program called "The Spending Limit Program" on Koodo that would have been one of those situations should this disconnection component stay in the Code. So one of the things we did a while -- a few years ago was, we looked at how do we get more customers able to get subsidy on a device -- more precisely, how do we take that on without taking too much of a burden of bad debt risk, things like that, given we are trying to subsidize a device and go that route, whether people have no -- as Arleen mentioned, whether they are new immigrants with no credit history, you know, it's sometimes a tough call.

2553   We also weren't a fan, to be perfectly honest, of the idea of security deposits. I think there is some language in here on security deposits that becomes confusing, there are issues around it, so what we did was, we actually created something called "The Spending Limit Program" so certain customers, whether they meet certain credit standards or don't meet other credit standards, we offer them a spending limit program, which means we will give you the device, but as your bill hits $200 -- that's where we currently have the cap -- we will suspend your service. We are upfront about that and very clear.

2554   Over a period of time, if a customer is very good paying and they show a good credit history over a 9-month period we actually remove that spending limit program, but that limits our risk and allows us to take on basically more risk for that customer to bring more customers onto post-paid service that we would otherwise basically say, "I'm sorry, we can't offer you a post-paid service, you would have to take prepaid."

2555   And we need the ability for instance to suspend customers in that respect around that cap. So that would be something that our belief is, you know, with the Code as written in Option 1 we wouldn't be able to do that we think is very necessary for low income Canadians, new immigrants, students who have no credit history.

2556   MS KING: Yeah, and this came from direct feedback from our customers, absolutely, being able to control their spending and be able to get a subsidized device for that.

2557   MR. BANDERK: I think we went back to -- you know, one of the foundations, I think, of this Code is we really believe that it's necessary to make sure there's clarity, transparency to consumers. And I think that's why we suggested we should go back.

2558   Some of the wording in Option 1 is very good from a clarity-transparency perspective on notification periods and things like that. That's all good.

2559   We also think it's very important from, you know, this Code on helping to diminish switching costs to create more competition, potentially, within the market. Those are good.

2560   Where we're getting into policies that are potentially sort of a one size fits all for the customer base, things like data caps, things like disconnection, being able to suspend customers, that boxes us in a lot of ways and basically makes us sometimes trade off one customer group for another customer group.

2561   And what we're doing as -- on the most part is eliminate that and let competition take care of that, given the Code focusing on the clarity, the transparency and reducing switching costs. Let competition take the rest of it.

2562   COMMISSIONER MOLNAR: I want to just make sure I understood.

2563   You're suggesting that a disconnection code that requires you to provide significant notice to customers before you disconnect them will prohibit your ability to develop competitive alternatives?

2564   MS KING: No, we're fine with the notice. We actually probably do more notice than --

2565   COMMISSIONER MOLNAR: What are you not fine with, particularly?

2566   MS KING: Our ability to -- if someone racks up -- you know, increases their spending beyond -- as an example, for our spending limit program, beyond $200 within the month, this Code would say we'd have to wait, I believe, 60 days before --

2567   MR. BANDERK: To suspend the service.

2568   MS KING: To suspend the service. Whereas this program allows people to actually go up to 200, then we suspend. And it does allow us to bring on a lot more customers that wouldn't have been -- we would not have been able to bring on.

2569   COMMISSIONER MOLNAR: This Code doesn't prohibit you from putting in caps, right? Do you see this Code prohibiting you from putting in caps?

2570   I mean, you mention that you're trading off one group of customers against another. And frankly, this is a very, very small group of customers we're talking about here.

2571   You know, there's a lot of customers out there that don't really care and will never be impacted by a disconnection policy. We understand that.

2572   But there is a small group of customers who face situations, unanticipated situations, you know, where this will impact them and they're vulnerable customers. And I'm still just trying to understand particularly -- like rather than toss it out, what, particularly, would need to be changed because what I saw is you scratched out all of Option 1.

2573   MR. FULLER: Yeah. So that's why I said like there's a lot in Option 1 we have zero problem with at all and, in fact, do more than this today.

2574   So why don't we leave it like this? Why don't we say we'll take Option 1 as the basis and come back and modify the one or two things that we have a concern with in Option 1 and do it that way as opposed to just taking the whole thing out and going to Option 2.

2575   Does that -- you know, because --

2576   COMMISSIONER MOLNAR: Yes, thank you.

2577   And if you don't mind, when you make those modifications, please be very clear as to why they're required.

2578   MR. FULLER: That's fair.

2579   COMMISSIONER MOLNAR: Thank you.

2580   MR. FULLER: Okay. Completely fair.

2581   THE CHAIRPERSON: That's for the 22nd of February, please.

2582   MR. FULLER: Okay.

2583   COMMISSIONER MOLNAR: I mentioned yesterday that I wanted to discuss data caps.

2584   I want -- I guess I would just make a comment that I'm hopeful that parties will comment on what you've proposed as it regards the voice and text notifications.

2585   There is an opportunity, as you know, later in this process for parties to comment. And I thought it was interesting that you said, you know, it's high cost, low impact on the voice and texting notifications. So I think it's important that everybody have an opportunity to comment on that.

2586   But you do agree that it's potentially high impact on the data side. Would you agree?

2587   MR. FULLER: Yes.

2588   COMMISSIONER MOLNAR: And I see in your comments you say that:

"In our experience, U.S. and especially international data roaming are where consumers face the greatest risk of bill shock."

2589   And then you put in a cap on international, but didn't address the U.S. So tell me --

2590   MR. FULLER: Oh, no, no. We have a cap in both. Sorry.

2591   We have a cap in international and a cap in the U.S. for systems reason we couldn't launch immediately. It comes in, I think, March.

2592   MR. JOHNSTON: In March.

2593   MR. FULLER: Is it March? March.

2594   COMMISSIONER MOLNAR: Is it the same $200 cap?

2595   MR. FULLER: Yes. It is because it's all one. Yeah.

2596   COMMISSIONER MOLNAR: So it's a combined cap of data roaming outside of Canada for $200, or do you have one for --

2597   MR. FULLER: Correct.

2598   COMMISSIONER MOLNAR: Yeah.

2599   MR. FULLER: It's a $200 data roaming cap anywhere outside of Canada, U.S. and international.

2600   COMMISSIONER MOLNAR: Okay.

2601   MR. FULLER: And we've got alerts, you know, at like $10, 20 -- I think every $10; right?

2602   MR. JOHNSTON: Yeah.

2603   MR. FULLER: Every $10 you rack up, you get a text.

2604   COMMISSIONER MOLNAR: Okay. So how did you determine $200 to be the appropriate cap?

2605   MR. FULLER: We just went -- so it was basically based on some statistics around what drives calls into our call centre with people, you know, concerned around their bill. So our view was if you can provide notifications to someone when they have $10 of roaming use, $20, you know, $30 and they keep getting these texts, they're fully aware of, you know, where they are and what they've spent.

2606   When you get to 200, we just ask for confirmation from them that they want to continue, right, so that we have a record, if you will, that says, you know, you acknowledged that you were at $200 and still wanted to continue to increase your roaming costs.

2607   We felt getting that acknowledgement at $200, you know, given, you know, the break points, if you will, at which people, you know, phone about their bill was, you know, sufficient.

2608   But just to be clear, we're providing notifications at every step along the way like you -- you know exactly what you've sent at each, you know -- at each increment, okay.

2609   COMMISSIONER MOLNAR: So if they don't give you express consent to continue, you --

2610   MR. FULLER: Service remains stopped.

2611   COMMISSIONER MOLNAR: You keep the service stopped --

2612   MR. FULLER: Yeah.

2613   COMMISSIONER MOLNAR: -- when there's a $200 cumulative cap on -- so if you're in a monthly -- or a family plan, for example, is that the entire family that's capped at 200 or is that by device?

2614   MR. JOHNSTON: By device.

2615   MR. FULLER: By device.

2616   COMMISSIONER MOLNAR: Two hundred dollars ($200) by device.

2617   MR. FULLER: Yeah.

2618   COMMISSIONER MOLNAR: Okay. And the 200 was -- you didn't do any kind of consumer testing on that $200. That was chosen internally.

2619   MS KING: It was chosen internally, but we do feel that the consumers have their voice in our call centres and their -- every time they call in to make a complaint about these charges, that is their voice. Listening to them is really our research and what we depend on.

2620   COMMISSIONER MOLNAR: What would it take -- and you don't have to answer me now, but I would ask that you answer.

2621   What would it take for you to modify your systems to enable the consumer to choose a cap rather than have the $200 cap imposed?

2622   MR. JOHNSTON: We'd have to go back.

2623   MR. FULLER: Yeah. It will be hugely expensive, but we'll go back and check, right.

2624   So I mean, like the system today that basically blocks the traffic, it's pretty -- you know, much more straightforward to basically set the cap at 200 for any subscriber. If now the database needs to actually, you know, on a per subscriber basis have, you know, potentially a million different caps in there as everybody's chosen different numbers will add a huge amount of complexity.

2625   COMMISSIONER MOLNAR: That adds the --

2626   MR. FULLER: We'll talk to our IT guys, but I just -- I know any time we want to do -- you know, from a marketing standpoint, any time I ask for anything that is -- you know, requires customization by subscriber, the bill goes up, you know, massively.

2627   COMMISSIONER MOLNAR: Okay. And so when you -- you'll have an opportunity --

2628   MR. FULLER: Yeah.

2629   COMMISSIONER MOLNAR: -- to explain that more fully.

2630   And also, if you don't mind, also comment and explain on what it would take to expand that to also include domestic, a cap on domestic.

2631   MR. FULLER: Okay.

2632   COMMISSIONER MOLNAR: And I am talking -- under your proposal, it relates to, you know, data and roaming and not voice and text, so I'm still talking data and roaming, not voice and text.

2633   MR. FULLER: Okay.

2634   COMMISSIONER MOLNAR: And if I understand right, your position on domestic is that, well, if they need caps, they should go to pre-paid? If they need that kind of control?

2635   Is that your position?

2636   MR. FULLER: Yes. Our position is as long as we're providing notifications -- and there's online tools to find this, but in particular if you're giving someone notifications on exactly what their spend is and data, then, you know, why do you need to cap them?

2637   If they want a service that's capped, for instance, for a teenager that they're worried will ignore the notifications, then that's, you know, what a pre-paid service can provide.

2638   MR. JOHNSTON: I just want to also reinforce in post-paid, several other important -- so there's the usage actual alerts, the text message alerts we provide. There's the on-board -- sorry, the online usage dashboard that we have on our website. There's the "my account" app that actually allows you to track your data usage.

2639   There is the shared or pooled family plans that allow you to pool data across subscribers that allow you to avoid overage on one by taking advantage of underage on another account.

2640   And of course, in our lower tier plans, we have data -- the concept of flex where the -- you have a bucket of data and then as you go over it, the price actually starts to fall. So as you -- if you go dramatically over your initial allotment, your price per megabyte actually falls to avoid large overage situations and cushion the blow of going over your bucket.

2641   So these are all innovations we've built to address this shock issue within domestic data and we've really just seen in our credits and our customer complaints have fallen dramatically and are actually approaching those of voice, whereas, you know, where we really believe the opportunity to continue improving and make a more dramatic impact is on the roaming side, so we're -- yeah.

2642   COMMISSIONER MOLNAR: I accept, and I certainly don't want to take away what you've done --

2643   MR. JOHNSTON: Yeah.

2644   COMMISSIONER MOLNAR: -- for your customers or the innovations you've put in, but not all customers want to spend their time sorting out how much data they have left, and particularly in something like a family plan.

2645   And while you throw pre-paid up as the answer, pre-paid as well has some limitations. You can't have a subsidized device normally on a pre-paid. So if you want to take advantage of the subsidized device, you need to go on a post-paid fixed-term plan. So for those customers, they don't have the same sort of protections you suggest pre-paid does in those hard limits.

2646   And all customers out there, I don't believe, want to be in the situation of going into, you know, you mentioned they're really pull devices, where you can go on and you can sort out what sort of usage you're at. But frankly, you know --

2647   MR. JOHNSTON: With the --

2648   COMMISSIONER MOLNAR: -- I'm a customer and that's not what I want to do, and I don't think I'm the only one. And certainly based on what we've heard in this consultation, I think you would agree that there is customers out there that don't want to do it either. They want some protection, they want some way to manage this data. It's new to so many customers. And, I mean, there is a lot of complexity. You have a BlackBerry that's one amount of data. You have an iPhone, it's another amount of data. It's very complex and the cap really gives a level of protection to customers that all you're talking about maybe helps, but it's a difficult process. And our consultation did indicate this as one of the key issues.

2649   MR. FULLER: Sure. So --

2650   COMMISSIONER MOLNAR: So we're looking for a solution. And if you think that $50 is not a solution, if you think that allowing each customer to cap at their own levels is not a solution, if you think having it over the full bill amount that includes voice and text is not a solution, give us a better solution.

2651   MR. FULLER: So I --

2652   COMMISSIONER MOLNAR: But I think just monitoring tools may not be that solution.

2653   MR. FULLER: Okay. So if you -- if the Commission, after all of the discussion, feels that you, you know, must -- that it's important in domestic services to have a cap on post-paid, you know, our belief the monitoring are sufficient, but if you guys think that they aren't, then a couple of suggestions around the idea of a cap.

2654   First of all, we firmly believe $50 is far too low.

2655   Secondly, the system's complexity of allowing people to set their own will, I can assure you, be very expensive, right? So, you know, we should have a predetermined cap. Maybe it's $150 or $200 or you guys can, you know, think through what the right number is. I would argue 50 is too low, but it should be, you know, one cap.

2656   And one thing I would urge you to consider is the Code as you wrote it basically said that everybody, every post-paid subscriber has to have a cap, a default as a cap. You make a convincing point that there are some customers that will value and want that, but, you know, why does the default have to be on, right? Why couldn't the Code merely say that we all have to offer the capability to have a cap for those customers that want it. Because I think a lot of customers don't, you know, feel the need to want to cap. There are obviously some that, you know, you guys had spoken to that do, but it doesn't have to be, you know, default on. It can be default off and we have to actually be in a position to be able to offer the cap for anybody that is in that circumstance that wants a subsidized post-paid device and also wants the advantages of a cap. Okay? Is that ...

2657   COMMISSIONER MOLNAR: Thank you.

2658   I want to move on to the issue of pre-paid and I want to begin by just understanding better the pre-paid services that you folks offer, both through TELUS and through Koodo. Because we talk about pre-paid, and pre-paid really does at this point cover quite a number of different offerings and I'm not sure that we're always thinking about it, you know, consistently. So if you wouldn't mind, just before I get into my questions, could you just go over the different types that you offer of pre-paid services.

2659   MR. JOHNSTON: Okay. So in -- with TELUS brand pre-paid, I think you can delineate across two different avenues for the client. There is -- of course there is -- well, let me start with the standard sort of toping up or inserting cash into your account so that you have an available amount of spending to take advantage of the service.

2660   From there you have two choices. One, there are sort of pure pay-per-use opportunities where people can use voice and text and data at a particular rate without the use of what you might think of as a rate plan that is paid for in advance. So that's number one.

2661   And then number two, there are various let's call them rate plans or packages of services that are available that you would pay for in advance and would allow a prescribed amount of, for example, text messaging. So you can buy a $15 text messaging package that will allow you unlimited messaging for a 30 day period for $15. And you pay for that in advance. When your month -- or 30 days was over, that service would cease and we -- you know, we'd be prompted and asked and very often the consumers are on automatic renewal of that service, and then that service would continue on for the next month. That would apply to similar services that would include voice and text; voice, text, and data, or combinations thereof of those three services.

2662   MR. FULLER: So if -- basically what it is is you can -- you get a pre-paid phone, you can buy on a pay-per-use basis, right, effectively, you know, buy buckets, or you can buy bundles of services upfront that, you know, might include something like unlimited text and auto-renew those if you want, right? So that's -- those are your two options.

2663   MR. BANDERK: On -- yeah, Koodo is a little bit different. So I understand actually where some of -- a lot of this confusion comes from. It is a little bit confusing to distinguish pre-paid and post-paid. One of the easiest ways, I would suggest, is whether a credit check is required at activation is one of the key differentiators between a pre-paid and a post-paid plan.

2664   As well -- so on Koodo we do actually do require a -- basically you pre-pay a monthly plan and we have four base -- what we call base plans, ranging from $15 for an unlimited text plan to a $50 unlimited talk and text plan. And then we have Boosters, what we call Boosters. So you buy a bucket of minutes or a bucket of data that you can use then at any point in time. So they -- you know, they're not capped to a month. They're good as long as you have a base plan active. So you can get 500 megabytes and use that over four months, five months, six months. Thinking -- think of it as filling up, you know, your car with gas. You can use it whenever you want to, assuming you're still paying for the lease of the car, which is the base plan. Okay?

2665   COMMISSIONER MOLNAR: Do customers -- and I know the answer a little bit to this but I'll ask you anyway. Do customers port their numbers to any of these plans?

2666   MR. BANDERK: Yes, they do. Yeah. There's less porting in pre-paid, I would suggest, than post-paid, but they do.

2667   COMMISSIONER MOLNAR: Yeah. Certainly in your pre-paid monthly plan customers can port their numbers and --

2668   MR. BANDERK: Sure. In all services they can port their numbers, pre or post.

2669   COMMISSIONER MOLNAR: Is it commonplace in the pay-per-use? Like, I thought that was one of the things, sort of one of the values of that is it came with a number.

2670   MR. FULLER: It does, but you can -- if you, you know, fall in love with that number and you want to move to another plan or a post-paid plan, you can take it with you.

2671   COMMISSIONER MOLNAR: Oh, yeah, you'll port away from it, but --

2672   MR. FULLER: Yeah.

2673   COMMISSIONER MOLNAR: -- do people port their numbers into?

2674   MR. FULLER: They occasionally do, yeah.

2675   COMMISSIONER MOLNAR: They do?

2676   MR. FULLER: Absolutely. Not as much. I mean, generally most people -- most porting is from pre-paid to post-paid and within post-paid, but there are certainly -- you know, it's the capability to port your number from post-paid to pre-paid and people do, right? Not a majority of people, but people do.

2677   COMMISSIONER MOLNAR: M'hmm. So where there are essentially monthly rate plans, would you agree those are essentially the same as a post-paid, it's just maybe the credit issues or even just your offerings themselves that do it? I mean, they're -- from a customer's perspective, they're really no different at all. You're on automatic renewal each month and it's just working as a normal monthly month-to-month plan.

2678   MR. FULLER: Yeah, that's correct, yes.

2679   COMMISSIONER MOLNAR: Yeah.

2680   MR. FULLER: They -- you know, there's a lot of similarities between them. The key difference -- this is actually why our argument comes back that you don't need caps in a post-paid world, the key difference is that until you, you know, go out and purchase more, you know, Boosters or overage, you won't have the service. So --

2681   COMMISSIONER MOLNAR: But maybe you don't want to use up your entire bucket in the one month.

2682   MR. FULLER: Sorry?

2683   COMMISSIONER MOLNAR: I said maybe you don't want to use up the entire bucket in the one month.

2684   MR. BANDERK: And that's why we offered that Koodo service where the bucket doesn't -- it holds over from month to month to month, so that you can buy, you know, 500 minutes and they'll last you as long as you want assuming you're buying a base plan, which is mostly text based --

2685   COMMISSIONER MOLNAR: M'hmm, m'hmm.

2686   MR. BANDERK: -- or data that goes over that. So we specifically looked at that customer segment who wanted minutes that continued and that's why we made the offer.

2687   MR. FULLER: And the same is true in TELUS --

2688   MR. JOHNSTON: Yeah. And --

2689   MR. FULLER: -- the minutes holdover.

2690   MR. JOHNSTON: That's right. And of course you can -- you would purchase --- on the plan side or these bucket side, you can purchase different sizes of those depending on what you think your typical usage patterns are. So there's choice --

2691   COMMISSIONER MOLNAR: M'hmm.

2692   MR. JOHNSTON: -- from a monthly perspective in terms of how much you think you're going to need and have proven you need so that you can tailor that to your -- the consumer can tailor that to their needs.

2693   COMMISSIONER MOLNAR: Okay. Yesterday you gave a number, I think it was, like, between 45- and 50,000 pre-paid accounts expire.

2694   MR. JOHNSTON: 35- to 40-.

2695   COMMISSIONER MOLNAR: 35- to 40- per month? Those pre-paid accounts, what did you include in there? Did you include these that have a rate plan? Was that all of them or were -- that's all you've pre-paid?

2696   MR. JOHNSTON: That would be inclusive of all pre-paid, yes.

2697   COMMISSIONER MOLNAR: Okay.

2698   MR. JOHNSTON: I ...

2699   MS KING: If they were on a monthly rate plan, they wouldn't actually expire.

2700   MR. JOHNSTON: No, but -- sorry. If they are on an auto top up, they wouldn't expiring because they're -- obviously they've chosen to be ongoing clients. But a client who was on an ongoing plan and then chose not to top up and then expired after 90 days would be in that number. So those aren't exclusively pay-per-use clients that chose to stop paying after 90 days. It would include the -- that is a number inclusive of our entire pre-paid base that includes both groups who happened to stop using their service for 90 days and then were deactivated from our subscriber base or from the network.

2701   COMMISSIONER MOLNAR: Okay. I'm just trying to -- I'm trying to somehow separate in my head and maybe for purposes of this hearing the difference in pre-paid. As you know, that there is an issue and there is consumers who have requested that pre-paid cards not -- or pre-paid services not expire. And I'm trying to sort of get it clear in my head and I think for purposes of our discussion just what exactly we're talking about. Is there a way, as we're talking about this, we can sort of separate or delineate those buckets, those usage buckets that don't have a rate plan that people have taken up, it comes maybe with a number? I'm not sure.

2702   How is it that we separate that issue from the full issue of pre-paid? Because I don't -- it is a sub-segment of pre-paid that's asking that, right, the services not be allowed to expire, in my view.

2703   Does it make sense or am I confused with what I think?

2704   MR. WOODHEAD: No, I think -- I think there are people. If I apprehended what the issue that these folks had is that they buy a $10 pre-paid card and they don't want it to ever expire. They don't want a time limit on the use for it in whatever increment that they buy.

2705   And what we were trying to explain to you yesterday as well, that the problem with that is, first off, none of the other provincial legislations attempted to do this and they have all hived these out.

2706   Second, there are issues associated with keeping a telephone number associated with an account for that period of time.

2707   And then, thirdly, that for financial and securities reporting reasons we must disclose when we have inactive accounts so that we're not accused of padding our subscriber numbers.

2708   So while I understand their concern, there are reasons why that can't be done and why there are costs associated with tying up that number when we don't have any idea whether that account is just simply dormant, the person is waiting to use it, or the person no longer -- is dead or for whatever reasons. So that's kind of where our concern was with it.

2709   I understand that that's what people may want to happen but there are countervailing reasons why that can't happen.

2710   COMMISSIONER MOLNAR: Would you suggest there are better options for those customers who are looking to have a continued service and have been relying on the sort of combined paper use cards, if you will, that there would be a better option that some of your rate plan options, pre-paid rate plan options might be a better option so that their usage components don't expire?

2711   MR. WOODHEAD: I would ask if Kevin could answer that because if you take -- I suspect if you take your lowest plan that would have an auto top-up that you wouldn't have expiry.

2712   MR. BANDERK: Actually, for that user who is looking for that there is probably better plans in Koodo where we're actually specifically targeting what we would consider active users. That's specifically sort of that youth segment who wants to use their phone and can't get credit -- or can't get credit.

2713   But there are options in the market. TELUS and I know some of the other carriers have one year service. So you buy -- I think for the most part it's $100 and that gives you service for a year and a certain amount of usage. I couldn't tell you what that usage is. It probably varies by brand.

2714   That's probably the best option for that customer who is looking for that sort of phone for that just in case sort of perspective.

2715   MR. FULLER: And if you renew that $100 service for the next year that whatever minutes you had in your bucket --

2716   MR. JOHNSTON: They roll over.

2717   MR. FULLER: -- they roll over as well, yeah, right.

2718   MR. JOHNSTON: So yeah, I would really encourage -- I mean I think the solution, to help answer, is actually the purchase of small denominated monthly services. Whether these -- you know, that small amount of minutes or text messages or data is the, in fact, solution for those people that, you know, use very little and just want the service to be on.

2719   Those can come as, you know, sort of in the $10 to $15 increment range, so at a very low monthly spend level that keeps that service active. It avoids this -- you know, it sort of solves both sides, their needs and the constraints that we're working under in terms of numbers and security regulations, et cetera.

2720   MS KING: And more than 90 percent of our customers who actually do expire that we mentioned yesterday actually have a zero balance. They have no more minutes left.

2721   COMMISSIONER MOLNAR: Okay, thank you.

2722   MR. FULLER: The other thing to note too is like the minutes can be transferred too, right, on the phone.

2723   So say you had that $100 plan or that $10 a month plan for, you know, five years and you got a bucket of minutes built up on the phone of 300 minutes or 400 minutes, you can -- you know, and you decide you don't want it anymore, you can sell that phone and the bucket of minutes to a friend or on Kijiji, right.

2724   But they can be transferred to another person. They are kind of stored value, if you will. As long as the phone is continued to be used they have value. The only event that they don't is if you are no longer using the phone and it's become inactive and then we are subject to this 90-day policy.

2725   COMMISSIONER MOLNAR: Thank you. I want to move on to one final issue and that's the application to existing contracts.

2726   Now, you would suggest no parts of this Code apply to existing contracts?

2727   MR. WOODHEAD: I'm suggesting that, again, even in the provincial legislations this has been prospective.

2728   I'm suggesting that the common practice would be that when you are going to prescribe something like this that you would do it prospectively, not retroactively. And I believe, you know, without going into -- I believe that there are some legal considerations around that, you know, I think are somewhat problematic.

2729   From a practical perspective existing customers, because as we tried to explain yesterday, certain things like device balance and some of these things that we have brought into the market have been in the market as a part of our offer since November 2010. Some elements of the Code would be already expressed by our offering for existing customers. So they would have the benefit of some of the key elements, I think, of what you are proposing in the Code.

2730   But as a matter of going back when you implement the Code, in saying you know on this particular existing contract it will now benefit from all of the whole operation of the Code, I don't think that is doable.

2731   COMMISSIONER MOLNAR: Could you be a little more specific as to what is not doable?

2732   I heard you on the device, but you also said that in your particular instance you have essentially implemented the early termination fee formula. So that's not much of an issue for you.

2733   So what is the issue for you? If you could just be --

2734   MR. WOODHEAD: Well, I think the general context --

2735   COMMISSIONER MOLNAR: -- clear and direct what here is difficult?

2736   You mentioned this is operational. From an operational perspective what in this Code would be difficult for you to apply, not apply retroactively but apply prospectively to existing customers?

2737   MR. WOODHEAD: Well, the retroactive aspect is that we have an existing contract with the customer based on terms and conditions. So when that contract would expire obviously the Code would then apply.

2738   That's, I think, my issue, it's going retroactive on contracts that were entered into for different -- under different terms and conditions. That's where our issue is.

2739   COMMISSIONER MOLNAR: Exactly. If you don't mind, could you tell me particularly? You mentioned that there are potential legal issues and policy issues, if you will, and then you commented on operational issues.

2740   So what I would like to know is operationally what would be difficult for you? Why would it not be possible to apply this Code to existing customers?

2741   MR. WOODHEAD: Okay. We can certainly provide a list but I'll give you some sort of flavour for that right now.

2742   For older contracts we wouldn't be able to probably calculate what the device balance is because we wouldn't have that information. We would have to go back and re-sign every single one of our customers who would fall into that category, I think, that you're referring to. Those are two very large operational issues. But we can go through it and come up with more, and there will be many more because of the discord between what may have been existing contractual terms in the past versus what the Code requires.

2743   My other point I'd like to make is that in terms of the -- to some of the proposals where you are coming very close if not completely in the ratemaking sphere with dollar caps and some of these things that are proposed here, I think that that falls into the retroactive ratemaking problem. You know, I think that's a problem that the Commission will have to wrestle with if that's what it is considering doing.

2744   COMMISSIONER MOLNAR: Are you suggesting establishing early termination fees is a ratemaking exercise?

2745   MR. WOODHEAD: I think arguably it is.

2746   COMMISSIONER MOLNAR: And are you concerned by it?

2747   MR. WOODHEAD: I am.

2748   COMMISSIONER MOLNAR: You are?

2749   MR. WOODHEAD: Yeah.

2750   COMMISSIONER MOLNAR: Because it seemed to me that virtually all members of your industry supported establishing an early termination fee formula.

2751   MR. WOODHEAD: Beginning on a prospective basis.

2752   COMMISSIONER MOLNAR: And applying it on a nation-wide basis.

2753   MR. WOODHEAD: And it's prospectively.

2754   COMMISSIONER MOLNAR: You're not concerned that we establish what appear to be ratemaking proposals. You're concerned that we don't apply them retroactively?

2755   MR. WOODHEAD: Correct.

2756   COMMISSIONER MOLNAR: Okay, thank you.

2757   Those are my questions.

2758   MR. FULLER: Sorry, Commissioner, if you want some other examples of things that would be difficult to apply prospectively?

2759   COMMISSIONER MOLNAR: Yes, absolutely. Thanks.

2760   MR. FULLER: You know, two that would come to mind too would be the Personalized Information Summary in the form as you have outlined it. If we had to go back and prospectively provide that to all seven million subscribers that would be challenging. They obviously don't have it. We give a Personalized Information Summary now. It's not exactly in the same format that you guys had outlined here. But not all of our subscribers would have that.

2761   A second would be unlocking the phones. We still have a significant number of CDMA phones in our base. It's actually impossible to unlock a CDMA phone. So you can only unlock you know HSPA and GSM phones. You can't unlock a CDMA phone because they are basically, for lack of a better word, custom built tuned to a particular CDMA network. So it's impossible to unlock some of our phones.

2762   COMMISSIONER MOLNAR: Thank you.

2763   I would ask, if you don't mind, that you come back with real details after you've had an opportunity to perhaps go through, you know, all the different elements of the Code and what might be the implications. And perhaps, at the same time, you might think about what elements there is and you know concern if they were to apply.

2764   I mean, frankly, from an operational perspective, from your customer service perspective, it's much easier to have one set of rules than to have a pre and post-wireless code when you're talking to your customers, right? So you know, there are elements that it's just operationally sensible from your systems and operations perspective to apply to all customers.

2765   So, if at the same time that you're talking about what you can't apply, you could tell me what it makes sense for you to apply?

2766   MR. WOODHEAD: Fair enough. And that would be for February 22nd, as well?

2767   THE CHAIRPERSON: That's correct.

Undertaking

2768   COMMISSIONER MOLNAR: Thank you. Those are my questions.

2769   THE CHAIRPERSON: Commissioner Duncan?

2770   COMMISSIONER DUNCAN: Thank you.

2771   I just have a couple of questions that I overlooked asking.

2772   Just on the personal information form, yesterday you mentioned that you thought it would be a good idea if it could be incorporated in the contract, and the impression I had from what you said was that it would appear at the front, at the very outset.

2773   MR. WOODHEAD: That's correct.

2774   COMMISSIONER DUNCAN: Yes, that's a great idea.

2775   But when I read this, it didn't specify where it would appear. Am I right in that?

2776   I came away thinking that it could be anywhere in it, but I thought it advantageous that it would be right at the beginning, so you might want to specify that.

2777   MR. FULLER: Okay.

2778   COMMISSIONER DUNCAN: And I didn't mark the section, I just --

2779   MR. FULLER: Yes, we can do that. We didn't specify that, you are right, but that's where we put it today, at the front, and we can make that clear.

2780   COMMISSIONER DUNCAN: So you are happy with that.

2781   MR. FULLER: Yes.

2782   MR. WOODHEAD: Sorry, you want us to reflect that in the appendix?

2783   COMMISSIONER DUNCAN: No, I just wanted to know if you agreed with me that it should be at the front of the contract.

2784   MR. WOODHEAD: Yes, we do. That's what we actually do, as opposed to a separate document.

2785   COMMISSIONER DUNCAN: Or as opposed to somewhere in the middle of it.

2786   MR. WOODHEAD: Oh, it's not going to be at the middle or at the end --

2787   MR. FULLER: That's for sure.

2788   MR. WOODHEAD: -- as a footnote or something.

2789   COMMISSIONER DUNCAN: At the beginning would be --

2790   MR. FULLER: That's where we put it today and where it should go.

2791   COMMISSIONER DUNCAN: Okay. Thank you.

2792   I think it would be worth specifying for those who don't.

2793   With respect to deposits, what percentage of your customers would you say would have a deposit?

2794   Because I noticed from reading your December submission that they don't seem to be a big issue for you. So I am just wondering what percentage would have a deposit.

2795   MR. BANDERK: For instance, on Koodo it's none. That is why we have introduced things like the spending limit program and things like that.

2796   Security deposits aren't customer friendly, they are hard to collect, they are hard to return.

2797   We never thought they were very customer friendly, so we have tried to avoid them at all costs, to be honest.

2798   And, with TELUS, I think it's the same thing, they no longer take security deposits.

2799   COMMISSIONER DUNCAN: No deposits at all.

2800   MR. BANDERK: No.

2801   COMMISSIONER DUNCAN: Okay. Did someone mention earlier this morning about reviewing them after nine months?

2802   MR. BANDERK: That wasn't the spending limit program. We do review customers, and if they have had good payment history on our spending limit program, after nine months we remove that limitation.

2803   We basically say that they have proven themselves to be, you know, a very strong paying customer, there is no need for us to limit them anymore.

2804   There is no longer that risk that we had taking them in the first place, so we remove that limitation, which is an improvement for their service, and reduces complexity and costs on our side, as well.

2805   MR. WOODHEAD: How I would characterize that is that, in this space, they have reduced considerably their credit policies -- this is the program that they are referring to -- and the quid pro quo for that is that then they monitor over that 90-day period, or nine-month period, in order to establish a credit history.

2806   That is how it operates, as opposed to upfront deposits, which are unwieldy.

2807   COMMISSIONER DUNCAN: So if somebody didn't prove to be a good credit risk over the nine months, you would do what?

2808   MR. BANDERK: We would keep them on the program.

2809   COMMISSIONER DUNCAN: Just keep monitoring them you mean?

2810   MR. BANDERK: Yes, and we will review them -- and, to be honest, I can't remember off the top of my head what the next review cycle is, but we will review them again.

2811   COMMISSIONER DUNCAN: On the TELUS side, then, no deposits, as well?

2812   MR. JOHNSTON: Yes, and we have the very same -- we leverage the very same credit limit program that Kevin was speaking of with TELUS, in the very same way.

2813   COMMISSIONER DUNCAN: Okay. Thank you very much.

2814   Those are my questions, Mr. Chairman. Thanks.

2815   THE CHAIRPERSON: I have a few questions.

2816   Coming back to the implementation, assume a prospective application. Obviously, if we go down that road, any new clients that you sign up would, of course, benefit from the code when it's in place. Correct?

2817   MR. FULLER: Correct.

2818   THE CHAIRPERSON: In a sense, when a contract gets amended, it is, in a sense, a new contract, with new terms. Why wouldn't that apply, as well?

2819   MR. FULLER: It would.

2820   THE CHAIRPERSON: So the moment you have a new client --

2821   MR. FULLER: New clients are viewed as either brand new clients to TELUS or an existing client that renews on a new contract with us.

2822   THE CHAIRPERSON: Who would benefit from the code.

2823   MR. FULLER: Correct, yes, from the date that it is -- you know --

2824   And that is how we handled the provincial legislation, for example, in Quebec. Anybody that was renewing with us was subject to the new rules that were put in place.

2825   THE CHAIRPERSON: And, I take it, there are constantly ongoing amendments in your relationships with clients, for whatever reason.

2826   Are there not?

2827   MR. FULLER: Yes. Many customers change the plan that they are on, and whatnot, at different points throughout the year, right.

--- Pause

2828   THE CHAIRPERSON: There seems to be a caucus at the back.

2829   MR. FULLER: We are trying to actually -- I think where you are going with this is that, in any amendment to any particular term, all of a sudden it's a new contract.

2830   I think that's where you are going, and then that would make it subject to the code.

2831   I think we would have to actually consider that. But, absolutely, when a contract is renewed, it would.

2832   To some extent -- for example, with our post-paid churn, about 20 percent of customers churn the network every year, fully 20 percent.

2833   So I understand where you are coming from; the thing that I would have to ponder, Mr. Chairman, is the issue you have just raised, in terms of amendment. Is that, in fact, a whole new contract, or is it contemplated in the --

2834   THE CHAIRPERSON: But it certainly is an opportunity for a new conversation between the provider and the customer, right?

2835   MR. WOODHEAD: Yes.

2836   THE CHAIRPERSON: Okay. Assuming that -- and I take it that you will want to address that perhaps in your comments, but assuming that, from a factual perspective, if you look at the amount of churn, that is, new clients coming in, as well as patterns of amendments from the past, how long would it take, on a prospective basis, for all of your customers to be subject to the --

2837   MR. WOODHEAD: I would say, probably, somewhere between two to three years, and probably closer to two.

2838   And, you know, I don't want to leave this as me sounding like I am afraid of anything in this code, or that we are afraid of it, it's about the application of it.

2839   We actually want customers to have the benefit of some of these things, it is the actual -- and, again, we will get to it, I think, in the response to Commissioner Molnar's question, in the undertaking, but there are some operational challenges around applying it retrospectively.

2840   THE CHAIRPERSON: And I have never mentioned application retrospectively. I am asking, let's say that we -- and I am just saying six months.

2841   I know that some people will comment that six months is too quick, but let's assume that in six months we decide the new code applies. Without it applying retroactively, but prospectively, when will Canadian customers, in your customer base, be able to benefit?

2842   MR. WOODHEAD: I think two years.

2843   THE CHAIRPERSON: Within two years.

2844   MR. WOODHEAD: Yes.

2845   MR. FULLER: And I would go further than that to say that a number of the operational aspects of what you have in the code would likely apply to our entire base, once we implemented it.

2846   If you think of something like notifications, Mr. Chair, it wouldn't make sense for us to say: Okay, we have changed our notifications, but it only applies to these new contracts.

2847   We would roll that across our entire base.

2848   I don't even know if, operationally, we could actually segregate it out to people that had signed to the new contract versus the old.

2849   So a number of aspects would immediately apply, retroactively, to some elements of our base, because, frankly, we couldn't, operationally, split it out otherwise, right?

2850   THE CHAIRPERSON: Right. I am not unsympathetic to the operational aspects, I am rather disappointed to hear that, after six to nine months to set up your systems and your operations, it may take yet another two years for Canadians to benefit from this fully.

2851   MR. FULLER: Yes, I mean the last word is the condition, fully. We have 7 million customers, so it's not as if a large majority of those customers are not, in relatively short order, going to benefit from this. As we have said, most of these things we already do.

2852   For the last two and a half years, all of those customers are already pretty much in line with where we are going here.

2853   THE CHAIRPERSON: Would you be able to break it down for us, through an undertaking by the 22nd of February, as to how much of your customer base, from the date the code applies, applying it prospectively, would actually be benefiting from it, all the way to your 7 million?

2854   MR. WOODHEAD: Yes, we can do that.

Undertaking

2855   THE CHAIRPERSON: Okay. So I have a sense of who is being left out in the cold.

2856   MR. FULLER: We can do that, and just so we are clear, you are asking, if it was applied prospectively -- and we will pick a date X number of months out -- at what point would all of the base start to benefit from it.

2857   That's what you are looking for?

2858   THE CHAIRPERSON: Well, no, because it's a growing percentage, right?

2859   MR. FULLER: Right.

2860   THE CHAIRPERSON: Some who immediately come on board, because they are new customers, benefit immediately, I take it. Right?

2861   MR. WOODHEAD: I'm sorry, I am not trying to -- I am trying to understand.

2862   I mean, generally, to everything that is in here, to --

2863   MR. FULLER: We will pick the significant aspects of the code --

2864   THE CHAIRPERSON: I think you have to link it with the other undertaking, as to what are the operational limitations, right?

2865   I get that. But assuming that we are past those operational limitations, and the code is in force, how long will it take to get your entire 7 million base, prospectively, under the code?

2866   I think you are hesitating because you think there are some aspects of the code that are more difficult to implement than others.

2867   MR. FULLER: No, I think the only concern we have is that, by the 22nd -- like, if we have to do that for D.4.1, D.4.2, D.4.3, it could be challenging, for every single aspect of the code, because they are going to apply to different --

2868   THE CHAIRPERSON: No, I meant the code as -- assume that the question is that the whole code applies as of a date.

2869   MR. FULLER: Right, but it was my point earlier that some aspects of this code will, on the day that it is effective, wash across our entire base, as opposed to just people who have signed new contracts.

2870   Do you see what I mean?

2871   There are some aspects of the code that, operationally, you can't apply on a segregated basis.

2872   THE CHAIRPERSON: My question assumes that the coming into force is at a date that already has taken into consideration your operational limitations.

2873   MR. FULLER: Okay.

2874   THE CHAIRPERSON: I don't know if that's six months or nine months.

2875   MR. FULLER: Okay.

2876   THE CHAIRPERSON: We'll figure that one out. But let's say it's a future date after we've made the decision, this is the content of the Code, there is a period of time -- six months, nine months -- to be determined from then in terms of the churn of your customers. How fast do we get everyone --

2877   MR. FULLER: Okay.

2878   THE CHAIRPERSON: -- into benefiting from the Code fully?

2879   MR. FULLER: Okay.

2880   THE CHAIRPERSON: You can do that?

2881   MR. FULLER: Yeah. The wording's clear.

Undertaking

2882   THE CHAIRPERSON: Okay. The second question comes from a comment we heard online -- well, fair, read -- yesterday, and this is one of your customers. This individual says:

"We tried to avoid a contract last year by buying cell phones outright and pre-paying month-to-month. Guess what? Telus limited the features we could access. You have to have a contract in order to access all features."

2883   THE CHAIRPERSON: Is that the case?

2884   MR. BANDERK: My guess is what the customer is referring to in that situation is that no features they can't access, but there would be promotional plans I believe in place that are sometimes tied to a contract.

2885   THE CHAIRPERSON: So, in fact there are disincentives to going to prepaid; right, because you'd actually have to add --

2886   MR. BANDERK: Sorry, did you say prepaid? This was post paid.

2887   THE CHAIRPERSON: Well, this was somebody who bought the phone and pre-paying month-to-month, so they went to a prepaid situation and somehow they're complaining that they're -- or they're making the point that they can't have access to all the features.

2888   MR. BANDERK: Yeah. I think they're technically actually talking about a post paid plan. I think what they've done is they bought the phone and they've gone on a month-to-month post paid plan where they're, you know, getting their -- and, so, in this particular case there are some -- many of our post-paid rate plans are available to anybody, both month-to-month and people in contract, but we occasionally have promotional plans that are only available to people on contract and she, in this particular case, would not have access to that promotional plan.

2889   All of our features like that we have, you know, are available to anybody on month-to-month though.

2890   THE CHAIRPERSON: So, the features are available, it would just be the pricing promotions that may not be available --

2891   MR. FULLER: Right.

2892   THE CHAIRPERSON: -- if one is... This person, definitely, I don't know, the name's not been identified, definitely said they were pre-paying month-to-month, so...

2893   MR. BANDERK: If they're -- and I mean they are, if they are prepaid, there are certain services that we don't have for -- international roaming for instance isn't available for prepaid, based on the same problems we have with rating, we can't rate them real time so they can't prepay them effectively and things like that.

2894   So, there are potentially -- without getting more detail from the customer it's hard to specifically refer to what their angst is, but those could be some situations.

2895   THE CHAIRPERSON: Well, the comment's online, you might want to have a look at it. They also complain that you need to be a Harvard lawyer to understand these contracts and the average Canadians cannot afford to challenge them.

2896   MR. WOODHEAD: One of the --

2897   THE CHAIRPERSON: There's a bit of frustration there.

2898   MR. WOODHEAD: Yeah. One of the -- perhaps what I could also offer here is that, if this individual would like to phone in to escalations or --

2899   MS KING: We'll find them. Where is it posted?

2900   THE CHAIRPERSON: It's posted on our online comment.

2901   MS KING: Yeah, okay.

2902   THE CHAIRPERSON: Which I'm sure you're all following as we are as it goes on.

--- Laughter

2903   MR. FULLER: Yes.

2904   THE CHAIRPERSON: Last question. And this you're going to have to help me with because I just don't get it, I might be slow.

2905   Assume a customer has purchased -- has a three-year contract -- has decided to go with a three-year contract with you with a subsidized device, the way you calculate the termination, I understand it's amortized over the period of time so that at the end of the three years presumably it's zero.

2906   Assume the device has not broken apart and it's still working and the person wants to just keep going, under the Code the contract just gets rolled over month-to-month; correct?

2907   If the phone subsidy has been amortized, does the rate paid in the 37th, 38th, 39th month go down by the subsidy that was blended into the price?

2908   MR. FULLER: It does not, no.

2909   THE CHAIRPERSON: I don't get that because it's been amortized. Why are they paying past the 36th month? If you've said that you've recovered your costs in that 36 months to subsidize it, I get that, and sort of a way of helping folks get into this and you want to keep them.

2910   But assuming somebody does not want to upgrade because the phone's great, meets their needs, why doesn't the cost go down? I don't understand.

--- Off microphone

2911   MR. FULLER: Sorry. It doesn't automatically go down. We find the vast majority of our customers upgrade at that point and, you know, move into another, you know, contract term with another subsidy.

2912   In the event that you decided that you wanted to keep the device because it was fine, you're happy with it and you've decided to keep it for another couple of years, you can -- if you either go into one of our stores or phone Arlene, you can move to a SIM-only plan, a month-to-month plan which would basically be 10 percent off of our then existing rate plans.

2913   So, it doesn't automatically do that, but if you consciously decide, I've now decided I'm going to keep this device for another year or two years, then you can move to a new rate plan at 10 percent off of our then existing plan. We just don't automatically do it.

2914   THE CHAIRPERSON: And just so I understand the economic model then, that means you're pocketing, subject to the 10 percent reduction, the subsidy that you would otherwise be in a sense providing the customer.

2915   MR. FULLER: In the 10 percent case?

2916   THE CHAIRPERSON: No. Well, assuming somebody goes, takes the effort to go to the store --

2917   MR. FULLER: Yeah.

2918   THE CHAIRPERSON: -- you don't actually tell people that that's a possibility, I take it?

2919   MR. FULLER: Well, no, no, we do, that's right on our website. We're actually spending marketing dollars --

2920   THE CHAIRPERSON: You push that?

2921   MR. FULLER: Yes, we do.

2922   THE CHAIRPERSON: I mean, it's fine to say it's on the website, but are you actually encouraging people to keep their devices?

2923   MR. JOHNSTON: Yes, it's on the front -- if you look on telusmobility.com, there's a tile very, you know, prominently displayed that says, you know, if you bring your own device or you already have your own device, it's 10 percent off our rate plan suite to -- for those customers.

2924   THE CHAIRPERSON: It still seems to me that there's an amount in your rate plan that is attributable to the device subsidy that you don't need anymore because you now own outright the phone.

2925   MR. BANDERK: Which is true and that's why you would move to this SIM-only plan after or bring your own device back.

2926   THE CHAIRPERSON: You're only getting a 10 percent reduction then?

2927   MR. FULLER: No, the full reduction. I don't know, if you divide -- if it was a $600 device and divide it by 36, you're now getting the full reduction of the otherwise available money.

2928   Well, actually it's pretty close, right?

2929   MR. JOHNSTON: It's within distance because it -- I mean, a $600 device, the typical subsidy would be far less than 600. So, you know, it would be in the five to $10 range, you know, let's say $10. So, in between five and 10. If you take an average subscriber and multiply by 10 percent, it gets very close between the five to $10 range.

2930   THE CHAIRPERSON: Why do I get the feeling that that's not what you want customers to do, to actually go out and maybe invest and keep the device?

2931   It reminds me a lot of, you know, when car salesmen wanted everybody to be on long-term leasing, or banks right now that are trying to get people to over pay for housing above what their salary should be and, therefore, all kinds of regulators have to come in to control that market so people don't buy above their means.

2932   MR. JOHNSTON: I think it was really -- the reason we came up with the 10 percent plan was to address the need of people who have their own devices.

2933   So, both -- and also I think an important aspect to this is, what we're very much more seeing today is people who have bought an iPhone and after two years want the latest and greatest iPhone and they want to pass along or hand down their existing device to a family member or a friend and that is a big and very large growing segment of the market, and that 10 percent offer not only deals with the person who wants to -- they can call in or go to the store to -- you know, when they're off contract, they've decided they want to do that for a long period of time, but also to really facilitate the hand-me-down behaviour that's growing in the market.

2934   That was -- it was designed to deal with both of those situations.

2935   THE CHAIRPERSON: Which is great for you because with a hand-me-down situation is that, not only do you keep the old phone with perhaps another customer on your service -- hopefully, not going to the competition --

2936   MR. JOHNSTON: Right.

2937   THE CHAIRPERSON: -- but on top of that you get a new three-year contract and the new subsidy system going for another three years.

2938   MR. JOHNSTON: Yes, but it also very much helps the customer because they can very inexpensively provide a service to perhaps a son or a daughter that they mightn't have been able to in the past.

2939   And, so, this also gives them an additional 10 percent -- in lieu of the subsidy very much around that to provide that capability.

2940   So, I think -- I don't see a trade-off there, I think that's very much in the mutual interest of the consumer and certainly we -- you know, we're not going to say no to an additional subscriber on the network.

2941   THE CHAIRPERSON: We'll have to move on.

2942   MR. JOHNSTON: Okay.

2943   THE CHAIRPERSON: But I'm still puzzled what happens on the 37th month --

2944   MR JOHNSTON: Right.

2945   THE CHAIRPERSON: -- and why on these three-year contracts.

2946   MR. WOODHEAD: Okay. Fair enough.

2947   THE CHAIRPERSON: Maybe you can address that in your comments because I think that is an area of frustration for Canadians.

2948   Those are our questions. Thank you for accommodating the overnight for this, it's very good.

2949   So, we'll just take a short five-minute break to allow the next interveners to set up.

2950   Thank you very much.

--- Upon recessing at 0947

--- Upon resuming at 0955

2951   LA SECRÉTAIRE : A l'ordre, s'il vous plaît. Order, please.

2952   Mr. Chairman, we will now proceed with the presentation by Samuelson-Glushko Canadian Internet Policy & Public Interest Clinic (CIPPIC) and OpenMedia.ca.

2953   Please introduce yourselves for the record. You have 20 minutes for your presentation.

PRESENTATION

2954   MR. ISRAEL: Thank you.

2955   Good morning, Mr. Chairman, Commissioners.

2956   My name is Tamir Israel and I'm Staff Lawyer with CIPPIC, the Samuelson-Glushko Canadian Internet Policy & Public Interest Clinic.

2957   I have with me here today Lindsey Pinto, who is the Communications Manager at OpenMedia.ca.

2958   I want to thank you for giving us this opportunity to come here today and participate in this proceeding. It touches on issues that are very important to OpenMedia.ca and to CIPPIC, so we're grateful for this opportunity.

2959   To start off, Lindsey is going to talk a bit in general terms about some concerns voiced by Canadians on the general nature of wireless services in Canada. After that, I will provide some specific comments on the Draft Code provided by the Commission, and then we will be happy to take your questions.

2960   Lindsey.

2961   MS PINTO: Thank you for having me here today. I applaud the CRTC for taking the initiative to develop this national code of conduct.

2962   I appear before you as the Communications Manager of OpenMedia.ca. OpenMedia.ca is a grassroots organization that works towards informed and participatory digital policy.

2963   THE CHAIRPERSON: Could you just pull your microphone a little closer or approach the microphone? One of the challenges is that when we broadcast on CPAC and on the website people aren't always hearing, so we should be conscious of that. Thanks.

2964   MS PINTO: Of course. This is better?

2965   THE CHAIRPERSON: Thank you.

2966   MS PINTO: Oh, much louder.

2967   Over the last few months, 2,859 Canadians visited OpenMedia.ca's website to submit their "Cell Phone Horror Stories" and inform this hearing. Their comments were also used to inform our submission to this proceeding. The Canadians who commented are customers in the wireless market and have experienced trouble with their providers.

2968   Acting on behalf of citizens, OpenMedia.ca and CIPPIC have put forward a submission that is grounded in the lived realities of those Canadians. Their concerns are valid and there is clear evidence to support them. Canada's digital future will thrive through more choice and stronger incentives for innovation.

2969   With so much at stake for millions of individuals and, indeed, the industry as a whole, the outcome of this hearing should be a Code of Conduct that facilitates choice and innovation, that safeguards against price-gouging, and that is evidence-based, and by that I mean grounded in the lived realities of Canadians.

2970   Firstly, we feel that it's crucial to facilitate choice and innovation in the wireless market because, as Chair Blais stated before the Heritage Committee in October:

"The future of the communications sector rests mostly on the rapidly changing technology, the dynamism and innovation of the industry, and the creativity of Canadians."

2971   Canada simply cannot afford a wireless market that is anti-technology. Every Canadian should enjoy real choice and diverse options for wireless service. Fostering real options in the wireless market will help lower prices and increase connection speeds, strengthening Canada's digital future.

2972   The comment from Chris Rogers of Guelph, Ontario, provides an excellent summation of how punitive contract termination fees -- an issue within the CRTC's proposed scope for the Code -- act to impede choice in the cell phone market. He writes:

"I find it despicable that some carriers continue their archaic contract cancellation policies, which keep customers afraid to leave their carrier if they want to try a new one. The companies know that these inflated fees scare their customers. This behavior and policy is terrible and we need less of a stranglehold on our activities and options as customers. Let's do something about this..."

2973   As this citizen points out, high termination fees and automatic renewals, to name only two issues, are symptomatic of a situation where only a few incumbents control a vast majority of the market. Those large players, as such, have little incentive to innovate or to provide competitive service offerings but only to retain their dominant positions.

2974   The vast majority of the cell phone market is controlled by just three companies and Canadians want to be empowered to freely switch between providers, including to independent operators.

2975   The Code must also safeguard against price-gouging. In order to have real choice, Canadians must be able to make informed decisions about the carriers they choose, the prices they pay and the contracts they sign. We cannot allow these decisions to be clouded by unclear or inaccurate representations of communication services or of their prices.

2976   Toronto's Jowi Taylor, for example, felt mislead by Rogers' marketing tactics after she attempted to plan ahead for a trip. She writes:

"On a weekend trip to Chicago last year, I planned ahead and bought that $30 Month Pass in spite of the fact that I was going for only 3 days but I wanted to be safe. ... I arrived home to a bill for over $400 for data roaming charges. When I called to complain, I was advised that the iPhone uses lots of data for background location services and that kind of thing, which is why my data charges were so high. Well, isn't that kind of what a smartphone is all about? Isn't that the purpose of having that phone in the first place? How can they advertise that you can stay connected on your travels and 'Roam Free'? Why call the package a Month Pass when it's clear that even the most basic smartphone use is going to chew up the data limit in a matter of hours?"

2977   The CRTC should protect Canadians from exploitation when they enter into cell phone contracts. This includes practices such as unclear fees, including excessive termination fees, lack of advertising or contract clarity and changes to agreements without customers' consent.

2978   You must hold carriers accountable for the promises they make to citizens and ensure that carriers compete fairly.

2979   Finally, the Code must be evidence-based. This means that it must be grounded in the lived realities of Canadians, as a broken wireless market has real human consequences.

2980   A lack of choice in the cell phone market leads not only to stagnation, not only to dead weight on our digital economy, but also to poor quality of service and continual disregard for citizens' needs.

2981   In her Cell Phone Horror Story, Ontario resident Leah Nielson described the difficulty her mother experienced dealing with Bell representatives after the death of Leah's father:

"...a few days after the funeral ... I had to start helping my mom take care of various business items, such as cancelling the cell phone that my dad had. I will never forget my mom calling the cell phone company. The operator at Bell was unbelievable. My mom explained that her husband had just died and that she needed to cancel his cell phone, but she would be keeping her phone. The operator didn't even have the courtesy to express her condolences and then proceeded to tell her that there would be a $200-plus early cancellation fee."

2982   The CRTC has taken great strides forward in realizing that citizens are key stakeholders in the telecommunications market. I encourage the CRTC to continue acting in a way that demonstrates it is not simply an industry regulator but also a Canadian institution uniquely positioned to champion the public interest.

2983   The telecommunications industry is, as you know, very complex. To fully understand it, one needs to understand engineering and technology, contract law and policy, customers' rights, the role of communications in democracy and culture, and more. Citizens can be incredibly intelligent and still miss a detail in a contract or still be uninformed about a policy that ought to protect them. They can have foresight but still be hit with unexpected life changes. They can be sceptical but still be fooled by misleading advertising.

2984   That is what the writers of this Code must acknowledge. This is about equipping Canadians to participate, to make informed decisions and to exercise real choice. To do this, the CRTC must act upon citizen input -- their stories -- above all else. This proceeding has the potential to lay the groundwork for citizens to become masters of their own digital future.

2985   My colleague will now discuss in more detail some elements of the draft Code you have presented. Canadians await your Code and hope that based on the frame outlined you will make it one that paves the way for a brighter chapter in our country's digital history.

2986   MR. ISRAEL: Thank you, Lindsey.

2987   As Lindsey noted, I hope to address a few specific concerns relating to the Draft Code the Commission has put out. We would be happy to address other elements in more detail either during the question period and we will in addition address even more in our reply.

2988   I apologize for not providing an appendix chart as I was -- but we will provide one in our written comments. So you will get one with our full annotations.

2989   In addition, I just want to start by saying that the Code is generally good. We focus here in our comments on elements where we think it could be improved as opposed to a lot of the elements that it already does very well, such as the notification clauses and the real time notices. So just to put that frame on our comments.

2990   So that being said, we do think some adjustments are necessary if the Code is to provide the adequate level of protection that Canadians are expecting.

2991   Specifically, our comments here are designed to ensure that the proposed national Code:

2992   - does not reduce protections already offered by provincial legislation;

2993   - that it places customers on equal footing with providers; and

2994   - that it takes steps to reduce customer lock-in -- or additional steps, I should say.

2995   To start, the Code should not operate to defeat protections that are already available to customers through provincial efforts. Additionally, or more specifically, anticipated provincial protections should be included, and more to the point, the enforcement mechanisms attached to these provincial protections should not be undermined. And what that really comes down to is a question of whether there is a systemic enforcement mechanism.

2996   So current provincial protections offer a mechanism for both systemic and ombudsman-like enforcement of the protections they offer. Most provincial consumer protection statutes allow for private rights of actions, statutory damages and, critically, class actions.

2997   The CCTS has proven very effective at resolving disputes on an individual arbitration basis. However, CCTS decisions are not publicized unless there is a lack of resolution. Additionally, the CCTS lacks the power to enforce judgments on an industry-wide basis or the jurisdiction to hear broad-ranging public interest complaints. It also lacks the possibility for interventions. While the annual reports can form a solid basis for broader-ranging procedures before the Commission, there are no comparable enforcement mechanisms in the current Draft Code.

2998   We therefore suggest at minimum that section A4 of the Draft Code be retained so that provincially granted rights and remedies, where provided, should continue to be available to customers. Additionally, thought should be given to mandating service providers to include the Code as an overarching set of contractual obligations to their customers. Barring that, a more comprehensive assessment of CCTS powers might also address some of these concerns, I think.

2999   Another one of our overarching set of concerns is that this Code succeed in levelling the playing field between customers and service providers. Elements of the Draft Code should be improved to help achieve that.

3000   Particularly, we think the addition of cooling off periods would be helpful for mobile devices. The objective of a cooling off period would be to let customers assess their handset 'in the field' before committing to what is essentially an expensive device and could have a long-term shelf life.

3001   There are cooling off periods in -- they are pretty commonly used in consumer protection legislation, and many technical devices when purchased in-store will provide cooling off periods. The core impediment to a cooling off period in the mobile device market, as we see it, is the prevalence of fixed-term contracts, because absent those we don't see why there would be any concern over letting people take a handset home to try it out for 14-15 days and bring it back. So we feel that that might be something that can be addressed, properly addressed through the Code without overstepping regulatory boundaries.

3002   Another element that could be improved from the Draft Code is contract renewal, which is section D3.4. It allows for contractual renewals to default to month-by-month services. We have suggested a grace period where customers are insulated from sudden changes to the terms of their services on the day their fixed-term contract expires.

3003   We heard -- Mr. Chairman, you were speaking this morning about the opposite problem where the rate continues at -- the contract continues at the same rate even though there is no longer a subsidy. That's a problem.

3004   Another problem we've seen is that on the day of termination customers are automatically defaulted to the highest available rate until they -- and now they're left with a really high rate and very minimal time to find a new alternative.

3005   So we're suggesting a 30-60 day grace period where essential terms of the contract can't be changed after expiry date to give an extra buffer for customers to find a new service to replace the one that's outgoing or it could continue, but after the 60-day grace period, of course, changes can be made because there is no longer a fixed term in place.

3006   As for unilateral changes, the Code adopts measures to insulate customers against unilateral contract changes. These require some adjustment, we feel, if they are to address customer concerns. Unilateral changes are one of the greatest sources of frustration for customers and are inherently unfair. Customers sign up for what is all too frequently a three-year contractual term only to have the underlying conditions of the service change partway through. The Draft Code provides customers with the right to cancel any contract without penalty if the service provider make changes.

3007   Customers should also have the option of refusing changes imposed on them during a fixed contractual term. Simply permitting them to leave without penalty may not be sufficient. Mobile devices may not be compatible with other local service providers. Comparable service offerings may no longer be available.

3008   For this reason, a number of provincial statutes do grant customers the right to refuse changes while maintaining their existing service contracts, and the Code should adopt that right of refusal.

3009   Additionally, section D2.2 of the Draft Code categorically excludes fair use policies from the regime limiting unilateral changes. We've found that the line between fair use policy and key service component is often thin.

3010   So, for example, data usage is a primary example of this. Often, a fair use policy will impose additional usage restrictions beyond those that are in the traditional service data usage component that is impeded on a monthly basis. So it's a second cap on top of the initial cap, data usage cap. Often, hitting that second data usage ceiling will incur additional fees or a cut off or other types of consequences, so making a change to that usage allowance that is in the fair use policy will have a substantial impact on the service and consumers should be protected for that and we have seen examples of that.

3011   Finally, all significant changes should be covered, whether periodic or otherwise. As drafted I think this Code covers that, but I think we do feel that that should stay as in and add-on services such as voice mail, which are fairly integral to the service, should not be excluded from the protection offered against unilateral changes.

3012   The last section, a high level set of points that I wish to address, is the issue of locking customers in.

3013   Canadians are highly concerned about being locked in to services that they are unable to leave. Concerns over lock-in and high switching costs have been voiced by regulators around the world, the Competition Bureau here in Canada and what I would say is an overwhelming number of individual participants in this proceeding and we agree.

3014   Lock-in problems are a source or at least a contributing factor to much of the frustration and specific harms that customers have voiced in the proceeding. For example, faced with poor service offerings or bad customer service or personal life changes, customers are prevented from leaving their providers. This has direct impact on customer satisfaction, as well as on competition, as it can raise switching costs to significant levels.

3015   While it is not clear the extent to which this practice occurs, there is also an additional concern that the current lock-in scenario allows carriers the unique opportunity, to 80 percent within a fixed term contract, waive outstanding termination fees for a new customer who wishes to sign on to a new term with a new device which prevents them from circulating within the market.

3016   I think this concern was voiced by Members of the Commission the other day.

3017   In addition, the mechanism by which Canadians are locked in causes additional problems. The intermingling of device costs with service offerings insulates both the device market and the service market from direct competition pressures.

3018   While most Canadians would gladly accept a free phone every three years, it is not clear they would willingly pay the added costs -- currently built into their monthly fees -- associated with a 2.5 year replacement cycle I think, as the Commission pointed out earlier.

3019   While the Code seeks to address this issue by means of an unlocking provision and limits on termination rates, e think some modification to these would help achieves those objectives.

3020   With respect to unlocking, the current Code provisions should ensure that unlocking fees do not operate to unreasonably frustrate Canadians seeking to fully enjoy the use of their devices or to change providers.

3021   Section D7.1 of the Code, of the two option there our preference is for Option 2, but we think Option 2 should be adopted, but modified to remove fees for subsidized handsets as well as unsubsidized or at least put some sort of reasonable cost recovery limitation on those so that they don't run unchecked.

3022   Moreover, a better understanding of the underlying costs and considerations associated with locked devices is needed. If it is viable -- even at some cost to carriers -- adopting a "no locked handset" rule should be considered. I just point you to the comments of the Competition Bureau provided in this online consultation on the Draft Code that we are discussing here:

"Locked handsets are a powerful block to consumers who want to switch service providers. The Bureau believes that device locking should be prohibited in the marketplace, and that service providers should be required to unlock any previously locked devices free of charge. Therefore, the Bureau recommends that Option 1 in section D7.1 be adopted in the Wireless Code, but with no fee attached to the unlocking, as any such fees create switching costs that may harm competition."

3023   Again, I say that within the context of I think a number of carriers have provided undertakings to provide greater information on what is associated with the process, so taking that into account in the submissions.

3024   Finally I want to address the device/service contract bundling.

3025   The termination fees adopted by -- the limits, I should say, on termination fees adopted by the Code -- limits on termination fees adopted by the Code still impose switching costs. Even though they go some way to addressing concerns over switching cost, they still impose switching costs that can be in the hundreds of dollars, depending on how much of the contractual term remains.

3026   Again referring to the Competition Bureau's comments on this Draft Code:

"... restrictive, long-term contracts have been found to raise concerns when they create switching costs that harm the ability of firms to enter into or expand in markets. In past cases, the Competition Tribunal has issued orders limiting such contracts..."

3027   Again, this is now from a competitive perspective:

"... in one case limiting them to one year, and in another disallowing them entirely. The restrictive, long-term contracts used by existing service providers may impose switching costs on consumers. There is extensive economics literature on switching costs that demonstrates how these costs harm competition and reduce consumer welfare."

3028   Now, a number of solutions have been suggested to address this issue.

3029   Finland, for an example, at one point imposed an absolute ban on device subsidies for a period of time. While in effect, this led to increased churn rates, higher competition and reduced service prices, it also led to longer handset replacement cycles.

3030   A number of other jurisdictions imposed two-year limits, absolute limits on service contracts and each of these types of options should be considered.

3031   Another option that is worth considering, we think, to adopting one of these solutions is in section D3.3 of the Code. It could be modified to provide customers with the option of paying outstanding device indemnification fees upon termination in monthly installments. This will ensure that high handset prices do not translate into heavy one-time termination fees operating as switching costs.

3032   In conclusion, we congratulate the Commission on this Draft Code as it has developed. With the modifications suggested herein, or some form of them, it will serve as a long and enduring basis for customer protection and will leave Canadians with a vibrant and competitive marketplace.

3033   Thank you. Those are our submissions and we will be pleased to take your questions.

3034   THE CHAIRPERSON: Thank you very much, both of you, for your presentation and also the work you have done prior to the beginning of the hearing to get comments from Canadians to be added to this proceeding.

3035   As others have mentioned, we know there is frustration in the marketplace, but we want to be focussing on solutions during this so that's where I'm going. We know perfectly well there are problems and we want to find solutions to those problems.

3036   And I take your point, your comment that for the most part you are satisfied with the content of the working documents. In your comment phase you may be providing some additional context there.

3037   I take it as well that there are a few points you find are particularly important to maintain to achieve the overall objective and so that's why you have mentioned them. Even though you agree with them, you don't want them to be modified.

3038   Is that correct?

3039   MR. ISRAEL: That's right.

3040   THE CHAIRPERSON: Okay.

3041   MR. ISRAEL: Barring slight language or modification tweaks.

3042   THE CHAIRPERSON: Right, which you will have a chance in the comment and reply phase to provide your views on and to reaffirm which parts you believe are important.

3043   Now, I'm going to ask you a couple of questions that start at the high level and then we will ask some more detail.

3044   When I read your original submission back in December you used expressions about consumer protection and I'm wondering if you would help me understand your position more clearly.

3045   Is this really about consumer protection or is this about consumer empowerment because of the difference of approach that one would take?

3046   MR. ISRAEL: I mean, more broadly I would see it -- if I wanted to be very technically correct in what I'm saying, it's really about providing a telecommunications service that is very responsive to the need of consumers in that respect. I think that does have an element of impairment.

3047   I think where the line between consumer protection and empowerment starts to blur is actually where we are talking about elements of this Code or of this ecosystem that are aimed at enhancing competition. I think those tend to go hand-in-hand in this particular context.

3048   And then also, in addition, I think the line between consumer protection, consumer empowerment and I guess enhanced transparency, which is really in a context where a lot of the services are extremely complex and shifting on a rolling basis and to an extent that's hard for even people who are immersed in the field to keep up with. I feel that those sometimes merge a little bit.

3049   To give an example, the monitoring tools, I see those as, for example, a mix of consumer protection and empowerment. I should say I find those types of tools mix consumer protection and empowerment in a way that isn't that easily extractable in the sense that they allow consumers to make more informed choices in ways that the nature and complexity of the services might now allow readily.

3050   THE CHAIRPERSON: Right.

3051   Well, maybe, I will bring you sort of an example. At paragraph 38 you talk about what happens at the end of fixed-term contracts and how sort of providers sometimes waive termination fees to get customers to sign in to a new service agreement.

3052   There are two ways one could look at that. An informed consumer could have said, "Yes, I have informed myself, yes, it binds me for a little longer, but I'm getting this great device, which I want, and I know exactly what I'm going into." That's one -- so there is an informed consumer operating in a marketplace.

3053   Or you can take another approach, which is a more protection approach and say notwithstanding the choice, an informed choice, we are not going to even allow them to make that choice. Some might suggest that's a bit of paternalism from a Code.

3054   MR. ISRAEL: Absolutely. Just to be clear, I was not suggesting that no customer initiate -- any customer initiate a change. It should be allowed in those contexts.

3055   The added sort of protection or empowerment, however you want to term it -- probably protection is a better term in this context -- that animated that extra 30 to 60 day grace period, it did come at -- we did see a lot of -- it was -- that was an area where a lot of people were commenting saying that, you know, my contract was up and I was expecting it to roll into this month by month, like to continue as is for -- on a month-by-month basis, but then, you know, on that first monthly bill that I got, suddenly I was at a -- I had -- because I was no longer in a fixed-term contract arrangement, I was suddenly at a higher bracket or whatever the default bracket that I was put into.

3056   And in this Code, there's nothing that directly addresses -- there's not a lot that directly addresses a scenario where you're outside a fixed-term contract.

3057   So I mean, that's -- I think that's -- I think that's -- so an informed consumer still might not -- I mean, there's other ways of handling it, a notification that, you know, on this day your service is going to change to this. That might address that in a more consumer empowering way.

3058   But I think the grace period of two months on conditions that you're already -- that you've already provided, I don't think that's an excessive production task.

3059   Other things like cooling off periods are maybe more traditionally consumer protection type protections.

3060   Again, I -- we think they're important to have here. You know, we think they do facilitate consumer empowerment in the sense they let consumers -- it's hard to test out these increasingly sophisticated handsets. And we're talking about a multiplicity of devices now in the store.

3061   And without having to -- being able to take them home for, you know, a two-week period is a way of assessing them sort of in the field, which is hard to do in the store.

3062   And because these are now -- we're talking about fairly expensive technical tools. That's why we thought that type of -- I would classify that as a consumer protection -- why that type of consumer protection is helpful.

3063   So I think -- so I guess there are some pure sort of consumer protection type elements in this, but we feel that they're justified.

3064   THE CHAIRPERSON: Right. I'm not suggesting one is better than the other. I'm just wondering what approach we should take because sometimes -- and look, I get that some customers are frustrated out there. But it leaves me wondering, sometimes, what's the responsibility of the consumer out there to protect themselves.

3065   MR. ISRAEL: We're not saying that -- so we tried to suggest solutions that are targeted to specific issues that we saw were occurring, and that's the -- I feel, overall, the Code is fairly balanced, so you know, these are -- so some of the suggestions that we're making here are ones that are targeting specific issues that we saw were occurring that we think would be worth addressing in a Code just because they were recurring so often.

3066   And on the other hand, the cost to the carrier is not great. A grace period of 30 days, for example, is not a great -- so we felt that they were sort of balanced -- balanced editions that would not be very out of sync.

3067   The Ontario -- if you want -- there's no direct precedent for that. The Ontario proposal for -- that didn't go through that died with Parliament had something similar where, you know, a one-year contract, it had a very sort of detailed regime over what happens when a contract runs out. And it did have a sort of grace period, but when that was up, the contract died completely.

3068   We felt that was less of a choice because then the customer might want to roll into a month by month, but I mean, as far as I could -- it is an added protection, so I take your point. But we feel that it's one that's grounded in what we've seen where some of the problems were occurring.

3069   THE CHAIRPERSON: Okay. I've asked others this. What does success look like?

3070   Have you given some thought as to what would be performance measures in the -- you know, as whether we're achieving the objectives?

3071   MR. ISRAEL: I'd like to say definitely fewer complaints and fewer wireless complaints as a total of net complaints at the CCTS.

3072   Again -- but that -- again, that's a hard metric to -- I think you need some qualitative -- or sorry, qualitative analysis to go with that quantitative, so you have to match up and see, you know, what -- where the complaints are coming in, are they -- so if the complaints still go up after this, you know, are the complaints targeting other areas of the Code, are they more systemic.

3073   I don't think just a pure qualitative analysis of complaints would --

3074   THE CHAIRPERSON: But by that same token, if there are more complaints, it may actually mean that people have more information on their rights and, therefore, are acting upon it.

3075   Isn't that a possibility as well?

3076   MR. ISRAEL: Absolutely. So it's a -- it's kind of a double sword.

3077   Another one that we had suggested, I think, in our initial contract -- in our initial submissions that increased term would be a good example. But again, that's also a difficult one to just do completely qualitatively -- or quantitatively without a qualitative analysis because if the Code does its jobs and consumers are more happy with their providers, maybe they don't leave as often.

3078   So it's hard to -- I think all of those factors would have to be looked at in addition to surveys to see what's underlying those -- those figures.

3079   So I think a combination of qualitative and quantitative analysis -- I think both those figures should be tracked.

3080   THE CHAIRPERSON: Right. I think it would be very useful for us if, in your comments, that you actually -- I get your point, you know, that there are obviously some objective indicia of performance measures, but there may be some objective ones that you would get through public opinion type surveys.

3081   MR. ISRAEL: Yeah.

3082   THE CHAIRPERSON: But that only gets us part of the way. We'd actually have to figure out what are the right questions to ask, what is a good indicia of success in this in terms of goals.

3083   So if you could help us --

3084   MR. ISRAEL: Yeah.

3085   THE CHAIRPERSON: -- form an opinion on this, that would be excellent.

3086   Now, in your process, you had nearly 300 participants. And I know you -- in your presentation you talk about the need that whatever we do would be evidence based. And I was wondering if you could help us -- and maybe you don't have this information.

3087   But of all the participants that participated in your process, do you have a sense, you know, who their service providers are, where are they on a regional breakdown, what kind of contracts or do they -- are they pre-paid or post-paid types?

3088   Do you have any survey type information about those participants?

3089   MS PINTO: We do have those numbers. I don't have them on hand.

3090   THE CHAIRPERSON: Okay.

3091   MS PINTO: I can provide them later on. But in short, I mean, this was a convenient sample of Canadians.

3092   We cast a fairly wide net in trying to get people to send in these comments. We did advertising online and reached out through our very wide networks. And we received comments from a variety of Canadians, many of whom appeared to have been engaging in pre-paid services, and from a variety of providers, but largely through Bell, Telus and Rogers.

3093   THE CHAIRPERSON: Right. Which would be normal in light of their market share.

3094   But any information you can give us about their regional distribution, the types of contract, any data on an aggregated basis? Obviously, I -- we don't want the privacy of individuals to be -- do you think you could do that by the 22nd of February?

3095   MS PINTO: Sure, yes.

Undertaking

3096   THE CHAIRPERSON: Thank you. That would be appreciated.

3097   Let me now turn to contract terms, the duration. And of course, you have issues about -- a lot of people have issues about the three-year agreement.

3098   You mentioned, you know, their general life changes occur. You move from one jurisdiction to another and, of course, the technology -- sometimes there's an obsolescence inherent in the technology.

3099   In the Code, we've provided for clear -- the draft suggests that there be a better way to manage termination clauses. And if one balances on the one hand, you know, not to be too paternalistic and taking away the choice of three-year contracts with a more robust Code that actually sets out what happens on termination and provides clearly what would occur if one terminates earlier and, therefore, you can make an informed choice, with what you see in the Code, is it required, therefore, to necessarily remove the option of a three-year contract?

3100   MR. ISRAEL: I think that's one measure that would -- would help.

3101   The one that we focused on, I think, as I said -- I think there's a few options that different regulators have tried to address what is, I think, a problem that is at the -- as I was saying, is at the core of a lot of these other issues, which is if you're locked in for a certain period of time, a lot of these other issues are exacerbated because they come up and you can't leave. So that competitive solution is just not there.

3102   So again, reducing the term of that lock-in addresses that to some extent because you know you can leave sooner, basically, if you're really unhappy with either the service terms itself or anything that comes up along the way.

3103   The unbundling, which I referred to, which was done in Finland, I think also addresses that to a particular extent because in some way it actually takes care of the lock-in. There's less of an incentive to lock in in that scenario.

3104   The one that we were -- we were -- another one that we were suggesting is to -- what's essentially -- it's a way of maintaining the ability to have device subsidies but letting the -- part of the problem with the way that the Code is -- part of the problem that we see with just -- sorry, I'll back up.

3105   Of course, if a customer leaves, they have to pay for their -- you know, the remainder of their handset that -- or device. That's sensible. But the problem is that if you're one year into a three-year contract and you have a $6 handset and you're faced with an immediate $400 fee, that's a pretty steep switching cost that most customers cannot -- are not going to be able to take on in order to switch providers. So what we were --

3106   THE CHAIRPERSON: Right.

3107   MR. ISRAEL: -- saying --

3108   THE CHAIRPERSON: Here, let me push you on that.

3109   MR. ISRAEL: Yeah.

3110   THE CHAIRPERSON: Some -- we're talking about the future, not the past.

3111   MR. ISRAEL: Sure.

3112   THE CHAIRPERSON: If, in the future, somebody actually knows when they are making this agreement that, effectively, after one year there -- it is -- they know exactly how much it is going to cost.

3113   MR. ISRAEL: Yeah.

3114   THE CHAIRPERSON: And notwithstanding that, they have freely -- we are assuming they are intelligent, have achieved the age of majority, they can enter into contracts and they have signed this and have done the research required because we have provided more tools for able to -- for people to inform themselves, surely they have a duty, and there are consequences.

3115   MR. ISRAEL: Sure. I mean, I would just say that in the general -- just stepping back generally to contracts, usually there's the concept of efficient breach. So if you're -- if you're breaching a contract, you're not -- there's not supposed to be any sort of ... Maybe a better way of looking at it is it really is a question of competition, I think, on that particular point. The question is are customers going to leave when they hit that two year mark and they're -- they want another -- they want to go to another provider or they're unhappy where they're at or they -- or there's even a better -- there's just better offers on the market right now, are they going to switch if it's going to cost them $280 to do that?

3116   What we're suggesting is sort of a -- what we think is a balanced solution. They will still have an incentive to stay because every month they stay that 280 balance is paid off for -- without them doing anything. But if they want to leave, they'll be able to do it -- I mean, we've seen a lot of examples of people who are on these phased plans already because they're out there in the market and they've come to us and said more specific -- like, specific examples have been, you know, I was on this three-year contract that I signed, I bought a device; one year in the -- something changed, in this particular case the fair use policy, my usage was cut in half and I wanted to leave and they said you can leave, you just need to pay the remaining $280, but I -- you know, that's not an option for a lot of people.

3117   THE CHAIRPERSON: Okay.

3118   MR. ISRAEL: So you're almost back to square one.

3119   THE CHAIRPERSON: Again, that's focusing on the past. I'm saying --

3120   MR. ISRAEL: No, no --

3121   THE CHAIRPERSON: -- I'm saying if the Code is in place --

3122   MR. ISRAEL: Yeah.

3123   THE CHAIRPERSON: -- and people have better information --

3124   MR. ISRAEL: Right.

3125   THE CHAIRPERSON: -- they know exactly what they're getting into, why --

3126   MR. ISRAEL: Well --

3127   THE CHAIRPERSON: -- why would we or anyone else suggest that a three-year contract is not appropriate? Because they'll know exactly -- they'll have the option of -- by paying the termination fee, which will be clearly identified.

3128   MR. ISRAEL: I mean, I suppose -- I mean, on the one hand it goes -- I can give you a couple of examples of why I think that that should be addressed specifically.

3129   First of all, as I -- one example is what I was just referring to, things do change. Throughout the term of the contract things do change. So I can't -- you know, I can't -- the example I was given just now, two years into this three-year contract -- or one year into this three-year contract, the usage allowance was cut. The absolute usage allowance and the fair use policy was cut in half. So that's a change.

3130   And then the customer wants to leave at that point but they still need to pay for the handset, right? Regardless of what happens, they need to pay for that device. So the question is how do you facilitate that without, you know, forcing them to stay.

3131   So the Code envisioned that. It actually puts in -- beyond the clarity and notification requirements, it actually puts in limits on what you can charge as a termination fee. You can only charge what -- you know, what's -- what hasn't been covered on the other handset fees. But what I'm saying is that that's not going to achieve the objective of letting people leave when they get upset with a service provider, when -- you know, when the market has changed over a three year -- you know, two year period and become a highly -- a lot more competitive, or at least elements of it have become more competitive, it's not going to let them make that switch because that cost is still going to be fairly prohibitive. Because you're talking about, you know, fairly high-priced devices -- you know, fairly high-priced devices that -- you know, that are dropping at a rate of $10 or so a month over a three-year period, which is a fairly long amortization period for a device at that rate. So, you know, unless you're near the very end of that contractual term, that's still going to be a fairly substantial impediment to switching.

3132   And I think one of the objectives of what we're trying to do here is to facilitate that switching. There's a user fairness component which the notification takes care of to some extent, but the general market problems there, the competition problems, notification, I don't think, addresses that because at the end of the day the customer is going to be faced with the same high -- you know, the same what's essentially a cost for switching that they're not going to be able to bear. So they're not going to be able to switch.

3133   THE CHAIRPERSON: Okay. So your view is that we should ban three-year contracts?

3134   MR. ISRAEL: Sorry, no. I mean, sorry, I'm saying that that is one option that will reduce, you know, the amount of -- the amount of amortization period over which phones are paid back. But what I was suggesting was something different, was that if I am at that two year mark of the three-year contract or whatever and I want to leave, I have the option of staying with provider A, who I'm done with now, but I still owe them, you know, 280 on the other handset, I can still pay them that back in monthly increments.

3135   THE CHAIRPERSON: Right. I saw that. So it's -- you're adding --

3136   MR. ISRAEL: Yeah.

3137   THE CHAIRPERSON: -- to the termination regime by suggesting that even though you've gone to another carrier you could continue to pay your financing costs for the device.

3138   MR. ISRAEL: So you pay off the handset, but you --

3139   THE CHAIRPERSON: Right.

3140   MR. ISRAEL: -- so it's the way of splitting the handset. And I think that will facilitate a little bit of competition on the handset prices, as well as the service offerings without taking away the subsidies or, you know, the -- I think we like to call it pay by -- we don't like to call it indenture but pay by -- you know, pay by service.

3141   THE CHAIRPERSON: Right. Now, of course you understand that the service providers will be -- find that a bit of a challenge because since you don't have an ongoing business relationship after that if you terminate after two years and you still owe that company, they may find themselves with a growing number of bad debts.

3142   MR. ISRAEL: Well, I mean, I -- yes and no. I mean, there are a lot of -- I mean, there is a lot of ways to collect on debts, right? That -- I think the majority of Canadians do pay their debts, right, so I don't -- and I think that there -- you do have an ongoing relationship with them and I think that the phones themselves could become actual -- you know, actual products that people sell for money, as opposed to just ways of facilitating --

3143   THE CHAIRPERSON: M'hmm.

3144   MR. ISRAEL: -- these lock-in terms. And in that case, in that scenario the -- you know, the providers will have an incentive to, you know, facilitate that sale.

3145   THE CHAIRPERSON: Okay. Let me now turn to the locking of phones. You've heard -- your original position was that there's no legitimate reasons to lock. We did have some discussion yesterday that -- especially when new devices come out, for -- you know, first of all, you want to have them locked when they get delivered or else you're sitting there with the potential of a theft out of the store, but the -- so you don't have people reselling and arbitraging the phones, a bit like scalpers, that there is a period of time that you -- especially for new, really desired devices that there should be there. And one of the parties suggested that 30 days was too short and 90 days would be a better period. Do you have any views on that?

3146   MR. ISRAEL: As far as the period, I think we'd like to hear a little bit more from the carriers about how that operates. I mean, we're -- I mean, I -- if there is legitimate claims like that, it makes sense to address them, but on the one hand I ... I mean, the actual -- the illegitimate unlocking of a phone I don't think is a very difficult thing and maybe someone can speak to that. It's -- the problem is that customers can't do that because then they lose their warranty.

3147   THE CHAIRPERSON: M'hmm.

3148   MR. ISRAEL: So I -- the people stealing the phones off the shelf or whatever, I think they might be -- they might not have -- face that impediment. So they might not -- I don't know if they'll welcome --

3149   THE CHAIRPERSON: They may not be concerned about the warranty if they're stealing, yeah.

3150   MR. ISRAEL: Right. So I'm not sure ... So I'm not sure to what -- I don't know, but I -- if there is a legitimate concern there, I think that there is a way to address that. We would still want -- you know, if a customer buys a phone and wants to, you know, travel, you know, on week one, there should still be a way of doing that, if that makes sense, if it's --

3151   THE CHAIRPERSON: I see what you're ...

3152   MR. ISRAEL: -- clear that they're ...

3153   THE CHAIRPERSON: Yeah, yeah, yeah.

3154   MR. ISRAEL: But, I mean, we would want to see a little bit more to just -- to understand exactly how that dynamic works before ... So ...

3155   THE CHAIRPERSON: Okay.

3156   MR. ISRAEL: Yeah.

3157   THE CHAIRPERSON: And I take it that -- I'm sure you would want everything to be done for free on the unlocking, but I'm reading between the lines that there may be some recognition that there are actual hard costs for the companies to do that, particularly as some carriers -- or providers just -- you know, they have to walk through with the client. So as long as it's cost based, would you be comfortable with that?

3158   MR. ISRAEL: We don't -- I want to -- we'd want to -- I want to -- it would be good to get a better understanding of that. Not in a rate setting-type context --

3159   THE CHAIRPERSON: Okay.

3160   MR. ISRAEL: -- but just a little bit more. Because I'm hearing some people are saying it could be as high as $500 or it could be as low as, like, just having a database. And I'm just -- I know having a database doesn't cost that much.

3161   THE CHAIRPERSON: Right.

3162   MR. ISRAEL: So just a little bit of understanding of what exactly is the variation, I think, would help make that assessment.

3163   THE CHAIRPERSON: Right.

3164   MR. ISRAEL: I mean, on a cost recovery basis it makes sense. I mean, when we looked -- there were -- there was pretty big variations. Some people were charging, you know, 50, 60, $70, some were charging $35 and as a sort of a flat rate, but -- and it wasn't handset specific. So we're just -- we saw, like, that those types of variations concern us and --

3165   THE CHAIRPERSON: Okay. But let's say it's -- TELUS, I think, was at the 35 end of the dollars spectrum. That doesn't seem unreasonable to you?

3166   MR. ISRAEL: Again, the -- it's not ideal in the sense that if you just think of the switching costs and how they start piling up because you have connection costs on the other end and this is, like, leaving costs on this end and sometimes there's a few more. So it's not ideal, but it -- I think we're going to -- could we reserve comment to that to --

3167   THE CHAIRPERSON: No, no, absolutely, there'll be --

3168   MR. ISRAEL: -- after the interrogatory?

3169   THE CHAIRPERSON: -- there's actually some undertakings about where additional --

3170   MR. ISRAEL: Yeah.

3171   THE CHAIRPERSON: -- information would be put on, so that's fine for that.

3172   MR. ISRAEL: Thank you.

3173   THE CHAIRPERSON: Okay. That's good. Maybe I can talk about bill shock. I want to just test your perspective on that because you're well-connected with users here. There's a suggestion that really bill shock is more -- is less an issue of voice and text because over time it's more intuitive. Canadians understand, because we've had a few decades and a few years of experience with both voice and text, that in fact the real challenge about bill shock is with respect to data and roaming. Would you agree with that based on the comments you received?

3174   MR. ISRAEL: Yes and no.

3175   THE CHAIRPERSON: It can't be both.

3176   MR. ISRAEL: To make things easy. Well, that's what lawyers are paid to do, right?

3177   THE CHAIRPERSON: Yeah.

3178   MR. ISRAEL: So ... (indiscernible). But I think -- I mean, even voice and data is not a uniform and unchanging market, so even there there is sometimes changes to the service and to service types of offerings. So, for example, there was a point, you know, a few years back where all texting was unlimited and suddenly it went to, you know, like, a pay-per text scenario, and then at other times it was, you know -- you know, there's different ways of packaging minutes and text. So people do have more experience with that, I agree with that, but I think we have seen concerns that have arisen from voice and text-type usage. Long distance, it's not always clear. Some of it is roaming, you know, national roaming as well is something that people have found surprising. They're not -- they didn't know that they were -- you know, that they were entering sort of, I guess, a higher cost area, I guess, or whatever it is.

3179   THE CHAIRPERSON: Right.

3180   MR. ISRAEL: So --

3181   THE CHAIRPERSON: The suggestion is that we should focus on where --

3182   MR. ISRAEL: Yeah.

3183   THE CHAIRPERSON: -- the real problem is and that maybe voice and text is not as bad as data because it's not as intuitive to know, you know, how much does a map cost to download, right, in terms of broadband time --

3184   MR. ISRAEL: Yeah.

3185   THE CHAIRPERSON: -- air time and so forth.

3186   MR. ISRAEL: Yeah.

3187   THE CHAIRPERSON: And that maybe that both with respect to the tools we're talking about of setting caps, whatever level that is, or giving the opportunity, that it should be maybe focused on the areas where the rate shock and financial impact are the greatest. And that would be -- one party suggested would be more in the area of data and roaming.

3188   MR. ISRAEL: Yeah, I think we're eager to hear as well, I think, what somebody, one of the carriers undertook to come back with some figures on what percentage of these, you know, sort of excessive overage fees are hitting, are coming out of the voice and texts.

3189   My intuition is, I think it's a simpler customer experience to have these things go across the board. One of the customers that was -- I mean, if there is implementation concerns I think those are worth -- if it's a lot harder to implement for voice I think that's worth sort of listening to or hearing in a more detailed way.

3190   THE CHAIRPERSON: Right.

3191   MR. ISRAEL: Like, what the underlying concerns are.

3192   THE CHAIRPERSON: And ready to hear whether there is a reasonable case to be made that perhaps in voice it's more of a challenge to implement.

3193   MR. ISRAEL: Well, yeah. So the default, I would say, would be to cover all of that.

3194   But if there is -- I mean, and I think for customers that will be a lot clearer as well to just have the notifications come whenever they're hitting -- you know, whenever they're hitting -- whenever they're about to incur excessive fees.

3195   THE CHAIRPERSON: Right.

3196   MR. ISRAEL: I think that's a positive tool.

3197   THE CHAIRPERSON: Sorry?

3198   MR. ISRAEL: A better understanding of the challenges involved with offering notifications in specific spheres might help. I think that's coming.

3199   THE CHAIRPERSON: Right. It's been suggested, though, that having up to three notifications for each voice, text, data, roaming per month will be a major annoyance. Unprecedented, I believe, the word was.

3200   MR. ISRAEL: Well, I mean, I know they do have it -- I think in the EU they have started rolling out these types of notifications.

3201   Again, I don't think it will be every month because you're not going to be hitting whatever the limit is every month on every one of our services, particularly for things -- you know a lot of -- there is a lot of unlimited plans for voice and text out there now. So you won't be getting those.

3202   And in addition you will have the option of, after that first month where you get really annoyed of -- if you do -- turning them off. Or some people might like them. I mean you're talking about -- I think I get more service requests from my provider in the course of a month than might accrue from my usage overages.

3203   But I think it's better to -- it's a question of the customers have the ability to modify those. So I don't think the fatigue is necessarily the primary impediment to having a number of streams in there.

3204   THE CHAIRPERSON: Okay. I understand.

3205   Well, there be other comments put on the record -- well, both undertakings and comments. So I'd ask you to follow that and react to that as we go forward.

3206   MR. ISRAEL: Thank you.

3207   THE CHAIRPERSON: Those were my questions. That's good, okay.

3208   Well -- oh, sorry. Candice Molnar -- Commissioner Molnar.

3209   COMMISSIONER MOLNAR: Good morning.

3210   I know you had extensive conversation with our Chair regarding the early termination fees and the switching costs and how switching costs or early termination is effectively an impediment to switching. And my problem is I don't know what you or we or anybody would consider to be the reasonable outcome.

3211   Because I've looked at this and I'm going to use easy numbers. I've used easy numbers that I can divide by two or three. So assuming there is a $600 subsidy. That might be a little high but, again, it divides by two and three. So it's $200 a year would be essentially paid off through a three-year term. So if you leave at the end of two years there is $200 remaining. And you would suggest that that is an impediment to switching.

3212   MR. ISRAEL: That is a high switching cost. I mean in any other industry that's a high switching cost.

3213   So is it a high purchase fee for a handset, no. But it's a high switching cost.

3214   COMMISSIONER MOLNAR: Right.

3215   MR. ISRAEL: So you just have to -- if you're looking at what is this going to do to the competitor's environment and what is it going to do to the customer who is looking and really wants to change for whatever reason and is faced with this decision, what is it going to -- how is it going to be factored in?

3216   It's not a high price for the handset, right? It's a reasonable price for the handset.

3217   COMMISSIONER MOLNAR: Yeah, yeah, I understand.

3218   MR. ISRAEL: What is their decision going to be?

3219   COMMISSIONER MOLNAR: I understand what you're saying. It's a high switching cost.

3220   So a consumer may be uncomfortable and it may cause him to think if after two years they want to switch. Is it worth paying the $200 to switch to another carrier? Is it worth paying the $200 to get the latest iPad or iPhone -- I'm sorry.

3221   But the alternative, the likely alternative is that if it's moved to a two-year contract, I think the very likely alternative is not that they are going to amortize that $600 over two years but they are going to create an upfront, right? Your upfront cost is then $200 and you're still going to have $200 per year.

3222   So you either have an upfront cost or a backend cost. But there is still that cost there.

3223   MR. ISRAEL: Yeah.

3224   COMMISSIONER MOLNAR: If you take that device and there is in fact -- if it's worth $600 it's going to be paid somewhere.

3225   So what's worse? Is it worse to impose on all customers an upfront cost or is it worse to impose on them a backend cost that they can pay -- they can choose to pay or not whether they want to switch.

3226   MR. ISRAEL: Right. So you're referring to the two year cut-off as opposed to the amortization option.

3227   I mean, I think part of what's happening is the question -- I think what needs to be addressed and is hard to address in the abstract, is whether that is a $600 handset or if that's just the price that's -- the question is whether there is actually competition on the handset price at this point because the handset is worth more to the carrier who sets the price as a lock-in tool, I think at this point, and at least for the ones that are relying on these three-year contracts and as a standalone product.

3228   So the question is that actually -- if nobody is actually paying -- forever paying cash for these handsets is there actually a competitive market on the price of these handsets?

3229   So what might happen is if -- you might start seeing competition on the price of the handsets where that upfront cost actually goes down because carriers are -- I mean, part of this is hero economics. I mean, people are dealing with upfront.

3230   When people are dealing with an upfront cost they are dealing with it upfront whereas where they are dealing with a delayed cost they are not anticipating paying it but, you know, they're only going to -- they'll decide to wait in the three-year contract if they want to pay it.

3231   So part of it is just what the assessment process of actual consumers are and what the actual impact of this is going to be. But I think the concern is that they're just -- when you have the cost upfront there is a more direct competitive pressure on the actual handset price and it might actually not be $600. It might be $500.

3232   Some handsets, and this is not true across all handsets but you'd have to do a pretty comprehensive analysis which we haven't undertaken, but there is at least suggestions from other jurisdictions where they have decided to limit this that some of the handset prices might have been inflated, you know, before this type of limitation came in. So there is that suggestion.

3233   And the other side to that is if the cost is paid upfront does the service fee go down because when the carriers are setting the monthly service fee presumably they are -- you know, they are assuming a higher percentage of customers are not going to leave at that two-year mark and pay that $200.

3234   So the value -- they are deriving more value from the monthly service fee and I think that's set at a level that's presuming more customers are going to stay, if that makes sense. So the --

3235   COMMISSIONER MOLNAR: No, I'm sorry. I didn't understand what you were saying.

3236   MR. ISRAEL: Sorry. I think --

3237   COMMISSIONER MOLNAR: So you were suggesting that somehow under a two-year contract the value is greater than a three year where --

3238   MR. ISRAEL: No, no.

3239   COMMISSIONER MOLNAR: -- I mean, certainly the value to a carrier is greater for a three-year contract.

3240   MR. ISRAEL: Yeah, let me rephrase that.

3241   I think that the way that it's set up right now with the -- or the way that you're suggesting where the cost comes in at the end, there is just no direct -- the competitive pressures or the cost of the handset as well as the actual cost of the service are fairly insulated from direct competition so it's hard to see.

3242   There is not direct competition on what the cost of the handset is because everybody is getting it for free. It could be $800, it could be $900, it could be $10,000. It doesn't matter. It's free, right, if you're assuming that you're going to stay for the duration of the term.

3243   So if you're getting it for free and your cost is three years of service, it doesn't matter what the cost of the handset is. So the question is whether -- how strong the the competitive pressures are on the cost of the handset.

3244   If you pay for that handset upfront the market -- you know, the market pressures are going to be such that presumably, at least, the service in a functioning market if there is competition, the monthly service fee will go down because more of that -- you know, every single person who buys in will have paid the $200 for the handset as opposed to the $200 on the last year of contractual services.

3245   Does that make sense? Maybe I should --

3246   COMMISSIONER MOLNAR: I still don't understand how the monthly fee goes down. You have just moved where that $200 is paid.

3247   MR. ISRAEL: If you have a perfect competitive --

3248   COMMISSIONER MOLNAR: I mean if you're talking about -- okay, go ahead.

3249   MR. ISRAEL: If you have a perfect competition environment, right -- sorry, I'm not explaining it well, is the problem.

3250   But if you have a perfect competitive environment, right, if everybody needs to pay upfront then the handset is -- there is a $400 value that's amortized over, you know, two years or whatever.

3251   Okay, you're saying -- but I guess the underlying assumption there is that more value is being derived out of the monthly contract than is actually -- you know, than is actually being provided in the value of the handset. So they are getting more than $600 out of the three years of having the customer there.

3252   Does that -- I'll try to address it in more --

3253   COMMISSIONER MOLNAR: No, that's fair enough. I just --

3254   MR. ISRAEL: Again, we're -- I think what we're --

3255   COMMISSIONER MOLNAR: If I could just kind of put back what I think I heard you say and you can tell me if I understood you?

3256   It is better ultimately for the industry for the potential cost of devices over time and due to the pressures of competition that will be increased by eliminating the switching cost. So it is better over time even though customers may have to pay more upfront. The long term benefits outweigh deferring that payment.

3257   MR. ISRAEL: Right, because the service fees will go down. But we're -- again, we're --

3258   COMMISSIONER MOLNAR: Do you promise?

3259   MR. ISRAEL: I'm sorry.

--- Laughter

3260   MR. ISRAEL: I promise.

3261   Do I get a commission?

--- Laughter

3262   COMMISSIONER MOLNAR: We are going to tell everybody that you said the fees would go up.

3263   MR. ISRAEL: What we are concerned about -- I mean, there are examples of this. Again, in Finland, what they put in place at a certain point -- they don't have this anymore, or they have a reduced version of it, but for a while what they put in place was a ban on handset subsidies, and right after that they got a significant amount of competitive pressure. Prices went down and a lot of new carriers came in. The competitive environment got hyper-competitive.

3264   So there are examples where this has happened. So I am not just -- it sounds like I am making stuff up, but I'm not, there are examples of where this has happened.

3265   But I think what we are talking about is that there are other options to dealing with what we see as a problem, which is the three-year lock-in. Some of them involve, for example, what I was describing to the Chairman before, which is the scenario where you -- which is what we think is sort of a middle approach, that you keep the subsidy, and if you want to leave at any point, you still pay for the handset.

3266   And then there is value in the handset, the carrier wants to derive value from the handset --

3267   COMMISSIONER MOLNAR: I just want to touch on that. I wasn't going to, but you brought it up again.

3268   Essentially, you suggest that these carriers become financing, and, obviously, customers have many options for financing. They, maybe, don't want to put it on their Visa, because that is a high cost, but there are many, and I suppose one potential is that maybe the carrier who is taking them, or the WSP who is taking them, may themselves consider, as a cost of acquisition, either paying for that early termination fee, or at least agreeing to fund it over their new contract.

3269   But it is hard for me to understand why it would make sense that the service provider you are leaving should be the one financing that.

3270   Help me understand that. I don't understand that at all.

3271   MR. ISRAEL: Sure. They would never want to do that on their own. I am saying that that's a solution to what is a competitive problem that puts in place a set of incentives that we feel is a reasonable balance.

3272   I am not suggesting that carriers would want to do this on their own, I am suggesting that this is a way of ensuring that the termination fees that are in this draft code right now do not continue to act as an impediment and a high switching cost for customers, but that, at the same time, does not put a ban on subsidies or things like three-year contracts.

3273   What I am suggesting is that this will help what we see as the underlying problem, which is that consumers are upset about being locked into contracts for long periods of time, and being unable to leave, and being faced with a really high cost when they want to leave, whether these costs are, you know, paying for the device that, when they got it, they thought they wouldn't be paying for -- whether these, what are essentially high switching costs, are going to continue to be an impediment to switching, or not.

3274   So I am not saying that this is something that a carrier would do on their own, but I am suggesting that it is a reasonable solution that doesn't go as far as those other two solutions, but still addresses what I see is a problem with the code, which is, two years into my three-year contract, will I pay $200 just to switch to another provider? Probably not, no matter how upset I am with my current provider.

3275   That is what that is designed to do. It is sort of an attempted solution.

3276   COMMISSIONER MOLNAR: Thank you. That's all.

3277   THE CHAIRPERSON: Thank you very much. We look forward to reading your comments and your replies, as the process continues.

3278   MR. ISRAEL: Thank you.

3279   MS PINTO: Thank you.

3280   THE CHAIRPERSON: We will now move immediately to the other presenters.

--- Pause

3281   THE CHAIRPERSON: While you are settling in, just so everyone knows, we will finish with this presentation and then we will break for lunch and pick up after lunch with Rogers.

3282   Welcome to our hearing. All we ask is that you identify yourselves at the beginning, so that the court stenographer can identify you correctly in the transcript.

3283   Please go ahead.

PRESENTATION

3284   DR. MIDDLETON: Catherine Middleton, from Ryerson University.

3285   On my immediate left is Barbara Crow, from York University, and to her left is Tamara Shepherd, also from Ryerson University.

3286   First, I wanted to thank you for the opportunity to present a research perspective, to bring a research perspective to this consultation.

3287   Our purpose is to provide input to the development of the code, based on relevant Canadian research and international practices, especially with respect to mobile use by youth and seniors.

3288   Our intent is to complement our initial written submission with specific thoughts on the Wireless Code Working Document, and reiterate some of the key points that we made in our written intervention.

3289   I will start with some framing, and then Barbara will offer some insights on the code development from the perspective of seniors, and Tamara will look at the perspective of youth, and talk about supplementary resources for consumers, and then I will close.

3290   I wanted to start by talking a little bit about the context of this code. We weren't able to be here yesterday, but listening to some of the discussion today and some of the press coverage from yesterday, I think it is important to recognize that this is much more than about just locking phones and contracts and the length of contracts and so on.

3291   I would say that the outcome of this hearing and the development of a code will contribute to creating an environment where Canadians have affordable access to mobile telephone and broadband services, so that we can participate fully in a digital economy.

3292   So it is really about an infrastructure question, it is about having access to services in ways that suit the needs, the everyday needs, of Canadians.

3293   So, yes, the code is important, but it is just one piece of this. It's about removing constraints and barriers to use, so that Canadians are not afraid to make full use of their mobile services.

3294   It is enabling access to information and services from anywhere, without the fear of unanticipated costs, for example, without the need to find free Wi-Fi because it's too expensive to use your data plan. It is about enabling people to get their first cell phone -- many Canadians don't have mobile phones -- or to make fuller uses of the services they already have, and to be more innovative in what we are doing.

3295   The CRTC's Communication Monitoring Report, the 2012 document, noted that Canada had a 78 percent penetration rate for mobile subscriptions in 2011. This sounds pretty good, but then, when you look at the international comparative data that was at the end of that report, the U.S. is over 100 percent, the UK is about 125 percent, Italy is at 150.

3296   So we are not adopting -- Canadians are not adopting these services at the same rate as many of our international peers.

3297   The OECD last week released fixed and wireless broadband statistics, and they showed that our penetration rate for mobile broadband services, which includes data plans on phones, tablets and standalone devices, is just over 40 percent. Compare that to Korea, at 104 percent; Sweden, at 102 percent; or Australia, at 97 percent.

3298   Canada is 23rd in the OECD, as compared to the U.S., which is 8th, with 76 percent.

3299   And, I apologize, these numbers aren't in the written submission, but we will give them to you.

3300   So there is much, much more room for improvement in creating this environment in which Canadians actually choose to adopt mobile services at rates similar to international competitors.

3301   Chairman Blais, in answer to your question about what success would look like, I think one indicator would be to see these numbers increase.

3302   These are measurable numbers. We can very easily tell whether we have moved from 40 percent uptake of mobile data services. That is measurable, it is being recorded, and presumably, if we work together to create a better environment, we will see that adoption take place.

3303   We certainly support the implementation and development of a code, but suggest that there are limitations. The code, in and of itself, will help Canadians become more informed consumers of services, but we need to supplement it with other resources and actions to ensure that Canadians do receive reliable telephone and other telecommunications services, at affordable prices, as per the CRTC mandate.

3304   We have some general comments on the code document, and we will provide a fully annotated set of comments in our final response.

3305   Just very quickly, the code, as it is written, is certainly a good working document. We would note that, even as it is, some of the language is inaccessible. It is still confusing. If you look at the section on termination fees, Option 2, that is still a pretty hard thing to understand.

3306   We would say that one thing that is not in it, in Section D.1.2, is noting limitations on the provision of services.

3307   There was the question earlier, or the example, of somebody who had service from TELUS, and they said that something had been locked out, they weren't able to access things. Things like that, whether you need a data plan, that sort of information should be in there.

3308   We also suggest that the general principle should be that customers opt out rather than opt in to services, as our basic starting point; that unlimited should mean unlimited; and we note that in other jurisdictions, in addition to providing information on roaming rates, governments have taken action, collective action, for example, across the EU, to bring rates down.

3309   I am going to turn it over to Barbara Crow now, to give some perspective looking specifically at seniors.

3310   DR. CROW: I would like to thank the CRTC for this public hearing, providing an important interface between citizens and consumers.

3311   Based on our research with youth and seniors, these groups have specific needs that can be better facilitated by wireless services in Canada.

3312   Why are seniors important?

3313   I would like to remind everyone that we all get old, we all will get old, and there will continue to be new technologies. So what kind of wireless code will understand and reflect this demographic and changes in technology?

3314   Seniors are one of the fastest growing demographics. In 2011, 5 million adults were over the age of 65, and this number is expected to double in the next 25 years.

3315   By 2051, one in four Canadians will be over the age of 65. Moreover, the gap in life expectancy between women and men is closing.

3316   What are seniors' concerns?

3317   In our research with over 300 seniors across the country, asking them about why they do and do not use mobile technologies, their main reported use was for emergencies. The phone lent them and their families a sense of security.

3318   As a result of emergency use, many seniors restricted cell phone use because another family member was paying for the service.

3319   And it's also important to note that a number of seniors who do have mobile phones receive them as hand-me-down devices from their children or their grand -- or handing up from their grandchildren.

3320   And there was a significant awareness on the part of the seniors about these high costs and either having their family members being aware of the high cost and their family reminding them to only use them in emergency situations, or they self-imposed the kinds of use on the phone, they limited their kinds of use because of the cell phone costs.

3321   So, many seniors would like to use mobile phones, but the high costs prohibit the kinds of use. So, it's important to consider these costs, given how more and more government services are being provided online and through the mobile devices.

3322   Seniors would like a Wireless Code and accessible and we have much, much legislation with Disability Acts legislation, with plain language contracts available in a variety of formats: print, online, voice, and face-to-face.

3323   They want to understand the contract. And I can give you an example. In some of the provisions in places where seniors find out about telecommunications contracts, like kiosks, the actual physical environment is prohibitive, they have to stand, there's nowhere for them to sit and they often felt rushed. The seniors commented on how staff did not have the patience to explain the phones and the contracts to them and some of the seniors have some very interesting strategies on how they've dealt with being in these kinds of situations.

3324   The seniors have raised many concerns about contracts and they would like to have more flexibility: shorter contracts, a longer cooling off period to reflect the learning curve and, for example, once seniors discover new features, they may want to change their plan.

3325   Another item not directly related in the Wireless Code, but many seniors raised, are concerns about privacy and, in particular, how to deal with unwanted phone solicitations and they had a lot of concern about their data, where it was going within the public and private sectors and how it was being collected and how they could control and access this data.

3326   And their most significant concern was about roaming. They didn't understand how roaming worked. So, I think we need a very clear representation of how it works and the cost.

3327   So, before I pass it over, I'd just like to say that I think it's important to create more -- less onus on the consumer and that we need to have a Code that supports citizenship, that provides market innovation and profits and remembers fundamentally that this is about the right of communication and we need -- and how important communication is to citizenship and being a consumer.

3328   So, thank you.

3329   DR. SHEPHERD: Thank you. Thanks.

3330   Okay. Thank you to the Commissioners as well.

3331   So, just leading off from Barbara's points about seniors, I'd like to talk a little bit about youth. So, youth are also I think a key demographic to consider in the creation of a Code like this that ostensibly will be around for years to come, that's the idea anyway.

3332   Youth are the consumer group with the highest levels of mobile device adoption and significantly, according to the 2012 CWTA Cell Phone Consumer Attitude Survey, youth were the highest adopters of Smartphones, and I think all of the talk around mobile data is especially relevant to these youth who are around 18-24 year olds, those are the highest adopters of Smartphones.

3333   According to research that we've done with youth about how they negotiate the typically high costs of mobile services, they enacted a number of strategies similar to the seniors and they had a number of key concerns that I think the Wireless Code Working Document has started to address and that might be clarified a little bit further.

3334   So, I'll just go to a couple of sections in particular.

3335   Section D1.1, Plain language. This was a key concern of many youths. They felt as though all of their contracts were written in legal jargon that none of them really could understand and so they didn't even bother looking at them. So, writing the contracts in plain language was key.

3336   And, in addition, they mentioned that they would like to see standardized contracts across providers so that it was easier for them to compare the different services provided.

3337   Section D1.6, Privacy policies. So, again, like the seniors, youth had concerns around their privacy, especially the issue of the management of the personal information that remains on their devices once they're returned for repair or once they go in to switch -- to upgrade their devices.

3338   So, they were concerned about what kind of information remains on the device.

3339   In section D2, Changes to contracts by service providers. The issue of notifications I think was appreciated by many of the youths that we talked to, but one of the issues that they mentioned was that sometimes they received texts, like SMS notifications, and that they were concerned about getting too many texts being charged for those text messages and they thought that email notification might be a better mechanism for that.

3340   In section D3, Contract cancellation, expiration, renewal. The youth felt that the penalties for changing services during the term of the contract be clearly indicated. They often found that this was especially a point on which they got unannounced and hidden fees applied to their accounts when they tried to change aspects of their plan.

3341   They also noted, as did many of the online submissions, that the standard three-year term for a contract is too long -- and I'm sure you will hear that again -- especially for young people who are often in more mobile life situations, three years is quite a long time when you're 19 years old or 20 years old.

3342   So, the three-year contract is something youth were concerned with.

3343   In section D4, Clarity of advertised practices. This, again, was another key concern of young Canadians, especially as they are one of the targeted groups in a lot of mobile phone advertising.

3344   So, they found -- they generally had the attitude that mobile advertising was untrustworthy and they said especially in regard to prices quoted in advertisements.

3345   We had one participant say that you should assume that the price quoted is about 50 percent of what you will actually pay.

3346   So, they're very skeptical and savvy about the advertising, but they really felt as though they were being misled as consumers and didn't appreciate the lack of clarity in advertisements. They'd like to see the ads reflect the real cost of services.

3347   So, in addition -- and this is something that's not explicitly in the Code but I think is important to note -- regarding service plans, youth said that they needed more flexibility in the ways that plans are organized and presented.

3348   So, they tend to use SMS and data as opposed to voice services of mobile phones and they noted a lack of plans that do not include voice or, you know, minimize the cost for voice, which is something they don't tend to use as much.

3349   And this is, again, a concern that was brought up in some of the online comments by deaf users. So, I think this is an area where considering the needs of special consumer groups can also supply benefit to a number of Canadians.

3350   So, that is sort of summarizing what youth have said to us about the Code.

3351   I'd like to move on to the issue of consumer education. So, this kind of speaks to the consumer empowerment versus protection discussion that was had earlier.

3352   But we think the issue of consumer empowerment is key to the success of a Code. So, independently of service providers, we believe the CRTC should develop some impartial resources and tools to help Canadians understand wireless services and to recognize whether a supplier is adhering to the Code, so this would help with the enforcement as well as the promotion of the Code.

3353   So, one issue which is covered in the Working Document under C3 is how consumers can make a complaint related to the Wireless Code.

3354   I think a lot of the people that we talked to anyway were unsure whether they could make complaints and who they should complain to. So, the action of the CCTS should be publicized I think more broadly and the CCTS might want to think about creating some kind of outreach resources for helping people to submit complaints.

3355   Under section E, promotion of the Wireless Code, young people in our research noted that useful approaches here could go beyond, let's say just putting resources on an online portal, to extend toward creating something like a viral video, to doing interviews with celebrities, to making a Facebook page, to creating educational mobile apps, such as like an app that would allow you to check on your contract and see if your contract is adhering to the Code.

3356   So, these are just some sort of like multimedia strategies for outreach.

3357   Another key point here in the promotion of the Code would be some accredited online resources for being able to compare the plans from different providers.

3358   So, there are a few websites out there now, but to having an official accreditation on those pages would help consumers to be able to make informed choices about their plans and to compare.

3359   And then more generally -- and we both noted this, Barbara and I -- both youth and seniors would like increased public literacy about how mobile data works. So, data is a little bit difficult for people to get a hold of and the Commissioners noted this as well.

3360   So, having something like an explanation of the costs per unit of data, so how much does it cost to transmit, you know, a megabyte or something and what that means in terms of the device's functionality.

3361   So, for example, how much data does it take to do a particular activity, like translating the data into something that people can understand in terms of the way they use their devices and also explaining the differences between mobile data and wi-fi, and this was a point that some of the seniors brought up.

3362   So, yes, so generally outside of the Code itself, there needs to be some additional information available on the sort of basic terms and definitions that are used in contracts and this just helps to allow people to understand exactly what the contract is saying.

3363   As we noted in our intervention, there are some interesting precedents for consumer education resources in similar jurisdictions such as Australia and the UK where a federal regulator has produced a number of guides to how consumers can get the best price for their services and these are all available freely online, as we noted. And this sort of simple and accessible information we believe should be available to Canadian consumers as well.

3364   And now I turn back to Dr. Middleton for closing comments.

3365   DR. MIDDLETON: Great. So, we just want to reinforce that we see the Code as one component in enabling choice and affordability.

3366   I admit it's important for the Code to take a default position of protecting and enabling consumers, but things like opt out rather than opt-in provisions are important.

3367   Some of what we've given you in terms of insights from youth and seniors simply highlight the fact that their concerns are shared by everybody, these issues around focus on plain language, the need for improved consumer education resources, these will help everyone. Clearer contracts help consumers understand the cost of their services but they don't improve affordability all on their own.

3368   Despite Telecom Decision CRTC 2012-556 that said that the market didn't require regulation around competition, certainly, many of the issues raised here do suggest that there remains a lack of effective competition in the Canadian marketplace and that action is needed beyond informing consumers of the terms of their contracts to ensure that Canadians do have access to affordable, innovative mobile telecom services.

3369   And finally, I would just reiterate the fact that mobile services underpin and enable the digital economy, so it's really essential that we the citizens of Canada work with our service providers, consumer interest groups, regulators, governments and academics to create an environment in which our use of such valuable services is not constrained.

3370   Thank you.

3371   THE CHAIRPERSON: Thank you very much for that presentation. Commissioner Simpson will start the questioning.

3372   COMMISSIONER SIMPSON: Thank you very much.

3373   Dr. Middleton, just to clarify for the record, I think I heard you say at the beginning of your presentation that your position was for consumers to opt out rather than opt in, and then you corrected yourself at the end. So just one more time for the record, will you state your position?

3374   DR. MIDDLETON: Yes. The position should be that they have to opt in rather than opt out. Yes.

3375   COMMISSIONER SIMPSON: Great. Great.

3376   DR. MIDDLETON: Thank you for -- no, I think you're right, so thank you for clarifying that.

3377   COMMISSIONER SIMPSON: Okay. Thank you very much. The Commission is very grateful for the work you've done. This is a policy hearing but it's also heavily inputted by the consumers who will be affected by this policy and as such you're bringing a lens of social policy to this hearing that I think is very valuable.

3378   I would like first -- to use one of my favourite expressions of eating your vegetables first before we go to the dessert, the vegetables being the critical components that you have talked about with respect to either inclusion or exclusion from the Code, the Draft Code that we're looking at right now, and then let's run out the clock talking about social policy because I've done a lot of reading about etymology or the references in your various research undertakings, a lot of which were available online, some behind pay walls and others were just published as books and available on Amazon, which I don't think in not going there I've limited my research but I -- if you don't mind, that will be the format we take.

3379   Now, I'm looking at your written notes that were given to the hearing this morning, that accompanied your oral presentation, and on page 4 at the very top you had said:

"Note that the language is not entirely accessible..."

3380   That's a word that has multiple applications. Are you talking about it in the broadest consumer sense or are you using it in the narrower sense of accessibility as often applied to disability or people that have a disability?

3381   DR. MIDDLETON: No, I -- we're really referring to it there in the broad consumer sense.

3382   Though, as an example, the description of subsidies are referred to as subsidies in some places, economic incentives elsewhere. Consumers -- or Canadians just tell us they just want a phone and they just want to be able to figure out how to get the phone, and so wading through all this stuff about whether it's a subsidy or it's an economic incentive, that language might make sense to the provider but it's still not really simple.

3383   And the challenge of course here is, as you hear from more of us and we say, well, you should add this, you should add this, we're going to end up with this massive big Code. So the challenge is how do we keep it at very, very simple, easy-to-understand language, using the same terms throughout?

3384   And we'll provide you with some more specific examples, but there are several places where a term is used one place to describe something and then it's used -- a different term is used to describe effectively the same thing elsewhere. So that can easily be fixed.

3385   COMMISSIONER SIMPSON: That's excellent. Thank you.

3386   In your next point, you point out an inconsistency in the determination of days involved in the cooling off period and you draw attention to the language in A6 of the Draft Code and how it contradicts or appears to contradict the description of the cooling off period in the personal information section and I'm wondering if you could be explicit as to that contradiction and how it might be corrected.

3387   DR. MIDDLETON: Yes. My understanding of reading the document is the section that talks about distance contracts -- and we didn't address this specifically -- is kind of interesting because I'm not sure that we should have different types of contracts. So the way that you enact a contract doesn't necessarily mean the contract should be different. So I think probably that concept of distance contracts is problematic.

3388   But setting that aside, the provision in A6 around distance contracts says that you have 30 days from the time that you get your contract to decide that you don't want the contract.

3389   There isn't -- as far as I could tell, there isn't actually -- in the statement of the Code there isn't a description of the cooling off period. It just comes up in that personal information summary, but there it says 15 days.

3390   So it doesn't seem to make sense to me that if we mail you your contract you get 30 days and if you made the -- signed the contract in the store it's 15 days. So that's the inconsistency we're referring to there.

3391   COMMISSIONER SIMPSON: Thank you.

3392   In your next point, D1.2, you are indicating or implying that this section should -- as I'm reading your critique of it -- should note not just what you are getting in your contract, regardless of whether it's plain language or the current contracts, but you're actually saying that it should note any limitations, and this is sounding to me as though you are prescribing a code -- or a contract that tells you what you're not getting and I'm a little puzzled by that.

3393   DR. MIDDLETON: Well, I guess an example of that would be that in some instances you have to have a data plan that goes with your phone. So what I am -- so the limit there is that if you want to buy a smartphone and you don't want a data plan because you've decided that you can just use Wi-Fi, you need to know that. You need to know and presumably it's laid out elsewhere in the contract because you've signed up for a data plan, but it should be clear that there are certain things that you may not be able to do. It, of course, becomes complicated because then you have a massive long laundry list.

3394   But I think the basic principle is if there are things that we think people are likely to want to do and that they cannot do because a provider has decided to limit that, that should be noted. So that's the point. So the example would be not being able to buy a smartphone without a data plan.

3395   COMMISSIONER SIMPSON: Or, not to put words in your mouth, but there's the possibility because of the complexity of smartphones today that you're not aware of what other things it may be able to do and therefore you don't ask for them.

3396   DR. MIDDLETON: Well, that's right. And part of that would come to the cooling off period or sort of that -- part of it would be the broader educational resources available.

3397   But this is certainly something that we found that comes up with seniors, that once they start to use these things there's all this fantastic stuff they can do -- and this is stepping away from the issue of it being limited -- but they might not have enough data on their plan because they didn't think they were going to use it and it turns out it's fantastic and they do use it, so they want to change their contract. But that's a different topic.

3398   COMMISSIONER SIMPSON: Yes.

3399   In the same section -- I need my glasses -- you're calling for a statement that declares the total value of the contract, something similar to Air Canada declaring the full cost of a flight, not less all the other appendages.

3400   Is this really to educate the consumer to the magnitude of the decision they're making or the implication of it?

3401   DR. MIDDLETON: Yes, I think it's the magnitude of the decision. So certainly, the move to put the monthly cost in is great, but I use Australia as an example where there's always a little thing at the bottom, it's always in fine print, but it says "This contract will cost you $2,400 over 24 months," and I think given the magnitude of these decisions of what you're contracting for, it is useful information to have.

3402   Obviously, we can do the math ourselves but sometimes just seeing that written there really helps us understand what it is we're agreeing to.

3403   COMMISSIONER SIMPSON: So the description of services, monthly cost, device cost, one-time payment cost, payment terms, independently, not aggregated, is not enough in your mind?

3404   DR. MIDDLETON: I think it's just nice to have that total figure. So add up the device, add up the monthly cost that you've agreed to, and give it to me over the term of the contract, so multiply it by two or multiply it by three, whatever that contract is. Yes.

3405   And presumably it's just simple math, you just add another line in here and your spreadsheet calculates it or your system calculates it for you.

3406   COMMISSIONER SIMPSON: Yes. Okay.

3407   With respect to inclusion, some kind of a statement or disclaimer with respect to the speed of the data service you're buying, I'm not a technical expert and I know -- I choose to believe that there's a difference between buying Internet services where speeds are variable and purchasable on tiers, but there may be -- and we'll let staff figure this out -- the limitations in terms of the carrier you're choosing because some carriers are adopting technology that is different than others and I don't know that that is a -- it may not be a realistic ask.

3408   DR. MIDDLETON: Yes. What I'm thinking about there is more on the mobile broadband side. So because this Code applies also to provision of, say, a standalone service, if I buy a standalone mobile broadband service, I should know that you're guaranteeing me a speed of 4 megabits per second or 10 megabits per second, so just asking for that. If that's what I'm buying, I think that should be stated there just as it would be in a fixed broadband contract.

3409   COMMISSIONER SIMPSON: As opposed to the cellular data?

3410   DR. MIDDLETON: Yes. Yes.

3411   COMMISSIONER SIMPSON: Okay.

3412   DR. MIDDLETON: Yes. And that, of course, raises the challenge of whether you have slightly separate provisions if it's a standalone mobile -- broadband mobile data versus a cellular service.

3413   COMMISSIONER SIMPSON: Okay.

3414   Back to our opt-in/opt-out conversation. You're taking a position that automatic contract renewals, once a fixed-term contract has expired and you kick into a monthly contract, that the consumer, and particularly the interest groups that you're advocating on behalf of, should be told that their contract is going to end and it should end, and therefore if they don't get around to informing the carrier, their contract will terminate and then they have to go to a brand-new plan.

3415   How is that advantageous to them?

3416   DR. MIDDLETON: Yes. So just to clarify -- first, I will also say we're not advocating per se on behalf of these groups. We are researchers that look at their interests.

3417   COMMISSIONER SIMPSON: Right.

3418   DR. MIDDLETON: But I think what we're looking at there is simply the day that you sign the contract you tick a box saying you would like them to automatically renew it or you wouldn't, and so you've made that decision at the outset as opposed to that decision being imposed upon you, that it will automatically renew unless you make other options.

3419   So the other mechanisms in place as you come to the end of the contract and the continuing over sort of on a month-to-month thing, I think, benefits the consumer. So it's not our intention to have you -- have your service stop the day that your contract ends, but the intention would be that when you signed your contract -- and, granted, if it's three years before, you may have forgotten about this, but when you signed your contract, you were asked, "Do you want to automatically renew this or not?", yes or no.

3420   COMMISSIONER SIMPSON: But there is the potential, though, if you -- regardless of which way you choose at the beginning of the contract -- no, that's not correct. If you choose to not have your contract renewed but ask for the option of being -- of granting permission, you're in that same kind of zone as you are with a pre-paid contract -- or a pre-paid cell, rather, where it might run out at the most inopportune time or where caps are imposed where, all of a sudden, you lose your service.

3421   How is that different -- I mean, I can't conceive of why a consumer would want, even in the smallest sense, to put themselves at risk of losing the service because of negligence in getting another contract.

3422   DR. MIDDLETON: Yeah. Well, I think we -- I think they just should be given that option, so I would suggest that many people would say, "Yes, please, automatically renew it", but if I don't want it automatically renewed, give me that option up front instead of saying by default it will renew.

3423   COMMISSIONER SIMPSON: And with respect to mobile premium services, we've heard a lot about that. This is an issue.

3424   We'll be talking to the carriers throughout the week on this issue, but I'm not sure, again, opt in/opt out is within the scope of the hearing or the scope of jurisdiction of the Commission because it may be a consumer-related issue that involves other legislation.

3425   And for example, we're dealing with opt in/opt out with anti-spam legislation --

3426   DR. MIDDLETON: Yeah.

3427   COMMISSIONER SIMPSON: -- and it may require an action separate from something we can do in this hearing.

3428   DR. MIDDLETON: Yeah, fair enough.

3429   COMMISSIONER SIMPSON: But we note it. Yeah.

3430   DR. MIDDLETON: And I think the principle is if there -- if it's possible, then people should be asked, "Do you want this automatically or don't you?"

3431   So that's really the point there, is just giving people that option to answer that question.

3432   COMMISSIONER SIMPSON: Okay. Working our way through the list, on D4.1, you said to the best of your knowledge, there are no government-mandated fees.

3433   You're right; none that we impose.

3434   DR. MIDDLETON: Yeah.

3435   COMMISSIONER SIMPSON: But this is a sticky area because sometimes when we do something that our jurisdiction doesn't like, we get attributed --

3436   DR. MIDDLETON: Right.

3437   COMMISSIONER SIMPSON: -- with a CRTC tax or something along that line, and it sort of sticks in our throat as much as yours, but there it is.

3438   It is a catch-all, a necessary catch-all, in the Code and you -- we may have a mutual understanding for the need of it and you may want to, if you choose to, modify your request to have it removed because --

3439   DR. MIDDLETON: Yeah.

3440   COMMISSIONER SIMPSON: -- I think we need it.

3441   DR. MIDDLETON: Fair enough.

3442   I guess our concern was that, in a sense, we were legitimating government mandate and fees by saying they existed, whereas the moment, Canada is pretty clear they don't charge a mandated fee any more.

3443   COMMISSIONER SIMPSON: No.

3444   DR. MIDDLETON: And so by putting it there, you're sort of saying yeah.

3445   COMMISSIONER SIMPSON: Yeah.

3446   DR. MIDDLETON: But I understand the flip side of that.

3447   COMISSIONER SIMPSON: On D4.3, "unlimited should mean unlimited", I think we're hearing a lot of individuals, both WSPs, you know, wireless service providers, and consumers and in groups across the board thinking this has to be revisited. So I think it's a -- it's got traction.

3448   DR. MIDDLETON: Yeah.

3449   COMMISSIONER SIMPSON: But we don't know where it will go. It's -- but it's on the record.

3450   Moving on, this starts to move into the social policy area, but on D5.1, you say you should note government action and other jurisdictions to reduce roaming rates and clarifying information on rates is not enough to improve consumer outcomes.

3451   I think that's a statement of debate. It may be a statement of fact. But it really starts to play into the whole issue of consumer behaviour and consumer education as opposed to something that regulatory prescription should be dealing with.

3452   The roaming contracts that are of a remote nature, of a third-party nature to a core carrier that you subscribe to for your phone are the offending individuals when they have punitive rates, but it really -- do you not think that it really starts to get into the grey area of how much consumer education is required or consumer responsibility to ensure that they've done their part to not have bad things happen?

3453   DR. MIDDLETON: Yes, absolutely. I think that consumers need to know what they agree to and, when they go somewhere, what will happen. But if you take the European Union as an example, the regulators there have said the roaming rates need to come down and here's the schedule that they need to be at over the next -- and I can look up the documents. We'll refer to them.

3454   But there is a specific schedule that says these are what the rates should be, both for voice, text and data, over time.

3455   So yes, clearly making it easier to understand what the roaming rates is a first step, and it's outside the jurisdiction of the Code to look at that. But I think it's important to understand that simply putting it in the Code will not miraculously solve all the problems with roaming.

3456   COMMISSIONER SIMPSON: This may be an area now for Dr. Crow in moving into seniors and individuals with disabilities.

3457   Your opening comment indicated that a wireless device provides an additional level of security and a sense of security and that the increasing use of the phone creates an increasing reliance on this type of device.

3458   First off, with respect to accessibility and the general nature of your observations of what the industry should be doing to make its product or its devices more accessible and more usable, have you, in your research, wandered through our 2009-430 decision which had six paragraphs with respect to obligations for disability to the wireless industry? Did you get that far?

3459   DR. CROW: Not specific. I have looked at the CRTC recommendations around, and we have lots of legislation around what kinds of ways we can make these devices accessible, so I do think that those are important. There are issues around the ease of use, the physical -- the physicality of the device.

3460   COMMISSIONER SIMPSON: I'll help you out a bit.

3461   We have an entire section in this decision dedicated to mobile wireless devices, and it's too long to read, but it sets the table, although perhaps not to the complete nature that you're asking for -- but it does set the table with respect to expectations on accessibility with respect to everything from availability of devices that are adaptable or suited to specific groups and also accessibility and provision of information in various formats, both on websites and in printed material and other forms, as well as, you know, a plethora of other items.

3462   And it might be helpful to have a quick look at that before you --

3463   DR. CROW: M'hmm.

3464   COMMISSIONER SIMPSON: -- complete your final submission because I think we're getting there.

3465   No one, if you talk to the disability groups, is satisfied with the progress we're making because words have to turn to action, and this is obviously where things fall short of the objectives. But I think it's something that you should have a look at --

3466   DR. CROW: Absolutely.

3467   COMMISSIONER SIMPSON: -- because the Commission, I think, is enlightened to this issue. But it still may reinforce your point that the industry has not perhaps moved as fast as we would like. Okay.

3468   DR. CROW: Could I just --

3469   COMMISSIONER SIMPSON: Yes.

3470   DR. CROW: -- go back to the issue around security?

3471   COMMISSIONER SIMPSON: M'hmm.

3472   DR. CROW: I think it's important to pay attention to the way in which the devices, mobile devices, are marketed to seniors or the way in which it gets represented to them and then how that shapes their use.

3473   So a number of seniors are interested in the devices not for security reasons, that they want to communicate with their grandchildren and do.

3474   So there are -- I think it's important that the representation of the mobile devices and phones are not just about this is going to improve your safety or security or somebody can help you in an emergency situation because it then makes the seniors feel vulnerable, that this is the way in which they're supposed to be using this technology.

3475   So I think that that's important in terms of some of the issues around advertising to youth, that this isn't about -- about just being -- you know, that they're going to be helped out in emergency situation. They want to use the devices for other kinds of things outside of just security.

3476   COMMISSIONER SIMPSON: Moving -- still on the subject of seniors and disability groups, but moving back to a policy question regarding the Code, are there -- other than what you presented today, are there other areas that you haven't touched on that you think the Code has to specifically address for these groups?

3477   Is there anything -- this is a clean-up question.

3478   DR. CROW: I think the -- some of the issues that we've raised or that the seniors have said about mobile technologies, the Code -- are larger than the Code, right.

3479   COMMISSIONER SIMPSON: Yeah.

3480   DR. CROW: But the Code is an important part of the interface around what kind of telecommunications we want to have on offer and make available to Canadians so they can participate.

3481   And one of the, you know, most important findings of our research with the seniors was that communication matters and they want to be able to communicate and they need it to be affordable to be able to participate in it. So that's one of the important takeaways from talking to the seniors about mobile technologies.

3482   COMMISSIONER SIMPSON: Thank you.

3483   This is my -- I think will be my last question with -- specifically with respect to the Code and then we can move over to the broader nature of your -- of your appearance here.

3484   You had specifically mentioned individuals who are living in a rural environment and they, too, are operating at a disadvantage sometimes because of that choice or necessity.

3485   And I am wondering if you feel that there should be specific inclusions with respect to the consumer's ability to exit contracts in instances where they have experienced significant service delivery problems, not just issues of cost or provision of the bells and whistles of the nice to haves, but of the need to haves.

3486   Do you think that there should be a provision in there for poor or no service in issues of rural customers?

3487   DR. CROW: The seniors would tell you there should be. Yes, thank you.

3488   COMMISSIONER SIMPSON: Okay.

3489   Now, if I may, I would like to go into the background of where you were coming from with respect to your research undertakings. I'm going to rely on the work I have done with respect to Orange in the United Kingdom and also the work that was done by the Brotherhood of St Laurence in Australia and how they were working with the regulator down there.

3490   Dealing with Orange first, what I found interesting as I got into their declared policies on their website was -- and I was reviewing the mobile guide for good practices for disabled and elderly customers in the UK -- this particular utterance of this company was really based a very heavily on a larger framework that was prepared and produced by the EU with respect to discrimination of these groups.

3491   What I found interesting -- and I'm asking to compare notes here -- that as you read through their good practices guide it was filled with good intentions, but not a lot in the way of specifics with respect to actual delivery.

3492   It talked, for example, about:

"It seems that the Orange policy is based on a framework of the EU policy preventing discrimination..."

3493   This is Part III of their 1995 Discrimination Act:

"... and it's also built on general conditions of entitlement..."

3494   Which is another document in the EU

3495   The main thrust seems to be on the denial of service to these parties, not the provision of good services. And there are sections on reasonable adjustment provisions stipulating provisions of (a) persisting in the devices and services.

3496   In other words, it's a good intent document, but it's not necessarily an assurance of good delivery and I'm wondering if you have a similar take on that and, if so, why do you think it's something that is a benchmark that we should be looking at when I don't think it does enough?

3497   DR. MIDDLETON: I think with many of these things we have to start with the good intents, so I think it's important to simply be aware of what's out there as a starting point. And I agree that we need to go well beyond that, but I think our intention in bringing -- in mentioning these documents is to say we don't need to start from scratch. There has been some other work out there, it isn't necessarily finished, but it's really about bringing awareness to some of this existing work and not -- as you say, not taking it as being the final way of doing this, but just simply saying: Here are some things people have already been thinking about, let's be aware of that as we start to tackle these issues or continue to tackle these issues so that we are not starting completely from scratch ourselves.

3498   We can respond to that a little bit more. I must admit I don't have it in front of me, but we can respond to that a little bit more if you like.

3499   COMMISSIONER SIMPSON: It was great reading, but I couldn't help but get a little puffed up as a Commissioner because when I looked at what it was implying and then I looked at the framework of what we have been working on, as I say, one of the more substantial hearings I sat on as a rookie Commissioner was the accessibility hearing and I think we came out with a lot of good stuff that I called attention to earlier.

3500   But not to throw a bone to the wireless providers, but they have been marching in that direction, not just because we have been pushing them there, but it is good business.

3501   One of the first things that I came to recognize is that I am gradually -- as I am approaching my 65th year of age in a few years -- becoming more and more sight capable with my eyes going south and my hearing reflecting bad habits when I was a kid listening to music, but those in varying and graduating forms are disabilities that -- and when you look at the chunk of the marketplace that is graying in this country and around the world, those providers are recognizing that this is a consumer opportunity and I choose to believe that they are walking in that direction.

3502   So again, sort of bringing you around to another way of looking at it, it might be informative to review what we have done and what the industry is doing in Canada, see if it's actually a little further than perhaps you had thought.

3503   The other area that I dug into was the Mobile Matters: The Youth Advocates Project which I really found interesting because this, for those who haven't read it, was a project put together by an NGO in Australia that looked at economic and social implications of wireless devices, Smartphones and technology in youth and the subject matter was I think grade 11 and grade 12 students for the most part.

3504   I didn't get a chance to see what the methodology was, but essentially they were taking a very broad view that there are two areas of concern.

3505   One is the utility of wireless services, Smartphones and other wireless devices and how they are, in their opinion, reaching a certain sort of essentiality with youth because, as a lot of the anecdotal comments that I read were stating, we are not just goofing around on these devices, this is how we communicate today. And to the credit of the regulator ACMA in Australia, they were trying to get their heads around this as well in that they see a paradigm shift from how other generations went about communicating, you know, from fax and cable to e-mail and telephone and wireless and now texting.

3506   And then the other side of it to a lesser extent dealt with the economics.

3507   But where I would like to start is to hear why you think that an individual who is a high user of these services but economically challenged should be given a break somehow, to the extent that they be given some kind of preference or differential treatment because of their -- I don't want to call it a hardship, but their economic status?

3508   DR. SHEPHERD: Okay. I think the issue is not necessarily about differential treatment, it's about sort of bringing down the costs to all consumers, and that would include youth.

3509   But definitely in our research we found that mobile devices are indispensable for youth everyday communication and that basically the wireless infrastructure is the primary infrastructure that they use to communicate.

3510   So a lot has gone into, for example, the landline telephone infrastructure in this country and so that has been built up in a certain way that I think the wireless infrastructure has not necessarily and that's sort of where we see the everyday concerns of youth being mapped onto the policy issues.

3511   So I would say that the concerns of the younger people in our study is to bring down the costs in general, because they also recognize that they will be using these services for probably the rest of their lives, so they are just at the beginning of a life cycle of using wireless services.

3512   So I think their concern is not necessarily to have special treatment, but to bring down the prices in general.

3513   And to add to that, a lot of the younger people we talked to -- so these are let's say 17, 18, 19-year-olds -- still have devices on like a family plan for example. So there are ways in which they don't necessarily even pay for their service, but at the same time they are still concerned with the costs because they know, through their parents yelling at them usually, how much it costs and these are indispensable communication devices for them. So it's hard for them to sort of like reconcile the high costs that they know are coming with the sort of necessity of using these devices.

3514   COMMISSIONER SIMPSON: Yes, but I want to live downtown in a nice condo because it's closer to work and it costs three times as much money as living in the suburbs. I mean there's a desire and a cost implication and I could even gild the lily by saying and I want to get out of my car and reduce my carbon footprint, but somebody -- you know, condo manufacturers should recognize this as a responsibility and reduce the price of urban condos?

3515   I just don't see how that squares, at least not initially.

3516   DR. SHEPHERD: Well, I think with the cost the issue is more that it's difficult for them to tell whether the cost is warranted for that service or whether it's a price gouging type of issue.

3517   So, for example, one of our participants discussed voicemail being an additional $10 a month cost which seemed ridiculous and so the results of that was that he just didn't have voicemail and didn't ever, you know, get messages.

3518   So there are ways in which, yes, there are compromises that young people engage in in terms of like negotiating the high costs, but at the same time it's not necessarily evident why the costs are so high in a lot of cases.

3519   COMMISSIONER SIMPSON: Yes. And I can understand why because I have spent five years trying to understand how the whole telecom system works and it's -- it's very complex, but -- it's not as simple as you think. You know, it's a multi-multi-billion dollar infrastructure that in Canada has to get paid for by a very small number of people in a very large geography when, you know, you look at OECD examples and cell phone penetration in markets like Korea and Israel, you know, why can't we be like them? Well, they have a footprint the size of Vancouver Island and 10 times as many people so the network and the system doesn't have to be as big. Now, that's not something that consumers really care about, but it's a reality that we are dealing with here. So enough of that.

3520   My next question for you is, to the credit of this study it dealt a lot with trying to identify usage behaviour and this youth consumer who, very rightfully as you say, is becoming the leading edge of a new marketplace, a new reality 20 years from now, but to the credit of all the individuals that participated, in that there was a lot of dialogue about the need for education and to prevent the sticker shock. I think on the front page of the study was one comment about how my sister got a cell phone and the next thing you knew she had a $3000 bill.

3521   As I look at all the comments that have come in in this very open process, by far, even in the last two days, into the high 90s of percentile -- or low 90s of percentile, the consumer is expressing pretty much an isolated concern for cost and the need or the recognition for the need for education and information that will help them make informed choices seems to be very low on that particular totem pole. And I'm wondering as an individual that practices a certain element of sociology, if you could tell us what we can do to help change and move the needle on that to make the consumer, the youth consumer recognize that they have to educate.

3522   DR. SHEPHERD: So I think on the issue of consumer education for youth, one of the, I guess, gaps that the youth in our study identified was a lack of targeted resources for youth that are not buried on a website somewhere that are out there. So they wanted, like I said, celebrity interviews and viral videos and a Facebook page and more sort of public and -- as well as accessible resources for them instead of --

3523   COMMISSIONER SIMPSON: Talk to them in mediums they use.

3524   DR. SHEPHERD: Exactly.

3525   COMMISSIONER SIMPSON: Yeah.

3526   DR. SHEPHERD: Multimedia, yeah. And one of the, I think, points, to just go back to the cost issue just for one second, is that the youth in our study at least were very savvy about the telecom industry and they know that companies are making record profits. So they -- I think they're aware that the costs are not necessarily 100 percent about our geography or the sort of challenges that our geography poses to service provision. So I think they know to some extent that the prices are potentially inflated on certain services.

3527   And that being said, I think having more resources for how to calculate actual costs of service. So as we mentioned today, what does it cost to send, you know, megabytes worth of data, for example. Like, what are the real costs of doing those things. And I think those kind of resources would be very useful for not only young consumers but for seniors as well who want to understand how data works and just for consumers in general as part of sort of demystifying cell phone contracts. Because I think a lot of the time, and you've seen a lot of the comments on the online portal, that it's difficult at times for consumers to tell what they're being charged for, that fees seem to come out of nowhere, there's hidden fees, the issue of fees that get added on midway through a contract, for example. So all of those kind of issues around transparency and the accessibility of your contract and your billing statements is part of what we suggest for having consumer resources around those issues. So having, yeah, resources about what it actually costs.

3528   COMMISSIONER SIMPSON: Just for the Chair's knowledge, I just have a few more questions, Mr. Chair.

3529   On the subject of contracts, you had opined that we might consider standard language contracts for all providers. And I would put to you that that might put the providers in a position where they can't be creative and offer different options to different markets, different age groups, different demographics. Does that cause you to reconsider?

3530   DR. SHEPHERD: I would say in terms of standardization it's not necessarily that all the contracts should be the same or, you know, blanket across the board but more than each clause could have a standard sort of way of wording that service or that clause.

3531   COMMISSIONER SIMPSON: M'hmm.

3532   DR. SHEPHERD: So it's more about being able to compare contracts from different providers more readily, whereas right now they're all a bit more individuated.

3533   COMMISSIONER SIMPSON: M'hmm. On the education and specifically on the consumer tools that should be or might be available to help a consumer be a better user of the services they're buying, those tools, are they the responsibility, do you think, of the regulator or the government to provide versus -- because, again, you said at instances where Ofcom in the UK was taking this responsibility for consumer education, providing consumer tools. I think so, too, is Acuma. Or do you think that it's up to the provider to -- as long as the tools are sufficient and effective, that the provider should provide these tools to better use their specific service to that specific customer? Do you think it's the government's responsibility or an industry responsibility?

3534   DR. SHEPHERD: I think there is a responsibility at least to -- if not create the resources, at least to accredit certain resources so that it's not sort of like a paid advertorial situation, that you have some sort of third party impartial resources for consumers that they can trust.

3535   COMMISSIONER SIMPSON: M'hmm. I had -- second to last question. I had asked the Canadian Wireless -- CWTA yesterday if they thought that -- like other industries, the alcohol industry being one, where they have a responsibility to put out a moderation message. And they indicated that they would be willing to do this. At least that's what I thought I heard. Would this go -- be a step towards satisfying your concerns that the industry is taking a proactive role? If they were to put a program together, again using the type of mediums that you're recommending that reach elders, people with disability and youth, would they be doing the job, do you think? Would it be effective? Would it help?

3536   DR. SHEPHERD: It would help. I don't think it's sufficient though, yeah.

3537   COMMISSIONER SIMPSON: Okay.

3538   DR. SHEPHERD: A technical question. Locking and unlocking telephones has been a really interesting issue and I'm interested to see if you have a position on whether unlocked phones would help in combating bill shock because, as you've indicated, particularly with younger people, that it gives them the flexibility to be able to modify their phone with a SIM chip for the country they're in if they're travelling, if they're backpacking around Europe. Would this be something that you'd advocate, unlocking of phones as a condition of purchase?

3539   DR. SHEPHERD: With the youth that we spoke with, unlocking phones was definitely something that they were concerned with and they mentioned experiences such as travelling abroad and the ease of getting a cell phone, for example, in Europe or wherever they were travelling and buying, you know, a pre-paid card for 5 Euros or whatever it is and having just that ease of use abroad, as opposed to when they're here and have such sort of, as they felt, convoluted contracts and conditions of service. So I think unlocking would be one strategy to address that.

3540   COMMISSIONER SIMPSON: Have you seen any research or have any indication that that also might create a security or a risk problem because phones are unlocked? And we know that right now theft is appearing to be on the rise. Would that be a cause for concern, arguing against the idea of locking?

3541   DR. SHEPHERD: Well, this is not something that we have done in our research, but I would say based on the input that we have had from young people in Canada, that a lot of their decisions about their phone use, they mentioned, was a sort of individual choice. So I think with something like unlocking, for example, again it's like an opt-in kind of situation where, you know, the consumer takes on a certain amount of responsibility if he or she chooses to do that.

3542   COMMISSIONER SIMPSON: Okay.

3543   DR. SHEPHERD: M'hmm.

3544   COMMISSIONER SIMPSON: And my last question. You had as a group indicated that there should be a trial period for plans to ensure that they're right for their customer. Could you just elaborate on what the perfect trial plan looks like. Is it a low cost, no cost? What is it?

3545   DR. MIDDLETON: I think it's that question of flexibility. And to their credit, certainly some of the providers do this, where there's a bundle of data and it slides a little bit, but I think we're looking at an option perhaps in the first couple of months just as people understand what it is they really do. Again, as we've said, it's hard to know what data you actually use and there's some evidence that people overbuy data plans because they're concerned about hitting these charges when in fact they use very little data. So I think to have probably a couple of months experience would allow people to really understand what they needed. Or, on the flip side, just to have that information much more easily available upfront. So that when you knew going in, you had a much better sense of exactly what it is you were likely to use.

3546   But that said, certainly as we've discovered with seniors, often people find all sorts of things they want to do that they didn't know they could do, so in that instance they might want to increase. That said, I can't imagine there would be any provider who would be unhappy if they came to you and said we want to buy more service. So it's really --

3547   COMMISSIONER SIMPSON: Yeah.

3548   DR. MIDDLETON: -- the flip side of that that's the bigger concern, when people overbuy data.

3549   COMMISSIONER SIMPSON: Just a postscript. It was in your presentation earlier this morning. For the record, do you support the notion that there should be an a la carte-type service for people with disabilities so that they have the option of not buying a service they can't use?

3550   DR. MIDDLETON: Yeah. Yeah. I think -- absolutely. That said, though, certainly the simpler these things can be the better.

3551   COMMISSIONER SIMPSON: M'hmm.

3552   DR. MIDDLETON: As soon as you get into a ton of a la carte it gets complicated, but very clearly if somebody is not going to be able to use something, then they should have an option not to buy that.

3553   COMMISSIONER SIMPSON: M'hmm. Okay.

3554   DR. MIDDLETON: Yeah.

3555   COMMISSIONER SIMPSON: Thank you.

3556   THE CHAIRPERSON: Madam Poirier.

3557   COMMISSIONER POIRIER: Hello. I really appreciated the conclusions of your research. It's very helpful. And I hope all the wireless service providers are listening because it should be part of their marketing approach. Because I think we take for granted that youth know everything about cell phones, data, roaming, and so on. And we tend also to forget about senior citizens. We are all baby boomers and will be senior citizens. Naturally we will have been raised in that context that is different, but still your conclusions are very interesting and very helpful.

3558   The only topic I want to raise is about D1.4, "Personalized information summary". Okay? I haven't heard anything specific. Maybe I missed a few of your comments. But I was wondering is it a good solution to go in the direction of your conclusions to present a personalized information summary to all the consumers so they would know exactly what is the amount to pay, what are they -- what is the contract giving them and maybe they could opt in, opt out, see what is good, no good for them, and add or, in the opposite, restrain the contract. So I'd love to have your comments on this.

3559   DR. SHEPHERD: Yes, thank you. Yeah, that was one element of the working document that we really appreciate. I think that totally speaks to a lot of what we're saying about specific consumer groups and the issues that specific groups have in terms of understanding what exactly they're signing into, whether it's youth or seniors or consumers in general. So having that personalized information summary is definitely important and I think is one of the key contributions that's in the working document.

3560   We just wanted to sort of -- I guess our comments today were more about finessing some of the elements in the personal information summary and clarifying some of the elements. But I think having something like that and keeping it simple, again, is the sort of key mantra, I guess, that we wanted to emphasize. But having something that summarizes the costs and summarizes the total costs of what the person is agreeing to in the contract would be very helpful to have upfront.

3561   COMMISSIONER POIRIER: Okay. Anything you want to add to the draft code we presented in regard of personalized information summary? Any other thing you feel we should put in it?

3562   DR. SHEPHERD: I think the issue of having, like, a total cost stated somewhere would be a really good addition to make.

3563   COMMISSIONER POIRIER: Okay. The one you mentioned earlier, it's the only one? No other comment? Thank you very much.

3564   DR. SHEPHERD: Thank you.

3565   DR. MIDDLETON: Thank you.

3566   THE CHAIRPERSON: I think you answered a question I hadn't asked yet about how you measured success. So I take it in your final comments you will be providing -- it seems to me that you've got a unique perspective and skill sets coming from where you are in this to help us come up with performance measures of this initiative? Is that your intention?

3567   DR. MIDDLETON: Yeah. We can certainly -- I was thinking how I would answer that question when you asked it previously, and so we can elaborate on that.

3568   THE CHAIRPERSON: That would be appreciated.

3569   DR. MIDDLETON: Yeah. Yeah.

3570   THE CHAIRPERSON: And, you know, this will be a bit of a struggle for us because all kinds of performance measures churn, right? You can interpret in several ways a number of complaints. One can interpret a number of ways. And so we're going to have to probably go down the road of not so much subjective but qualitative measures to reach it. And so I think you -- it would be useful to have your perspective on that. Not to exclude quantitative measures, but, I mean, what would we be looking at to measure success. Sorry?

3571   DR. CROW: I think uptake.

3572   THE CHAIRPERSON: Uptake of?

3573   DR. CROW: Of the devices, people using the devices is going to be an important measure.

3574   THE CHAIRPERSON: Is -- sure, I understand.

3575   DR. CROW: Yeah.

3576   THE CHAIRPERSON: Because you're seeing this within a broader picture of how do we --

3577   DR. CROW: M'hmm.

3578   THE CHAIRPERSON: -- encourage a digital economy.

3579   DR. CROW: Right.

3580   THE CHAIRPERSON: Okay. Good. Excellent. Thank you very much. Very useful and very appreciated. Those are our questions for you.

3581   DR. CROW: Thank you.

3582   THE CHAIRPERSON: Thank you very much.

3583   So we'll take a break until -- lunch break until about 1:20 and we'll start with Rogers at that point. Thank you.

--- Upon recessing at 1216

--- Upon resuming at 1319

3584   LE PRÉSIDENT : Donc, à l'ordre, s'il vous plaît.

3585   Nous allons entendre maintenant les représentants de...

3586   THE SECRETARY: Rogers Communications Partnership. Please introduce yourselves for the record and you have 20 minutes for your presentation.

PRESENTATION

3587   MR. ENGELHART: Thank you very much.

3588   Mr. Chairman and Commissioners, I am Ken Engelhart, Senior Vice President of Regulatory for Rogers Communications. With me today:

3589   - to my left is Raj Doshi, Senior Vice President Products;

3590   - to Raj's left is George Weber-Kramer, Director Voice, Portal and Content;

3591   - and to his left Jim Smith, Vice President Core and Service Networks.

3592   - to my right is Dawn Hunt, Vice President Regulatory;

3593   - to Dawn's right is Howard Slawner, Director Regulatory Matters;

3594   - and to his right is Julie Laurence, Senior Legal Counsel.

3595   Behind me:

3596   - starting from my left is Charit Katoch, Director, Regulatory Economics;

3597   - Kim Walker, Ombudsman;

3598   - Deborah Evans, Senior Manager Regulatory Policy;

3599   - and Josh Yarmus, Legal Counsel.

3600   As we look at the Commission's draft Code we believe it is trying to give Canadians worry-free wireless service. We agree with this objective and have been working to achieve it in our own services.

3601   Historically, the rapid pace of wireless innovation and change has resulted in more complicated contracts, more complicated pricing plans, and more complicated bills. While customers appreciate the new services they are asking for more simplicity. They want simpler plans and predictable bills.

3602   Rogers has already taken steps to implement worry-free wireless services. Last fall, we launched simplified pricing plans, many of which include unlimited voice, unlimited text and unlimited long distance.

3603   Just recently, Rogers began including call display and voicemail in all of our in-market plans.

3604   And finally, this past Friday, Rogers announced that we will be rolling out our new data roaming rates this spring that will bring the same type of simplicity and price predictability to U.S. data roaming.

3605   We support having a federal wireless consumer Code. Having reviewed the CRTC's draft consumer Code we submit that the following sections should be adopted as currently proposed: A2, A3 (either option), A5, C1, C2, C3, D1.1, D1.2, D1.6, D2.2, D3.2, D3.3 (Option 2), D3.4 (Option 1), D4.1, D4.2, D4.3, D5.3, D6.1, D6.2, D10.2, E1 and F1.

3606   For the other sections, we believe that consumers' interests will be served through some clarifications or some changes:

3607   Rogers agrees with clause A1. However, since it is a consumer Code, the application section should say that the Code applies only to consumer agreements and not to commercial and corporate accounts.

3608   Having multiple wireless codes is a concern. Instead of making the use and enjoyment of wireless services simpler, multiple sets of rules will make it more complicated for both consumers and carriers.

3609   Canadian consumers should have a consistent set of rules so they understand what their rights and obligations are at all times with no confusion, no matter where in Canada they are located.

3610   Our customer contracts more than doubled in size just to accommodate Quebec and Manitoba's rules. Each new Code will make it grow larger and when Canadians move about the country, the confusion factor will grow.

3611   What rules will apply to a student from Ottawa who buys a phone in Gatineau and later takes it to school in Halifax? Should the rules be different for her sister who goes to school in Montreal?

3612   Family plans, which our subscribers love, will have the potential to become subject to different Codes.

3613   Multiple sets of rules also increase costs for carriers. Carriers will continuously have to change their systems as multiple governments and regulators make periodic changes to their rules.

3614   Finally, the proposal to apply the federal or provincial provision that is most favourable to the consumer will create ambiguity and inevitably result in more disputes.

3615   Who will decide which clause is more favourable? Is terminating service at the end of a contract term, the rule in Nova Scotia, more customer-friendly than extending it on a month-to-month basis as the Commission proposes?

3616   Failing to make the correct choice could subject carriers to penalties. This clause creates uncertainty when the Code is supposed to be providing clarity. That is why a single national Code is needed.

3617   For greater clarity, section A6 should be amended to specify that a customer can cancel the contract within 15 days upon return of the device.

3618   With regard to the question of when the Code should come into force, Rogers supports the CRTC's goal to move as soon as practically possible. There is no reason why at least some of the recommendations could not be implemented in the short term. Those changes requiring more significant work can then be allotted additional time.

3619   Rogers therefore recommends a staggered implementation process. For those Code requirements that do not require IT system modifications; for example, paying interest on security deposits, a three-month period should be provided.

3620   For those changes requiring more implementation time; for example, distributing copies of the code to all stores and online, six months should be given.

3621   Finally, any new rules that require significant IT solutions, such as monitoring tools and alerts, should be given 18 months to implement. We recognize that the 18-month period is substantially longer than the 6 months proposed by the Commission's draft.

3622   However, making changes to a carrier's critical network and billing platforms is significant and highly sophisticated work and cannot be rushed. That is why the Australian regulator ACMA gave 12-18 months to implement its consumer code while the FCC gave American carriers 20 months just to implement alerts.

3623   In fact, implementing the Code is more complex than the implementation of wireless number portability where Canadian carriers were granted 15 months. Tighter timelines will only result in mistakes as well as delays to other critical IT work such as the rollout of new services.

3624   Dawn...?

3625   MS HUNT: Once implemented, the provisions of the CRTC Code should be applied on a going-forward basis only, as per Option 2 in section B2.

3626   To begin with, it is unfair to subject a party to a penalty for failing to comply with a regulation that did not exist at the time an agreement was entered into.

3627   Secondly, all the provinces instituted their consumer codes on a prospective basis.

3628   Thirdly, having to apply the new rules to the myriad of existing and grandfathered price plans would be an IT nightmare. Of course, the Code would apply to contract renewals where the customer has a new term commitment.

3629   With respect to the provision of additional information specific to pre-paid services, many of the provisions of the Consumer Code are simply not applicable to pre-paid services. Pre-paid customers do, however, need to understand how their service works. Option 1 in section D1.3 addresses this need. It ensures that pre-paid customers will clearly understand how pre-paid services function and how to manage their balances.

3630   On the specific issue of pre-paid credits, we are unsure what the last sentence of Option 2 means. If the commencement of the prepaid service cannot be limited in time, we agree. The card can always be activated. However, once activated the dollar amount should not last forever.

3631   These are not gift cards for goods. They are a billing mechanism for a specific service over a specific period of time. Requiring pre-paid services to be unlimited in time will fundamentally change the economics of the service.

3632   For the provision of the Personalized Information Summaries, we would rather not layer on another document for the customer. If the purpose of the summary is to enable comparison shopping we would be happy to print a copy of the draft contract for the customer. If the purpose of the summary is to provide all pertinent information about the customer`s service, Rogers already summarizes it in our "Walk-Out-Working" packages.

3633   If the Commission decides to require a summary, Rogers recommends making some slight changes to the clause's wording. The section currently requires that a summary be provided before there is an agreement. This would make telesales and renewals more difficult.

3634   Customers who have a phone want service the minute they hang up after negotiating a contract. They will not like being told to wait until Canada Post delivers a CRTC-ordered summary before they can call their friends. Instead, summaries should be required as a condition precedent to service activation, only on request.

3635   Similarly, requiring carriers to provide a permanent copy of the contract prior to the start of the service is not always possible or desired. Again, customers expect their service to be activated immediately.

3636   With regard to an alternate format for customers with disabilities, Rogers proposes electronic files that these customers can access with software that increases font size or reads the document.

3637   Making changes to contracts during the term of the agreement is one of the areas of most concern for consumers. As we said in our written submission, carriers should not be allowed to make fundamental changes to a wireless service agreement during the term of the contract. Prices, term length, and included volumes should remain the same for the full term.

3638   However, some flexibility is needed for optional monthly and pay-per-use services which the customer can add and drop at their convenience. Since there is no customer commitment for these types of services for the term of the contract, carriers should be allowed to change them.

3639   With respect to cancellation dates, Rogers recommends that customer cancellation notices become effective the day the service provider receives them. It is not reasonable to expect a carrier to effect a cancellation prior to its receipt.

3640   Raj...?

3641   MR. DOSHI: Rogers is a strong supporter of the use of monitoring tools and alerts to help make our wireless service worry free. One of the biggest sources of customer frustration has been the difficulty in keeping track of their usage and unknowingly generating a large bill. Rogers has several monitoring solutions available at no charge on Smartphones and online to ensure our customers can manage their usage and are not surprised.

3642   As mentioned earlier, Rogers has already taken -- introduced simplified pricing plans that typically include unlimited voice, text messaging and long distance, thereby eliminating the risk of incurring additional fees for those services all together.

3643   Rogers' new U.S. roaming pay per use rate will give customers 50 MB of service per day in the U.S. for $7.99. We believe that it will go a long way to making U.S. data roaming worry free, easy, and affordable.

3644   Along with these price plans, Rogers also provides monitoring tools and notifications to help our customers. They can go online or download a free app to monitor their domestic voice, text and data usage. They are also advised when they start roaming including the applicable fees.

3645   Even with these precautions, Rogers recognizes that some customers remain concerned about data services. Unlike voice and text messaging, data usage is more passive and it can be difficult for a customer to understand just how much of their allowance they have used.

3646   That is why Rogers supports requiring near real-time alerts advising customers when they are approaching the limits of their data allowances, both domestically and abroad. These alerts address a real need by consumers and will help them avoid bill surprise from data services, currently the biggest source of unanticipated charges.

3647   With respect, our experience with alerts prompts us to recommend that you slightly modify the number and timing of the alerts in the working draft of the Commission's Code. While customers appreciate tools to help manage charges, they do not appreciate being over-notified, especially when away on vacation or business. Text alerts at 75 percent and 100 percent will provide customers with the information they require without becoming an annoyance.

3648   Rogers submits that providing alerts for voice and text is not worth the expense. These services are rarely the source of surprise charges. Customers are generally aware of how long they speak on the phone or how many text messages they send, and monitoring tools are provided.

3649   Furthermore, most current price plans provide unlimited voice and text messaging and are therefore never subject to additional charges.

3650   Finally, as data continues to grow, usage of these services is actually beginning to shrink. Therefore, spending millions on voice and text alerting platforms will not be money well spent. Providing these alerts domestically would require a major capital investment by Rogers of tens of millions of dollars.

3651   In addition, voice and text alerts for roaming are very problematic because we are dependent on the foreign carrier who may not have updated us on usage for several days. By contrast, capital investment is well spent to provide data alerts, where it matters.

3652   The CRTC's proposal to provide text alerts the first time a customer uses a service that results in an additional fee is also highly problematic. This requirement could impact such services and features as directory assistance, long distance, music subscription services, et cetera. There is no reasonable technical solution to address some of these problems we face.

3653   Finally, Rogers is concerned that the Commission is limiting the scope of alerts by requiring them only through text messages. We suggest that voice, text, and data alerts should all be allowed.

3654   The consumer Code's proposal to cap additional fees once they hit $50 creates so many technical and practical problems that it is, with respect, impossible.

3655   In order to cap a customer's post-paid service, the network must be able to calculate a bill every minute. Post-paid platforms are not designed to do that. Usage is only billed periodically.

3656   ACMA had similarly considered such caps until they realized no carrier had the technical capability of actually doing it. No carrier in the world provides this for post-paid services.

3657   The only instance of a similar cap is the EU data roaming cap. But that cap only restricted a single service, data roaming within the EU, at a limit of 50 Euros.

3658   The CRTC's proposal goes much further, capping all services that create additional fees over a total of $50. This is far more complicated as we would have to track and bill multiple services across different platforms and networks while running an aggregation of each subscriber's total bill amount. Introducing this functionality to our post-paid billing system would be prohibitively expensive.

3659   In any event, Rogers and the other carriers already provide a service to those customers who wish to self-impose a limit on their additional fees. They always have the option to subscribe to a pre-paid service. There is, therefore, an excellent solution already available.

3660   The CRTC's proposal to restrict features upon request again faces technical barriers. Rogers already allows customers to disable certain features. These include text messaging, premium text messages and outgoing long distance. Some services, such as data roaming, can be easily disabled from the customer's device. However, many services, like directory assistance and incoming long distance cannot be similarly restricted.

3661   The Commission's draft code also requires that all hardware come with the data usage disabled, as a default for customers that do not subscribe to a data plan. Most devices arrive that way, but not all.

3662   MR. ENGELHART: Rogers agrees with the CRTC's Option 1 for unlocking devices. This provision empowers customers to unlock their devices shortly after purchase, while ensuring that customers fully understand the terms for unlocking in advance.

3663   In fact, Rogers has just announced that it is implementing this practice, though our initiative provides the means to unlock after 90 days, instead of 30 days.

3664   The Commission should consider adopting 90 days, as well. Most subscription fraud is detected within 90 days, so it makes sense to unlock at that time.

3665   Rogers believes that Section D.8.1 should be clarified. We believe that customers who lose their device or have it stolen should have two options. First, they can cancel their contract, pay all charges up to the date of cancellation, and pay any early termination fee.

3666   Alternatively, they can continue their account, including paying their monthly fee, temporarily block their service, so that no unauthorized usage charges are incurred, and ultimately transfer their telephone number and service plan to a new device.

3667   Due to the differences between landline and wireless services, there is no need for the CRTC to regulate security deposits. Unlike landline phones, consumers always have the affordable option to subscribe to a prepaid service. For as little as $10 a month, a customer can have wireless service.

3668   Finally, Rogers has concerns with both options for disconnections. Carriers should be able to disconnect service for non-payment with 30 days' notice.

3669   However, to protect the consumer, they should not be allowed to disconnect service where there is a legitimate dispute.

3670   They should also be required to implement a reasonable payment plan for customers that need some time to pay off a balance.

3671   In conclusion, Rogers supports the CRTC's objective of giving Canadians worry-free wireless service. The working draft we are discussing today will greatly assist in making this objective possible.

3672   However, the Commission's code must be practical, too, taking into account technical and system limitations, and recognizing that the wide availability across the industry of prepaid and unlimited voice and text solutions largely negates the need for regulatory action in the areas we have just highlighted.

3673   Rogers hopes that the Commission will consider our concerns and suggestions. We would be happy to answer any questions you may have.

3674   THE CHAIRPERSON: Thank you very much. Commissioner Molnar will start off the questioning.

3675   COMMISSIONER MOLNAR: Good afternoon everyone.

3676   I want to begin by getting some clarification around your paragraph 3, where you say that you support A2, A3 -- blah, blah, blah.

3677   Just for my purposes, so we can move forward more easily, is this any different from the positions that you had through your initial submission and your reply?

3678   Have you changed position by supporting any of these?

3679   MR. ENGELHART: I think those are all the same. Later on you will see that we now support unlocking. So I think that's a difference.

--- Pause

3680   MR. ENGELHART: Oh, yes. Raj just reminded me that in D.3.3, we are now fans of Option 2, whereas we used to like Option 1.

3681   And, for the life of me, I can't tell the difference between the two, but my legal group --

3682   COMMISSIONER MOLNAR: Which one, D.3.3?

3683   MR. ENGELHART: D.3.3, that's correct.

3684   COMMISSIONER MOLNAR: What is it?

3685   THE CHAIRPERSON: It's the calculation of early termination fees.

3686   COMMISSIONER MOLNAR: Okay. Thank you.

3687   So except for unlocking and the calculation of early termination fees, your positions are unchanged.

3688   MR. ENGELHART: Yes. I think it's fair to say that, in our comments, we didn't know exactly what the Commission was going to do on our draft code, so some of our positions may have been silent.

3689   But, yes, unlocking is the only thing, I think, where we have really changed our mind.

3690   COMMISSIONER MOLNAR: Okay. Thank you. It just helps me going forward, not knowing exactly what all of those sections are.

3691   Just a little background before I get into the questioning.

3692   You have three flanker brands, as well as the Rogers brand.

3693   Is that right?

3694   MR. ENGELHART: Two, Fido and Chatr.

3695   COMMISSIONER MOLNAR: And, as you are here today, you are representing all of them?

3696   MR. ENGELHART: Yes, we are.

3697   COMMISSIONER MOLNAR: Thank you.

3698   Could you tell me, between Rogers and its associated brands, do you offer any fixed-term contracts that are available at a separate price with or without a device subsidy?

3699   MR. ENGELHART: Fixed-term plans that are available without --

3700   COMMISSIONER MOLNAR: Where there is a different price with or without a device subsidy.

3701   MR. ENGELHART: There are probably some older ones in market, but after the Quebec legislation came in, we looked at it, and the Quebec legislation really says: You don't have a fixed contract without some hardware being provided.

3702   That's really what the Quebec legislation says.

3703   So we looked at that and we said: We should probably roll that rule out across Canada, because it's simpler that way.

3704   And the more we thought about it, the more we thought: This is a way that we can reduce a lot of complaints, because when people get their contract extended, because you are giving them half off or 30 percent off on some rate, there are often complaints afterwards, where they say, "Hey, I never knew my contract was being extended."

3705   But when people get a piece of hardware, for the most part, they know that their contract has been extended.

3706   So we do not currently have fixed-term contracts unless you get a piece of hardware with a subsidy.

3707   COMMISSIONER MOLNAR: So are your monthly rates different than your fixed-term rates?

3708   MR. ENGELHART: Are our monthly rates different than our fixed-term rates.

3709   Raj?

3710   MR. DOSHI: Within the three brands, we have plans that provide subsidized devices with term, and others, for example in Chatr, that do not.

3711   With the plans that provide the subsidized device, the customer has the option to choose the monthly, month-to-month, where they have brought their own device, or to take advantage of our subsidized device proposition.

3712   There is no rate difference on the plans that are in the market. We do run campaigns, for example, Hand Me Down, where a customer takes an iPhone or a BlackBerry, provides it to someone in their household, or a friend, and the discount in market today -- we provide $5 off text and talk only plans and $10 off talk, text and internet plans.

3713   So that is an incentive to say, if you have a device that is still working and you want to put it on an in-market plan, here is an option.

3714   So that is how we make that, so to speak, distinction.

3715   COMMISSIONER MOLNAR: And you were talking about Fido, or you were talking across the portfolio?

3716   MR. DOSHI: Across the portfolio.

3717   COMMISSIONER MOLNAR: So you have incentives on monthly plans. You don't have incentives on your fixed-term contracts?

3718   MR. DOSHI: When you say fixed-term contracts, I think the nature of the contract is that the incentive is given to the customer as part of a commitment, and when that commitment expires, the customer has the choice to get another device, in terms of an upgrade, or continue with that device.

3719   And there is a list of plans that are available that the customer can choose from at that time.

3720   So the commitment is over, as is the, so to speak, amortization period.

3721   MR. ENGELHART: Commissioner, just to add -- and maybe to confuse -- and Raj and George can correct me if I am wrong -- we do sometimes give promotional pricing to customers who are in contract that would be lower than the month-to-month rate, but that promotional pricing, under our new policy, never extends your contract term.

3722   So if you are on a contract with Rogers, you might get the subsidized device and a lower price, but that lower price, if it came to you mid-contract, would never extend your contract.

3723   COMMISSIONER MOLNAR: Contracts must be very valuable.

3724   It is the value of the device and additional incentives in order to sign that contract.

3725   So are you comfortable, with the changes that this is proposing to early termination fees and so on, that those contracts will continue to be as valuable and there won't be significant upheaval in the market, as it regards pricing, as a consequence of this code?

3726   MR. ENGELHART: We implemented the Quebec ETF formula already across Canada, about a year ago. So I do think that it will make it easier for customers to switch, but it's a change that we are quite comfortable with.

3727   COMMISSIONER MOLNAR: Okay. Thank you.

3728   Could you tell me, if you are comfortable telling us here -- and, if not, you can undertake to do it, but I would be interested to know approximately what percentage of your customers are under fixed-term contracts.

3729   MR. ENGELHART: Yes, we can give you a more precise number, but I believe that we have somewhere around 1 million or 2 million that are month-to-month at any given time.

3730   COMMISSIONER MOLNAR: You might have to give me a little bit more information --

3731   MR. ENGELHART: Okay.

3732   COMMISSIONER MOLNAR: -- just to give me sort of a percentage, because I don't know your customer base.

3733   MR. ENGELHART: We have 10 million customers altogether.

3734   COMMISSIONER MOLNAR: Oh, so 90 percent are under contract.

3735   MR. DOSHI: That would be about 10 to 15 percent on post-paid.

3736   We will give you the split, in terms of the actual details.

Undertaking

3737   COMMISSIONER MOLNAR: Okay.

3738   And nobody is under contract under your new conditions, unless they have a subsidized device.

3739   MR. ENGELHART: Correct.

3740   COMMISSIONER MOLNAR: So 90 percent of your customers -- and I understand that you have some older plans out there, but it would be the case that about 90 percent of your customers have a subsidized device.

3741   MR. ENGELHART: Raj said post-paid, so we have about 1.5 million prepaid, about 1.5 that are month-to-month, and about 7 million that have a contract right now.

3742   COMMISSIONER MOLNAR: Thank you.

3743   Before I get into what you talked about in your opening remarks, I want to cover off something that you didn't talk about, but many, many consumers talked about, and that's the length of the contract term.

3744   I'm wondering if you could provide me your views as it regards the length of the contract term.

3745   MR. ENGELHART: Certainly.

3746   I guess I would agree with a lot of what TELUS said yesterday, which is that you can really pick your own contract term now.

3747   We have followed the Quebec formula across Canada. We call it our FLEXtab solution. Even though it's not a tab, just to make matters confusing we call it FLEXtab.

3748   And so it really means you can have a one-year, a two-year, a three-year, a four-year or a four-month, you can cancel whenever you want and pay the unamortized portion of the upfront subsidy.

3749   And, you know, if you think about it, if you get a $600 device and you get that for $150 on a three-year contract, well, we could give it to you for $300 on a two-year contract or $450 on a one-year contract, but that just means that we've got that $150 a year and we're earning the time value of money on it, not the customer. So I don't think there's much benefit.

3750   And the other thing that we did, and I wish I had done it before our reply comments went in, but I took a look at the U.S. AT&T and Verizon prices, and it's very hard to compare price plans across different countries because they're all so different, but the AT&T and Verizon plans are very similar to Rogers' current plans because Raj copied them. So it makes them quite comparable.

3751   So if you look at the same service, gig of data, unlimited voice, unlimited LD, voicemail, caller ID, the sort of standard package, you look at an iPhone, we're at about -- I think we're at $179 for the device for a three-year contract, and AT&T and Verizon are at $200 over a two-year contract.

3752   But then you look at the monthly service fees and we're considerably lower than them, so that if you cancelled your Rogers' contract after two years and paid the termination fee, your total payments to Rogers would be lower than your total payments to AT&T and Verizon over those two years.

3753   We're happy to provide the chart backing that up on the undertaking date.

3754   But it says to me that there's not a real problem here we need to solve for.

3755   COMMISSIONER MOLNAR: Except that customers say there is a problem and one of the things I guess I have been troubled a little bit by is the fact that, you know, you mentioned you've already implemented this new --

3756   MR. DOSHI: FLEXtab.

3757   COMMISSIONER MOLNAR: -- FLEXtab across the nation, and TELUS said the same, and yet, these comments are coming in.

3758   So while it doesn't appear to you there is a problem, certainly, consumers feel there is a problem. They feel they're lacking the choice. They feel that they're -- well, I don't need to tell you. I expect you've read all the comments as well. I mean we've all read the record and we can't ignore that there is a problem, whatever that problem might be. Customers view there's a problem with this.

3759   I just want to go on a little bit to ask you, you were here this morning when CIPPIC suggested that -- well, you said that, you know, paying it at the end means that essentially customers have been able to keep that money for a longer period of time. Nonetheless, in their view, having that lump sum payment at the end acts as a barrier to moving to a new supplier.

3760   Do you have any comments on that?

3761   MR. ENGELHART: Yes. I mean, I don't really see it. You know, if the cancellation payment was an arbitrary amount I would take their point, but if you pay off the subsidy and, you know, you can move carriers.

3762   Let me just respond to, if I could for a moment, what you said about the customers' complaints that have come in, in this process, and I think part of that is people thinking, I wish I had the same device payment I'm paying now and the same rates I'm paying now but for a two-year contract, not a three-year contract.

3763   In the same way that if this was a cable TV hearing, everyone would say, I don't want to pay $100 for 100 services, I want to pay $8 for eight services, but the economics of the cable TV business mean that smaller packages you pay a higher wholesale fee, you pay a higher rate.

3764   So I understand that people wish they had a two-year contract, but I think that if they knew that there were tradeoffs involved, the views might be different.

3765   Let me also say that when I gave my little comparison of Canada and the U.S. we pay more for our phones than AT&T and Verizon do. So they actually have lower costs than we do, which is another reason why I think we're doing quite well here.

3766   MR. DOSHI: Just one other support information on this.

3767   The BlackBerry Z10 is a good example where we've launched the device on both Fido and Rogers. So on Fido it's available on two years at $350. On the Rogers brand it's available for $150. Now, it's associated with plans that are relative to that brand but it is a choice that is available to the customer if the term commitment is a key choice for them.

3768   I will say that the vast majority of uptake is on the Rogers brand at three years and that's been typical because the entry cost is a lot lower. And I think, as Ken indicated, from a pure economic standpoint the customer would be better off to take the three-year price and if they change their mind in that three-year service period the unamortized portion is all they would have to pay. So from a pure economic standpoint, the three-year term, we believe, is a better option for the customer.

3769   Understandably, education is a key piece of that. So that's something that we are working on with our customer base. We've actually put ads in the marketplace to educate customers of the notion of FLEXtab and the flexibility it gives them.

3770   COMMISSIONER MOLNAR: Thank you for mentioning that Fido offers the BlackBerry, the new BlackBerry on a two-year plan because I had been looking for two-year plans.

3771   MR. DOSHI: Sure.

3772   COMMISSIONER MOLNAR: Do you advertise it as much as the Rogers plan?

3773   MR. DOSHI: We do advertise it. Each brand advertises something different.

3774   Fido is focused much more on the brand that cares and so a lot of their attributes are what's promoted, but in store and in certain marketing activities we will promote the device and the price.

3775   But Rogers is very much intently focused on the device and so you will see a lot more Rogers ads focus on the device and the price.

3776   COMMISSIONER MOLNAR: Okay.

3777   I want to go back to what you said about the devices costing more here in Canada than the U.S.

3778   You also maybe heard this morning the notion that if there were shorter term plans, if there was a higher upfront fee, there also might be pressure on the price of those devices for the customers.

3779   I'm not sure if you would like to comment on that.

3780   MR. ENGELHART: I didn't thoroughly follow the argument, so I'm going to let Raj respond to that one.

3781   MR. DOSHI: Yes.

3782   Just for clarification, in terms of when we launch new devices -- and actually the BlackBerry Z10 is a very good example of that -- there's always let's call it an inventory shortage issue, particularly as all the carriers in Canada are looking to satisfy the needs both of their existing customers and new customers. So with that pricing structure in place, we still put the devices out at a very comparable price point.

3783   If you compare today to the Galaxy S III, the iPhone 5 and the BlackBerry Z10, they're all in a similar price point. So understanding full well that we're trying to give the customers a choice relative to the costs that are provided to us as carriers, the manufacturers themselves understand which category of device they're playing in and will try to get the cost structures in a similar range, not always the same range obviously.

3784   Does that clarify or --

3785   COMMISSIONER MOLNAR: I don't know if it clarifies it.

3786   MR. DOSHI: Okay.

3787   COMMISSIONER MOLNAR: I just -- I want to ask, what sort of difference is there between the pricing of devices that your suppliers provide to you versus in the U.S. Do you have a sense? Do you have a good sense of that?

3788   MR. DOSHI: Yes. Do I have a good sense? I think it varies from manufacturer to manufacturer and model to model depending on, you know, if they have certain supply availability versus demand shortage type considerations, but our best estimate would be in the 15-20 percent higher range.

3789   And I think it's driven a bit by the volumetric differential between the U.S. and Canada particularly. We use a 10:1 ratio of volume on almost everything. So that usually has a consideration in terms of the pricing structures.

3790   COMMISSIONER MOLNAR: Is that true for the BlackBerry?

3791   MR. DOSHI: I can't say because they haven't launched in the United States yet.

3792   COMMISSIONER MOLNAR: Oh, that's true. That's true. Okay.

3793   MR. DOSHI: But you will see differences in pricing pretty evident on the website.

3794   COMMISSIONER MOLNAR: Okay.

3795   I'm going to move on to the issue of unlocking and you've noted that you've changed your position and you are -- did you say you've already implemented the 90-day unlocking policy or you're going to implement?

3796   MR. DOSHI: Yes, we've already announced that we will be following the 90-day policy. So effective last week we put that in place. We've always had an unlocking policy and we were one of the first to introduce it. That was tied to the contract completion. We have since then changed the stance to say as long as the customer is 90 days into their contract period we would unlock it or if they're not in contract we would unlock it.

3797   COMMISSIONER MOLNAR: You will unlock it immediately if they purchase outright?

3798   MR. DOSHI: Right. Because they're not in contract it would be immediate. So --

3799   COMMISSIONER MOLNAR: And the 90 days is for the reasons stated by TELUS?

3800   MR. DOSHI: Yes. We've identified -- I think TELUS indicated some issues related to fraud or billing cycles in terms of first bills and the period at which collection information or I guess delinquency is identified is in that 90-day period.

3801   The other one -- again, I'll go back to the BlackBerry Z10 as a very good example of that -- is that we strike commercial agreements with the various manufacturers and spend monies in marketing with an expectation of certain volumes.

3802   To the extent that these devices are locked to the Rogers network, it provides our customers access to those devices. In absence of that, what can happen is that these devices are in market open, for sale, can leave the country, particularly, and that has happened in the past, or amongst carriers as well because thinking, for example, of a Future Shop location, we want to make sure our customers are able to access the devices, particularly as we've worked to put commercial arrangements in place for that.

3803   If they were, so to speak, unlocked, they would be consumed by other carriers and, so to speak, not support our commercial arrangements and interests in making sure when we're telling customers they're available here, they may not be available for Rogers customers but maybe utilized by other carriers.

3804   So that's some of the other supporting rationale for the allocation.

3805   And manufacturers themselves have arrangements on a country-by-country basis and do not want to see these devices sourced from Canada to other parts of the world. They have their own programs and sales teams in those countries that they want to work with to sell their devices.

3806   COMMISSIONER MOLNAR: You charge a fee for unlocking?

3807   MR. DOSHI: We do. It is $50.

3808   COMMISSIONER MOLNAR: Okay. I want to move on to the issue of the monitoring and usage management.

3809   Under your section on page 9 of your comments, Notification of Additional Fees, I just want to understand -- now, you've -- you essentially echo the Telus argument that providing notification and caps and management tools for voice and text is -- I think the Telus words were low impact/high cost. So -- and that's your perspective as well?

3810   MR. ENGELHART: Yes. We were -- were struck by how similar our view was to the Telus view when we heard it yesterday.

3811   COMMISSIONER MOLNAR: So when you're talking about the alerts and so on as it regards the Code, are you talking simply about data or are you still talking about alerts?

3812   MR. ENGELHART: Yes, our proposal is that you get monitoring tools for voice and text, check on your iPhone, check on your computer. You get monitoring tools for data, and you get alerts for data, both domestic and roaming.

3813   COMMISSIONER MOLNAR: So it is a pull tool for voice, a pull tool for data, but a push tool as well for data. So you'll push alerts for data.

3814   MR. ENGELHART: Yes.

3815   MR. DOSHI: Yes.

3816   COMMISSIONER MOLNAR: And roaming.

3817   MR. ENGELHART: For data roaming. Not --

3818   COMMISSIONER MOLNAR: Data roaming.

3819   MR. ENGELHART: -- voice and text roaming. Correct.

3820   COMMISSIONER MOLNAR: Okay. I expect you've heard our conversation with Telus as it regards the issue of the capping of data roaming and data, frankly. Data. Not just roaming.

3821   Are you talking here about just data roaming -- alerts for just data roaming, or is it for data usage?

3822   MR. ENGELHART: No, we're talking -- we are saying the Code should mandate alerts for both domestic data and for data roaming.

3823   COMMISSIONER MOLNAR: Okay.

3824   MR. ENGELHART: There should be alerts.

3825   I can talk about the cap issue if you want me to.

3826   COMMISSIONER MOLNAR: Yeah, and I -- I guess I'm getting it mixed up here, and I shouldn't.

3827   So you're going to push out alerts for domestic data and roaming.

3828   The discussion we had with Telus was that domestic data and roaming are also the issues that create the largest -- where customers really are most vulnerable. You -- I think you noted even in your comments that it is the issue that creates bill shock and customer frustration and so on. And so the proposal in the Code is that there be some cap.

3829   MR. ENGELHART: So let me address the cap issue.

3830   So the original proposal in the Code was a cap on all optional services, you know, 411, long distance, data roaming, what have you, all aggregated to a $50 limit. So as Telus said and as we've said, really can't do that. It's too hard.

3831   Aggregating everything with a real time usage and rating engine would cost hundreds of millions of dollars as it did for our pre-paid service where we have that kind of engine. But to add that to the post-paid platform would be too expensive.

3832   Now, if you're just talking about one service like data roaming, yes, you could do a cap. If you were just talking about domestic data, yes, you could do a cap. Separate caps.

3833   If you tried to say $50 across domestic data and data roaming, now you've got two systems that have to be smashed together and it is more expensive and it doesn't always work. But if you said to us you need a $50 cap on domestic data, you need a $50 cap on roaming data or data roaming, it's technically doable. It might cost us $5 or $10 million, it might cost the industry $40 or $50 million, but it's not out of the ballpark because once you can alert people, you can cut them off. It's not that incremental a cost.

3834   It's our recommendation to you that you do not do that.

3835   So all of our new domestic in-market data plans are what we call flex plans. So the way that works is you start with a package, and maybe you could take the low package or the medium package or the high package or the really high package.

3836   Say you take the medium package, but that month, you go crazy with your data. There's not really an over charge. We just automatically move you to the big package and you pay the big package rate that month and next month you drop down to the medium package again.

3837   So at the end of the month, you've got a $10 higher charge, but it's not bill shock in the same way that we read about in the paper, $1,000 or $10,000. It's $10.

3838   Maybe you used so much data you went up two and you got 20.

3839   Now, bear in mind, you're still getting alerts. We're not arguing against alerts. But if I've got a plan that gives me one gig and one month, I just go crazy. I'm getting my alerts, but I use seven gigs. We'd have to cut you off after six gigs.

3840   And so that's very disruptive to customers. It's very disruptive to be cut off and we get a lot of complaints. And I worry that this is not making customers happier.

3841   If I can give you a similar story for U.S. data roaming, we now have a plan that gives you, for $7.99, 50 megabytes per day.

3842   Now, the average iPhone customer -- the average Smartphone customer uses about 700 or 800 megabytes in a month, so 50 megabytes a day is 1.5 gigabytes per month if you use the same amount every day that you -- across a whole month. So 50 megabytes is a lot.

3843   Our intention is that it's going to let you take your Tablet or your Smartphone to the U.S. and use it just like you'd use it in Canada.

3844   Now, again, there's alerts when you get near that $50 -- or that 50 megabyte. We say to you, you're getting near your 50 and if you hit the 50, we tell you, you've just used another one, so there's another $8. So now you're $16 instead of eight.

3845   But again, it's not the same type of dramatic shock. The vast majority of customers will use only 50 megabytes in a day. And you might have somebody happily going to the U.S. on a one-week vacation. They're spending $8 a day. Monday to Saturday they're happy, and Sunday we cut them off because now they're over the $50 level.

3846   So we would -- we would recommend against capping. Our advice to you is that capping is very disruptive.

3847   The solution to bill surprises, we believe, are flex plans because the flex plans just move you to the next plan. They don't give you a big overage fee.

3848   The other solution to bill shock is the a la carte rate, the daily -- the rate if you don't have a plan. We've brought in domestic day passes to solve that problem. We've now brought in U.S. plans to solve that problem.

3849   So I realize bill surprise for data has been a huge issue. I realize you've got a lot of letters. I believe the market is looking after it. I believe alerts are a sufficient solution, and I would not go to caps unless you become convinced that alerts don't work.

3850   COMMISSIONER MOLNAR: What if we turn that because you mentioned that you are putting in plans and you believe that the market is taking care of it. The record today says customers aren't happy, and maybe they're -- maybe the market will take care of it over time, but the record today says the customers aren't happy.

3851   Telus proposed that if there was to be caps, that they should be -- it should be a customer's decision whether or not these caps be applied, so if you have these plans and your customers are happy and confident that they better manage their overages, they wouldn't subscribe to a cap.

3852   What are your thoughts on that?

3853   MR. ENGELHART: Their engineers might be smarter than ours because ours say that if we have a different level of cap for everybody, it's really expensive. Now, on or --

3854   COMMISSIONER MOLNAR: I'm sorry. I'm not talking about the level of cap. I'm talking about opting in as to whether there be a cap.

3855   MR. ENGELHART: We can do that, too, and that would obviously help. But you've got to realize that no matter how much you warn people, 50 percent, 70 percent, 80 percent ignore your warning and they'll be down in the U.S. and they'll be cut off and they'll be angry.

3856   So in theory, yes, if you opt -- you can opt out of that cap, but a lot of people won't and it's going to lead to a lot of concern.

3857   MR. DOSHI: Just to comment on that, I think the notion of the customer opting in for the cap is a way better solution than opting them in by default. And the reason is the consequence of not allowing that is that there could be service disruption when the customer didn't know, whereas when they have actually opted in for a cap, they know that at this certain dollar amount it's going to -- the service will stop working. And that to me is probably one of the biggest factors to consider.

3858   COMMISSIONER MOLNAR: Okay, thank you. And the other discussion we had with Telus is what is the appropriate level for that cap, I think that --

3859   MR. DOSHI: Yes. And I think on that front would be consistent in that to apply a level that is consistent across the customer base is technically more feasible versus going right down to customer specified amount, which becomes very complex from a system standpoint and that is something we are consistent on.

3860   MR. ENGELHART: And as my example of the U.S. data roaming indicated, 50 is probably too low.

3861   MR. DOSHI: Too low.

3862   MR. ENGELHART: Because someone goes to Florida for two weeks, you know, so you would be looking I think at more like 100 or 200.

3863   MR. DOSHI: Yes. We should clarify that for data roaming the devices when they come in are set to data roaming off. So, there is intrinsic within the device a mechanism wherever the customer is to acknowledge that they want data services while they're roaming.

3864   So that is kind of a first step. And then, the solutions we're talking about in terms of alerting as well as selecting different plans makes it even more active.

3865   When a customer goes out of country just as a point of fact, we send a text message when they land, that identifies that they're roaming to the country and then the rates for voice text and SMS and also provide a link to a set of options that they can choose to buy packages for both data text and voice.

3866   Also, we provide a Call Centre number that they can call, all of these are free of charge. So, both the web access as well as calling the Call Centre are non charged so that they can make sure that they get the right solution, roaming solution for themselves.

3867   COMMISSIONER MOLNAR: Okay. Thank you. So, instituting an option for customers to have a cap on domestic data and on data roaming would not limit your flexibility in providing your customers with market base solutions; would you agree?

3868   MR. DOSHI: I would say for -- if their consideration is of a cap I think go back to Ken's comment. The notion of a cap is not something that customers particularly with service disruption is something they probably want, but if you considered it, roaming maybe a greater consideration than domestic and I think domestic is there are a lot of solutions available. We have got --

3869   COMMISSIONER MOLNAR: Okay. Again, I am just wanting to make sure because it isn't our goal to limit market base solutions. Our goal is to address underlying problems in case the market doesn't solve them, or maybe as, you know, as some kind of an interim step until the market -- until there is assurance that the market is solving them.

3870   So, if this was instituted as an option for consumers, it wouldn't limit your ability to come up with market base solutions. Do you agree?

3871   MR. DOSHI: On data in particular, it would not.

3872   COMMISSIONER MOLNAR: Thank you. You've made some comments here somewhere about the are or the cooling off period or buyers remorse -- do you want to just clarify, I am trying to find then that there is some section in the Code. Oh, here it is.

3873   Paragraph 10, where you want to amend Section 85 on Distance Contracts to say, if you sign it on a distance basis, you have 15 days to return the device.

3874   Is the intent there just to align it with the -- upon return of the -- yes.

3875   MR. ENGELHART: That's right. And this is -- this is my lawyer's thing. You didn't say upon return of the device so maybe he gets to keep his iPhone, so he shouldn't get to keep his iPhone. He should have to give it back.

3876   COMMISSIONER MOLNAR: Oh! That's what you're saying?

3877   MR. ENGELHART: Yes, right.

3878   COMMISSIONER MOLNAR: Oh! Okay. Okay. I misunderstood this.

3879   I do want to talk about the cooling off period though. You have in your comments too as earlier had discussed, or I think it may be even your policy now that you have a 15-day cooling off period; Is that right?

3880   MR. DOSHI: Yes, 15 days and you can't use the phone for more than half an hour.

3881   MR. ENGELHART: The voice.

3882   MR. DOSHI: Voice for half an hour.

3883   COMMISSIONER ENGELHART: You can use unlimited data, but voice for only 30 minutes. What's the rational for that?

3884   MR. DOSHI: Yes. The rational was we used to have a data usage component with it and this is the evolution. Customers found it hard to measure how much data they had used, whereas for voice they know when they've talked on the phone for more than 30 minutes.

3885   So, we've put some parameters because once the device is returned, we can't sell it as new and so the idea was if it's a changing mind there should be some parameters that would allow the customer to return it. So that's 15 days, 30 minutes of usage.

3886   COMMISSIONER MOLNAR: Is there some sort of set limit upon which you can't continue to sell that as new?

3887   MR. DOSHI: From the standpoint, yes, there are legal stances. There are certain parameters and especially in voice usage that we cannot sell it as new and that 30 minutes is well past that.

3888   COMMISSIONER MOLNAR: Oh! I see. So, when there are returns, you are not selling them as new?

3889   MR. DOSHI: No. They will be sold as used and so we bear the burden on that the dealt on and what we can sell it for.

3890   COMMISSIONER MOLNAR: I see. Okay. I want to talk about implementation. You recommend a staggered implementation process. Have you identified within this Code which of the different elements of the Code can be -- could be implemented at the different times?

3891   MR. WEBER-KRAMER: Hi! We've given some examples in our opening remarks. For example, you know, for security deposits, those of you who think that we could implement them in about three months, with regards to the interest in moving that out nationally, things that would require a longer implementation time, like distributing copies of the Code to all stores, things like alerts and caps, you know, if at all possible, it would take much longer period of time, you know.

3892   And there are a number of things that we could actually implement immediately. So things like our current ETF policy or every termination policy, we could be doing at some of our self-serve monitoring tools already in place for consumers as well as our unlocking policies.

3893   COMMISSIONER MOLNAR: Could I ask as an undertaking that you go through the Code, the proposed Code, and identify which of the different elements you could implement within the three different periods that you state?

Undertaking

3894   MR. ENGELHART: Yes, of course, we will. Just, you know, to assist the Commission, it's going to vary from carrier to carrier, right. Things we are already doing, we can do immediately with the systems we have already built. We can do a lot faster than carriers who don't have the systems, but we will file that undertaking, yes.

3895   COMMISSIONER MOLNAR: For sure. It would appear that most national carriers are going to be in a situation similar to yours.

3896   THE CHAIRMAN: It's a bit like a competitive model. If you got up ahead, it's going to be better, right? So --

3897   COMMISSIONER MOLNAR: And perhaps when you give that, you could also give some justification as it relates to these time periods.

3898   So, while you say there it's accelerated it's still to suggest that it would take six months, if I'm reading this correctly, to distribute copies of the Code to all stores and online. It's not obvious to me why that would take six months.

3899   I mean, I recognize you're big and you might have a lot of stores, but I'm pretty sure you could get a device out in less than six months, so hopefully you could get the Code out.

3900   MR. DOSHI: Actually, that often surprises internally as well, but given the myriad of systems as well as the different points of distribution, to get some of these changes and some of those systems thinking of third party, like Future Shop, Best Buy as an example, to get changes in, we have to float through their processes as well and that's why this is reflective of basically being able to get across all the different channels and points of distribution to these changes.

3901   COMMISSIONER MOLNAR: Fair enough and that's why I asked, you know, if that's suggestive by time frame perhaps justify it.

3902   And 18 months for IT solutions, is that based upon something?

3903   MR. DOSHI: So, it's based upon depending if you take some of the complex requests within the Code, trying to build integration between networks as well as billing systems can take in the range of 12 to 18 months.

3904   A good example actually is the US roaming solution that we are putting into market that we've talked about, at the $8.00 mark in Spring of this year has been something that has been in the works for probably nine to twelve months.

3905   We are still working to get that Code delivery in testing and past solutions were there is integration of both networks and billing systems can have ramifications that you never expected i.e. loss of service and having to pull things back.

3906   COMMISSIONER MOLNAR: Can I ask you how long did you have to put it place the Provincial Legislation?

3907   MR. DOSHI: This Bill 60 Legislation was --

3908   MR. WEBER-KRAMER: It was at least one year for us to put it in various stages and currently --

3909   COMMISSIONER MOLNAR: So, it wasn't 18 months.

3910   MR. DOSHI: No, but the one and important point in that one was it was a IT system solution change.

3911   MR. ENGELHART: Right.

3912   MR. DOSHI: Whereas when there is network and IT system integration required, it's a longer lead time. There is a difference between actually different groups that have been our company but more so vendors as well systems integration that's required in that front.

3913   MR. ENGELHART: But in some cases for the provinces we did not have time to do IT solutions.

3914   MR. DOSHI: Right.

3915   MR. ENGELHART: We had to do manual solutions which are not only very difficult, but not as accurate.

3916   MR. DOSHI: And not scalable.

3917   COMMISSIONER MOLNAR: So you will provide the justification as to why 18 months is required.

3918   MR. ENGELHART: We will.

3919   COMMISSIONER MOLNAR: Could you also identify what particularly? You have said that this is different because it requires network and IT solutions. Are you talking about the issues of the monitoring and usage or is it something else?

3920   MR. DOSHI: So, I think the distinction between -- so from a network we can get what people use. So, I'll give you -- I go back to an example I have you earlier.

3921   I said that when someone lands in a foreign country we will provide them a text message and provide them a number to call the Call Centre and it's free of charge.

3922   From out network system, we know that a call was made for X minutes. Let's say they call the Call Centre for five minutes, it would show up as a five-minute call. To rate that, which is to say, okay this number we've explicitly said will not be charged, is a rating solution.

3923   And so, to do that requires basically looking at all the records and then figuring out what the charge should be.

3924   Those two integrations are what takes complexity. So, putting a dollar cap requires us to be able to rate every single transaction and, in order to do that, you need to know all the rating rules.

3925   Generally in the post paid systems that happens once a month. So, asking to do that on a real-time basis is a completely different structure to what we're doing today.

3926   COMMISSIONER MOLNAR: Okay.

3927   MR. DOSHI That's why the complexity.

3928   COMMISSIONER MOLNAR: And fair enough. I certainly would encourage you, if something is costing too much, because you're having to rate minutes to put forward a reasonable alternative that meets the same objective.

3929   MR. DOSHI: Exactly. So, we do and we use in certain solutions proxies to provide and say, rate it at approximately this, or if they're simple tiers, we'll provide that. So, we'll provide those solutions in that submission.

Undertaking

3930   COMMISSIONER MOLNAR: And your proposal is...?

3931   THE CHAIRPERSON: That's stuff for the 22nd of February.

3932   MR. DOSHI: Yes, sir.

3933   THE CHAIRPERSON: Just to be clear.

3934   You have to turn on -- there's a maximum number of mics that need to be on at any given time, so if you're not talking, that's why you're seeing flashing greens sometimes.

3935   MR. ENGELHART: Since I don't have to do the work, we can certainly have it done by the 22nd.

--- Laughter

3936   COMMISSIONER MOLNAR: So, it's your position that this should apply only to new contracts and contract renewals?

3937   MR. ENGELHART: You mean data alerts and data --

3938   COMMISSIONER MOLNAR: No, no, I'm sorry, the Code.

3939   MR. ENGELHART: The Code.

3940   COMMISSIONER MOLNAR: The Wireless Code, once put into place --

3941   MR. ENGELHART: Yes.

3942   COMMISSIONER MOLNAR: -- should apply.

3943   MR. ENGELHART: For in-market contracts and going forward, yes.

3944   COMMISSIONER MOLNAR: For, I'm sorry, what?

3945   MR. ENGELHART: The plans we're already selling in the market today and any ones going forward, that's what the Code should apply to.

3946   COMMISSIONER MOLNAR: Do you believe there's any elements of the Code that could be applied to existing customers?

3947   I mean, what are the dangers? And I could go back to your numbers, but that's an awful lot of millions of customers that would not be covered by this Code.

3948   MR. ENGELHART: Well, that's right. But, I mean, as Telus mentioned, for the early cancellation fee we sometimes wouldn't even be able to go back and figure out what the no-contract price was at that time and use the new formula.

3949   So, for the formula and things like that, it would be very hard to do for -- for things like caps, it would greatly add to the complexity to go back and take all our 11,000 grandfathered plans and figure out how to rate those.

3950   Now, your question was, is there anything we can do right now. I don't know if my colleagues have any ideas.

3951   COMMISSIONER MOLNAR: Let me make sure I've asked my question correctly.

3952   At the time the Code comes into effect, are there elements of the Code that could be applied to existing customers?

3953   MR. DOSHI: To existing customers? So, just for clarification, the ECF solution, we've put that in as of January last year, would apply for anybody upgrading to a new device or a new customer coming onboard. So, that would be, in effect, immediate.

3954   Things like alerting, to the extent that the data solutions, we can provide volume usage, rating I think would -- what Mr. Engelhart was saying is that it becomes very complex for 11,000 different plans, so we would offer it on in-market plans that are available today and, so, put some parameters around how quickly we can get the solutions to market.

3955   COMMISSIONER MOLNAR: Maybe it might -- because this is quite detailed as you look at all the different elements of the plan and explain how it is or is not operationally possible to apply -- perhaps as an undertaking, as we asked of Telus, if you could go through and identify what elements --

3956   MR. DOSHI: Can and can't.

3957   COMMISSIONER MOLNAR: -- can be and, if they cannot be, explain why and what would be required.

3958   And, while I didn't ask this of Telus, you know, as you go forward do you think, you know, maybe it would also be useful if you could provide us with what might be a reasonable proxy alternative to applying that plan.

3959   I mean, you talk about the fact -- and Telus did as well -- that all of the grandfather plans with all the different device subsidies and so on, to go back to determine what that early termination fee would be is simply not practical, but is there something that could be done?

3960   MR. ENGELHART: We will certainly do that. But, I mean, we started to use the Quebec formula in January of last year, so if our old cancellation penalties applied to something a year before that, you're going to get to a pretty small amount by the time this Code comes into effect, so...

3961   But we will answer that undertaking, yes.

Undertaking

3962   COMMISSIONER MOLNAR: Okay. And fair enough. And this is an undertaking that our Chair asked of Telus and I'll pass it on and, if I get it wrong, you can fix it up.

3963   But he did ask how long it would take for your entire customer base to churn on to this Wireless Code.

3964   So, again, that's an undertaking to go back, and there are key elements as you noted, the early termination and so on. So, if you can, based upon how many contracts come due each year, to give us some sense as to how long it would take to have all of your customers?

3965   MR. ENGELHART: And we can do that. But, I mean, it occurred to me as I was hearing the question, it's three years. I mean, to get every last customer who's in -- the person who signed the contract the day before the Code came into effect, it's going to be three years later.

3966   Now, a lot will be doing an early hardware upgrade and getting a new contract, but every last one, the answer is three years.

3967   COMMISSIONER MOLNAR: But I don't think the question is how long until your last customer because I agree, I mean, I think I did that math once and it's like 2017 or something like that, but I think the question is how much of your customer base will be protected by the Code in the different years.

3968   MR. ENGELHART: Very well.

Undertaking

3969   COMMISSIONER MOLNAR: Thank you.

3970   I want to go through some other questions just to clean up the record here, not potentially what you've discussed here today, but I want to begin with the issue of the personalized information summary.

3971   You submit that should not be necessary and I have to say, at paragraph 17 I was astounded to see you say that if customers require information for comparison shopping they should use a draft copy of your contract.

3972   I've taken a look at your contract. I don't know what customer's going to go through that and understand, you know, their prices. I mean...

3973   So, what is available to customers when they're making their decision and what do they leave with so that they feel confident that they know the fundamental most important terms of their agreement?

3974   MR. ENGELHART: So, those are two different purposes, so let me explain them both.

3975   In terms of making sure that customers leave that store or leave that service experience knowing what their service is and what their deal is, it is very much in our interest to make sure that takes place.

3976   When people sign up for new service, if they don't understand it they phone us, when they get their first bill they phone us and phone us and phone us.

3977   So, it is -- we do everything in our power to make sure that that customer leaves the store with all the information they need to understand their plan, and we have a whole, what we call a walk-out working package and, for our corporate stores, and they're walked through what they've got, boxes are checked off, et cetera, et cetera.

3978   So, I believe we do a pretty good job of explaining to people what they're getting already.

3979   Now, the other purpose which was advanced by some of the parties in this proceeding was, wouldn't it be great if we had a summary document that really laid out crisply what the deal was that we could buy -- that we could get before we buy and we could take it around to other stores, operated by our competitors, and shop it around and say, can you beat this deal?

3980   And what we're saying here is really the same thing that Telus said yesterday, fair enough, but don't -- please don't make us create another document, we'll just stick that information in the beginning of the contract, print them out a contract, because every time we create a new document it adds complexity and happy to satisfy this requirement, but don't make us create a new document.

3981   COMMISSIONER MOLNAR: Are you suggesting that page 1 of your contract would be what we call the personal information summary?

3982   MR. ENGELHART: We would make it so, yes.

3983   COMMISSIONER MOLNAR: Okay. And is it your view that the information that's contained in the draft personal information summary is the proper information?

3984   MR. ENGELHART: It all looked pretty reasonable to me. I mean, you'd have to know that stuff for sure.

3985   COMMISSIONER MOLNAR: Okay. You've got like whatever, 15 lawyers sitting at that table.

--- Laughter

3986   COMMISSIONER MOLNAR: All right. Some simple questions.

3987   You currently provide paper copies of contracts if requested and at no charge?

3988   MR. ENGELHART: Correct.

3989   COMMISSIONER MOLNAR: Yes, okay.

3990   Do you keep a copy of a customer contract on file if requested by the consumer later in the contract or for resolving complaints?

3991   MR. ENGELHART: In theory, yes, but sometimes it's the dealer that keeps it. We have had problems retrieving them from dealers.

3992   So, I don't know, Josh, if you want to add anything.

3993   MR. YARMUS: Yeah, they're -- from time to time it can be difficult to retrieve contracts from different store locations that may have different storage methods, but we're working on coming up with a system that will provide some consistency there.

3994   COMMISSIONER MOLNAR: So, it's your intention going forward that you would have access to a copy of the customer's contract, if they requested to see it you would be able to provide it, or for your own purposes in looking at issues?

3995   MR. YARMUS: That's what we --

3996   COMMISSIONER MOLNAR: Okay. Thank you.

3997   I'm going to ask you a question, I asked it of the CWTA yesterday and, frankly, it was answered to my satisfaction, but I will give you an opportunity to answer anyway and that's related to pay-per-use services.

3998   It had been proposed in the CWTA Code that those should be able -- the price and terms and conditions of pay-per-use services should be able to be changed without notice.

3999   Could you explain why that would be appropriate or, better yet, just agree with CWTA that in fact it would be proper for customers to have notice on these services?

4000   MR. ENGELHART: Yes. We give notice for any pay-per-use service that is part of a post-paid arrangement.

4001   Now, if it's something like picture messaging charges we give 30 days' notice; if it's roaming rates, we changed the website. We don't send out notices, but you get that text message on your phone when you land in that country. So when you land in Azerbaijan you know the roaming rate in Azerbaijan, so there's your notice. It's on your phone.

4002   Similarly for our day passes for data. If we change the rate when you turn on your phone if you don't have a plan, your phone says: If you want data it's going to cost you X dollars, press here.

4003   So there is always notice of a new pay-per-use price.

4004   COMMISSIONER MOLNAR: And that notice is sufficient. As you mentioned, it's 30 days if you were do something like change the price of picture messaging, or something to that effect?

4005   MR. ENGELHART: That's correct.

4006   COMMISSIONER MOLNAR: Okay.

4007   I just want to understand your position as it regards optional services.

4008   You suggested that wireless providers should have the flexibility to change the price of optional services that a customer has subscribed to. I'm not sure if we fully understand. Is that services -- as this has come about, you know, we have talked about their services that a customer chooses to subscribe to over the fixed term and there are others that they will choose on a monthly basis.

4009   Is that what you are talking about, where they are not under the fixed term --

4010   MR. ENGELHART: Correct.

4011   COMMISSIONER MOLNAR: -- whether they are optional or not?

4012   MR. ENGELHART: Correct. So if the customer agrees: Well, for my entire term I'm going to take voicemail at this price, then obviously we can't change that, they have made a commitment.

4013   COMMISSIONER MOLNAR: Okay.

4014   Could you tell me, how do you calculate early termination fees when a customer cancels a non-wireless contract early? Let me explain maybe like something for example such as for the use of the iPad or something like that where there is no device.

4015   I guess it's still a wireless contract.

4016   MR. DOSHI: All right. In the case of an iPad for example there isn't a fixed contract, there is a service contract that is there for the customer. So there are other tablets that we have in market where we do provide a subsidy and if the customer so chooses there would be a fixed term contract with them.

4017   COMMISSIONER MOLNAR: And are your terms of early termination the same for them as they are for --

4018   MR. DOSHI: For Smartphones?

4019   COMMISSIONER MOLNAR: -- Smartphones?

4020   MR. DOSHI: Yes, it's the same.

4021   COMMISSIONER MOLNAR: They are.

4022   MR. DOSHI: Yes, the subsidy amortized over the period of the term.

4023   COMMISSIONER MOLNAR: Okay. Thank you.

4024   Do you offer any subsidized devices with monthly -- I think we have already answered this, but the question really is that one of the terms that's discussed on early termination is where there is a subsidy with monthly contract and that that should be amortized over 48 months.

4025   So my first question is: Is there ever a situation where you are offering a subsidy on a monthly contract?

4026   MR. DOSHI: The situation arises where there is not a fixed term contract but a contract that pays down, similar to a Koodo tab that they were talking about, the tab being amortized over the payment cycle of the customer. It's a percentage of how much you spend per month.

4027   That's the scenario that would probably apply. I would suggest that that should be kept as an option because the tab solution is something that is prevalent in the marketplace alongside with a fixed term period as well.

4028   COMMISSIONER MOLNAR: Do you suggest that a period of 48 months is appropriate?

4029   MR. DOSHI: We do not have a solution of that nature in the market today, but I would believe at 48 months -- most of the carriers who do have it in the market have it at around 36 to 48 months.

4030   MR. ENGELHART: Raj, if I may add to that, the existing provincial consumer protection legislation all uses that same formula, the 48 months, so just for consistency.

4031   COMMISSIONER MOLNAR: I understand that it is for consistency, but it's still 48 months when customers have been saying that devices don't last much longer than two years before the batteries start going, before technology makes them obsolete, and so on.

4032   And so I'm just asking why would we put in place, you know, legislation or a regulation acknowledging 48 months as a proper when all the customers are saying devices really don't last much more than 24 months?

4033   MR. ENGELHART: I may be a poor salesman for the tab solution because we don't offer one, but here is my understanding of what our competitors do.

4034   You get a device on a tab, say there is a $480 subsidy, instead of just giving you the device and you go on your merry way, with the tab it's now you owe us $480. It's on your bill, you are running a tab, that's what you owe us.

4035   My understanding of what our competitors do is, they take a percentage of your monthly bill -- so if the percentage is 20 percent and you are spending $75 that month and they write $15 off that tab, if you don't spend -- so it's the greater of that amount or 1/48 of the existing time, so in my example $10. So every month your tab either gets written down by that percentage of your bill or by the 1/48 amount.

4036   The way I believe our competitors do it is, at the end of the three years if there is a remaining tab they write it off. So the 48 months is really there as a way of calculating a minimum amortization in the event that your monthly bill is very low.

4037   But we don't offer it, so you should probably talk to one of the folks that does in case I have messed it all up.

4038   COMMISSIONER MOLNAR: Fair enough. We will talk to the people who do, because --

4039   MR. DOSHI: Just one other note on --

4040   COMMISSIONER MOLNAR: -- the proposal is not that you write it off over three years, this says that the early termination fee is calculated as that and we just want to understand why we would use 48 months.

4041   MR. ENGELHART: Just one other note in terms of devices, we should also consider the types of devices that are coming to market and will continue to come. Some we have not even dreamed of yet, but conceptually a tablet would last at least 48 months so when we put those on the market you would hope -- thinking of your own PC experience, et cetera.

4042   So we would look at Smartphones as one of the biggest categories and that has much more wear and tear, but tablets are a consideration as an example.

4043   COMMISSIONER DUNCAN: Someone else can talk about it. It's hard to imagine tablets that weren't even around 48 months ago are going to live that long. I think the iPad is on what, Version 3 or 4 now.

4044   Anyway, can I go on to the issue of early device upgrades.

4045   Is it your practice to offer early device upgrades?

4046   MR. ENGELHART: Yes.

4047   COMMISSIONER MOLNAR: It's a normal practice?

4048   MS HUNT: Yes.

4049   COMMISSIONER DUNCAN: And when do you offer your upgrades?

4050   MR. ENGELHART: You can do an early upgrade at any point simply by paying whatever the device amount is plus the unamortized subsidy remaining in your contract. You could do it on month one.

4051   COMMISSIONER DUNCAN: So essentially they pay the early termination fee and they can upgrade?

4052   MR. ENGELHART: Correct.

4053   COMMISSIONER MOLNAR: So you are not offering to write off the early termination fee if they upgrade?

4054   MR. DOSHI: Not as a matter of right. There are obviously promotions where we do that, but if you just want that really cool device that you can pay the early termination fee as a matter of right.

4055   COMMISSIONER MOLNAR: If I was to ask as a matter of practice, do you normally write off the early termination fees?

4056   MR. DOSHI: As a matter of practice, no, but depending on the value of customer at what cycle they are in, there are programs that we run against those, but the general premise is, it is a discount off the upgrade cost more than it is a, shall I say, forgiveness of the balance.

4057   COMMISSIONER MOLNAR: And this initiates a new contract for a new contract term?

4058   MR. DOSHI: Correct. If they so choose to take a subsidized device.

4059   COMMISSIONER MOLNAR: Are there any other circumstances, other than the early device upgrade, that would trigger a new contract term for an existing customer, besides the expiry of their contract?

4060   MR. DOSHI: Okay. All of our term extensions or renewals require hardware with it. So only if you take a hardware subsidized device is there any change in term.

4061   COMMISSIONER MOLNAR: Moving on to the issue of clarity of advertised prices.

4062   The unlimited plan, you have seen the proposal is don't use the word "unlimited" if there are limits.

4063   Are you okay with that?

4064   MR. ENGELHART: We are, of course.

4065   Now, then the 15 lawyers come into the discussion and one of their concerns is fair use policies. So we have these fair use policies, somebody buys a wireless device and uses it as some form of spam or call forwarding or what have you and they end up with more minutes of use every day than there are minutes in a day. So we cut those people off, but we do that whether they are on an unlimited plan or a limited plan because they violated our fair use policy.

4066   So I believe "unlimited" should mean "unlimited", but I -- we do have a fair use policy, so I don't know if we have to disclose that upfront, but we do have that. And, you know, I guess we would appreciate a bit of clarity from the Commission as to what things we wouldn't have to alert upfront. So I don't think -- if we say unlimited domestic -- domestic voice, we shouldn't have to say but doesn't include roaming, you know, but maybe we do have to say that, and there are zone-based plans where it's unlimited in Montréal. We say it's unlimited in Montreal, but obviously if you use it in Ottawa there's a charge, so ... But I absolutely agree with the sentiment that "unlimited" should mean unlimited.

4067   COMMISSIONER MOLNAR: And fair enough. I think whatever comes out of this code has to be absolutely clear for everyone. There can be no confusion or interpretations by -- on either side. So to that end why don't you provide us with some examples of how you would clearly articulate the intent of this and how it should be. You know, all 12 of your lawyers can get together and come up with the proper wording to make that clear.

4068   MR. ENGELHART: Mr. Slawner, who's going to do most of this work, is looking -- he's slumping lower and lower in his chair, but, yes, of course.

4069   COMMISSIONER MOLNAR: So you do not want us to make any determinations as it regards security deposits. And your argument for this is pre-paid?

4070   MR. ENGELHART: Right. There's a lot of people who have very poor credit ratings and we just won't take them as post-paid customers. They're on pre-paid. Now, there is a very small subset of that group, even though they have terrible credit scores, who say I don't want pre-paid, I want post-paid, just tell me what I have to do. So for those customers, we make them buy the phone at full price, no subsidy, and we make them give us a 200 dollar deposit. And there is a small kind of a niche of customers who want that for whatever reason, and most of them are still gone within a year for non-payment. So there's a reason they had that low credit score. But if we had to have a lower security deposit, I just don't think we would serve those customers with post-paid. So I don't think there's a -- I think this is sufficiently different from the wireline market that you don't need to regulate security deposits.

4071   COMMISSIONER MOLNAR: I'm just reading over your disconnection to see why it is significantly different from the wireline policy so that we don't need to do disconnections either. Maybe you could explain that to me.

4072   MR. ENGELHART: Sure. I think the idea behind the Commission's disconnection policy was in the days when phone was a monopoly service, and if someone got disconnected they would not be able to have a phone, which was obviously a problem. Here you've got a lot of wireless carriers and pre-paid services, so being disconnected doesn't mean you don't have a phone. As I read the Commission's proposal, we'd have to give people two months before we could cut them off for non-payment. We spend about a hundred million a year in bad debt, so this is a big problem for us. And we absolutely agree that if someone has a legitimate dispute we shouldn't be able to disconnect them. We absolutely agree that if they need more time to pay, we should put them on a reasonable payment plan. But if they're just not paying, we would like to cut them off on 30 days notice. If we have to cut them off on 60 days notice, we will just have more bad debt.

4073   MR. DOSHI: We actually stratify based on the credit risk when we take different levels of action in terms of either cutting off service or sending notification. So that is very efficient in terms of looking at the customer profile and assessing risk and then action accordingly. So I'm just suggesting that that's something that we as a company would have to do to manage our bad debt impact.

4074   COMMISSIONER MOLNAR: Okay. Enforcement. You made a comment in your initial submission that enforcement could occur through a group B tariff filing. Is that still your position?

4075   MR. ENGELHART: I think it works. Only us old timers remember those tariffs, so it's -- I think it would work. And, you know, one of my concerns at the time I wrote that was I was talking to provincial officials who said, you know, ours is a law; this thing isn't a law, it's a policy. So I thought, well, a great thing about a tariff is it has the force of a regulation. So it would give the provinces some assurance that this was a legal statutory instrument. So you could certainly do it by way of a tariff. I think if you didn't it would be equally effective but there would be no harm in it.

4076   COMMISSIONER MOLNAR: And that wouldn't change the fact that the actual enforcement would be done by the CCTS?

4077   MR. ENGELHART: I don't think so. I may not have thought it all the way through, but I don't think so.

4078   COMMISSIONER MOLNAR: Okay.

4079   I know that our Chair is going to ask how you measure success. What do you call success? And so I'm going to let him ask you that question.

--- Laughter

4080   THE CHAIRPERSON: Oh, no, go ahead, go ahead.

4081   COMMISSIONER MOLNAR: But I am going to ask one of the elements of knowing the number of complaints -- there's complaints that go to the CCTS but there's also a number of complaints -- I would hope that the vast majority of complaints are dealt with within your own organization and aren't escalated. Would it be difficult for you to track what complaints are related to elements of this wireless code within your own company? And the second part of that, and would you be willing to provide that information, report that information?

4082   MR. ENGELHART: I'll let Kim Walker, our ombudsman, answer that. I think if we can track it we can provide it certainly, but, Kim.

4083   MS WALKER: It wouldn't be very difficult for us to do that. We don't do it today obviously, not knowing yet what was going to be in the Code, but we could do that going forward.

4084   COMMISSIONER MOLNAR: Thank you.

4085   I just want to make clear -- and you've said that this Code should apply to commercial. And one of the things that I had actually meant to ask TELUS and I forgot and I want to cover with you is that as well as consumer -- normally it's consumer and small business that are -- so would you agree that this would apply to a small business customer?

4086   MR. ENGELHART: We have commercial plans. We have small business plans. They would not apply. We have a lot of small businesses who buy a consumer plan. So if they've bought a consumer plan, it would apply no matter who they are or what they're doing. But if they've bought a small business plan, it wouldn't apply. That would be our proposal.

4087   COMMISSIONER MOLNAR: Okay. I'll just -- I'll leave it at that right now. What are the difference? Maybe I won't leave it, I just need to understand a little bit. What are the key differences between your small business and consumer plans? And I'm not talking about pricing here. Are there different terms or do they both offer device subsidies?

4088   MR. DOSHI: They generally do offer device subsidies, but in the small business scenarios there may be other products involved as well as just the wireless solutions. The terms could be different in terms of length or the commercial use in terms of pricing. That is handled through a separate process. It's not what you would see in market directly.

4089   COMMISSIONER MOLNAR: Okay. Okay. My last question. We've heard some parties come forward and say they feel very optimistic and hopeful and believe that this Code will go a long way to addressing consumers' concerns in the marketplace and giving them the powers and the information and empowering them. So they're feeling optimistic. Is it your view that the Code generally as discussed, and we have discussed some concerns you have where perhaps it's maybe gone a little further than necessary, but I -- do you believe generally that this Code will be successful in addressing the concerns that really have generated this proceeding?

4090   MR. ENGELHART: Yes, we do. We think that -- you know, I look at some of the things like the CCTS and the -- and PIPEDA when it came in on privacy. And at the time my initial free marketeer reaction was we don't need more government regulation. And I'm happy to say I was wrong on both. I think the CCTS has been a real benefit and I think the privacy legislation is a real benefit, and I think this Code will be a real benefit too. If I could put in one small plug for national regulation, we think it would be more beneficial if there's a single national code.

4091   COMMISSIONER MOLNAR: Okay. Thank you. Those are my questions. Thank you.

4092   THE CHAIRPERSON: Commissioner Simpson.

4093   COMMISSIONER SIMPSON: Good afternoon. Just two quick questions. This is perhaps a technical as opposed to a corporate policy question, but in the billing of minutes, I'm thinking particularly with pre-paid accounts, is it the norm for the industry to bill on a minute-by-minute basis regardless of whether a portion of a minute or a full minute has been used? And secondly, is it possible to bill fractions of a minute so that if you're buying a hundred minutes you get a hundred minutes, as opposed to perhaps a hundred 10 second calls?

4094   MR. DOSHI: Yeah. I think technically -- just to answer your first -- second question, technically doable. We have in the past had market pricing that was around the second. Particularly Fido had per second billing. The market pricing evolved to basically a minute scenario. So I think the response would be that the rates would change if you went to per second versus per minute, but it is technically doable.

4095   Customer adoption, I think the norm in the industry is now on a minute basis.

4096   COMMISSIONER SIMPSON: Okay. Thank you.

4097   Freeze accounts, a term I hadn't heard before, but in an instance where you routinely are out of the country for a month or two at a time, do carriers or do you as a company offer the opportunity to suspend an account for a determinate period of time and resume billing activity later?

4098   MR. DOSHI: Let me give some background and Kim can also talk about some of the requests she gets as well.

4099   One of the things that we do provide the customers the ability to do is to do price plan changes as any time. Now, the price plan changes within a category. For example, if you have got a voice and data plan you can go to lowest voice and data plan, no change in term or any other changes required.

4100   So the customer can request that they go down to the lowest plan that basically keeps the number going.

4101   COMMISSIONER SIMPSON: Is there a notification period required or can this be done immediately?

4102   MR. DOSHI: No, they just call and do the price plan change and then when they come back and want to go to the higher plan they can come back and do that.

4103   COMMISSIONER SIMPSON: Great, thank you.

4104   THE CHAIRPERSON: Madam Poirier.

4105   COMMISSIONER POIRIER: I'll ask my first question in English because it was on Twitter in English and the other ones in French because you are present in the French market too.

4106   So do your mobile devices offer data roaming meters?

4107   MR. DOSHI: Some of the devices do. It's dependent upon the manufacturer what they've built in.

4108   The newer devices that are coming out do have data roaming meters that are proxies for how much data is being used. In fact, one of my colleagues was actually showing me that they have got that going on one of the LG devices, as an example. But it is not a standard across all devices.

4109   COMMISSIONER POIRIER: Okay. Is it costly?

4110   MR. DOSHI: So this is -- when you say "Is it costly?" it is a manufacturer-determined item.

4111   COMMISSIONER POIRIER: Yeah.

4112   MR. DOSHI: So for us to request it specifically would probably be cost prohibitive because they have got to build a bunch of codes in just for the Canadian marketplace.

4113   So keeping in mind most of the devices we leverage are launched in the U.S., and therefore we get economies of scale from that.

4114   COMMISSIONER POIRIER: Okay. So it can become cheaper in a few years from now.

4115   MR. DOSHI: That's correct.

4116   COMMISSIONER POIRIER: So less expensive, yeah.

4117   MR. DOSHI: And manufacturers, like I said, some of them are already putting them in now.

4118   COMMISSIONER POIRIER: Okay. Thank you very much.

4119   Mes questions en français sont sur le verrouillage. C'est une question qu'on se posait hier beaucoup auprès de d'autres compagnies, et on n'a pas encore eu les réponses.

4120   Est-ce que les téléphones que vous vendez, vous les commandez avec un verrouillage ou est-ce qu'ils sont vendus ainsi de façon exclusive par les manufacturiers?

4121   MR. ENGELHART: The ones that we order are all locked.

4122   COMMISSIONER POIRIER: You order them -- vous les commandez de cette façon-là de façon intentionnelle? Pourriez-vous les commander sans qu'ils soient verrouillés?

4123   MR. DOSHI: So we, the manufacturers, and as a carrier group lock the devices, as explained earlier.

4124   There is a number of reasons for that. Some of it from the standpoint of managing and making sure that we have got inventory available for our customer base, some to do the fraud protection as well because, as I indicated, the period that we indicated for 90 days will allow us to make sure that there isn't that risk of fraud.

4125   Manufacturers themselves lock devices such that they do not want devices for the Canadian market ending up in other parts of the world. So they lock them. As an instance, Apple also locks them within their stores when they sell them.

4126   They have recently opened up after the launch of the iPhone 5 unlocked devices, but only after the market demands at the Canadian marketplace were met.

4127   CONSEILLERE POIRIER : Alors, j'essaie de comprendre, et vous pouvez peut-être me le préciser.

4128   Est-ce que ce sont les manufacturiers qui veulent absolument que tous les téléphones soient verrouillés ou est-ce que c'est une forme d'entente qui fait aussi votre affaire à vous?

4129   MR. DOSHI: It is actually in both their interests so they're trying to protect their interests from the standpoint of selling within the Canadian marketplace and our interest is to, as I indicated, identify it for fraud as well as inventory allocation.

4130   CONSEILLERE POIRIER : Alors, pourquoi est-ce que, dans certains pays, il est interdit d'avoir des appareils qui sont verrouillés? Ils doivent sûrement avoir des manufacturiers qui leur offrent ces appareils-là, et s'il y avait une réglementation qui interdisait de verrouiller les appareils, les manufacturiers devraient suivre cette loi-là.

4131   MR. DOSHI: In those -- many of those countries there is really no direct subsidy model. They are sold as consumer electronic goods and then the customer signs up for plans.

4132   So there is no, so to speak, model that requires that kind of locking solution.

4133   CONSEILLERE POIRIER : Donc, le fait de verrouiller les téléphones est relié au modèle d'affaires utilisé par les compagnies au Canada, qui est celui d'offrir une subvention et un service dans le même tarif?

4134   MR. DOSHI: That is correct.

4135   CONSEILLERE POIRIER : Est-ce que le modèle serait si difficile que ça à changer? Pourquoi ce modèle-là ne pourrait-il pas devenir une autre forme de modèle?

4136   Et moi, quand j'achète mon auto chez un concessionnaire Toyota, par exemple, ou Hyundai ou peu importe, je peux aller obtenir le service ailleurs.

4137   De plus, j'ajouterais qu'il existe des pays où, lorsqu'on a une subvention, on peut conserver cette subvention-là avec un fournisseur de services sans fil mais aller obtenir les services sans fil dans une autre compagnie.

4138   Alors, j'essaie de voir pourquoi vous tenez tellement à ce modèle-là alors que d'autres pays ont changé le modèle et alors que les consommateurs sont habitués d'avoir un autre modèle que celui-là dans d'autres genres de services qui leur sont offerts au Canada?

4139   MR. ENGELHART: So there's two connected issues, the locking and the service model. The service model is: Why are we all on this subsidy roller coaster where all of our customers are buying subsidized phones?

4140   I think the short answer is it's because what customers want. We had Wind come into the market a few years ago saying, "To heck with this ridiculous model" and about a year or two later they said, "We're going to adopt that ridiculous model. We're going to start subsidizing phones".

4141   In Spain recently two carriers gave up on subsidies and two carriers kept them. There has been massive customer movement from the ones without the subsidies to the ones with the subsidies.

4142   In the U.S., T-Mobile has announced they are not -- they're going to try to stop subsidizing phones. I'll be very interested to see how that works.

4143   So customers want that subsidized phone. They want that latest and greatest device. They don't want to pay for the full cost upfront. That's why we're in the model that we're in.

4144   People are experimenting with other models. You heard about SIM-only plans with TELUS. We're looking at those too.

4145   I think the model is there because that's what people want in the countries where they have outlawed that subsidy. Everyone is running around with old Motorola flip phones. They don't all have the latest and greatest phones.

4146   In terms of the unlocking you're correct that you could do the subsidy model without the locking. Indeed, we are proposing here today, and we've announced, that we will give up the unlocking after 90 days.

4147   In addition to the fraud and inventory issues that Raj talked about, we're still going to want people that we sell a phone to, to sign up to one of our service plans.

4148   We're a service provider so we want to sell you a phone and we want to lock you -- lock that phone to one of our service plans. You might -- two months later you might quit, or three months later, but we're not particularly interested in just being in the phone selling business.

4149   If you want to buy an unlocked iPhone you can get one at the Apple store. They sell them there. There is lots of stores that sell unlocked phones and that's a good business for an electronics distributor to be in. If you're a service provider it's not a terribly smart business to be in.

4150   CONSEILLERE POIRIER : Chez Rogers et Fido, si j'arrive avec mon propre appareil, est-ce que le service coûte vraiment moins cher ensuite et de quel pourcentage?

4151   MR. ENGELHART: Yeah. Bell and TELUS currently have SIM-only plans where they give you a discount. I think TELUS said it was 10 percent. We have not introduced a SIM-only plan now.

4152   We have introduced a hand-me-down phone plan where if you give your phone to, say, a family member then they get a discount for that term.

4153   Obviously, with Bell and TELUS now having SIM-only plans in market it's something that we are taking a very hard look at.

4154   CONSEILLERE POIRIER : Je pense qu'on n'interprète pas les intentions des consommateurs de la même façon de ce côté-ci et de l'autre côté de la table.

4155   Je pense que les consommateurs veulent de la transparence, voudraient savoir combien est leur subvention et combien ils payent pour leurs services. Je ne pense pas que vous offriez ces informations-là clairement sur l'ensemble de vos factures, et c'est peut-être pour ça que le système fonctionne.

4156   Peut-être que nous sommes les leaders du monde dans notre façon de fonctionner avec ce modèle-là, mais il y a quand même, comme disait le président, quelque chose qui ne marche pas dans ce modèle-là, parce que les consommateurs nous disent, en quelque part, ça coûte trop cher de changer de compagnie.

4157   Alors, j'aimerais terminer en posant une dernière question.

4158   Vous dites que ce serait vraiment préférable qu'il y ait un seul code. Je comprends que pour l'industrie, c'est beaucoup plus simple à gérer. Personnellement, j'aimerais mieux toujours avoir un seul intervenant dans chaque chose que j'ai à faire dans la vie.

4159   Cependant, si je me mets du point de vue du consommateur, je ne suis pas convaincue que ce soit la meilleure solution. J'aimerais juste que vous me convainquiez, parce que, personnellement, j'aimerais mieux avoir deux bodyguards plutôt qu'un seul.

4160   MR. ENGELHART: So one of our problems with a lot of the provincial legislation is it's very hard to understand what it means.

4161   So we've been talking today for example about optional pay-per-use services that are subscribed to. Quebec just says in their legislation you cannot change the contract. And so, well, is an optional pay-per-use service part of the contract or not? I think obviously not.

4162   The class action lawyers in Quebec think it is. Every time we've changed a picture messaging rate in Quebec we've been hit with a class action lawsuit, and the legislation is not as clear as it should be.

4163   So, for example, we've talked about this U.S. data roaming plan, or not plan but rate. So $7.99 gets you 50 megabytes in one day. Our current rate is $3.00 per megabyte. So getting one megabyte for $3.00 I don't think is as good a deal as getting 50 megabytes for $8.00.

4164   But for customers in Quebec they're going to have to opt into that new service. For everyone else it will be the default. They will get it automatically.

4165   But for Quebec customers they are going to have to accept it, because if we make it the default for Quebec customers some class action lawyer in Quebec is going to say, "Well, I've got a million people here who only wanted precisely 1 megabyte". So now their rate has gone up from $3.00 to $8.00 and you're not allowed to do that.

4166   So I think one of the advantages to having the Commission be the custodians of this Code is that they understand the wireless business and they can enact regulations which are reflecting that understanding.

4167   One of our frustrations in dealing with provincial consumer legislation is they don't seem to understand it. They pass legislation. We don't have a process like this where we can explain our concerns to them and when we do explain our concerns to them, they're often ignored.

4168   So in addition to having a single national Code, I think it is important that the person who administers that Code understands the telecommunications business. And I believe the Commission is much more expert in that area than the provincial consumer bodies.

4169   CONSEILLERE POIRIER : Je terminerais simplement en ajoutant qu'avec quand même la Loi de protection du consommateur, il y a des poursuites pénales qui peuvent aller jusqu'à 100 000 dollars, il y a beaucoup plus de dents, alors qu'avec le Code et son application, il y a beaucoup moins de pénalités financières.

4170   Alors, c'est certain qu'il y a toujours de bons exemples pour montrer que le consommateur est perdant peut-être avec certains des services que vous offrez, mais il y en a plein d'autres aussi qui font qu'il y a des recours pour les consommateurs que notre projet ne pourra pas donner au Code national.

4171   Alors, sur ça, je termine. Merci beaucoup, Monsieur le Président.

4172   THE CHAIRPERSON: Merci.

4173   So I'll have a couple of questions just to -- well, I'll start and follow up on this question of constitutional issues.

4174   If indeed you think that some of the provincial jurisdictions are unclear, perhaps even unconstitutional or inoperative due to paramountcy type of arguments, and I don't want to get into that debate here, but assuming that that's your view, why do you want us to do that dirty work in the sense of us occupying the field and us looking like the people that are occupying it?

4175   Why would we, as Madam Poirier suggested, take away an additional option from consumers? Why haven't you taken the recourses in superior courts if you're of that view?

4176   MR. ENGELHART: Well, I think you're absolutely right. It's an occupying the field sort of case.

4177   If you don't have a code I think the courts are going to say this is federal jurisdiction but they haven't occupied the Code, therefore I'm not going to strike down this provincial legislation. I think once you put a set of rules in, then the constitutional argument would become available to us.

4178   THE CHAIRPERSON: Even if we have drafted it in the way we have drafted it currently?

4179   MR. ENGELHART: No, I think --

4180   THE CHAIRPERSON: See, that's the point. You're turning to us to occupy the field, in a way to your benefit, but I'm not sure it's to the benefit of Canadians or the CRTC.

4181   MR. ENGELHART: Well, I think it is to Canadians' benefit. I think that having conflicting rules doesn't make sense. I think some of the provincial legislation for the reason I gave doesn't make as much sense because they don't understand this business.

4182   I just gave the example of a U.S. data roaming rate that will not be the default for Quebec customers. I don't think that's to their benefit.

4183   I understand that nobody wants to pick fights with provinces so I would tend, if I were you, to not consider that. I would ask yourself what is in the best interests of consumers.

4184   And I think the best interests of consumers is having a single Code by a regulator who understands the telecommunications market.

4185   THE CHAIRPERSON: Okay. I understand why that's in your best interests as companies, but you might want to give me a few more arguments and comments as why you think that's on top of that in the best interests of Canadians.

4186   Now, I had noticed in your written presentation you talk about what you're asking for, simplicity, and you're always talking about simpler plans rather than simple.

4187   How many -- did I hear you correctly when -- how many grandfathered plans do you have?

4188   MR. ENGELHART: Yes, you heard me. I got kicked by Raj, but 11,000.

4189   THE CHAIRPERSON: Well, I think it made it to the transcript in any event. 11,000; how did we get there?

4190   MR. DOSHI: So we allow customers the flexibility to stay on the plans that they have or to move to in-market plans at any time.

4191   So although there may be 11,000 plans there are fewer and fewer customers on the legacy plans. But they are still there and we do not take them out of market or at least take the customers off of those plans at this point.

4192   So that's why -- I mean, we are providing customer's choice and that's one of the consequences in terms of the system impacts. Our care groups have to manage all those legacy plans as well in terms of understanding and explaining the nuances.

4193   THE CHAIRPERSON: Have you ever thought that maybe that's part of the problem?

4194   MR. DOSHI: But the other alternative is that the customer is forced to change to current in-market plans and if they don't want to that's from their perspective, not choice.

4195   THE CHAIRPERSON: Well, Henry Ford seemed to find a simpler way of doing things. I mean, I get that it's difficult to do it.

4196   But, surely, it creates a huge communication nightmare for yourselves, the other providers and, in fact, creates a rather complicated environment from which the consumer has to operate.

4197   MR. DOSHI: Agreed. But I would just characterize with the new plans that continue to evolve in the market, the rate of migration to new plans is quite aggressive.

4198   But it's just we get down to customers that just don't want to change off certain plans and that's also instances when technology changes happen, where decommissioning most of the TDMA network was an example. We were giving a free phone to migrate to the new technology and we still couldn't get customers to migrate. At some point we have to do the forced choice.

4199   THE CHAIRPERSON: And I know how difficult that is. There is maybe a trust relationship issue there as well. Maybe that's why they don't --

4200   MR. DOSHI: Education, yeah.

4201   THE CHAIRPERSON: -- believe that maybe what you're offering them makes sense.

4202   A variation on the notion of simplicity, you're proposing a phased implementation and Commissioner Molnar asked you a number of questions on that, but don't you think that that will just add yet another layer of complexity to have a phased-in implementation?

4203   MR. DOSHI: I think the phasing-in is tied into the ability to actually develop the solutions. If the alternative is to wait till everything is ready, I think the Canadian consumer would have to wait, let's say, 12 to 18 months.

4204   So our proposal is things that can be done sooner, let's get them in place so that the customer benefits now and things that will take technically longer we'll put them into later release in terms of delivery.

4205   THE CHAIRPERSON: I do fear, though, that what the consequence of that is the same nightmare you're probably facing with the complexity of your service plans. That then becomes a bit of our problem as well because we are going to have to communicate a phased-in plan.

4206   MR. DOSHI: There's pros and cons on both sides of it. I agree with you.

4207   THE CHAIRPERSON: Yeah. There is a few places in your presentation today, specifically at page 7 -- at paragraph 7 and paragraph 18 and paragraph 27 where you've made statements.

4208   For instance, at paragraph 7 you're sort of saying that customers would prefer something -- would have a consistent set of rules, for instance. We actually heard the opposite from Union des consommateurs. So I was wondering if on that one and on the other ones -- I'll just go through them.

4209   On page 18 -- on paragraph 18 they say they would not like being told to wait until Canada Post delivers.

4210   On another paragraph 27 they do not appreciate being over notified.

4211   In all three of those instances do you actually have evidence supporting that or is that just your opinion based on, I guess, your relationship with them?

4212   MR. DOSHI: So in the case of paragraph 18 we do provide hardware upgrades and solutions both in store as well as over the phone as well as new activations. If the process were that a contract had to go out to them first to acknowledge receipt and then the phone goes out, that back and forth time would delay their ability to get access to solutions.

4213   So if the customer does request, we would put that process in place but the vast majority, given that we have solutions like buyer's remorse and that when they get the contract and the phone, if it's not to their expectations to have the right within that 15-day period to return, we believe is a better solution rather than forcing everybody upon a contractual process where we would deliver --

4214   THE CHAIRPERSON: Okay, I understand your argument. What I'm asking is do you have any --

4215   MR. DOSHI: Do I have any evidence to that effect?

4216   THE CHAIRPERSON: -- evidence to the effect or is that just your opinion of what they would like or not like?

4217   MR. DOSHI: Given that we don't have this process that you're recommending in place today, we wouldn't have that information but I would venture to guess that a customer once -- a negotiated contract -- would want access to the device as soon as possible.

4218   THE CHAIRPERSON: Right. You mentioned buyer's remorse.

4219   MR. DOSHI: Yes.

4220   THE CHAIRPERSON: You said how long has that been in place?

4221   MR. DOSHI: It's 15 days.

4222   THE CHAIRPERSON: No, for how many years?

4223   MR. DOSHI: For many years. I don't want to -- probably --

4224   THE CHAIRPERSON: But how many people actually use that right?

4225   MR. DOSHI: A good percentage. You know what? I would file that under an undertaking if that's possible.

4226   THE CHAIRPERSON: That's correct, if you would. The 22nd of February would be the date.

4227   MR. DOSHI: Okay. Okay.

Undertaking

4228   THE CHAIRPERSON: Now, earlier you were talking about locking and unlocking, and obviously I don't have the transcript, but if I understood correctly, you were saying that, for instance, you wanted to make sure that it was locked in for 90 days because some of your customers at Future Shop, if it wasn't locked in when they went to those service agents, the phones might have been all bought up quickly.

4229   Is that right?

4230   MR. DOSHI: Yes.

4231   THE CHAIRPERSON: Are you actually making the case, by saying that, of the Competition Bureau, that you are actually preventing somebody from going across the street and getting a better price?

4232   MR. DOSHI: No, it's not a price notion, it is the availability of inventory for our customers. So, if we have --

4233   THE CHAIRPERSON: Right, but if somebody goes in and says, "I just want that phone, and I want to be able to --"

4234   Maybe you have a good offering, a service plan that they want, but they might also be wanting to go across the street and do the service plan across the street.

4235   By locking it in, you are actually preventing them from going to the marketplace and finding the better service provider.

4236   MR. DOSHI: Understand that we have also spent efforts to put on our applications and solutions. For example, My Account is a monitoring solution that we put on our devices; mobile TV applications, sports and news-type information solutions on our phone; Rogers One Number, which is a service application.

4237   THE CHAIRPERSON: Right.

4238   MR. DOSHI: So we work with the manufacturers to create a uniquely defined skew for us. So the raw hardware may be the same, but the uniqueness is also in terms of the software that is included in the device.

4239   So when a customer from Rogers buys a Rogers device, these applications are available for their use.

4240   THE CHAIRPERSON: But you are actually saving the devices for --

4241   MR. DOSHI: For our customers --

4242   THE CHAIRPERSON: -- for your potential new customers.

4243   MR. DOSHI: Existing and new.

4244   MR. ENGELHART: I think the scenario that Raj is talking about is when the hot new device comes out, which is quite often. So the hot new device comes out, and there aren't enough hot new devices. So Apple will say, "Rogers, you get 10,000. And, Bell, you get 10,000. And, TELUS, you get 10,000."

4245   So if some of our 10,000 are sold unlocked, and people buy them and go to TELUS, that's not good. Now we don't have as many for the Rogers customers, and TELUS got 12,000 and we only got 8,000.

4246   This is an issue that affects hot new devices right after they are released. In the normal course of events, no, that is not the issue.

4247   I still don't agree with the Competition Bureau. I don't think the locking has anything to do with switching customers, and I think the proof of that is that we are here today saying we will unlock after 90 days.

4248   THE CHAIRPERSON: Okay. In the interest of time, I will move on to flex plans, which you mentioned, that you bring people up to the next level. I think I understood what you are doing.

4249   Are the other service providers offering anything similar, to your knowledge?

4250   MR. DOSHI: Yes, many of the carriers do offer them, I cannot say all.

4251   THE CHAIRPERSON: You don't think that all of them do?

4252   MR. DOSHI: I think that Bell, TELUS --

4253   THE CHAIRPERSON: You folks are watching each other all the time.

4254   MR. DOSHI: Right, I'm just saying that it varies, based on -- we have flex plans for Smartphones, and we have them for tablets, as well. So I can't sit here and say that every single carrier offers one across the board.

4255   But, at least in the major ones, with Smartphones they are available.

4256   THE CHAIRPERSON: From everyone, from all of the different service providers.

4257   MR. DOSHI: Yes. I would be cautious on the smaller carriers at this point.

4258   THE CHAIRPERSON: I think that you covered this earlier, but just to be clear, the personal information summary, which would be at the beginning of the document, would form part of the contract, would it not?

4259   MR. ENGELHART: Yes. If you agree to let us make it part of the contract, yes.

4260   THE CHAIRPERSON: Okay. I understand your point of wanting to reduce the number of documents.

4261   Now, I was a bit struck when you said earlier that you are having difficulty collecting copies of paper contracts from your various agents. Is that a significant issue for you?

4262   MR. ENGELHART: I am going to ask Josh to answer, but I believe that we are getting better. We are working on it. It's not perfect.

4263   Josh, I don't know if you want to add --

4264   MR. YARMUS: It's not so much collection, but consistency in storage and retention of information. Some of the stores are simply storing the contracts in boxes, in back rooms, and the ability to retrieve -- to have a consistent, solid system for retrieving the contracts becomes complicated.

4265   We are working on improving that. At the moment it's not as ideal as we would like it to be.

4266   THE CHAIRPERSON: You must have a fun time when it comes to, in a number of cases, going after clients that have not paid.

4267   MR. YARMUS: Yes.

4268   THE CHAIRPERSON: Evidence must be difficult to provide to the Small Claims Court.

4269   MR. YARMUS: No, we will track down the information, but it's not as efficient as we would like it to be, and that's why we are looking at ways to improve that.

4270   THE CHAIRPERSON: Right. It may point to something that I would like your views on, a more systemic issue. There are a lot of people out there who end up being your agents, whether they are in your stores or elsewhere, and when we implement this code, they become sort of the ambassadors of the code.

4271   How do we ensure that they become good ambassadors of the code if they have difficulty keeping documents that you would need to collect dollars later on?

4272   MR. ENGELHART: Sure. I will ask Raj if he wants to add, but, yes, anyone who is our agent is governed by certain rules and has to comply with certain policies and, for the most part, we can get them to comply with your rules.

4273   Some of the very big retailers have more market power over us than we do over them, so it can be a difficult conversation, but we will get there.

4274   THE CHAIRPERSON: I would rather us describe them as our rules; not our rules over here, but the whole industry's rules, once we finalize them.

4275   MR. ENGELHART: Right.

4276   THE CHAIRPERSON: I hope you would agree with that.

4277   MR. ENGELHART: Of course.

4278   THE CHAIRPERSON: Okay. I was asking TELUS earlier, and maybe you can help me out.

4279   Let's say that you have a device that costs you $500 or $600, and somebody goes into a three-year contract, and it's a subsidized situation -- so, I don't know, it's between $10 and $15 a month, which reduces that -- what happens on the 37th month? Why doesn't the rate go down if the blended cost includes a subsidy?

4280   MR. ENGELHART: Right. As I was saying before, that movement to SIM-only pricing has never been -- has only recently entered the marketplace.

4281   Logic would dictate that you are right, but the demand just hasn't been there. That demand, I think, is now there. That's why Bell and TELUS are now offering SIM-only plans, and I think that market will develop.

4282   THE CHAIRPERSON: Okay. So we may see an announcement soon.

4283   All right, I will ask the question. What is success, and how do you measure it?

4284   MR. ENGELHART: We don't have anything terribly profound here. I have thought about complaints, and I don't know if they are going to go up or down, and I don't know if going up or down would be good or bad.

4285   I have thought about churn, and I don't think that works either.

4286   I do think that the only way to measure it is with, as other people have suggested to you, some sort of public opinion polling, and you had better do one before the code comes in to get a baseline, so that we can see if it goes up or down.

4287   THE CHAIRPERSON: So a mixture of, probably, quantitative and qualitative, but more emphasis on qualitative, in your view.

4288   MR. ENGELHART: Yes. I would think that you would want to do both. I think you would want to do polling and you would probably want to do some focus groups, too, and you would want to see what people said.

4289   THE CHAIRPERSON: I take it that in your comments you will be expressing views on what might be good performance measurements for that.

4290   MR. ENGELHART: Yes, we can make some suggestions on what the right questions are.

Undertaking

4291   THE CHAIRPERSON: Okay. That's what I would be looking for.

4292   How do we finance that, because that requires a certain amount of activity and coordination.

4293   MR. ENGELHART: I guess from our Telecom fees.

4294   THE CHAIRPERSON: Okay. So you think that it's the role of the CRTC to do that sort of --

4295   MR. ENGELHART: I would think so, yes.

4296   THE CHAIRPERSON: Okay, fair enough. Thank you.

4297   I believe those are our questions. Thank you very much.

4298   We will take a short break, just to let us install, we have a lot of individual intervenors now.

4299   It will be just a short, 10-minute break.

--- Upon recessing at 1533

--- Upon resuming at 1544

4300   LA SECRÉTAIRE : À l'ordre, s'il vous plaît. Order, please.

4301   Mr. Chairman, we will now hear some presentations by some of the interveners from various CRTC regional offices in Dartmouth, Montreal, Calgary and Toronto.

4302   Our first presenter will be Mr. Daniel AJ Sokolov. He's appearing from Dartmouth Regional Office in Nova Scotia.

4303   Mr. Sokolov, hi. How are you? Can you hear us well?

4304   MR. SOKOLOV: Yes, I can hear you well. Good afternoon.

4305   THE SECRETARY: Good afternoon and welcome to this hearing.

4306   The Panel is now ready to hear your presentation. You may now proceed and you have 10 minutes.

PRESENTATION

4307   MR. SOKOLOV: Bonjour, Mesdames et Messieurs les Conseillers, Monsieur le Secrétaire. Good afternoon, ladies and gentlemen of the Commission, Mr. Secretary. I'm very glad for the opportunity, to have the opportunity to speak to you today.

4308   I have filed an extensive presentation which goes into the detail, which I won't be bothering you with today.

4309   I would like to focus on three points from my filing, but, first, I would like to pick up on a point that I heard discussed yesterday and today with TELUS, Rogers and the CWTA, and it concerns the pay-per-use charges and the changes to those, and I'm really shocked that this is a discussion point.

4310   I would think that if the Wireless Code when it comes into force allows pay-per-use changes at will by the operators, then the Wireless Code has failed.

4311   The operators have tried to present the case where the customer just looks at the bundle that they pay every month and then eventually if they have a pay-per-use thing they look at that separately if they want to use it or not and see what is the price at the moment, but this is not how it works.

4312   A customer looks at the offers that are in the market and, for example, he chooses a certain operator or a certain price package in combination with the pay-per-use prices. If he should go outside his bundle or if he should want to use a service that is not included and he compares these and then he chooses one operator and it would not only be short-changing the consumer but also unfair to the competitors to get all these customers in with a cheap pay-per-use charge and then later go in and suddenly change the price and the customer at that time is locked into his contract.

4313   Well, he can maybe go and pay a $100 subsidy to get out of his contract, but that for many consumers is not really an option. This is why they took the subsidized phone in the first place.

4314   So I really think, and I think I'm here in line with these lawyers in Quebec, that the pay-per-use prices are an integral part of a contract and just to go in and change them later, if the operator wants to do that that is fine, but then the customer must have -- must be informed in advance and must have the choice to cancel his contract without having to pay off any subsidies or other fees.

4315   So that is my point on the pay-per-use charge and please have a strong look at that.

4316   Coming to the main three points that I want to make in regards to my filing, the first one concerns premium services. It is my point of view that they must be deactivated by default on new contracts.

4317   That is especially important for protection to families because they often give their kids a phone and with these expensive services they can rack up -- you know how many texts a minute a teenager can send, that can get really, really expensive.

4318   Some of these texts cost $5 or $10 apiece and they're probably not aware of the cost and then they get a huge bill shock. And I think they should be deactivated by default.

4319   If the consumer wants them activated, he should tick a box in his contract when he signs it or call his operator later and say, hey, I need premium services and then they can be activated.

4320   And I think it would also be good for the CCTS if that's deactivated by default because they will have less work with customer complaints, just as a protection measure.

4321   The second thing is in regards to section D2 of the Draft Code. I have seen there a differentiation being made between D2.1 and D2.2 so that if there would be a change to the privacy policy or fair use policy that that would have different repercussions then, say, a more blatant price change for a minute of a call and I don't think this is how it should work.

4322   All these changes to a contract have to be treated the same because they are part of the deal that the consumer goes into. He might have a look at the fair use policy and if that suddenly changed to his detriment he might end up with a very large bill or he might not be okay with a change in the privacy policy.

4323   But then the provider wants to start selling some -- monetizing, as they call it, some data they yield from the consumer on how he's using his devices or what devices they are, whatever the operator finds a market for, and the customer might not be fine with that and then he can't cancel his contract without again paying the subsidy off just because the operator tries to change the privacy policy. Well, the consumer can't go in and demand a change for the privacy policy after he signed the contract. So the operator should not be allowed to do that.

4324   And the same, I think, should be true for the changes of the areas of local zones. I haven't seen that mentioned in the draft. I missed that. We have seen time and again in Canada that local calling zones have shrunk, which can result in much higher charges for the consumer.

4325   My third point is that the Wireless Code needs a non-discrimination clause and I think that for you as the Commission that's also a change to foster competition. So I'm not only talking about non-discrimination in regards to gender, race, age, religion and so forth but also discrimination by location.

4326   So what we currently have is that a lot of price plans are only offered in certain areas. The current top price plan you get in Canada is if you're a resident of Thunder Bay because the big operators are trying to fight a local small competitor there. We have some similar things often in the big cities where there is competition, like Toronto, Vancouver, Montreal. There are different prices than what you get, for example, out here in Halifax.

4327   Why is that? Because the big operators try to keep the new entrant small by taking away the customers they can get there. As a result, the small operators can't have enough customers. They don't get large operators eventually because they just don't earn the money because they don't get the number of customers.

4328   I think it's unfair to discriminate. If I want to go to a Thunder Bay store and get a price point from there, as a resident of Halifax I should have the right to do so. If it's only free calls within Thunder Bay and everybody else it's expensive, well, it's my choice to do so.

4329   The operators in the hearing have always said they want one Wireless Code and they don't want all the provincial regulation. Well, fair enough, I can understand that, it's a big overhead. If they want one nationwide regulation, then they should also give the same offers to all Canadians. So I think there really should be a non-discrimination clause that outlaws discrimination by location.

4330   How much time do I have left?

4331   THE SECRETARY: You have four minutes left, Mr. Sokolov.

4332   MR. SOKOLOV: Thank you very much. Sorry for speaking so fast.

4333   I would like to take time to comment on a few things that I heard yesterday.

4334   For example, when it comes to the spending caps and the real-time billing, it has come to my attention that the CWTA argued against price caps or charging caps and one of the examples they cited was roaming, that they only get the data from the roaming use at a much delayed time, so it would be impossible to put in a price cap for roaming.

4335   Well, I can tell you in Europe they have been very successful with these price caps.

4336   And we heard later yesterday from TELUS. They said the only place where they have put in a price cap is for roaming. So how does TELUS do it and the CWTA claims it can't be done? You know, the story doesn't ring true.

4337   The second thing generally about real-time billing, there are two points I would like to make.

4338   First of all, all the operators are able to do it on prepaid, so why do they find it so difficult to do it on post-paid? The real-time billing solutions are there and even a spending cap would not force the operator to have actual real-time billing. It's just a protection for the consumer, that he's not charged more than that.

4339   So, for example, if the operator only does near real time, you know, every three hours, every six hours, and the customer in that timeframe goes from a $40-bill to an $80-bill, well then that's a problem for the operator and not for the customer.

4340   It would stop for the customer at $50 and the other $30 would not be collectable. At that point it becomes a business decision by the operator, by the provider either to invest in a shiny real-time -- state-of-the-art real-time billing system or just go with what he has because it's cheaper, and then the odd customer, he would have a small loss there.

4341   But I would actually think that for fraud prevention the providers would eventually move to a real-time billing system anyway because there is fraud out there and they want to fight it in their own interest. So I don't really believe the story that this is going to, you know, make them go bankrupt if they have to protect customers that way.

4342   Another point that was put in by the CWTA, they painted horror stories of the U.K. where after some regulation was put in all the price plans became more expensive and the fees went up.

4343   What they were describing is a simple inflation adjustment. So once a year, if there has been enough inflation, the price -- certain prices in existing contracts are adjusted, and should there be deflation, they have to go down again. So I don't think that is, you know, such a bad thing as the CWTA has painted it.

4344   The last thing I would like to touch on is this thing with the prepaid and protecting the balances of prepaid customers. I think that the 90 days that TELUS was stretching, it is a random number.

4345   Regulation authorities in other countries -- in some other countries they have actually put in regulation themselves on how customers are counted, because TELUS was going on about the financial market and how customers are counted.

4346   I have seen, for example, that the 3 Group that's headquartered in Hong Kong has networks across Europe. They count their prepaid customers. They keep them on for 15 months, not just 90 days, but in their ARPU reporting, so how much average revenue per use that they have, they calculate out, they take out the inactive accounts. So this is something they made very transparent in their financial reportings.

4347   So I think all these problems could be solved. The 90 days is a rather random number. It could as well be 15 months, give the customer some time to come back. Also for people maybe who just travel to Canada time and again, for them it would be a very, very good thing to get a prepaid card and then they use it two, three, four times a year whenever they come here. So that is a thing.

4348   And then finally there was a lot of discussion if the consumers want all this notification on caps at the draft round of discussion and I don't see that as a huge problem. If there's an opt out for the consumer and he says, well, I don't want all these notifications and I want a cap with $1 million, then the consumer should have the right to do so.

4349   So these are all problems that could be solved if the operators are willing to do it and I hope that the Commission is willing to act on it.

4350   Thank you very much.

4351   THE CHAIRPERSON: Thank you very much, Mr. Sokolov, for participating in this hearing. We very much appreciate when individuals take the time to appear in our hearings. We obviously listened carefully to your presentation and although I don't see a lot of senior representatives from the providers in the room, I'm going to give them the benefit of the doubt and assume that they too are listening at least through other devices. There's one or two, but not many.

4352   So Commissioner Simpson will have some questions for you.

4353   MR. SOKOLOV: Thank you.

4354   COMMISSIONER SIMPSON: Hello, Mr. Sokolov. Sprechen sie Deutsch?

4355   MR. SOKOLOV: Ja, ich spreche Deutsch. Ich bin in Wien aufgewachsen.

4356   COMMISSIONER SIMPSON: We'll continue on in English.

4357   First of all, I would like to say -- echo the Chairman's words that you have contributed greatly already to this hearing because we're encouraging people to come forward and you've done so in a very clear manner. As a matter of fact, you've made my work extremely easy because of the manner in which you dealt with each of the Code items with very clear presentations on your views.

4358   So with that, I would like to deal more with your three main points and get to the meat of your arguments there, also with your general remarks, if that's satisfactory to you.

4359   First off, on the access to premium services you're saying they should be deactivated. This, I presume to mean that, you know, you would prefer to have an opt-in rather and opt-out scenario where they're not coming in as part of the bundle?

4360   MR. SOKOLOV: Yes.

4361   COMMISSIONER SIMPSON: In your very thorough research, you probably have a better idea than I as to how these third-party premium services are represented at the time of looking at a potential wireless provider. It's been a long time since I've had the benefit of a private phone and I would like to know from you where this particular issue comes from and rises to the top of your concerns.

4362   Are premium services adequately represented in disclosure at the time of looking at a wireless contract with a vendor?

4363   MR. SOKOLOV: Well, the problem is that they are not -- no, because you -- the different price points are there and it is hard at the time you walk into a store and sign the contract, it is hard to predict what premium services will there be and how much they will cost.

4364   Now, there are other countries who have decoded the cost into the number. There is regulation in some countries how these numbers, these premium numbers are advertised. They have to state the cost. Sometimes when you call or when you get a text message they have to, within the call -- before they start charging you the first minute, they have to give you a disclosure how much it's going to cost.

4365   This is not -- I don't think this is something that can easily be put into a contract before you sign it. The problem here in Canada is these numbers are advertised but it's unclear how much it costs to the consumer or, you know, if there it's in a tiny, tiny print that you can't read.

4366   And then there is a big problem potentially -- I don't know if it's as rampant in Canada yet, but it was a huge problem in Europe until they put in strong regulation against it. It was reverse charge text. So there were fraudulent companies who just started to send premium text messages to random numbers and rake in a lot of money, take that and run.

4367   COMMISSIONER SIMPSON: Have you --

4368   MR. SOKOLOV: And so --

4369   COMMISSIONER SIMPSON: I'm sorry, go ahead. I'm sorry.

4370   MR. SOKOLOV: No, please.

4371   COMMISSIONER SIMPSON: Have you had personal experience and tried to negotiate or have resolution with a wireless provider on the subject of premium services? Have you been stung by --

4372   MR. SOKOLOV: Yes, I have.

4373   COMMISSIONER SIMPSON: And what was your experience?

4374   MR. SOKOLOV: Yes. Well, my experience was, thankfully, not a very high amount, but I tried -- I tried to find out if it was hidden in the bill. I can file it for your reference, I have the bill here. It was hard to spot in the bill, I just found it by coincidence, it is hidden indeed. It is not in the itemized billing. Then I called the provider, I said, "Why is there the charge? Which number did I text to?" They couldn't tell me. They said, "Well, you send one, but we don't actually know."

4375   I was in touch with the CCTS. The CCTS told me, "Well, if I send -- if I ask the provider not to bill me henceforth for any premium services then they are obliged to do so." I asked them, the provider says, "Nyet. We are not -- we don't care if you use them, we will charge you. We don't care what the CCTS said".

4376   Well, I don't have the money to hire, you know, a class action lawyer so I had to leave it there.

4377   COMMISSIONER SIMPSON: Was the provider's or CCTS' viewpoint that once you inadvertently began a commercial relationship with this third party provider, that it was up to you and that provider, not the carrier, to figure out a resolution to your problem? I mean, how much did the carrier get involved?

4378   MR. SOKOLOV: Well, I asked the -- well, first of all I tried to find out what this service was that was used, but it was obviously a text message sent somewhere. It was not a subscription service so I was not hit with, you know, one text message every day, so it was not an ongoing problem. I tried to find out like what was it. They couldn't tell me.

4379   Thankfully it was not such a high charge I just paid it, you know, it was cheaper than adding many more hours to, you know, fight about it.

4380   COMMISSIONER SIMPSON: Hmmm.

4381   MR. SOKOLOV: But I know there are families who rack up big, big charges and I see that there were these fraudulent companies in Europe and I'm sure they are not just giving in, now starting to bake bread to make a living, they are going to look for other markets where they can, you know, rip off people.

4382   COMMISSIONER SIMPSON: So your recommendation is full disclosure of any attached premium services, make them known to the potential customer and the customer has to ask for them at the time of signing of the contract.

4383   Is that what you are --

4384   MR. SOKOLOV: Yes. Well, the second part. Not so much the first part because I can see it's very difficult for the providers to inform the customer when he walks into your store of all the potential premium services that are in the market today or might be here tomorrow. You know, today it's horoscopes and tomorrow, I don't know, you get your CARFAX report through text messaging and it costs you $10.

4385   I don't know, you know. It's hard for the provider to predict the premium services throughout the next three years or whatever the contract length is, but if they are deactivated by default then the customer does not go into the trap of a premium service unless he specifically requests that and then it's up to the provider to activate or not.

4386   COMMISSIONER SIMPSON: Okay. Last question on this subject.

4387   At any time when you were dealing with your provider in this instance or the CCTS were you given any idea as to whether your account information was given to that third party provider at the time you initialized the phone?

4388   How did they come upon knowing you had a phone and an account?

4389   MR. SOKOLOV: Well, it works like this, obviously me or a family member sent text message to a certain number. It might have been a sweepstake they wanted to partake of, they saw an ad and "if you want more information text to this number", something like that. I'm not exactly sure. I never really figured it out.

4390   So they just -- it goes through the billing system of my provider so my provider sees, "Uh-huh, he sent a message to that number, this number costs $2.00, $5.00, whichever per text" and they put it on my bill and pass on a share of that money to that third party.

4391   So it was not a point in the discussion if my -- actually, until you asked me that I actually had never thought about it, if my identity was really -- apart from my phone number was ever passed on to the third party. I don't know.

4392   COMMISSIONER SIMPSON: So you are intimating here -- at the end of this paragraph you say:

"No provider should be forced to facilitate premium services."

4393   That doesn't seem to register correctly with me in terms of the rest of your argument.

4394   Are you saying that the provider is forced to offer the services, or do you mean the consumer should be forced to facilitate?

4395   MR. SOKOLOV: No, no. I think if there is a provider that has it on the prepaid service or some no-frills service, of if he says, "Well, you don't have a great credit rating, I will give you a post-paid contract, but without premium services", something like that, you know, then there should be no -- no way of anyone suing the provider and saying you have to provide access to premium services if the customer does not want to do it.

4396   COMMISSIONER SIMPSON: But how can the carrier -- by what you have just said in your testimony, the customer quite often triggers the relationship by a hot link, you know, some kind of device that causes them to click through and the next thing you know they are in a $2.00 a minute relationship.

4397   How is the provider responsible for the consumer's actions? I just don't quite get that.

4398   MR. SOKOLOV: Well, the provider does the billing and the provider keeps a large share of the money, so the revenue from this premium service is shared between the provider and the third party, and maybe some intermediaries.

4399   You know, this is not a huge point of my thing. Currently it is my opinion that the providers generally offer premium services, facilitate premium services because it is a good revenue source for them, that if there is a provider that should say, "Well, I don't want to go in that business, I just want to make phone calls and texts and data at whatever the normal rate is", then that provider should be free to say, "We are just not offering that."

4400   But from a consumer point of view this is not really a big point. The big point for me as a consumer and as a sole proprietor is they should just be not activated unless I ask for it so I don't inadvertent -- me or a family member or an employee, does not not inadvertently start using them.

4401   COMMISSIONER SIMPSON: Okay.

4402   MR. SOKOLOV: It should be a real decision. This is not just a normal text message that's included in my bundle, but this is going to cost me $5.00 apiece.

4403   COMMISSIONER SIMPSON: Okay. Prior warning of some kind.

4404   The next statement that you make, it's extremely broad. You are saying that:

"The Wireless Code should include a non-discrimination clause."

4405   And then you go on to provide a great array of examples of those who might otherwise be discriminated.

4406   Earlier today we had three Professors from Ryerson who had talked specifically about youth, individuals with disabilities and elderly people. You broadened the subject substantially. Why do you feel the need to do that? Are people, in your mind who by race, gender, political orientation, being discriminated by the phone companies?

4407   MR. SOKOLOV: I have no evidence of the discrimination for race or gender or sexual orientation, political orientation. I think this is -- and I would also think that this is already something that is in existing legislation generally. You know, there are laws and protections against discrimination of this kind.

4408   I have seen other markets where there are price plans offered only for women or only for men or only for certain age groups, but what my point is -- and that is not covered by any existing legislation to my knowledge -- is the discrimination by location.

4409   COMMISSIONER SIMPSON: Does Human Rights legislation not cover that though, in your mind?

4410   MR. SOKOLOV: Not to my knowledge, because -- not to my knowledge, no. It's just the experience in the market today that a lot of Canadians are really trying to get these price plans offered in Thunder Bay. It was not a random example, I know. I have read of people who just look up the local pizza parlour and tried to use that address, not with the intent to defraud the company, they are going to pay their bill, but they want to have that under the highest plan and they happen to live in, I don't know, Saskatchewan or Nova Scotia, wherever, and they just can't get it.

4411   COMMISSIONER SIMPSON: Okay.

4412   MR. SOKOLOV: And it's not only that they feel discriminated versus the people in Thunder Bay, it is also a way to thwart competition. They are trying to get the customers that are currently with Tbaytel and they, for years now, since the new entrants started in the big cities, you can get better price plans there than out here. So this is bad for competition. I mean, at the end of the day it's bad for the consumer because it keeps prices high everywhere else.

4413   COMMISSIONER SIMPSON: Okay. I will be coming back to that with respect to your comment on homeless people, but another area that I find very interesting because you sort of -- in the greatest percentage of your submission here you are very concise on a line-by-line basis with respect to the Code and things that we should look at, but in this area you are sort of comingling privacy policy issues with things like billing statements and wanting to have us consider making recommendations to modify information such as the disclosure of numbers that you have called or have called you on your phone.

4414   Why is that?

4415   MR. SOKOLOV: Well, that is not so much a thing of charging, but I think it's a privacy --

4416   COMMISSIONER SIMPSON: No, it's privacy I'm asking. Privacy, not economics.

4417   MR. SOKOLOV: Yes. I have seen that very successfully used in Europe. It's a style in Europe that the last three digits of the number are not disclosed on the itemized billing unless the account holder asks for that. That is just for -- you know, I hear it has saved a lot of marriages.

4418   But I think it's just that, you know, often there are several family members on one account and that you look, you know, what is your sister or your daughter or your wife or whatever, your son, who are they talking to and how often, and so on, and also similar situations with employees or whoever might be on your contract. And providers are going into that. They want people to buy these family packages -- you know, they have offers for that -- and then you can look in and really see who has been talking to whom for how long and when and where. So I think that could be improved upon, to have a certain privacy there as a default and if someone says, no, I want to know it all and I will tell everyone who is going to use it that that's what they disclosed to me, then that's fine.

4419   COMMISSIONER SIMPSON: Thank you.

4420   Working through your list, the issue of prepaid accounts never having a negative balance, are you aware of any instances where a prepaid account issued by a wireless company has gone into the negative balance with unwanted charges and then expected payment? Is this something that we should be looking at or is this something that you wish to never happen, but has not happened?

4421   MR. SOKOLOV: Well, I know that there's a big problem in Germany in the German market --

4422   COMMISSIONER SIMPSON: But this is not Germany, sir.

4423   MR. SOKOLOV: -- with people being sued. I know, I know, I just -- I just followed the discussion here and I want to prevent it becoming a topic in here.

4424   I have heard the Rogers and Telus in the hearings always say, well, everybody who does not want to get more charges, he should move to a prepaid plan. Well then, we have to make sure that the prepaid plan actually never does go into the -- you know, into arrears.

4425   COMMISSIONER SIMPSON: Okay.

4426   MR. SOKOLOV: And if the operators are doing it anyway today, then they shouldn't have a problem with it at all.

4427   COMMISSIONER SIMPSON: Sorry, I'm just reading forward here about the process.

4428   MR. SOKOLOV: Sure. Take your time.

4429   COMMISSIONER SIMPSON: Okay. On the disenfranchised, you make specific reference to the belief that the wireless companies should be doing more on a social level, if not on a social responsibility level to bring wireless, which is becoming a ubiquitous tool of all societies, to bring some form of wireless connectivity to those who are not able to pay for or do not have the ability to, by any mechanism, pre-pay or otherwise have a phone.

4430   How does that work in your mind, and does it also bring up another problem which is safety and security because of theft because we're seeing, you know, phones being stolen off of kids right now and I shudder to think of homeless people having a similar problem.

4431   Would you talk to me about that.

4432   MR. SOKOLOV: Well, I'm not entirely -- but that was in my first submission in this procedure and after seeing the Draft I'm -- it's probably not one of the things that have to be part of the Wireless Code.

4433   But I have seen other countries where there's schemes like that exist, it's either financed by the operator through the telecom fees or it's tax funds and I think it has a very strong safety and security implication for those homeless people because they are often victims, they are easy targets for people who are bored, people who are -- whatever malicious ideas they have and if they have a phone, they can maybe call the police or call someone for help.

4434   And, second, if there would be a system like that where homeless people could maybe use wireless phones, then they would also -- then I would say most of them would have a wireless phone, so they would have less incentive to knock the next guy over and steal theirs.

4435   So, I think that would be something that would be a high profit to the Canadian society and try to get these people back into communication. You know, they can't even apply for a job if they don't have a phone number.

4436   COMMISSIONER SIMPSON: Well, perhaps this might be an application for unused or unwanted phones that are turned back in --

4437   MR. SOKOLOV: Absolutely.

4438   COMMISSIONER SIMPSON: -- and are connected to an emergency network and that sort of idea.

4439   MR. SOKOLOV: Absolutely.

4440   COMMISSIONER SIMPSON: Yeah.

4441   MR. SOKOLOV: And I'm not saying the providers should hand out free phones to all homeless, this is not what I'm saying, it's more about giving a SIM card and some way they can use it.

4442   But having said that, though it is an important thing, I don't think it's for the Wireless Code as such.

4443   COMMISSIONER SIMPSON: Okay. And I guess last question and one statement, the statement first.

4444   In your previous posting on our comments you had indicated a question as to why prepaid cards are not calculated by the second but by the minute.

4445   And I had asked that question of Rogers and I will ask that of others, and it seems to be an industry norm and it's something we'll look into. but I just wanted to make sure that you understand that we're taking everything to heart.

4446   The last question I've got is to do with consumers with impairments and I'll ask you the same question I asked the three professors from Ryerson.

4447   Are you aware that we have policies in place right now that the wireless community and the Telcos in general are adhering to with respect to provision of services for those with disabilities?

4448   MR. SOKOLOV: Well, I'm not -- luckily I'm not in that target group myself, so I'm not aware of all the details of what's going on.

4449   COMMISSIONER SIMPSON: Okay.

4450   MR. SOKOLOV: So, if I may, I would like to say something about the per second billing.

4451   So, I know that the TELUS brand, Koodo, they have been offering that on new plans I think until last year with a per second billing. So, it is very easy for them to do so, they adjust they're billing so they can call -- they can bill you per second, per minute, per hour, it's just, you know, a very easy setting.

4452   So, to say that this is an industry norm, or what Rogers said just a few minutes before about something else, so, "this has only recently entered the marketplace." Well, they are the one who decide what is in the marketplace and what is the norm, so...

4453   And I know from talking to people in the telecom industry, the difference between per second and per minute billing is massive. It depends on the calling destination, calling out, but it's somewhere between 20 and 35 percent price increase. If you, say, have the same 20-cents a minute charge, you bill it per second or per minute over a large group of customers, it's between 20 and 35 percent price increase.

4454   COMMISSIONER SIMPSON: Thank you.

4455   MR. SOKOLOV: So, this is massive.

4456   COMMISSIONER SIMPSON: I ended, I'd like to know, one other reference. You had made mention, and I found this interesting, that you feel that if there is a change in the service area with respect to local versus distance calling, that should be grounds for an ability on the consumer to cancel or to walk away from their contract with specific terms.

4457   MR. SOKOLOV: Absolutely, yes.

4458   COMMISSIONER SIMPSON: Okay. Good.

4459   Well, those are my questions, Mr. Chair. Thank you very much.

4460   THE CHAIRPERSON: Thank you very much, Mr. Sokolov, for your participation in this hearing. It's very much appreciated and I hope and trust that you'll participate in the other stages of the proceeding as this evolves.

4461   So, thank you.

4462   Madame la Secrétaire.

4463   Thank you.

4464   THE SECRETARY: Thank you, Mr. Sokolov.

4465   Our next intervener. Mr. Chairman, is Mr. Michael Lancione who will be presenting from the Montreal Regional Office. He's on the screen.

4466   Welcome. How are you? Can you hear us well?

4467   Okay. We have a sound problem.

4468   THE CHAIRPERSON: Can you hear and see us?

4469   THE SECRETARY: Can you hear us, Mr. Lancione? No.

4470   Hello. We'll just wait for a few seconds.

4471   Can you hear us? No.

--- Pause

4472   THE SECRETARY: Perhaps we can hear the next presenter while we fix this one.

4473   THE CHAIRPERSON: Sure.

4474   THE SECRETARY: But I'm not sure if the Calgary Office will work.

4475   THE CHAIRPERSON: Okay. So, we'll just hold on in Montreal.

4476   Oh.

4477   UNIDENTIFIED SPEAKER: Hello.

4478   THE SECRETARY: Hello. Monique?

4479   UNIDENTIFIED SPEAKER: The Montreal Office here, but we're having...

--- Technical difficulties

4480   THE CHAIRPERSON: Okay. So, why don't we go to Calgary.

4481   THE SECRETARY: Calgary Office.

4482   THE CHAIRPERSON: Okay. And come back to Montreal afterwards.

4483   THE SECRETARY: Hi. Who is there at the Calgary Office, please?

4484   MS ANDERSON: Yes and I'll bring Mr. Fullerton in.

4485   THE CHAIRPERSON: Thank you.

4486   THE SECRETARY: All right. Thank you very much.

4487   THE CHAIRPERSON: It's Margot.

4488   THE SECRETARY: Mr. Fullerton, hi. Welcome to this hearing. The Panel is now ready to hear your presentation.

4489   THE CHAIRPERSON: Okay. Can you see and hear us correctly?

4490   MR. FULLERTON: I can.

4491   THE CHAIRPERSON: Okay, good. So, please go ahead. It's Jean-Pierre Blais, and you have 10 minutes for your presentation and then we may have some questions for you, so please go ahead.

PRESENTATION

4492   MR. FULLERTON: Excellent. So, I know you guys had a long, long day, so I won't make this too long for you at all and I think we might even get some levity in today which would be nice.

--- Laughter

4493   MR. FULLERTON: So, I got started in all this, I had an interest in what was going on with the cell phones.

4494   Just first personal experience, I've been a technical person all my life, you know, I trained my kids to learn about technology and not to trust it so much, you know.

4495   And then I ended up with, you know, an overage from my daughter's cell phone that used to use 300 megabyte of her 500 megabyte limit. Now, even when I talk megabytes, you know, I just have to ask the Panel real quickly.

4496   So, second question: who here knows what a megabyte equates to in actual cell phone functions?

4497   You know, I'm a technical person and I don't. It's kind of a rhetorical question really because no one really knows what an mb actually means when it comes to actually video usage or text usage or anything they might be doing on their phone.

4498   So, I find it interesting -- it's kind of a side point -- is that we get so technical when we talk to users from our cell phone providers.

4499   But anyway, that particular usage has been consistent for a couple and half years, two, two and a half years, and then she went over that by about 20 percent and her cell phone bill come in. Very unexpected, no warning, no asking if it was okay to go outside the 500 megabyte, it was just there.

4500   And really when I investigated into, it was one little -- one little change in her habit that she stopped taking a laptop to university for a month and relied on her cell phone a little bit more and that one little change in user habit really made a -- that made a change in the billing was quite surprising.

4501   So, that got me thinking, where else, you know, in all the bills that I have, where else does the billing model change in such a way without knowledge or without approval anywhere that I might -- and I couldn't find one in utilities or even my pay-per-views and the approval model, I couldn't find one that the billing just automatically changed from monthly fee to something extra coming without me knowing about it.

4502   So, that gets me right down to my main point which would be the goals. That is, you know, people or users should never be surprised by their cell phone bills and that's really something I think that we are surprised.

4503   We're in a hold and pray mode right now and that's, I hope and I pray I don't get anything new on my bill at the end of the month.

4504   So, a little bit of background from my perspective on what I've seen. People sign a three-year plan for a monthly cost and on that plan there is bundled usage that they believe will work for them. So, they sign up for that particular bundled usage.

4505   It's not clearly understood when extra charges will be incurred, so as time goes on, not really sure, go back to that same old megabyte question, when am I really going to be over?

4506   It's not clear yet as to what those charges will be when they're incurred. So if I am over, how much am I really going to pay for this? I don't really know.

4507   And today the responsibility for understanding overage costs, when they would apply and how to prevent them is a hundred percent on me, the user. I call that the hope and pray model. So the cell phone provider has taken none of the accountability but definitely gets all the benefits when I go outside of it.

4508   So I have to know the specifics of the bundle I purchased three years ago, I've got to figure out when I'm close to my edges of my bundle, whether minutes, text, data. I've got to figure out how to work my phone and how to stop it. And every phone is different and I think phones are very -- still very technical in nature. And then we -- I like to poke at the A and B question over and over and over.

4509   Another point, that smartphones will continue to be easy to use. They're going to continue to get easier to use. They do more work behind the scenes and will just work regardless of the air time needed to do it. That's what they do for a living. That's what they're expected to do. And they will continue on with this. And I expect overage charges will become more the norm than the exception as time goes on, as smartphones get smarter and try to accommodate the -- our ease of use.

4510   So just some ideas for change. I shift away from that hundred percent user accountability model. Get the cell phone providers a little bit more skin in the game.

4511   Cell phone providers to get explicit permissions to add extra charges. So providing information to me is one thing, getting my approval is another. So if I'm going to bundle, you know, and I'm going to go -- and I'm going to incur extra charges, I would like to be -- to give them approval to be able to do that. And there's just a couple of points on the notes there of what that could be done. Maybe it's a text and you've got X minutes left in your bundle and please reply to this text in order to approve the overage, whichever the case may be. So an information model for sure but an approval model preferred.

4512   What other ideas? Roaming to be turned off with the cell phone provider on a per-server basis. I know I experienced that roaming charges can be quite costly, but I can't turn off roaming on a per-service -- on a charge. I've either got to turn them all off or I've got to leave them all on.

4513   And if I was looking for the CRT to look at, you know, where is the most important bit to look at first, and to me that would be data. Data to me is one of the biggest culprits as far as overage because it's the least understood and it's the most your cell phone does behind the scenes.

4514   Text would be next, and voice being last. Mostly because voice has been around for a long time and we know about long distance charges and get a better sense for that. Text, there's a little bit of information comes when you're roaming and you get a little bit of information with text, but data is still very much -- very much in the hope and pray model.

4515   So -- and I'd just like to say, you know, when I was taking a look at this, I was imagining my car insurance working as my cell phone billing did, you know. And I took my family out on a trip for the very first time, go down to the States and then I come back and I find my insurance company, my nice monthly bill that was a hundred dollars a month all of a sudden is $200 a month because they're -- I didn't know that my insurance was going to change whenever I travelled on a road that I wasn't supposed to travel on.

4516   So that's my presentation for today. And I think just to restate the goal and that is people shouldn't be surprised by their cell phone bill. Thank you.

4517   THE CHAIRPERSON: Thank you very much, Mr. Fullerton. You did bring content to the -- to our discussions but also in a more light-hearted way and we thank you because the days have been long over here. And we are trying to replace what you describe as the hope and pray model by providing consumers with some tools, including, as you may have seen in the working documents, some greater disclosure at the outset of what exactly you're contracting into.

4518   Online usage tracking tools as well have been discussed. Notifications, when you're reaching certain limits. As well as the potential of putting in caps in terms of what you should -- what you're ready to accept as an amount above and beyond what would create financial hardship for you. And so, those were discussed.

4519   But in the past couple of days, and I think you've touched on this to a degree, some of the companies have been saying that voice and text issues, because we've probably been around those longer, are a little bit more intuitive because it's been a number of years, we got use at one point when long distance was expensive, knowing that long distance calls, therefore, the amount of minutes you are talking on the phone results in a cost. And texting has been around a little longer as well. However, I take it from your perspective that data -- that bill shock is more likely to come from data and roaming, is that correct?

4520   MR. FULLERTON: That's my belief, yes.

4521   THE CHAIRPERSON: Right. Some of the companies have suggested, and we'll test that evidence and they're going to provide some additional information, suggesting that to put in some of the tools we talked about, either the notification and the caps, there are technical and network costs associated with putting those tools and have asked us to focus our efforts on some of these. And they've mentioned that it's data and roaming that are really the sorts of things that are of -- in their view, of greater concern for consumers, which is, I believe, your perspective. And top of that they're saying that we can't do everything; therefore, we should focus our energies on putting in tools in data and roaming. How would you react if the outcome of this was specifically only focused on providing you tools around -- to avoid bill shock around data and roaming?

4522   MR. FULLERTON: I think that would be the right direction.

4523   THE CHAIRPERSON: Right.

4524   MR. FULLERTON: I think that's the -- I think that's the place that they need to spend their time and energy on and it's going to get worse if we don't, so ...

4525   THE CHAIRPERSON: That's good.

4526   You also mentioned that the devices --and despite your technical background you find some of the devices difficult to navigate through. Because as you mentioned, as smartphones become smarter, obviously they're only as smart as the operator sometimes, but there may be some devices on there to help us all better manage the usage of it. Who do you turn to as a consumer in the marketplace to get information on the available applications or other devices that could help manage your usage so you're not subject to any shock?

4527   MR. FULLERTON: That's a good question. I would say I turn to the internet and looking and searching to -- and just experiencing the phone just from a technical perspective. And my entire circle of friends and family look to me in order to -- in other words, their local expert. And every family and every circle of friends has an expert they would turn to if they're non-technical to try to provide that information.

4528   But I will take that one step further. Just something popped into mind as you were stating that, and that would be today I actually don't look to my cell phone provider to do that. So either provide a set of tools for an android phone or provide a set of tools for an iPhone or a set of tools for a Z10 phone in order to make it easy for me to press a button or to do something that says turn off roaming or turn off roaming for this or notify me when something happens, or to take data from my phone and inform me. But I'm thinking that might -- you know, that might be an avenue, you know, cell phone providers might want to consider when they're talking about how to provide information to users, is to provide applications themselves on the different phones. Don't know.

4529   THE CHAIRPERSON: If you wouldn't mind, could you tell me what kind of a contract you have with your service provider? Is it the three-year contract or do you pay as you go or how do you get your wireless services?

4530   MR. FULLERTON: Myself and my family is on a three-year contract.

4531   THE CHAIRPERSON: Why did you come to choose a three-year contract, as opposed to anything else?

4532   MR. FULLERTON: Two to three year -- absolutely. So a three-year contract, mainly for two reasons. Number one, I could get a better phone for less money. And number two is that the bundling itself, the prices were more enticing, if you will, on a three-year level. And plus, I've always looked at cell phones as being something I'm always going to have.

4533   THE CHAIRPERSON: M'hmm.

4534   MR. FULLERTON: So, therefore, I personally don't see the need to have a two year or one -- I don't -- I don't have a need to spend more money for a one-year term. Now, that said, if I could spend the same amount of money for a one-year term, I would pick that, right, because then I could redo it each time. But typically terms are -- the shorter they are, the more expensive they are, so I'm always going to have a cell phone, so I'll pick the one that's the most least expensive for me and work within that plan.

4535   THE CHAIRPERSON: Right. And you've bundled it with other communication services, is that correct? Your television, your -- or not?

4536   MR. FULLERTON: That's correct.

4537   THE CHAIRPERSON: Okay. So that's --

4538   MR. FULLERTON: Yes. Yes, I have.

4539   THE CHAIRPERSON: Okay. And that -- because of that bundle, you felt that that was the right price option for you even though it's a three-year contract?

4540   MR. FULLERTON: Actually, to be -- actually, to be quite clear, my bundling doesn't provide me any monetary incentive. So even though I have a Bell satellite dish and -- two of them actually and four Bell cell phones, having both those, there's actually no money incentive from Bell -- there used to be and they took it away from me in order to have both of those. So even though I have those together as a bundle, I don't think of them as a bundle. I think of the bundle as my data, minutes, and text on my single cell phone.

4541   THE CHAIRPERSON: Right. If you can indulge me just one more question. When you were trying to -- you were in the marketplace trying to decide whether you should take a three-year contract or not, explain to me how you went about comparing prices and getting information.

4542   MR. FULLERTON: I didn't really do a lot of comparing of prices. Our particular company uses Bell already and they ended up having what I considered to be a reasonable plan pricing-wise. So I didn't really shop around. It was one of those things where, you know, it looked good, the pricing looked good, the minutes looked good, you know, kind of -- it was more of a thumbnail approach than an investigative -- in-depth investigative approach. So it's just whatever sort of -- whatever just felt right and went -- and we went with that.

4543   THE CHAIRPERSON: And so you had a certain amount of brand loyalty, however, with Bell, I think, right?

4544   MR. FULLERTON: I would say there was -- yes, I would say there's brand loyalty. I would say that from my perspective, I am typically more -- would stick with something more unless there's a really darn good reason to switch.

4545   THE CHAIRPERSON: Okay. That is actually very helpful. It provides us a microcosm of many other consumers, and it is very helpful. Thank you very much.

4546   I believe those are our questions for you, Mr. Fullerton, so thank you for participating, and we hope that you will continue to participate in the other phases of this process.

4547   MR. FULLERTON: That's great. Thanks very much for inviting me.

4548   THE CHAIRPERSON: Thank you.

4549   Mr. Duncan, in Calgary, will join us now.

4550   Okay, so we will stay in Calgary, and then move back to Montreal.

--- Pause

4551   THE CHAIRPERSON: Hello, Mr. Duncan. It is Jean-Pierre Blais here in Gatineau. We are here with all the Commissioners. Thank you for participating in our process, and I apologize for the delay. Unfortunately, some of the other panels lasted a little longer, so thank you for participating.

4552   I invite you to make your presentation, and there may be some questions afterwards.

PRESENTATION

4553   MR. DUNCAN: Great. Thank you for allowing me to talk with you today.

4554   I am running a little short on time, so I am going to be paraphrasing my notes, if that's okay.

4555   THE CHAIRPERSON: That's perfect.

4556   MR. DUNCAN: I want to begin by saying that I find it really repulsive that people like me have to come here to get the proper cell phone services that we should be having.

4557   I am a little nervous being here because I should just be able to go out and use the phone the way I want to.

4558   All right. I want to thank the CRTC for having the citizens' complaints heard, but it is disheartening to notice that the removal of the three-year contract is not a proposed solution during the hearing.

4559   I know of a lot of people, my daughter included, who have been trapped in three-year contracts. They have lost the phone and they can't get out of the contract, so they are stuck paying a contract that is so expensive they can't get out of it. Then they end up going to a 30-cent per minute, pay-as-you-go, which is actually not even close to 30 cents per minute, it's like 12 seconds for every minute, and it is very expensive to have a pay-as-you-go.

4560   All right. I just want to say that if a three-year contract is supposed to cover the phone cost, and if you decide that you want to get out of your contract, why won't they let you pay off your phone and then cancel the contract?

4561   It is really -- it is costly to cancel a contract sometimes. They just don't seem to allow that. Then you are stuck with a locked phone, and so on.

4562   Why does a three-year contract, sometimes automatically, just renew on its own? Or, why does it not get cheaper if you stick with the contract, keep your phone and just carry on?

4563   People sign up for a free phone, which there is no such thing, but have to sign a three-year run. It would make more sense, if you wanted out of the contract, that you would buy the phone at the depreciated cost, or the value, which, of course, would make the companies have to ante up how much the contract price is really the cost of the phone in disguise.

4564   And then the next part of it talks about my daughter. She went out and bought herself a Smartphone, and she lost it within six months, and it was a heck of a time trying to get her out of it.

4565   All right. I am in the IT field, where there are 200 or 300 companies, if you look on the internet, and in our industry we have what is called a service agreement, where we agree to provide the customer with the service, no extra fees. That way it protects the customer, it protects us. If we say that we are going to be there in an hour, we are there in an hour.

4566   If we say that it's $80 an hour and we are there for an hour and one minute, we are not going to charge for two hours.

4567   In the cell phone industry, that doesn't happen. I keep going back to this 30 cents per minute, but if you actually talked -- for example, "Hi, honey, I'll be home. Do you want me to buy bread on the way home?" That's about a 5-second call, and the cell phone industry considers that the 30-cent per minute call.

4568   I always believe in treating customers with respect, and they will stay. The cell phone industry, with their three-year contracts, their roaming fees -- it seems to me like they just want to make money, they don't trust the customers to move elsewhere. That's why these contracts exist.

4569   Now, as far as contracts, they are confusing. The contracts are sometimes pages long, and most people do not take the time, or worse, are not given the time to completely read through the contract.

4570   They have proven that a contract is only a contract until conditions of the contract change. If suddenly you get a roaming fee that you didn't expect -- your text messages, where it says "Free incoming text", you look and there are charges for the text, because you got the text outside your area, and you had to pay a roaming fee on that free incoming text.

4571   And, then, dropped calls, there are no apologies for dropped calls.

4572   And when you get a $39.95 contract, suddenly the bill is $46 or something.

4573   It just doesn't make sense where all of these fees are coming from.

4574   If I may, I would just like to talk about unlocking a cell phone. That was brought up. I was reading through the internet. I, personally, am in the IT industry, and I am not sure that I should say this, but I, personally, know how to unlock a cell phone.

4575   If you look on sites like Kijiji and craigslist, most people are charging $25 to unlock a cell phone.

4576   So I just want to say that when you mention a reasonable amount, make sure it is a reasonable amount, because a reasonable amount to a customer is not a reasonable amount to a cell phone provider.

4577   All right. And, then, set a cap on additional fees if there is a contract. I was always told that, with a contract, it is there to protect you, it's there to protect everybody. A contract is a contract.

4578   So if there is a contract, how can there be additional fees?

4579   If you have a contract, make it clear that all fees are in force, and if there is an additional fee, make sure that it is clearly stated what that fee was, so the cell phone company has to prove that there was, indeed, a fee -- that you were outside your roaming area, that your 30 cents per minute -- that you actually talked for 62 seconds, so they charged you for a two-minute-long phone call. Things like that.

4580   Online tools for monitoring usage: This is a good idea, but additional fees always occur, despite your usage. You have the roaming fees, you have the 30 cents per minute pay-as-you-go.

4581   The cell phone providers should contact the customers if the extra fees happen. The customer should not have to do the work of the cell phone providers.

4582   If I am outside my area, it is up to the cell phone company to say: Hey, you know that we are going to charge you if that happens again.

4583   All right. I want to conclude by saying that if a cell phone company advertises 30 cents per minute, pay as you go, make sure they charge 30 cents per minute.

4584   All right. And make sure if you sign a contract that the prices can go up, give the customer an opportunity to buy the phone and get out of the contract.

4585   To me, the cancellation of a contract is about a month. You need a month to cancel your rent. You need a month to resign from your job. A month seems to be the standard. They shouldn't have to lock you in.

4586   And, if you decide to buy your phone, there is no reason why it's locked. It should belong to anybody.

4587   All right. So those are basically all the points that I wanted to talk about today.

4588   THE CHAIRPERSON: Thank you, Mr. Duncan, that was very fulsome.

4589   Commissioner Simpson may have some questions for you.

4590   MR. DUNCAN: Sure.

4591   COMMISSIONER SIMPSON: Thank you very much.

4592   Mr. Duncan, for someone who is feeling repulsed, you are doing a heck of a job in putting your case forward, and we thank you very much for that.

4593   In your written submission -- I didn't hear you mention something that I wanted to ask you about, and it was with respect to your daughter's issue with her Smartphone and her cell phone contract.

4594   MR. DUNCAN: Yes.

4595   COMMISSIONER SIMPSON: What has caught my attention is that you are stating that -- if I get this correctly in paraphrasing -- she entered a three-year contract, she had a Smartphone, she lost it after six months, but the carrier is refusing to let her out of her contract until the contract has expired, or is it until the phone is paid for?

4596   MR. DUNCAN: I had agreed to pay for the phone, but they still -- the contract, in their words, was under a year old, so they wanted up to -- it worked out to about two years' cost of that contract.

4597   So even though I agreed to pay off the phone, they wanted this outrageous amount to cancel the contract.

4598   COMMISSIONER SIMPSON: Did you take this -- did you elevate this -- after you weren't satisfied dealing with the vendor, did you take this to the Complaints Commissioner?

4599   MR. DUNCAN: I did not.

4600   COMMISSIONER SIMPSON: You did not.

4601   Because he is sitting here in the room today.

4602   Is there anything that is specific or unique about the contract? Given that you are a businessman and you are familiar with contracts, is there anything in that contract that stipulated in advance that you would be unable to get out of it, that you are aware of?

4603   MR. DUNCAN: I did not see the contract. I did not see the contract that she signed, because she went to a TELUS kiosk in Market Mall and signed the contract.

4604   And if you are familiar with that process, there is not even enough time to read the contract.

4605   COMMISSIONER SIMPSON: She signed the contract?

4606   MR. DUNCAN: She signed the contract.

4607   COMMISSIONER SIMPSON: And how old was she when she signed the contract?

4608   MR. DUNCAN: She was 18.

4609   When she turned 18, she was ecstatic because Daddy no longer had to give her this junky phone that --

4610   COMMISSIONER SIMPSON: Do you know what the age of majority is in Alberta?

4611   I don't, but I'm curious.

4612   MR. DUNCAN: It's 18.

4613   COMMISSIONER SIMPSON: Okay. Well --

4614   MR. DUNCAN: It's 18 to get a credit card, it's 18 to go to a bar --

4615   COMMISSIONER SIMPSON: Okay. I would encourage you to avail yourself of the services of the CCTS. They are pretty good at what they do, and that's what they are there for, because I think that I, personally, would do that, and I advise you to, because it does not sound correct to me that you would not get some kind of remediation from the vendor.

4616   The other point that I wanted, for the sake of time, to go through with you, is the issue of a minute is not a minute.

4617   You have been very clear about this.

4618   Was this experience -- forgive me if I have forgotten, but was this just with respect to a prepaid phone card, or is this complaint in general with respect to post-paid contracts, that everything is rounded up to the nearest minute?

4619   MR. DUNCAN: If I can name a company, I am currently dealing with Fido, and I didn't want to sign a contract. They offer what is called a month-to-month plan, where you can put on, like, anywhere from $10 to $50 on your phone, and it's month-to-month, and they advertise it as 30 cents per minute, unlimited incoming, unlimited outgoing text and then 10 cents a minute afterwards.

4620   But what happens if, for example, I just say, "Hi, I'll be home in 10 minutes," that is considered a 30-second call, right.

4621   And there was a time where I think I was down to 35 cents on my phone and a customer called me and we got disconnected. And I phoned Fido and I said, "Why did the phone disconnect?" And they said because I didn't have enough minutes. And I said, "But I thought that incoming calls were free."

4622   COMMISSIONER SIMPSON: I get the gist of it. I'm sorry, we're running out of time.

4623   The last question I have. You're the proud parent of an 18-year-old. I'm the proud parent of a 23-year-old daughter. When it comes to a plain language Wireless Code, knowing what we know about daughters and sons, how do you think we have to communicate this Code in order for it to be effective in getting them to read it and take responsibility for their end of the contractual bargain?

4624   MR. DUNCAN: Okay. Well, the plain language is a good start, but the contracts I've seen, there's so many pages, the text is so small, and in the environment they're usually not given an opportunity to read the contract, and also they're so excited about getting a phone they just want -- they just sign it.

4625   So I think there has to be reasonable time to read the contract and I think the salespeople have to be honest with what the contract says.

4626   Because I know sometimes, even at my age of 51, when I'm reading a contract, I don't understand it at all, and I, in the past especially -- when somebody says to me, well, that just says that, I in the past have just signed it too, and that's what these kids --

4627   COMMISSIONER SIMPSON: Mr. Duncan, have you had a chance to read the Draft Code that we have on our website at this point?

4628   MR. DUNCAN: I did not get a chance to read all of it but I have read some of it. That's why I responded to some of the questions that you had.

4629   COMMISSIONER SIMPSON: Okay. Thank you, sir. Those are my questions.

4630   MR. DUNCAN: Great. Thank you for having me.

4631   THE CHAIRPERSON: Thank you very much, Mr. Duncan. Hopefully you will be able to participate in the other stages of the proceeding. Thanks.

4632   Should we go to Montreal now?

4633   THE SECRETARY: We're going back to Montreal.

4634   LE PRÉSIDENT : O.K. Merci.

4635   THE SECRETARY: Hi, Montreal. Can you hear us?

4636   M. LANCIONE : On n'entend pas toujours, hein. C'est toujours muté, hein.

4637   LE PRÉSIDENT : Ah! Nous, on vous entend.

4638   LA SECRÉTAIRE : On vous entend là. Monsieur Lancione, on vous entend là. Est-ce que vous nous entendez?

4639   M. LANCIONE : Oui, je vous entends. Est-ce que vous m'entendez?

4640   LE PRÉSIDENT : Absolument, oui.

4641   LA SECRÉTAIRE : On vous entend et on vous voit.

4642   M. LANCIONE : Parfait! Excellent!

4643   LA SECRÉTAIRE : Alors, vous pouvez y aller. On est prêt à entendre votre présentation. Vous avez 10 minutes.

4644   M. LANCIONE: Parfait! Merci.

PRESENTATION

4645   MR. LANCIONE: Good afternoon. I would like to thank the committee for this opportunity to express my opinions, and what I believe are also the opinions of many concerned Canadians, on a new Wireless Code.

4646   There are three major items which need to be addressed in the new Wireless Code to better protect consumers.

4647   Êtes-vous toujours là?

4648   LE PRÉSIDENT : Oui. On vous entend.

4649   M. LANCIONE : Parfait!

4650   If you turn to slide number 2, the most important item that I would like to discuss is the duration of contracts. Over 12 million Canadians will own smartphones by the end of this year. The typical post-paid contract length for such phones is an excessive three years.

4651   Why do I call this excessive? There are two main reasons.

4652   If you turn to the next slide, the first is that three-year contracts do not reflect global trends. The U.K. and the EU have banned contracts longer than two years. The United States and Australia have a sufficiently self-regulated industry to make three-year contracts nonexistent. Canadians have also, as you know, overwhelmingly expressed interest in limiting contracts to two years.

4653   If you turn to the next slide, the second problem with three-year contracts is the rapid obsolescence of handsets. Software updates are rare for older handsets. As you can imagine, the phones are sufficiently sophisticated that they break easily and the hardware is constantly evolving. To give one example, if I purchase a handset without Near-Field Communication technology today, and let's say NFC becomes popular very quickly, I can't benefit from that technology for three years. I'm limited to "older" technology simply because carriers have made it so.

4654   So, if you turn to the next slide, my recommendation is that the CRTC follow global trends, recognize the rapid evolution of handset technology and limit cell phone contracts to 24 months. It should also be noted that the Canadian public and Competition Bureau are also pushing for shorter contracts.

4655   The second item to be discussed is phone subsidies. Carriers, as you know, typically subsidize expensive handsets by selling them at cheaper cost and they recoup this cost over the course of a contract.

4656   However, this is problematic because the subsidy is hidden in one monthly lump sum payment along with the service cost. Consumers are unaware of the subsidy amount and continue to pay the subsidized amount long after the subsidy is paid off.

4657   To make matters worse -- if you turn to the next slide -- carriers will offer non-subsidized three-year plans at either the same monthly rate, or a slightly reduced rate, as a subsidized plan, as this example shows.

4658   I have left the carrier name out. I don't want this to be an attack on one particular carrier but this was on the website of a particular carrier.

4659   A plan without a subsidy costs you $60 a month for 36 months. A plan with a subsidy costs you $60 a month for 36 months. The carrier has set up a system where a plan without a subsidy is highly unfavourable.

4660   If we go to slide 7, one solution, apart from limiting contracts to two years, is to separate the phone subsidy from the service contract terms. So, in other words, you would have two separate components on a monthly invoice: a hardware financing/subsidy amount and the service fees. The cost of the phone would be financed with monthly predetermined payments and these payments would disappear once the cost of the phone is paid off. Only the service fees would remain on future invoices.

4661   T-Mobile in the U.S. has implemented this system. Customers pay a lower plan rate because the carrier does not hide subsidy fees in their plans. The customer is free to buy a phone from T-Mobile on monthly instalments that eventually disappear from their bill or they bring their own unlocked phone with a zero subsidy.

4662   Another solution, if you turn to slide number 8, is to offer lower monthly rates, depending on how much the customer is willing to pay for the phone. A heavily discounted phone results in a higher monthly rate. This example shows a New Zealand carrier with a sliding scale of rates depending on subsidy amounts. However, this approach is less favourable and probably more difficult to legislate.

4663   Whatever approach is taken, one thing is clear, the trend of consumers paying a hidden subsidy long after the subsidy has expired must stop. Cell phone bills should clearly indicate and separate the subsidy amount from the contractual service plan.

4664   The final item, slide number 9, concerns the practice of locked phones. Carriers, with some exceptions, sell phones that are locked to their network. This is not unusual in itself. The problem is that a phone remains locked when a contract or subsidy ends. At the end of a contract, when the subsidy is entirely paid off, the phone should be automatically unlocked by the carrier at no extra cost. This should also be the case if a contract is cancelled by the client and the remaining subsidy is paid off in one lump sum payment.

4665   The CRTC has proposed early unlocking at a fee even if the subsidy is not paid off. It's a step in the right direction and my proposal would complement this in a way by adding that a phone be unlocked at no fee when the subsidy is fully paid off.

4666   And finally, slide 10. To conclude, there are three basic recommendations:

4667   - the CRTC should limit cell phone contracts to two years;

4668   - require the separation of phone subsidy from service fees on post-paid invoices; and

4669   - mandatory phone unlocking at no additional fee when the subsidy is entirely paid off.

4670   These recommendations when implemented would encourage greater competition in the industry and give consumers more choice, affordability and flexibility with their cell phone plans.

4671   Thank you.

4672   THE CHAIRPERSON: Thank you very much. That's very clear.

4673   Commissioner Duncan will have some questions for you.

4674   COMMISSIONER DUNCAN: Good afternoon, Mr. Lancione.

4675   MR. LANCIONE: Good afternoon.

4676   COMMISSIONER DUNCAN: Interesting because we have spent a lot of time over the last couple of days talking about the subsidy and people being able to cancel their contracts.

4677   It's my understanding that where we're at now is that a customer would be able to cancel their contract at any point by just paying the amount of the subsidy remaining on their phone. So if they were two years into the contract, they would have to pay -- they could cancel at their request the service and they would just have to pay the remaining one-third of the price of the phone service.

4678   And I'm just wondering if you have heard that and if you are satisfied with that at least as a partial solution.

4679   MR. LANCIONE: Yes, if I may, first of all, certain provinces such as Quebec have enacted legislation that does exactly that. This was enacted back in 2010 where the carrier would charge you the remaining subsidy if you prematurely cancelled the contract. So that's number one, and of course I'm fully in agreement with that.

4680   Number two, the issue of the subsidy, it gets a bit murky because the subsidy amount is once again hidden in the contractual amount.

4681   You know, sorry, maybe this is slightly going in another direction, but yesterday the CWTA with Mr. Bernard Lord and his colleagues, they were comparing -- they were sort of justifying the three-year contracts by saying yes, we have three-year contracts, but the upfront cost for the phone itself is much lower in Canada to sort of offset that.

4682   I've got to say that's not quite the case. If you go on Verizon.com for example and look up an iPhone 5, it's $199 up front for a two-year contract. If you go to Rogers or Bell, it's $179 with a three-year contract.

4683   So the idea that the longer contract sort of offsets the subsidy amount is not quite true. There's only a difference of $20 there.

4684   But generally speaking, yes, I do believe that that is a step in the right direction.

4685   The other thing I wanted to add was concerning the subsidy amount. I don't necessarily agree with -- again, I go back to the CWTA's comments from yesterday that consumers have a choice. The example I showed, two contracts, one with a phone, one without a phone, exactly the same rate.

4686   I know that Rogers and Bell are sort of trying to -- I guess they're trying to go one step ahead of you guys in anticipation of legislation and sort of saying, all right, guys, we'll unlock the phones for a fee, you can pay off the remaining subsidy, there's no heavy cancellation fees. I think that, you know, the telcos are sort of trying to go ahead of you guys and enact their own policies before you sort of bring down the hammer and legislate this stuff. Which is great, but the factor is that we do not have much choice.

4687   Earlier today, I think it was TELUS, or possibly Rogers, talking about certain plans where you would pay a 10 percent discount if you bring your own phone, but the idea of this 10 percent discount, it kind of feels like it came out of thing air. Why is it 10 percent?

4688   It also sort of leads one to believe that the telcos are sort of encouraging people to go with the subsidized phones. Hey, you can get an iPhone 5. Yeah, okay, it costs you a few bucks at the beginning, but the plan is $65, or you can bring your old four-year-old flip phone for $60 a month.

4689   So it kind of feels like the telcos are sort of -- I do not want to say that they are rigging it, I do not want to accuse them of anything nasty here, but it kind of feels like they are encouraging consumers, by making the other choices less appealing, to sort of go with a certain option, which is where the idea of separating the subsidy price from the service fee on the monthly invoice would come in. It would be clear if I want to pay off the phone in one lump-sum payment, the only thing that remains is a service fee.

4690   I know that certain members of the committee mentioned: what happens at the 37th month? Why am I paying the same rate?

4691   Good question. It is all hidden. There is no reason why it should be hidden, I guess is what I am getting at.

4692   COMMISSIONER DUNCAN: First of all, I think what we are seeing is, obviously, we are in for even better competition than we have had to this point because there are some smaller providers causing more competition and more pressure.

4693   I think that the providers realize that they have to enforce the code in Quebec. You are absolutely right. So this is obviously for them. We have heard them say that in some instances it is easier to make it apply across all the provinces. So that is part of what is influencing it, hopefully all for the good of customers.

4694   I think you raise a good point about having the cost of the phone and the service separated. What I understand now, from what we have heard, is that if you take the iPhone 5, for example, and I think that phone is maybe $500 or $600, so they are going to give you that phone over three years, you are going to have that phone, and they are going to amortize the cost, if you like, give you the discount, have you earn that by keeping the contract for the full three years.

4695   If you decide after two years that you want out or one year that you want out, you can do that. You can just stop the service and all you have to pay is what is left on the subsidy.

4696   So it seems that we are making headway.

4697   I think that your suggestion of separating those two things is certainly worth considering and we are certainly going to be looking at that.

4698   I wonder on the unlocking, because I think you had touched on the unlocking, we hear now that TELUS and Rogers, both willing to go to 90 days and they will unlock a device. We heard reasons. Their reasons are business reasons for wanting to go to 90, but that is still a better situation, I think, than you described, having to wait till the unit is fully paid for.

4699   So I do not know if you had any comment on that.

4700   MR. LANCIONE: Okay.

4701   COMMISSIONER DUNCAN: Sure.

4702   MR. LANCIONE: Yes, if I may.

4703   Well, let us start with the second point.

4704   I think it is fantastic that Rogers and TELUS are allowing people to unlock their phones after 90 days. I fully support that and I applaud them.

4705   I believe there is a $50 fee, at least with Rogers, to unlock the phone. You know, I could sort of appreciate the fact that if, after 90 days, I decide to unlock my device Rogers will charge me $50. I could sort of understand that. But when I pay off my subsidy and have to dish out an additional $50 to unlock that phone, it is unusual.

4706   Going back to your first point, you said that there is greater pressure on what we call the "Big Three" from increasing competition. Well, the gentleman from Dartmouth, Mr. Sokolov, one of his complaints, as I understood it, was that in Dartmouth there might be more expensive plans than offered in, say, Toronto simply because, when we talk about greater pressure from competition, it tends to be very localized.

4707   Toronto, Calgary, et cetera, you know, I would not even include Montreal in that calculation because in Montreal we do not have WIND Mobile and certain others that you have in Toronto.

4708   The other problem with that idea of competition, unfortunately, is companies like Bell and Rogers, they sort of jump into the bundles' game, and they say, "Well, you know, you already have television with us, yeah, we'll give you an extra five bucks off".

4709   So Videotron made a big splash, in coming into Quebec -- unfortunately, WIND Mobile was not able to -- but Videotron sort of made this big deal about starting cellphone service in Quebec, it was disappointing because all the good rates went to Videotron Internet, television and telephone subscribers.

4710   So, in a sense, you are correct in saying there is greater pressure from competition, as well as greater pressure from groups like the CRTC and the Quebec Government. But, at the same time, I kind of feel like the telcos need maybe a little further push towards, you know, going away from some of these sort of heavy-handed tactics and sort of unfair practices, like, you know, for example, charging a greater rate in a city outside Toronto than in Toronto, for example.

4711   COMMISSIONER DUNCAN: Well, hopefully, you will continue to follow the process and submit further comments, if you like, because I think that some of those stronger rules will come about as a result of this process.

4712   So thank you for your participation.

4713   Mr. Chairman, those are my questions. Thank you.

4714   THE CHAIRPERSON: Maybe just one last question.

4715   You seem like a well-informed person, who does his homework and all that.

4716   Can you help me understand? When you decide that you are about to enter into an arrangement, whether it is prepaid or not, how do you make the choice? How do you inform yourself? Because part of the challenge we may have going forward, it will be fine to have this theoretical code, but how does it actually work on the street? I would like to have your views on that.

4717   MR. LANCIONE: Sure.

4718   Well, first of all, I am well informed. I am also passionate about the subject and I am glad to see that many other Canadian individuals coming on here who are equally as passionate. It is good to see that.

4719   How do I make a decision in choosing a cellphone carrier, et cetera? Well, to be honest, I mean there is no great secret. Right?

4720   The best way -- and, you know, there is no legislation against this really, there is no way to sort of protect against this, but if I am with Rogers, and I have been with them for two years, it is very unlikely that I am going to go to Bell because Rogers is going to say, "Wait a minute, don't lose us, don't get away from us, we'll give you, you know, $10 off, we'll give you free voicemail, we'll give you this, we'll give...".

4721   So it sort of gets into a scenario where you are with one guy, chances are you are not going to migrate to another carrier. That is simply because -- not necessarily negotiations, but sometimes Rogers will, you know, openly say, "Hey, you've been with us for three years, what can we do for you? Can we give you an extra handset at zero dollars, instead of $99?"

4722   I am not necessarily being critical against that practice, but it sort of helps me to stay with one particular carrier, rather than migrating to another.

4723   I am not sure if that answers your question.

4724   In terms of why a three-year contract instead of a no-year or something, well, frankly, because I do not have that choice. It is either three-year or nothing. There is no two-year contract, unfortunately, for a lot of the handsets that I like and that my colleagues and friends like.

4725   So, really, there is no big secret. I do not know if that is the answer you were looking for, but --

4726   THE CHAIRPERSON: No, that does help. I mean there is brand loyalty to a certain degree, but you are also --

4727   MR. LANCIONE: Exactly.

4728   THE CHAIRPERSON: You also have to know the market. So you are negotiating, you are going out there. But not everybody knows that, right?

4729   MR. LANCIONE: Admittedly, I am.

4730   And I got to say I have a friend who wanted me to just add that this idea of negotiations should perhaps be done with; whereas, you know, if I have a certain plan and you have a certain plan, I happen to be paying less simply because I am a little better negotiator than you are, I have some friends that are sort of against that.

4731   I did not want to mention it because I felt my discussion was already fairly lengthy. I am not sure if others have touched on that. It is not necessarily something I am very passionate about. I mean if that is the way that the industry is going, great. If not, you know, I am not losing any sleep over it. I think there are more important issues to address before --

4732   THE CHAIRPERSON: Right. Fair enough.

4733   MR. LANCIONE: -- even mentioning that.

4734   THE CHAIRPERSON: Fair enough.

4735   You should tell your friends to intervene in our online process if they have that view, though, rather than ask you ask you to do it.

--- Laughter

4736   THE CHAIRPERSON: It is not that hard.

4737   Okay. Well, thank you very much for that. We appreciate your participating here.

4738   MR. LANCIONE: Thank you.

4739   THE CHAIRPERSON: Thank you.

4740   So I believe we are --

4741   MR. LANCIONE: A pleasure, thank you.

4742   THE CHAIRPERSON: Thanks -- are going to Toronto now?

4743   THE SECRETARY: We are going to Toronto now.

4744   Mr. Munro, Allan Munro, is that you? Can you hear us?

4745   MR. MUNRO: That is me.

4746   THE SECRETARY: All right.

4747   MR. MUNRO: I can hear you.

4748   THE CHAIRPERSON: Good. Can you see us as well, Mr. Munro?

4749   MR. MUNRO: I can.

4750   THE CHAIRPERSON: Okay.

4751   Well, please go ahead. We are listening.

PRESENTATION

4752   MR. MUNRO: Okay.

4753   Well, thank you for the opportunity to speak to you today. I felt it was important for me to take the time to address the committee and air my concerns, rather than just complain about cellphone plans and coverage.

4754   It has become a pastime for Canadians to complain about their cellphone carriers, while at the same time talking incessantly about the latest and greatest smartphones.

4755   It is an interesting juxtaposition: we want the latest and coolest smartphones, yet we complain about paying for them.

4756   I will not jump on the bandwagon that cellphone companies are evil. They are not. They are just businesses figuring out how to make more money within the rules laid out before them. My focus is on marketing and competition.

4757   There are three main cellphone segments that the telecommunication industries are advertising to: first, new customers who do not have a cellphone; existing customers who do have a cellphone; and, lastly, upgrading smartphones of existing customers.

4758   The messaging in the marketplace is quite clear for these three market segments. Incentives, discounted fixed-term contracts and bundled pricing is fairly similar among all the big three telcos. However, the fastest growing segment that no one is advertising to are the smartphones that are no longer being subsidized within a fixed-term contract. These are consumers that are happy with their three-year-old phone, but it is locked to the original carrier.

4759   Traditionally, this market segment would be called "conversions". No one is advertising or making any effort whatsoever to convert users from another carrier to their own network. This is a key strategy, how virtually all companies grow their market share, by growing their customer base, by soliciting offers to the customers of their competitors.

4760   McDonald's is aggressively going after the coffee and muffin business of Tim Hortons, while Tim Hortons is trying to eat the lunch of McDonald's through its offering of chili, sandwiches and panines. Starbucks, not wanting to be left behind, has launched a new coffee to compete with both -- for both the coffee consumer of both McDonald's and Tim Hortons.

4761   Even our very profitable banks offer special incentives to move your mortgage, but in the cell phone business in Canada, not one Smartphone carrier is spending a dime to move an existing Smartphone user to a different network. Why is that?

4762   I asked myself, as a marketer, if I were in their shoes, why would I not want to advertise to the growing number of people no longer bound to an agreement with their existing carrier and simply make them an offer.

4763   The answer is obvious; it takes effort and it costs money. And in the end, even if I did spend the money to try to grow my market share, my competitor would be forced to do the same thing, making it all a wash.

4764   I opened myself up to another marketing front where I'd have to invest in resources, time and money and people.

4765   Why would I want to rock the boat? My competitors are already locked into the -- are already locking all the cell phones that go through our doors. The CRTC is enabling us to stifle competition, employ fewer people and advertise on fewer marketing fronts.

4766   As a major telco, we are deciding to compete with a comprehensive offering. We offer to the consumer once in their initial contract, and from that point onward, we only need to retain them and not worry about them from being swayed mid-contract or at the end of their term.

4767   This is obvious in the churn numbers or the customer turnover presented by Rogers, Bell and Telus, which all hovered around 1.7 percent. That means that less than two percent of customers are switching carriers after their contract has been completed.

4768   With respect to Section D7 in the talking books unlocking cell phones, I have to ask why are the Smartphones being locked at all.

4769   From my work experience in the past, it was controlled distribution of a product would not meet demand or if, in a relationship, existed where a manufacturer and retailer wanted to control a supply and hence the price of a product in the marketplace or to foster the growth of a partnership and offer a retailer a special promotion.

4770   In the early days of Smartphones and global issues on activation and supply, I can understand why these agreements were made, but now, isn't it redundant to both lock a Smartphone and have the consumer sign up for a three-year fixed term agreement?

4771   The consumer has signed a three-year agreement at a determined price. Where can they go with their Smartphone without breaking the terms and conditions of this agreement? So why are the phones locked?

4772   In the glut of Smartphones coming to the market now, it isn't because of scarcity or about fostering a special relationship with a carrier. With global product launches, it isn't about making sure people aren't sending phones en massage to other countries. In my opinion, Smartphones are being locked to prevent conversions, to prevent competition.

4773   I believe the telcos have done their homework and have figured it out. It would cost them more money to have to advertise and market to the ever-expanding number of Smartphone users no longer under contract and, in doing so, will cut into their margins.

4774   I would ask these companies to explain why they are maintaining the need to lock cell phones. It can't be because of shortfalls in supply or margins.

4775   From my market analysis, I do not see the telcos colluding on price. They have different offerings and packages. When I signed up for my iPhone contract three and a half years ago, it cost me about $115 a month and now the same package is about $80 on a three-year agreement, a price reduction of roughly 30 percent. But no longer under contract, no one is competing for my business.

4776   It is as if Rogers, Bell and Telus and their sub-brands are agreeing not compete for each other's existing customers. And the fairest and easiest way to increase competition is to ensure all cell phones in Canada are unlocked.

4777   I ask the CRTC to create an environment where the telcos can no longer protect their turf by locking Smartphones and undermining the competitive marketplace. If every Smartphone in Canada were unlocked, competition would flourish and market forces would be in place to ensure pricing would be competitive and all market segments would be aggressively sought after.

4778   Thank you very much for your time.

4779   THE CHAIRPERSON: Thank you very much, Mr. Munro. If you have time for a few questions, Commissioner Molnar --

4780   MR. MUNRO: Sure.

4781   THE CHAIRPERSON: -- will have some questions for you.

4782   MR. MUNRO: Okay.

4783   COMMISSIONER MOLNAR: Good afternoon, Mr. Munro. Thank you for participating.

4784   You can see and hear me?

4785   MR. MUNRO: I can.

4786   COMMISSIONER MOLNAR: Okay, thank you.

4787   I'm not sure what opportunity you've had to participate or listen in to what's been occurring over the last couple of days, so I'll just give you a little bit of information that was new to me.

4788   It appears both Telus and Rogers unlock their cell phones after 90 days. Were you aware of that?

4789   Or let me say Rogers may not do it yet, but they have said they're going to. It's happening.

4790   MR. MUNRO: Well, not all the brands of Rogers do that. Fido is a sub-brand of Rogers, and they're not doing that.

4791   Telus does not offer a discount on pricing after you complete your contract.

4792   COMMISSIONER MOLNAR: Yes. Yes. Right now I'm just talking about unlocking. I agree with you on the -- but on the unlocking. And we will have Rogers respond to that because certainly it was my understanding when they were speaking to us that they were speaking for all of the brands under which Rogers operates when they said that they would unlock in 90 days. And I think the cost was $50.

4793   So for --

4794   MR. MUNRO: See, my question would be -- sorry -- why are they locking the phones, period. What's the rationale behind locking the phones?

4795   COMMISSIONER MOLNAR: Fair enough, Mr. Munro. And we heard you. I'm not going to sit here and defend what their rationale is.

4796   They have tried to defend their rationale and it's on the record if any time you want to see what they -- why they say are the business reasons for doing it. I guess the question is whether or not those business reasons support them continuing to be able to lock them for a -- you know, some period of time. But it's certainly different from where they started where they were locked even at the end of the contract.

4797   So things are changing a little bit -- and, actually, just if you'd like to comment. I'm not sure if you were able to hear the fellow who was on --

4798   MR. MUNRO: I couldn't hear it. There was a technical difficulty.

4799   COMMISSIONER MOLNAR: Okay. I'm just going to get his name -- Mr. Lancione had proposed that you may unlock your phone, you know, through the period and there can be a charge, but at the end of a contract period there should be no charge at all for unlocking that phone.

4800   Do you have any thoughts on that? Is it your view that it --

4801   MR. MUNRO: Well, I don't think the phone -- I don't think the phones should be locked at all. The reason why they're doing it is so you don't switch carriers so they don't have to compete on price. That's the reason for doing it.

4802   There's no technical reason why phones need to be locked any more. Like I have -- just so you know, I worked in an Apple store for a year and a half at the launch of the iPhone 4 to the iPhone 4S. And consumers had chosen their carrier, picked their phone and were quite happy. And then they would come back from a Rogers store and had purchased the phone outright, but it was still locked to the provider.

4803   Like that exists a great deal where they're selling the phones through a Rogers or through a Bell and concerns were paying full price, but the phone was still locked to that carrier. Like why would they be doing this?

4804   And it's all about reducing and restricting mobility so you can't use the phone in another country. That's what it comes down to.

4805   I'm not sure if you guys are -- I'm sure you're aware of the technical reasons, but if you have an unlocked phone and choose to travel, you can put in another SIM card if you're over in Europe or over in the United States and use the phone locally. When the phone is locked under that contract, you can't take it out of the country without being charged exorbitant roaming charges. That's their reason. It's all about money.

4806   COMMISSIONER MOLNAR: Yes, thank you.

4807   And as I mentioned, I think there is movement both as we'd proposed in the Code and in what the carriers appear to have done on their own since this -- some of this process began --

4808   MR. MUNRO: Without a doubt. Without a doubt.

4809   See, I worked at Kodak for 12 years in marketing roles and I launched digital cameras across the country for the first time in a major retailer. And I'm aware of how supply reasons works.

4810   And what they're doing, I believe, the telcos -- like Fido has changed their price in the last 30 days. Rogers is now offering a discount if you give your old phone to a family member. Bell is offering a 10 percent discount if you have an existing phone that's no longer under contract.

4811   I believe the telcos are coming to the table, giving you a little bit of an offer to take the wind out of the sales to say why aren't our phones unlocked from the getgo. This is completely a negotiation tactic from their positioning. And their margins range from 39 to 48 percent profit on these services.

4812   They don't want to lose this captive market of locked cell phones. They don't want any increase in competition, which is my position, is they don't want anyone to have to -- they don't want to have to protect all the customers they've already signed up for three years. They don't want to have that customer base in jeopardy, and that's their reason for locking the cell phones.

4813   As your -- as your other presenter said, after you finish your cell phone contract, before your contract is up, the telcos will say, "Oh, do you want the new phone? You're already credit approved. We can give you the new phone and you don't have to go through an application process".

4814   Like it's -- it works to their benefit rather than to the consumer's benefit if they're under contract to switch carriers.

4815   COMMISSIONER MOLNAR: Thank you very much. Those are my questions.

4816   MR. MUNRO: Thank you.

4817   COMMISSIONER MOLNAR: I thank you again for coming and being part of this proceeding.

4818   THE CHAIRPERSON: Yes, on behalf of the entire Panel, we want to thank you for participating. You brought a very crisp and focused perspective to this, and it really helps us have a balanced view of everything going on. So thank you very much, Mr. Munro, for participating.

4819   And I hope and trust, as you know, the process continues and there will be other stages in the process and I hope you will continue to participate in the further written phases.

4820   MR. MUNRO: I shall. Thank you very much.

4821   THE CHAIRPERSON: Thank you very much.

4822   So I -- we'll take a little two-minute break. Don't all run off because we have to set up some people in the room here.

--- Upon recessing at 1723

--- Upon resuming at 1729

4823   LE PRÉSIDENT : À l'ordre, s'il vous plaît.

4824   So we will keep going and now hear from Dr. Schoenen. Am I pronouncing that right? Okay.

4825   So please go ahead, Dr. Schoenen, and then there will be some questions.

PRESENTATION

4826   DR. SCHOENEN: Thank you very much for allowing me this effort with extra presentation material here, despite others who do it without.

4827   My input today is from a technical perspective more than what we heard before. I am an engineer in Electrical Engineering and Wireless Communications. I'm doing Research at Carleton University and my heart is one part the consumer side and the other side is the wireless manufacturer side, so I have seen them both and I have worked with companies, so I see where all the costs come from, but I want to put this all into a perspective of how it can be better matched to the user and this is my presentation.

4828   First is, there are a lot requests I have in my material. I can only concentrate on one item for 10 minutes, but there are more questions, so please ask me again if there are some interesting points you want to discuss.

4829   There is one week we are only here. I will shortly give a comment on the context and history of this and then what is the benefit for the people here and for the Canadians, details of that background and conclusion.

4830   So basically the request is, in this 10 minutes, that we need more transparent tariff structures. And it is not only the options that you heard before, it should be caps here or debundling the devices from the service plan, but instead you must get away from the flat rates because this is a very bad habit that came up because it makes certain things easier.

4831   And certainly the bill shock of people, consumers, took part of this decision to say maybe flat rates are better because you don't need to be concerned that you go over the limits. But this was from the old history that there were phones and you would phone longer than a certain amount or you have roaming charges, then of course you get a bill shock, but these days we have better tools to cope with that or have limits or caps or whatever, so there is no need for this fear, right.

4832   Instead, usage-based pricing is important, at least to be offered as a complementary -- as a side offer, but it must be there for the same price as the flat rates in order to allow more advanced services of the future.

4833   Because it's not like the problem is the phone, the phone usage or SMS usage, the problem is data usage in the future. It's so hard to predict what your phone is going to consume and put on the network that -- I will come to this later, but this is the main reason why we need to be more careful here.

4834   So fair prices based on the real usage are important and if the providers don't want to give this there is a refund method, so whatever you don't use up from your monthly plan you can get a refund for the unused megabytes, right. There is always a way to make a usage-based.

4835   They must disappear long-term because of these reasons, because it's similar to an all-you-can-eat buffet, right, it works as long as everybody consumes more or less the same, but it does not work if somebody eats like a mouse and another one like an elephant. This is the case in wireless data usage.

4836   Dynamic pricing is the future term, more futuristic, more visionary, but it has to come. It is similar to the smart metering in an electricity grid, it solves the capacity crunch problem.

4837   Because this is what we face right now in the wireless industry, we see how data is going up -- the next slide is actually about that -- and we can't solve this without special mechanisms or putting much more money into that, which is what we don't want because we want to have the prices down.

4838   So the outlook is a mechanism called user-in-the-loop which might be there in 5 years or in 10 years, but for the moment now it's good at least to have usage-based pricing to get people used again to consumer behaviour, to what you do has an impact on your costs. And if a child gets a plan he knows that it is your pocket money, it's using $5.00, it's using $10, it's using $15 for what you use, but you are responsible for this usage, it's not anything you can't see.

4839   Okay. And the benefit is that demand shaping reduces unnecessary traffic, which means that it saves CAPEX for the equipment that needs to be bought for rolling out LTE, IT advanced, and so on, which is so outrageously expensive. We all have to pay for this in our plans and we can save this because we don't need to roll out this so early or we can keep the infrastructure for 10 or 20 years instead of just five years, right, by saving on the usage. It is definitely possible because most of the usages right now are not necessary, like leisure videos and anything you can do on Wi-Fi at home, but you don't need to do this on somewhere in rural areas. But this is my personal opinion.

4840   And of course stop bundling of devices and plans, which is the building block approach, but everything can be put into building blocks.

4841   This is about bandwidth hogs. In Europe prices are in the order of $10 for the flat rates. We don't have this here of course because of missing competition, but this is the one side.

4842   The other side is what is it used for? If these plans are attached to a laptop or to a Smartphone there will be messages like this regularly updating the software and if people are not aware of what they are doing these updates will consume the data plan. They will just download hundreds of megabytes of things that they are not perfectly aware of, especially maybe 95 percent are not aware of this, how much this consumes, but it can add up to a consumption of a few hundred megabytes per month and on laptops it can be a gigabyte or even more. But if you end up doing this inadvertently and have to pay for this in the end, it is definitely giving you a bill shock.

4843   So there is an issue here about the usage where the people are not aware of what they are using, like for these applications, for downloads, and of course for videos, and this leads to a certain probability density of users using a certain amount per month. So you have people who are using 100 megabytes, 1 gigabyte, 500 megabytes, 200. All this is distributed in a certain way and most of them are harmless, but there are some people using more than the average.

4844   This is called bandwidth hogs in some literature, it's not my term, but basically these are the ones that consume the wireless resources, which are limited, and operators cover this in a flat rate, but the small users pay, subsidize the heavy users because of this.

4845   In the end, all this has to be paid, but most of the users don't use that much, right, so they subsidize those users who consume up to their limit of their flat rates, which can be in gigabytes or whatever. It is in wireless and the wired market, it's the same.

4846   So because of this unfair distribution it's like a mouse and the elephant in the all-you-can-eat shop.

4847   Actually, this leads to an increase of data usage in the future which is 100 percent increased per year. On the same side the capacity, so the providers or what the operators can put into the field, is limited and not growing at the same rate. It's technically impossible with limited money to put on a network which copes with the demand increase of data in the future.

4848   So we as engineers have to sort this somehow, but we don't find any solutions anymore. So one approach is thinking about if the demand is really necessary and for this to be put back to the user so that he is aware of what the demand is, only usage-based pricing can really help, because then the consumers become aware of that they are responsible for certain usage and they learn what this is used for, right. Because it's a price issue, $5.00 more or less. So this is the important part.

4849   The options there are linear prices, like usage-based prices -- this is the top left figure -- and flat rate prices is the lower left figure, of course with a he cap usually these days.

4850   But what is happening is there is usage payment. This red triangle is what you pay, but you don't need to because you don't consume that much. Only if you are at the right-most end then you pay what you should be, but the rest, you just over pay, but you don't use it and it is very hard to find something useful here. I mean you are subsidizing the heavy user basically.

4851   And the user's perception of flat rate is of course they love it, it's convenient, they don't need to think about their consumption. It's hated of course because of the heavy burden, especially the prices here, $60 or whatever, it's a lot.

4852   The operator's view is the customer binding and fixed income stream, so this closed markets and not changing, no competition. Then they don't need to control any traffic volume, but the traffic increase means that the congestion will be unavoidable in the future.

4853   When the traffic goes up at some point there will be congestion and it will lead to a lot of problems, that outages happen, applications don't work, downloads stall, videos don't work, and this would all happen because of congestion and increase of traffic if we don't go to something more responsible here.

4854   I will skip this because of time reasons.

4855   So what to take home from this, usage-based pricing needs to be mandatory in a way that you can get this for the price comparable of a flat rate. Let's say the flat rate has 1 gigabyte, you get something that has exactly the same amount in dollars per gigabyte so that you can average proportionally to your usage. And it's possible, it's just a question of putting this into mandatory regulations.

4856   But this allows more advanced things like dynamic pricing for demand shaping so in congestion times it may be more price eventually, or if you are in a rural area it may be more price because it's congested.

4857   And it allows going green, because what the people don't know is that transmitting 1 gigabyte of data over the wireless networks produces 36 kilograms of CO-2, so it's proportionate to the usage, and reducing the consumption also means reducing energy and carbon footprint.

4858   Of course intransparent building blocks -- bundling of devices is very bad, as we heard many times this afternoon, so with the building block approach where you just select this you can solve this problem as well.

4859   The advanced approach is to put this all into a control loop, which is kind of research right now and visionary and so it would not be part of the Code of course, but maybe in 5 years or 10 years.

4860   And with this we can achieve control of the demand in a way that we can always be using the network.

4861   I mean we don't need to extent this, we don't need to invest into new infrastructure, we can work with the current network without all these investments which saves money in the end and it prevents bandwidth hogs and it saves the small consumers so we don't need to pay that much because there is not too much investments.

4862   Okay. So this is my small contribution and thank you very much.

4863   THE CHAIRPERSON: Thank you very much, Dr. Schoenen. You have brought us to a completely different level which is fascinating so I appreciate that.

4864   Commissioner Simpson will have some questions for you.

4865   COMMISSIONER SIMPSON: Thank you very much.

4866   Doctor, excellent presentation. Last time we talked about user-based billing we nearly had a storming of the Bastille.

--- Laughter

4867   COMMISSIONER SIMPSON: I don't know if any of us have the courage to go there again, but I think we learned a lot by it.

4868   I want to to ask you a technical question --

4869   DR. SCHOENEN: Yes...?

4870   COMMISSIONER SIMPSON: -- just to prove I'm staying awake with respect to algebra.

4871   You are using a probability density algorithm, but is that the same as a probability distribution algorithm, because that is what I'm familiar with when we last looked at shaping networks?

4872   DR. SCHOENEN: Yes. This is just saying this is the usage pattern of what do we have. It's probability density function.

4873   COMMISSIONER SIMPSON: Probably achieve the same things. I was just curious if you were coming to --

4874   DR. SCHOENEN: Right. And of course you are right that this usage-based pricing has caused a lot of controversy in the last time.

4875   I remember an article two years ago and there was political forces involved helping certain approaches to stop it, but it's because of not knowing what's necessary, it's because of the fear of bill shock and audit. So the customers of course, and some operators, don't want it.

4876   COMMISSIONER SIMPSON: I appreciate that you have taken an academic and an engineering approach, but with the intent of trying to modify behaviours so that there is a bit more equity in the relationship between the seller and the buyer.

4877   DR. SCHOENEN: Right.

4878   COMMISSIONER SIMPSON: Because an educated buyer makes a better relationship with a more fulsome vendor.

4879   DR. SCHOENEN: Yes, absolutely.

4880   COMMISSIONER SIMPSON: Moving to the sociological side, there is always the issue of the tragedy of the common where --

4881   DR. SCHOENEN: Right.

4882   COMMISSIONER SIMPSON: -- and how do you -- knowing that that's textbook 101 sociology and behavioural patterning, why do you think that hitting people over the head with an economic engineering formula is going to improve behaviour, knowing what we know?

4883   DR. SCHOENEN: Well, the tragedy of the comments is one of my literature references in my papers. It's true that people won't care for the common good if there is not an incentive. In particular for this reason I want to put them back into a situation where they know they are responsible for a part of their influence on the system.

4884   So it's not that it's a kind of punishment or it's a bad situation for them, indeed it will even be better for most of the people because they are the low consumers.

4885   So the average would be on the same price, but the lower consumers would just pay less because they know they consume less and only those people who consume beyond the average will be affected because they will either have to pay more or they will reduce their consumption.

4886   COMMISSIONER SIMPSON: But isn't that what happens now when you have bandwidth tiers, you know, a 5 megabyte, 10 megabyte, 50 megabyte contract, that you are anticipating and working to try and understand what your capacity demands are as a user?

4887   Don't we accomplish that now?

4888   DR. SCHOENEN: This is very inaccurate and in most cases when you are not -- when people are not so educated they just choose something someone recommends, "Maybe you should better go with this or you should better go with this." When you exceed this you have to pay an extra fee which is almost like bill shock so it's adding extra problems, except you have this flexible pricing, like it was suggested this morning, which is kind of okay, but it is still inaccurate because it's step-wise. You cannot really give it proportional --

4889   COMMISSIONER SIMPSON: No shaping.

4890   DR. SCHOENEN: And step-wise already means that it's very course, you are on this bracket or you are on this bracket and changing this we have to think twice, maybe it's one or two bills where you go over this and then you decide to change and then you are on this higher bill, but maybe the next month you don't consume that much and you still pay this much, so it's not really appropriate for your usage pattern.

4891   COMMISSIONER SIMPSON: Well, so if we were take your model, or something like it, and also correspondingly give consumers tools so that they can actually start to have some kind of control over their economic and use destiny --

4892   DR. SCHOENEN: Exactly.

4893   COMMISSIONER SIMPSON: -- you are an engineer and I gather you have had significant experience in networks, I don't know that much about your experience in telephony and wireless, but from your understanding is it possible to built online and on-phone tools that give very precise information down to the second of usage and to the volume of your usage at any given time during a month?

4894   DR. SCHOENEN: Okay. Good question.

4895   So the story I hear from wireless manufacturers is that they currently measure the traffic in the router, on the router site, which has an accuracy of once in a minute. So this is the accuracy.

4896   But technically there is no big deal of changing this to something per second, but they just have to pay IT people to implement this. Or maybe it is even implemented but not used yet and they have to pay other companies, third parties for that, which may be in the order of $100,000 or $1 million or something to do that, but there is no big reason why not.

4897   COMMISSIONER SIMPSON: Would it be better -- again, this is totally hypothetical, but from your experience would it be better that the device manufacturers -- who are really creating consumer demand for more services and more bandwidth, not necessarily the carriers -- is this something perhaps better done by them and provided to the carriers as tools that come with the handsets?

4898   DR. SCHOENEN: Let's say for the first approach where you just have a linear usage-based pricing there should be something on both sides. There should be something on the operator's side where you can look up on a webpage this is my usage and it is precisely this and if there is a long phone call or a special expensive SMS it should be showing up in the bill so you can verify it.

4899   But for the online usage, in the moment you are using it you should have something on your phone which is given by the manufacturer of the operating system, which can be Android or iPhone, IOS, and so on. This is easily done.

4900   And there are some applications already which measure data, it's just optional. But now you have to install it, but it can be mandatory that at some point it is included.

4901   COMMISSIONER SIMPSON: And these could, in your estimation, conveniently attach to the carriers' network and be the bridge between user and producer of the service? Do you know anything?

4902   DR. SCHOENEN: The measuring equipment on the phone right now is user-based application, so it measures the data in a certain way, but I'm not sure if it's measuring on a precisely legal way. So the operator could say, "We measure it another way" -- and maybe there is a difference of 10 percent -- "so you have to go with our measurements because it's not exactly what the phone can measure, and there is an overhead which you might not get on the wireless network so they could more bytes here than there."

4903   So there might be an issue with that, but you can adjust it at some point and find the right values to make it work. It's possible.

4904   COMMISSIONER SIMPSON: Well, I'm at the outer limits of my intellectual capacity at this point, doctor.

4905   DR. SCHOENEN: M'hmm.

4906   COMMISSIONER SIMPSON: I'm going to turn it back to the Chair. Thank you.

4907   DR. SCHOENEN: And may I just add one point. The long-term idea is that you would see your costs beforehand. This is so important. Like, long distance calls, you should have a message before telling you it costs you more. Roaming should tell you before it costs you -- it should -- it's going to cost you more, and the same with data. If you are going to do something very heavy, like watching a video or downloading something, updates, it should tell you with a message this is consuming so much on the wireless cellular network which might affect your costs on the plan; you should reconsider it using on WiFi, using on cable or maybe if you want, but this is the cost. Maybe even the application tells you the cost. It could be $5 more, it could be -- it could go beyond your limit, but this should be beforehand of all the big transactions. But now this is not possible because the operating systems don't have this built in, but maybe in a few years.

4908   THE CHAIRPERSON: Thank you very much, doctor. You actually outlined one of the problems, we're not always rational when it comes to these cell phones. It seems more an emotional attachment to these and thank you for --

4909   DR. SCHOENEN: Absolutely.

4910   THE CHAIRPERSON: -- for adding and participating in the hearing.

4911   DR. SCHOENEN: Thank you. Thank you very much.

4912   THE CHAIRPERSON: Thank you very much. So ... Madame la Secrétaire, on est rendu où là?

4913   THE SECRETARY: The next presenter is in the room, Mr. Frederick Nakos.

4914   THE CHAIRPERSON: Welcome. Come and ... Come up to the table and set yourself up. Grab a glass of water there. And when you're ready, please start.

PRESENTATION

4915   MR. NAKOS: Good evening, Commissioners. My name is Frederick Nakos. I have been working as a sales representative for mobile phones for about three years now, although I will not name the actual company because at this hearing I do not represent anybody, only myself.

4916   Here today I am here to outline several different things that I have noticed over the years and I think should be interesting to go over.

4917   First of all, for the 911 fees, I have nothing against 911 fees. I know where they're coming from and that's perfectly acceptable. However, currently when clients are buying pre-paid cards, they're forced to buy a higher tiered card than what their plan dictates. In the example of Québec, let's imagine that you're taking a 25 dollar plan, well, there's the 40 cents 911 fee. If they just buy a 25 dollar card, the 911 fee is going to come before; therefore, reducing their current balance to $24.60, and aren't enough to fulfil their criteria, and, therefore, they're going to 35 cents a minute without them knowing.

4918   A solution to that would be to either include the 911 fees for the province within the pre-paid card or affix it to the end of it. That is to say, instead of buying a 25 dollar card, you're buying a 25 dollar and 40 cent card, like that is going to solve the entire problem because right now they're supposed to buy, say, $30 instead of 25 and over a year that's $60 that goes pretty much nowhere.

4919   The next thing I'd like to bring up, and I'm glad the good doctor did bring up about caps, is that the networks have -- well, they have a certain limit. With data usage going up, it's sometimes not physically possible to give for the entire demand. And especially with the greater plans at lower costs and faster speeds becoming common, it's important to address a problem that has at one point happened with home internet usage and is currently an issue with certain U.S. mobile carriers, namely, throttling users, or, that is to say, slowing down their internet speeds and without them necessarily knowing. It's important to address this now rather than later because LTEs coming out in Canada throughout, 75 megabytes per second is a theoretical top limit. And so it's important to indicate within I'm going to say unlimited plans, but if there are soft limits. For example, if the carrier deems that a user has used too much internet because they cannot give as much internet to everybody and they're going to slow down their usage, it's important to actually say it and at what point that starts to happen.

4920   Furthermore, clients should have guides as to what to expect in terms of the bandwidth that they're buying. For example, let's say they take a phone that has an LTE capability, well, it's very rare that any user is going to reach the 75 megabytes per limit. So we should indicate to users what they should expect in terms of speed on their phone very clearly because right now the only indication that they're not going to have the full speed is saying that it's going to be up to 75 megabytes per second. So to tell the user where they're going to have better speeds, if it's upload, if it's download, that can go a very long way.

4921   Thirdly, I'd like to bring a problem that happens very often. It's let us say that a client calls in customer service over the phone and let's say they had a problem with their bill or they're arguing for a better plan because they want to stay with the company. Oftentimes the customer service representative does not leave any notes. So when the client actually comes in stores and expects something, they can't get it because there's no notes left on the accounts. And it leaves the sales rep in a very distraught position because the client is expecting one thing but we cannot offer it because there's no notes left. To that respect, what would be very critical would be to e-mail the customer a confirmation of the notes left on the accounts of the person they spoke with and the time and date the phone was called. If you have an e-mail confirmation, it can go a long way saying that, yes, this actually happened, and then the company can then go and honour it.

4922   Just to give an example, I have had a client come in wanting to unlock their phone. I know unlocking is a separate issue. I'm just using it in an example in this context. They want to unlock their phone. The company allows to unlock the phone, no problem, they're eligible for the unlocking; however, the client cannot do it right away considering their phone is damaged and they have to go to the Apple Store to exchange it. They go to the Apple Store to exchange it, they come back a couple of weeks later, they call up expecting it to be unlocked; however, the policy has changed and they can no longer unlock it. Even though the notes have been there with the person's name, with the time and dates, the company can no longer honour it. So just having notes, confirmation and honouring can lead to a lot less frustration for everybody.

4923   Finally, and this has been spoken of very briefly before, geographical position and roaming fees. The client must absolutely have a way to know where geographically roaming and long-distance fees apply. Considering we cannot rely on regional codes, example, a call from a 514 phone within the Valleyfield 450 is not considered long distance, but a call placed in Joliette, 450, is. The client must be able to identify the subtleties put in place by the carriers. Several carriers do include an audio stamp when placing a call but not when one is received. It is, therefore, possible that a client can be billed without knowing while receiving a call outside his zone when they thought they were inside.

4924   An online tool and a sonar stamp must absolutely be in place in order for the client to be billed clearly and honestly, which brings me to the conclusion of my presentation.

4925   THE CHAIRPERSON: Thank you very much.

4926   MR. NAKOS: You're welcome.

4927   THE CHAIRPERSON: Thanks for being there and we won't dig into who you work for, but the perspective you're bringing is quite unique and original and very useful. So, Commissioner Duncan will have some questions for you.

4928   COMMISSIONER DUNCAN: Good afternoon. So you've given me lots to think about here, so you'll probably have to help me understand some of it. I don't -- in the first instance here when you talk about the 911 fees, you know that's going to happen, so you purchase $25. You know that in effect you're getting 24.60. So why do you have to go over it? Like, I just don't quite understand that.

4929   MR. NAKOS: A lot of people on pre-paid are not necessarily residents of Canada and a lot of times also they buy pre-paid cards because they come from other provinces, despite the fact that sales representatives are encouraged and 90 percent of the cases do, in fact they have to, tell about the 911 fees, the client does not necessarily realize or understand. To that effect, especially people coming from Europe, they do believe that it is included within the 25. And a lot of times we can't even control it. Because if they come in stores, we do ask do you have money left on your account and then we can sell the proper card. But let's not forget that pre-paid cards are sold in gas stations, dépanneurs, Future Shop, et cetera. To that respect, they just don't know.

4930   COMMISSIONER DUNCAN: So the personal information form that we're talking about people getting with their contract, is there a possibility to explain that there so they know? I guess --

4931   MR. NAKOS: I'm sorry, could you repeat that, on pre-paid?

4932   COMMISSIONER DUNCAN: No, I guess they're not because they're not going to get a contract.

4933   MR. NAKOS: Exactly.

4934   COMMISSIONER DUNCAN: They're buying a pre-paid card.

4935   MR. NAKOS: Exactly.

4936   COMMISSIONER DUNCAN: And so the solution you're recommending here is to -- who would you force to sell it for 25.40 in the example that you gave?

4937   MR. NAKOS: Well, if the cards in the system, when you print them out, either have per provincial basis the 40 cents already included within the card, that's going to be much cheaper than buying a 30 dollar card for the same service. To that respect, you could even just sell a 40 cent card or a 70 cent card depending on the province, in which case you wouldn't have to change the system at all, just include these extra cards.

4938   COMMISSIONER DUNCAN: So it just -- say we're talking about TELUS, for example.

4939   MR. NAKOS: M'hmm.

4940   COMMISSIONER DUNCAN: They give the cards to -- they allow retailers to sell these cards for them. And you're saying instead of selling a 25 dollar card, they'd sell 25.40?

4941   MR. NAKOS: Exactly.

4942   COMMISSIONER DUNCAN: Okay. And is that something that belongs in the Code? I guess you're maintaining it does.

4943   MR. NAKOS: It does, yes.

4944   COMMISSIONER DUNCAN: Okay. All right. Then I understand that. Thank you.

4945   So on -- moving on to the issue of throttling --

4946   MR. NAKOS: M'hmm.

4947   COMMISSIONER DUNCAN: -- would that be covered by the privacy policies and fair use section that's proposed and would that information -- could that information be disclosed in the personal information summary? So what we're suggesting is that when you buy a plan, not a card --

4948   MR. NAKOS: M'hmm.

4949   COMMISSIONER DUNCAN: -- but you become a customer of TELUS and you subscribe to a plan, TELUS, for example, that you'd get a personal information sheet that would give you the key information that's contained in your contract. So you don't have to wade through the whole contract, you've got this summary sheet here. That's the idea of it. Is that a place where this kind of information could be disclosed?

4950   MR. NAKOS: Absolutely. If they buy a 6 gigabyte plan but it's mentioned that after 3 gigabytes their internet connection will be slowed down, or, for example, if it's on a pay-per-use basis or a flexible tab basis, if after a certain amount they will be slowed down, that can absolutely go within that as long as it's disclosed.

4951   COMMISSIONER DUNCAN: M'hmm. I guess we will have to hear from some of the providers. I am just not sure about the throttling. You are suggesting they are doing this throttling and people are not aware of it?

4952   MR. NAKOS: I'm sorry. No, I am not suggesting that they are doing it right now. I am suggesting that it could be a possibility in the future.

4953   COMMISSIONER DUNCAN: Oh! Okay. So, we should provide for it?

4954   MR. NAKOS: Exactly.

4955   COMMISSIONER DUNCAN: Okay.

4956   MR. NAKOS: Considering that I do believe it's AT&T in the United States that after three gigabytes, they do slow down their connection.

4957   COMMISSIONER DUNCAN: Okay. And these notices alerts that we're talking about people getting -- that wouldn't apply to this? I guess not, it's not about speed, it's alerts about capacity.

4958   MR. NAKOS: It could be applied if it's more information, information is private, therefore if you know that you're about to be slowed down, then you can curb your usage towards that.

4959   COMMISSIONER DUNCAN: Okay. Alright. We can consider your comments. And the customer service representative issue now, have you ever escalated, you have experienced this problem or you have seen -- you have had clients I guess who have experienced this problem?

4960   MR. NAKOS: Yes, practically every week.

4961   COMMISSIONER DUNCAN: Every week. And do you ever suggest that they go to the service provider and make a recommendation that they improve their service in this respect?

4962   MR. NAKOS: What happens when they come in, I'm just giving you a base example of a typical case, say they negotiated their contract to have free calls after 5:00 p.m. instead of 9:00 p.m. They come in, they expected that to happen, so when you do the upgrading, we call our retail supports and say, this is what the client has been promised and the retail support representative is looking through these notes and says: no, that's never happened.

4963   Unfortunately, there is not much they can do and they are then forced to go back to customer service and say, I spoke to this person and there is no notes, tatatata! It's a long and arduous affair which can be very easily remediated by just having a confirmation as e-mail that got both parties actually have what is promised.

4964   COMMISSIONER DUNCAN: And I suppose the advantage to having the confirmation is that if you don't get the confirmation, it's a pretty good warning that they didn't make the note so you would follow up before you go in the store.

4965   MR. NAKOS: Precisely.

4966   COMMISSIONER DUNCAN: Okay. I understand that. And on this geographical positioning in roaming case, I understand that part of this is so you don't get hit with charges than for roaming, right, and that's what you are concerned about.

4967   I don't understand this online tool and a sonar stamp.

4968   MR. NAKOS: Oh! For example a sonar stamp. Let's say on my way here I made a call back home and it said that I may incur long distance charges considering that I am outside of my local zone. Not all companies actually do this, so if you can at first include that.

4969   Secondly, much like the online coverage maps, what you could have is an online Google map with delineations of where your 514 region starts and ends. If you step outside the zone, you will incur long distance charges.

4970   COMMISSIONER DUNCAN: And so those would be things that is not an alert, but something that would be available to you that you would be able to go to your supplier and check it out.

4971   MR. NAKOS: Absolutely.

4972   COMMISSIONER DUNCAN: Okay. Alright. I understand your points. They are very helpful and they are -- you need to, everybody has got something valuable to contribute, so we appreciate that. Thank you.

4973   So, those were my questions, Mr. Chairman.

4974   THE CHAIRMAN: Thank you. I was asking somebody else earlier that in a sense, people in your positions will become the ambassadors, the frontline ambassadors for the Code.

4975   What kind of training do you normally get when things like that occur in your regulatory changes?

4976   MR. NAKOS: Well, every new sales representation always has, I believe, 40 hours more or less of training to undergo, whether that's in stores or at a Head Office, where they go point by point, everything that is expected of them and they do role play training.

4977   As for the new regulations, there is always a document that's handed out to us and everybody is expected in fact followed up on a person by person and store by store basis, making sure that everybody reads it and understands it.

4978   THE CHAIRMAN: Now, you've had a chance probably to look at the new draft, the working document of the Code?

4979   MR. NAKOS: Absolutely.

4980   THE CHAIRMAN: Would you find it difficult or easy to being the ambassador for that and explaining it to people?

4981   MR. NAKOS: I find it quite easy, considering it's going to help the customer relationship with carriers very -- I'm sorry, it's going to help the customer-carrier relationship.

4982   As for the actual language in the Code, it's very easy to understand from myself and my colleagues when they saw it. It's easy to stand up behind this because it's protecting both the clients and the carrier.

4983   THE CHAIRMAN: Good. Thank you for that. It's very useful. Thank you.

4984   MR. NAKOS: No problem.

4985   THE CHAIRMAN: And those, I believe, are all our questions. Thank you. Thank you for hanging around late in the evening like this. It's very much appreciated.

4986   MR. NAKOS: No problem. Thank you for your time.

4987   THE CHAIRMAN: Thanks.

4988   THE SECRETARY: Actually, we have two more presentations to go, Mr. Chairman.

4989   THE CHAIRMAN: Yes, yes.

4990   THE SECRETARY: As Mr. George Foustas has indicated, he will unfortunately not be able to -- not be available to appear today.

4991   So -- la prochaine est en français et c'est une présentation par Skype. Alors, nous avons à l'écran ou on devrait avoir à l'écran, c'est bien ça, monsieur Tana Guindeba.

4992   Bonjour, monsieur Guindeba. Est-ce que vous nous entendez?

4993   M. GUINDEBA : Allo!

4994   LA SECRÉTAIRE : Bonjour.

4995   M. GUINDEBA : Bonjour. Je vous entends, madame.

4996   LA SECRÉTAIRE : Vous nous entendez bien. Parfait.

4997   M. GUINDEBA : Oui, très bien.

4998   LA SECRÉTAIRE : Alors, vous pouvez y aller maintenant avec votre présentation. Vous avez dix minutes.

4999   M. GUINDEBA : D'accord. Je vous remercie.

PRESENTATION

5000   M. GUINDEBA : Alors, ma présentation concerne un certain nombre de points que j'ai signalés. J'ai eu quand même des éléments de réponse par rapport à deux points: La partie dont j'ai parlé de transparence au niveau des facturations et des contrats. Donc, à ce niveau j'ai eu des éléments de réponse.

5001   Et la partie où je parlais de la vente des téléphones, c'est-à-dire les téléphones qu'on bloque; généralement on les bloque puis l'usager n'a pas les moyens de se trouver un cellulaire non bloqué. À ce niveau j'ai vu qu'il y a quand même le Code au niveau du point D, a apporté beaucoup d'amélioration à ce niveau.

5002   Par contre, ce que vois où on n'a pas beaucoup parlé, on me dira peut-être que c'est des procédures d'affaires, mais concernant les appels entrants que nous payons. Alors, moi, je me dis pourquoi ici au Canada les usagers doivent payer pour des appels qu'ils reçoivent?

5003   Est-ce qu'il n'est pas possible d'inclure ça dans des services offerts par défaut? Parce que l'usager n'est pas maître à 100 pour cent des appels qu'il reçoit. Parce qu'on peut recevoir des appels, on ne peut pas déterminer quand est-ce qu'on sera appelé et ce ne sont pas tous les appels qui peuvent attendre parce que, des fois, ça peut avoir des conséquences le fait de ne pas répondre à un appel. Ça, c'est pour les appels entrants.

5004   Le point suivant, j'ai parlé aussi des appels interurbains. C'est toujours... on me dira peut-être que ce sont des procédures d'affaires, que... Je me dis que nous sommes ici au Canada, un vaste pays, on est conscient là-dessus, je me dis que si un seul pays dans tous les cas, même s'il y a quand même dix provinces et trois Territoires, il y a quand même un territoire, un seul pays.

5005   Le citoyen doit se sentir à l'aise de bouger à l'intérieur du pays parce qu'ils n'ont pas des téléphones mobiles. Ce n'est pas un téléphone dans la maison. C'est un téléphone mobile qui voyage avec nous. Donc, on ne devrait pas avoir à se préoccuper de sa position géographique à l'intérieur du Canada.

5006   Donc, je me suis dit à ce niveau que le CRTC peut intervenir de telle sorte qu'il y ait des coûts ou pas, que ça soit réparti sur d'autres services, mais que ces choses-là soient basées pour nous, qu'on puisse appeler à Ottawa ou à Vancouver, étant à Montréal, sans faire des distinctions.

5007   Après ces points j'avais parlé aussi de certains services. Eux autres, ils les appellent toujours comme des services, ajouter qu'ils nous font payer comme l'afficheur du numéro.

5008   Pour ma part ici, moi, personnellement, je n'ai pas vu -- j'ai fait plusieurs pays bien entendu -- je n'ai pas vu vraiment où est-ce qu'on nous fait payer pour identifier les numéros appelants, un numéro qui nous appelle sur un cellulaire pour savoir c'est qui, on nous fait payer pour ça.

5009   Ici, il y a un paquet dans ce sens ici, généralement ils font afficher au répondeur, boîte vocale, ils le disent comme ça, mais je me dis quand même que l'afficheur, on ne devrait pas payer pour ça. Dans la mesure où moi je peux décider de masquer mon numéro et, là, je ne sais pas ce que l'appareil de l'autre côté va afficher. Donc, on peut comprendre que ce n'est pas à 100 pour cent dépendant de lui, là. Il peut empêcher de l'afficher aussi.

5010   Donc, je me dis que ce service peut être inclus dans le service offert de base, sans devoir payer... sans payer, je dois savoir qui m'appelle sur mon portable.

5011   Et un autre point où j'ai parlé, je sais que communément ici on appelle soir et week-end. Généralement c'est très connu. On a des forfaits où on donne des petits avantages tels que appels illimités, des choses comme ça et le soir, pour certains c'est 05h00, pour certains c'est 06h00 ou 07h00, et la fin de semaine le samedi et le dimanche.

5012   Bon, je comprends par ici, je me dis que c'est parce que c'est des périodes pendant lesquelles il y a moins de trafic parce que les administrations sont fermées généralement. Alors, pourquoi n'est pas appliqué ça aussi au niveau des jours fériés, tel que le jour des la Fête du Canada qui est le jour où on ne travaille pas? Donc, on peut dire aussi qu'il y a moins de trafic à ce niveau.

5013   On voit que tous les jours fériés nationaux ne sont pas comme au niveau des provinces peut-être, mais je me dis qu'il y a ces jours fériés fédéraux qui sont appliqués au niveau de toutes les provinces. À ce niveau-là, on peut appliquer les avantages offerts les soirs et week-end.

5014   Et aussi si c'est les jours fériés qui sont de compétence provinciale à ce niveau-là l'utilisateur qui utilise son téléphone étant dans cette province pourra bénéficier de ces avantages.

5015   Et je voudrais à ce niveau terminer en disant aussi que c'est très bien, franchement disons que j'apprécie beaucoup ce projet de vous mettre à l'écoute des citoyens. C'est vraiment une promesse telle que moi je les connais. Je vous remercie pour ça et je voudrais aussi dire qu'il serait bon qu'on n'ait pas tout le temps avoir affaires à des plaintes, de temps en temps avoir comme une cellule à côté qui va veiller à ce qu'il y ait amélioration des services offerts aux clients.

5016   Il y a plusieurs façons de le faire. On peut quand même imaginer faire des recherches, voir un peu comment ça se passe ailleurs. Bon, je vais dire la recherche du meilleur, qu'on ait quand même l'avantage qu'il y a, qu'on mette le client au devant. C'est ça.

5017   C'est bon que les opérateurs fassent leurs affaires, mais de temps en temps qu'ils pensent aux clients aussi, qu'on n'attend pas qu'on se révolte pour changer les choses.

5018   Donc, ça, c'est au niveau que, moi, je voulais intervenir.

5019   Pour les points où je disais que j'ai eu des éléments et des réponses concernant les téléphones bloqués, oui, effectivement j'ai eu des réponses parce que je mentionnais que, bon, lorsque le client a payé tout, c'est normal qu'il ait droit au déblocage. Ça m'a fait beaucoup plaisir et on a dit aussi que lorsque son contrat est fini si c'est un contrat de deux ans ou quoi, alors que c'est fini, qu'il ait droit au déblocage du téléphone. À ce niveau j'ai beaucoup de satisfaction.

5020   Je vous remercie.

5021   LE PRÉSIDENT : Merci beaucoup, monsieur Guindeba. Je vais mentionner que vous avez participé non seulement à cette instance-ci, mais aussi un moment important dans l'histoire du CRTC et des Communications, c'est la première fois qu'on entend un intervenant participer dans nos processus par voie de Skype.

5022   Donc, voilà, vous êtes le premier et sans doute vous ne serez pas le dernier. Donc, merci beaucoup. Madame Poirier va vous poser des questions maintenant.

5023   M. GUINDEBA : D'accord. Merci beaucoup.

5024   CONSEILLÈRE POIRIER : Oui. Bonjour, monsieur, et j'espère que vous nous voyez bien aussi?

5025   M. GUINDEBA : Oui, je vous vois bien, madame.

5026   CONSEILLÈRE POIRIER : Et j'en profite pour remercier le personnel technique qui a réussi à faire en sorte qu'on puisse enfin utiliser Skype dans nos audiences, alors...

5027   M. GUINDEBA : C'est applicable.

5028   CONSEILLÈRE POIRIER : Voilà. Vous apportez beaucoup.

5029   M. GUINDEBA: Donc, volontiers, mais je travaille.

5030   CONSEILLÈRE POIRIER : Parfait. Vous êtes dans le confort de chez vous alors que peut-être il y a une tempête à Québec, là, hein, une tempête de neige. Alors, c'est beaucoup plus profitable pour vous.

5031   Alors, c'est certain que vous abordez plusieurs sujets. Il y a certains des sujets qui ne sont pas l'objet nécessairement de cette instance-ci et c'est clair que je ne veux pas mettre de côté ces sujets-là, mais peut-être que je pourrais regrouper tout ça en vous demandant: Est-ce qu'il y a de la compétition chez vous?

5032   Si vous n'êtes pas satisfait de ne pas avoir certains services, d'avoir à payer pour des téléphones entrants et avoir des tarifs différents, d'avoir à payer pour l'affichage, est-ce que vous avez un choix de compétiteurs chez vous?

5033   M. GUINDEBA : Alors, à ce niveau-là, effectivement j'allais venir à ce niveau-là. Je me suis dit, ça c'est peut-être des services qu'on ne peut pas imposer directement aux opérateurs. Peut-être qu'on voit c'est pour les chiffres d'affaires, c'est le monde des affaires, parfait, mais vu qu'ils ont un nombre limité ici, eux autres ils vont certainement se mettre d'accord et le client n'aura pas... n'a pas le choix parce que quel que soit... en fait, nous, on doit consommer, le téléphone, on en a besoin. Donc, s'il y a un nombre limité d'opérateurs, les grands ici, on les connaît, ils sont trois plus quelques sous-traitants qui sont là. Il y en a moins d'une dizaine ici. Alors, nous autres, on n'a pas... soit on se plaint, soit on change d'opérateur et qui sont un monde limité comme on le fait des fois, on menace des fois de les quitter pour avoir des contrats à négocier.

5034   Et, là, je ne vois pas une marge de manoeuvre pour le consommateur, à moins qu'il y ait un arbitre comme vous pour arrêter certaines choses ou d'offrir beaucoup de licences pour que la compétition devienne grande et que les choses s'améliorent.

5035   CONSEILLÈRE POIRIER : Est-ce que vous pensez à ce moment-là qu'en créant un Code comme celui qu'on veut faire, ça va vous donner un peu plus de dents et de griffes pour obtenir de vos serveurs de téléphone sans fil des services un peu plus satisfaisants?

5036   M. GUINDEBA : Hum, hum.

5037   CONSEILLÈRE POIRIER : Oui?

5038   M. GUINDEBA : Oui.

5039   CONSEILLÈRE POIRIER : Tout à fait. Est-ce que vous avez déjà vécu des problèmes avec vos fournisseurs de service sans fil?

5040   M. GUINDEBA : Alors, moi, personnellement, bon, je me suis plaint au téléphone. Des fois je menace de partir, des fois je donne aussi des idées et ainsi on me fait des choses, mais je me suis dit aussi: est-ce que tout les Canadiens doivent faire comme ça?

5041   Est-ce qu'on doit tout le temps se plaindre ou menacer de partir? Est-ce que ce n'est pas bien d'avoir des choses qui sont claires, qui sont là claires et que tout le monde connaît?

5042   Est-ce qu'on doit faire un cas par cas tous les Canadiens ou cas par cas? Est-ce qu'on ne doit pas vraiment faire des choses pour le public?

5043   CONSEILLÈRE POIRIER : Donc, est-ce que d'avoir, par exemple, comme outil une sorte de résumé de votre contrat qui vous expliquerait expressément ce à quoi vous avez droit, à quel tarif? Est-ce que c'est quelque chose qui vous aiderait?

5044   M. GUINDEBA : Oui, beaucoup, beaucoup. Effectivement, comme je vous disais, la partie transparente franchement oui, qu'on explique très bien les contrats à l'usager parce que des fois c'est vrai, ils les mettent sur le papier ou ils les écrivent avec des caractères qu'ils choisissent eux-mêmes, mais comment mettre l'accent là-dessus, vraiment que l'opérateur soit sûr que le client a bien compris les consignes de son contrat. Parce que j'ai comme l'impression des fois qu'on a tendance à marquer certaines choses jusqu'à avoir des factures un peu élevées.

5045   CONSEILLÈRE POIRIER : Est-ce que vous avez déjà eu une facture surprise?

5046   M. GUINDEBA : Ça ne finit pas. Généralement ici les clients, les consommateurs ont toujours des factures surprise.

5047   CONSEILLÈRE POIRIER : Par exemple, est-ce que vous avez un contrat à long terme ou bien vous avez un forfait au mois?

5048   M. GUINDEBA : Ah! O.k. Moi, actuellement j'ai un contrat à long terme avec Telus à travers... à travers les réseaux des ingénieurs. Alors, puisque moi je suis intervenu parce que j'en ai eu plus de cas où j'ai peut-être plus de cas, moi généralement je prends le temps de bien lire le contrat, voilà.

5049   CONSEILLÈRE POIRIER : Et vous le comprenez?

5050   M. GUINDEBA : Oui, généralement, moi, je comprends. Mais ce n'est pas tellement... ce n'est pas généralement le cas. C'est des amis ou des personnes que je connais qui toujours ont des difficultés.

5051   Moi, j'essaie de faire le maximum de mon côté ou je dis, tu ne fais pas cela, mais généralement les gens tombent tous dans des pièges. Donc, je me suis dit, pour éviter ça, il faut qu'on dise aux opérateurs qu'ils soient... qu'ils fassent des machins des fois pour expliquer les choses aux personnes qui ne sont pas... Certains c'est par négligence, d'autres c'est parce qu'ils ne comprennent pas beaucoup ces affaires de techno ou ils ne comprennent pas beaucoup les choses. Ils savent seulement utiliser le téléphone.

5052   CONSEILLÈRE POIRIER : Est-ce que vous avez, en plus d'un téléphone sans fil, est-ce que vous avez un téléphone filaire?

5053   M. GUINDEBA : Ah! O.k. Non, je n'ai pas pris. En ce moment, j'ai pris l'internet, la télé, tout ça, mais le téléphone de maison, je n'ai pas pris. Les deux pour l'instant, ça ne m'intéressait pas beaucoup.

5054   CONSEILLÈRE POIRIER : Je vous apporte sur ce sujet-là parce que certaines compagnies nous ont dit qu'on ne pourrait pas appliquer au niveau de la disconnection le Code qui existe, qui est un code pour les téléphones filaires. Or, ils invoquent que c'est un cas d'ancien parce que, maintenant, ça ne devrait pas s'appliquer à la nouvelle technologie, mais de plus en plus de gens comme vous n'ont qu'un téléphone sans fil.

5055   M. GUINDEBA : C'est ça.

5056   CONSEILLÈRE POIRIER : Alors, si on vous coupe le téléphone, vous n'avez plus de ressource.

5057   M. GUINDEBA : C'est tout, je suis coupé du monde, là.

5058   CONSEILLÈRE POIRIER : Est-ce que vous voudriez qu'on s'assure que vous soyez protégé dans il y a coupure?

5059   M. GUINDEBA: C'est pourquoi on vous fait appel, on fait appel à vous. C'est vous notre espoir là-bas.

5060   CONSEILLÈRE POIRIER : Est-ce que vous vous sentez bien protégé au Québec avec la Loi de protection du consommateur qui est en application depuis 2010? Est-ce que vous es au pays depuis assez longtemps pour avoir vu une différence?

5061   M. GUINDEBA : Oui, oui, oui. Je vois quand même que ça aide beaucoup parce que je vois pas mal de personnes qui en parlent aussi, la consommation. Avant d'arriver à votre niveau, certains passent par l'Office du consommateur. C'est certain qu'eux autres qu'ils leur disent: non, vous devez aller ici.

5062   Et puis je vois quand même que ça aide beaucoup. Ça aide beaucoup parce qu'il y a des pays qui n'ont pas ce système-là.

5063   CONSEILLÈRE POIRIER : Est-ce que vous... depuis l'application de cette nouvelle loi-là, est-ce que vos frais de téléphone ont monté ou pouvez-vous faire un lien entre une augmentation de vos frais de téléphone avec l'application de cette loi-là?

5064   M. GUINDEBA : Alors, j'ai quand même remarqué des changements comme, par exemple, maintenant lorsqu'on résilie à des choses, on ne pouvait pas payer des sommes gigantesques comme on le faisait avant. On paie juste un écart avec le téléphone. Je vois quand même qu'il y a eu des modifications à ce niveau-là.

5065   CONSEILLÈRE POIRIER : Je vais vous poser une question un peu plus difficile peut-être à répondre parce que, là, vous avez une protection au Québec. Nous, on songe à faire aussi peut-être un Code qui protégerait l'ensemble des Canadiens. Est-ce que vous voudriez avoir deux codes ou un seul, qu'on élimine celui du Québec ou que vous gardiez les deux ou quoi?

5066   Qu'est-ce que vous souhaitez et est-ce que vous pensez que vous allez être comme citoyens capables de suivre l'application de deux codes, s'il y en a deux?

5067   M. GUINDEBA : Alors, moi, personnellement, je pense que, bon, nous sommes un pays ici, c'est vaste, c'est vrai toutes les provinces, c'est vrai, mais c'est quand même bon d'avoir une compétence centralisée qui pourrait superviser l'ensemble du territoire.

5068   Bon, peut-être qu'il y a des provinces qui ont des particularités sur certaines choses, c'est possible, mais vraiment des choses aussi importantes comme ceci, c'est bon qu'il y ait une compétence fédérale.

5069   CONSEILLÈRE POIRIER : Parfait. Donc, est-ce que les codes pourraient se compléter, à votre avis, parce que du côté du Québec, ça touche certaines réglementations et, nous, ce qu'on touche, sont des éléments qui sont parfois fort différents. Est-ce que vous voyez une complémentarité?

5070   M. GUINDEBA : Alors, s'il n'y a pas de contradiction, je pense que les deux peuvent aller ensemble.

5071   CONSEILLÈRE POIRIER : Vous êtes logique. Vous êtes logique. Alors, j'aimerais vous faire parler un petit peu plus sur les téléphones déverrouillés. Est-ce que votre téléphone est bloqué à vous présentement?

5072   M. GUINDEBA : Évidemment. Moi, je dis que j'ai d'autres moyens, internet payé pour le débloquer.

5073   CONSEILLÈRE POIRIER : Et Telus nous a dit que c'était 35,00 $ pour débloquer le téléphone. Est-ce que vous trouvez ça acceptable?

5074   M. GUINDEBA : Alors, bon, moi, je dis ceci, 35,00 $, ça dépend de quel moment on peut le débloquer. Si c'est un téléphone qui coûte cher, ils valent à moitié prix, par exemple, si un téléphone est 600,00 $, qu'ils vendent à 200,00 $, à ce moment, je pense que, bon, il pourrait peut-être demander plus même pour débloquer un téléphone, parce qu'on ne sait pas pourquoi la personne veut débloquer. Est-ce qu'il veut changer d'opérateur? On ne sait pas.

5075   Mais si c'est un téléphone que, moi, j'ai payé au plein prix ou bien j'ai fini mes contrats de deux ans, bien, là, je dois débloquer gratuitement, à mon avis.

5076   CONSEILLÈRE POIRIER : Et ma dernière question; sur votre facture, est-ce que c'est clair si votre appareil est subventionné, combien vous payez pour votre appareil par rapport au service que vous obtenez?

5077   Est-ce que vous voyez ça clairement sur votre facture et est-ce que ce serait utile pour vous de le voir?

5078   Oup! Il y a peut-être une coupure dans le lien. Est-ce que vous êtes là? O.k. On va attendre juste quelques secondes.

5079   J'avais presque terminé de toute façon. C'était ma dernière question. On me dit que c'était la meilleure, alors il faut absolument reprendre le contact. Oui.

5080   Et j'espère... on me fait remarquer, j'espère qu'au niveau de ses données, il a un forfait qui lui permet de rester longtemps en ligne avec nous sans que ça lui coûte trop cher.

5081   LE PRÉSIDENT : On rappelle apparemment.

5082   CONSEILLÈRE POIRIER : Oui, parfait.

5083   LE PRÉSIDENT : Donc, on peut patienter quelques minutes. Je suis certain qu'au début monsieur Graham Bell non plus n'aurait pas eu tous les succès. Espérons que ce n'est pas parce qu'il avait atteint sa limite.

5084   CONSEILLÈRE POIRIER : Oui, c'est ça. Peut-être qu'il a été coupé effectivement, comme dit le président, parce qu'il avait dépassé sa limite de données.

5085   À cette heure-ci, Monsieur le Président, on peut faire un peu des farces quand même là.

--- Pause

5086   LA SECRÉTAIRE : On tente de le rejoindre au téléphone là, mais ça ne semble pas fonctionner.

5087   Alors, qu'est-ce que vous désirez faire?

5088   LE PRÉSIDENT : Bien, est-ce qu'on peut faire le prochain appel dans ce cas-là? Est-ce qu'on peut? Oui.

5089   LA SECRÉTAIRE : On va essayer.

5090   LE PRÉSIDENT : Tentez de mettre la prochaine personne en ligne.

5091   LA SECRÉTAIRE : Et puis on va revenir à M. Guindeba après l'autre?

5092   LE PRÉSIDENT : Si vous êtes capable de communiquer avec lui.

5093   LA SECRÉTAIRE : Si on est capable. Parfait!

--- Pause

5094   THE SECRETARY: I will present you. Hi. Can you hear me?

5095   MR. KHAN: Yes, I can.

5096   THE SECRETARY: So I will present you. It's Mr. Nasir Khan, for the record.

5097   MR. KHAN: Yes.

5098   THE SECRETARY: We are ready to hear your presentation. Go ahead.

5099   MR. KHAN: Hello. How are you?

5100   THE CHAIRPERSON: We are fine, Mr. Khan. We hear you quite well. So make your presentation. The commissioners are here, and we will have some questions for you afterwards.

5101   MR. KHAN: Sure.

PRESENTATION

5102   MR. KHAN: Actually, I didn't have really much of a presentation. I more have -- like, I kind of see that it seems like already what you guys have, but I would really love to have at least a two-year contract. A three-year contract seems like you are a slave in front of all those companies. So it would be great to have that added.

5103   I would also suggest some of those options. Like, I would really have to be -- like, we should be adding -- I mean I am not sure if they should you do it by yourself or be put in the code to make sure those guys actually do.

5104   Whenever somebody doesn't use the minutes or the text time, or whatever they have, or the data on the wireless cord for a month, this just should be forward to them until their contract ends, something like that.

5105   So what will happen, if somebody doesn't use this month of 100 minutes, and he has used only 90 minutes, 10 minutes left, next month he will have 110 minutes, why it's also on the text and as well on the data. Let's say, 1 gig of data and use 500, and 500 is there, they can forward, next week they will have 1.5 gig of data, and further go on until their contracts lasts.

5106   So this will kind of give me some kind of satisfaction, Hey, I have something which is added next month to the next month till the contract -- if I have after six month 10 gig data, I am safe. I have no worry if I even get it unlimited or not on those.

5107   So those are the things that I had, something which should be really considered, options on that, where it I am sure will help all of us consumers in that way.

5108   I think that's pretty much it.

5109   THE CHAIRPERSON: Thank you. Thank you very much for that.

5110   Commissioner Molnar may have some questions for you, Mr. Khan.

5111   COMMISSIONER MOLNAR: Yes.

5112   Thank you, Mr. Khan. Good afternoon, good late afternoon.

5113   MR. KHAN: Good in this hour, and good afternoon to you.

5114   COMMISSIONER MOLNAR: I want to make sure that I heard well your first suggestion, because we are dealing a little bit with technology.

5115   Did you say that they should add two-year contract options? Is that what you said? Or what did you say, I'm sorry?

5116   MR. KHAN: Yes, that's what I meant. I mean, you know, like, three years feels like slavery to the -- it's the same way of feelings levied to the insurance companies or on cars, but the same way it feels like a slavery to the three years often. But two years, it seems pretty good, decent time, where you can switch around, so...

5117   And you feel comfortable, that, Hey, you know, here I'm not going to switch. Maybe in two I'll switch my phones, or not, or whatever the situation is.

5118   COMMISSIONER MOLNAR: Thank you.

5119   You are certainly not alone in feeling like three years is too long and two years is preferable. We have had a lot of public feedback suggesting a two-year contract length.

5120   I am not sure the extent to which you have been able to follow some of what is going on here about this code, but there is really kind of two camps: there is those who want a two-year and carriers who would suggest that, when the only thing that holds you into that longer term contract is paying off whatever is left of your device subsidy -- assuming you had a device subsidized -- when that is the only thing left, it is really not that problematic to be in a long-term contract.

5121   In fact, they have proposed to us that they are being very customer friendly, because rather than you having to pay that full device cost upfront, you get to pay some of it at the back.

5122   So that is what they are saying, and I would like to let you have an opportunity to comment.

5123   MR. KHAN: I mean, really, I was the person mostly had bought my own -- you know, my own phones. My first iPhone was bought upfront, rather than going to the contact. So that is another reason.

5124   Like, I know it sold a bit more at that time, but, ultimately, when I see the amount, the three years I am stuck with, and the amount I saved paid upfront was more savior for me. If they give, like, those options, it would be great.

5125   Like, I mean, the issue is that it is not the contract, it is what you are taking out of it. When they take it out there is so many penalties that it is not even the cost -- after a year anyway, the cost is still more than what you bought it upfront, the iPhone, so, like, giving it a maximum price. Or BlackBerry, right, like a BlackBerry Z10, after a year, the price won't be $600, but you will still be charged for getting out of that contract for $600, which, you know -- that feels more about it.

5126   If it is so friendly, it should be upfront whatever is left. You know everything depreciates, why not depreciate it, and then the price. Maybe that would a better option.

5127   COMMISSIONER MOLNAR: Yes. Well, for that it is worth, I absolutely understand, because I, too, for one of my children, bought an iPhone upfront because I could not get out of the contract for less than it cost me to buy that iPhone. So I certainly understand what you are speaking of.

5128   The other comment you made was discussing being able to basically accumulate unused usage.

5129   Are you suggesting that from when you are in a month-to-month plan or are you talking about prepaid or are you talking about everything?

5130   MR. KHAN: I would say generalize it. Like, I mean, see, if I did not use it, it is my minute. I paid for it. I am giving you an example, right? So either it is on the contract or it is a monthly basis, it is my minute. I paid to have those 100 minutes uses. But for some reason I did not use it, I used 50 minutes. But if I had that carry forward to my next one, to 150 now, I will be more comfortable using them.

5131   I am giving you an example on the minutes. It could the same for data. It could be the same thing for the text. And if it goes in six months, let us say I used -- out of 600, I used 200, I have 400, I will be more comfortable. Hey, I do not have to be worried about it, that I am going to pass it.

5132   So that is another thing I feel. If they are friendly, that should be the option, and should be to every single one, because that is our paid minutes not used that is carried forward to you, you can use another time.

5133   Maybe it will take that out of option in my mind, Hey, I don't have to have unlimited data or unlimited minutes. I don't use two months -- I use two months 200 minutes, but another month I use just 10 minutes out of it.

5134   So all those things can count. Texting same thing. Data same thing.

5135   I bet you if you ask all of our consumers if they have a 1 gig of data, they would ever use it, maybe 5. And, yeah, iPhone guys use a bit more, 600 gig -- MB, but the rest 400 MBs are gone. Or if they have a 6 gig data, they might use a 1 gig of it. But the 5 gigs sitting there, they did not use it, but they paid for it, that would be carried forward and will be more relaxing, more feeling that you are in control of it, the consumer has control of it, rather than that somebody is running you on that.

5136   Both ways it works, I think.

5137   COMMISSIONER MOLNAR: Yes.

5138   Mr. Khan, it is interesting, because we have actually been looking at the other side of that issue, not when you are under using your data usages, but when you are potentially over using, and it causes you to have overage fees, you know, whether it is through roaming or just through usage.

5139   So we have been looking in this code, you may know, at different tools for customers, such as giving them notifications, giving them online tools that they can look at to manage their usage, or to at least be aware of their usage, and also looking at if it might be useful for customers to be able to kind of put a hard cap on what kind of fees they might be charged for overage.

5140   Do you have a thought on that?

5141   MR. KHAN: Yeah. See, overage is the one side of it, as I said. Like, you know, it is one side of it, say, because if you are going over it, as I said, most likely, if I am not saying it's 50 percent of the customers we are, we might be under using it, there will be a month come up when I go on vacation, or maybe I just went a little bit outside for some other thing, my kids started using Netflix for a sec -- for that month for some reason more, and that month I jumped.

5142   So if I have those six months already, most likely not first two, three months, and then those add up, I might not have stuck onto that. I might be okay with it.

5143   So those are the options. Like, if it is right upfront there and it is an option, if you are under it -- under use, it could be good. Overage might cover some of those options. I would bet you if every user is using 50 percent of their data, texting and minutes, most likely if that is carried forward that overage issue would resolve anyways for some of them.

5144   COMMISSIONER MOLNAR: Okay. I understand now what you were suggesting. Thank you very much.

5145   Those are my questions. Thank you very much for participating.

5146   MR. KHAN: Thank you very much.

5147   THE CHAIRPERSON: Thank you, Mr. Khan. It's very useful to us to have people who have real-life, on-the-ground experience participate in our hearings. So that's very much appreciated. Thank you.

5148   MR. KHAN: Bye.

5149   THE CHAIRPERSON: Bye-bye.

5150   So that does it for today. So we'll adjourn and reconvene --

5151   THE SECRETARY: Mr. Chairman --

5152   THE CHAIRPERSON: Oh, you got --

5153   LA SECRÉTAIRE : On a récupéré M. Guindeba.

5154   LE PRÉSIDENT : Ah, excellent!

5155   LA SECRÉTAIRE : On a fait plaisir à Mme Poirier. Elle va pouvoir poser la question qui tue pour terminer.

5156   LE PRÉSIDENT : O.K. Excellent! Merci.

5157   LA SECRÉTAIRE : Est-ce qu'il est là?

5158   CONSEILLÈRE POIRIER : Est-ce que vous êtes là, M. Guindeba?

5159   M. GUINDEBA : Oui.

5160   CONSEILLÈRE POIRIER : Bon.

5161   M. GUINDEBA : Vous allez mettre la vidéo?

5162   CONSEILLÈRE POIRIER : Oui.

5163   LE PRÉSIDENT : Voilà!

5164   M. GUINDEBA : Voilà!

5165   CONSEILLÈRE POIRIER : On est très content de vous retrouver. Merci pour votre persistance. Si vous pouvez un petit peu baisser l'écran pour qu'on vous voit un petit peu plus, ce serait parfait. Oh, pas trop. Pas trop.

5166   M. GUINDEBA : Pardon.

5167   CONSEILLÈRE POIRIER : C'est comme dans tout, on va trop d'un côté, il faut ramener les gens en plein milieu. C'est notre rôle, vous le savez.

5168   M. GUINDEBA : Parfait.

5169   CONSEILLÈRE POIRIER : Écoutez, j'étais en train de vous poser une question ici que la foule souhaite que je vous demande.

5170   J'aimerais savoir : Est-ce que sur votre facture, il y a une distinction entre le coût de votre subvention, donc de l'appareil que vous utilisez, et les frais de services que vous payez, et selon votre réponse, aimeriez-vous que votre fournisseur de services sans fil vous donne cette information-là?

5171   M. GUINDEBA : Oui, je trouve que c'est intéressant. C'est bon quand même avoir une facture vraiment où le client, il n'y a pas d'ambigüité, où il y a toutes les données qui éclaircissent un peu sa situation et son solde actuel vis-à-vis de son fournisseur. À mon avis, c'est mieux d'avoir au niveau de la facture des parties réservées à cela. C'est-à-dire le téléphone m'a coûté combien à la base, j'ai remboursé combien, il me reste combien. Je pense que c'est bon de le savoir aussi.

5172   CONSEILLÈRE POIRIER : Est-ce que vous êtes informé par votre compagnie qu'après la fin de votre contrat, par exemple trois ans, si vous décidez de garder le même appareil de téléphone et que vous poursuivez avec cette compagnie-là, que normalement votre paiement pour vos services devrait diminuer?

5173   M. GUINDEBA : On n'a pas cette information. Moi, je ne l'ai pas. J'ai été quand même trois ans avec un opérateur. On a même fini par se quitter parce qu'il ne voulait pas renouveler certains des avantages qu'il m'offrait. Je n'ai jamais entendu parler de services après le renouvellement.

5174   CONSEILLÈRE POIRIER : Aujourd'hui, puisqu'on a eu le fournisseur de services qui est le vôtre, TELUS pour ne pas le nommer, on nous a dit qu'après trois ans, au 37e mois -- c'est une question posée par le président -- pour les clients qui le demandaient, il pouvait y avoir une réduction de 10 pour cent. Est-ce qu'on vous avait informé de cela?

5175   M. GUINDEBA : Je n'ai pas cette nouvelle.

5176   CONSEILLÈRE POIRIER : Est-ce que vous pensez qu'on devrait vous informer de cela, qu'il y a une réduction une fois que l'appareil est payé?

5177   M. GUINDEBA : Bien, je pense que c'est bon de le savoir. S'ils nous le disent, je pense que c'est bon. Tout ce qui est nouvelle, c'est bon pour le client.

5178   CONSEILLÈRE POIRIER : Parfait!

5179   Alors, je termine en vous demandant, est-ce qu'il y a d'autre chose sur le Code -- vous l'avez consulté -- que vous voudriez qu'on améliore?

5180   M. GUINDEBA : Vraiment, c'est... Come je dis, c'est vraiment un bon travail. Surtout le fait que c'est tout le monde qui contribue, je trouve ça vraiment, vraiment solidaire. Je vous encourage sur ce plan-là.

5181   CONSEILLÈRE POIRIER : Et on vous invite à contribuer jusqu'à la fin de toute cette audience-ci. C'est-à-dire vous pourrez répondre, si vous avez des commentaires à faire encore, jusqu'au mois de mars, et on annoncera les dates sur le site Internet. Merci beaucoup.

5182   M. GUINDEBA : D'accord. Moi, je vous remercie.

5183   LE PRÉSIDENT : Merci beaucoup pour avoir participé, et je suis désolé pour les quelques ennuis techniques, mais ça été une excellente contribution. Merci encore et bonne soirée.

5184   M. GUINDEBA : Merci à vous, Président.

5185   LE PRÉSIDENT : Merci.

5186   M. GUINDEBA : À la prochaine.

5187   LE PRÉSIDENT : Donc là, on peut ajourner, merci, jusqu'à 8 h 30 demain matin.

5188   So we will adjourn until 8:30 tomorrow morning. Thank you very much.

--- Whereupon the hearing adjourned at 1840, to resume on Wednesday, February 13, 2013 at 0830

REPORTERS

Lynda Johansson

Monique Mahoney

Jean Desaulniers

Madeleine Matte

Date modified:

2013-02-12