ARCHIVED - Transcript, Hearing 13 February 2013

Volume 3, 13 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

13 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

13 February 2013

- iv -

TABLE OF CONTENTS

PAGE / PARA

PRESENTATION BY:

- v -

UNDERTAKINGS

PAGE / PARA

Gatineau, Quebec

--- Upon resuming on Wednesday, February 13, 2013 at 0831

5189   LE PRÉSIDENT : À l'ordre, s'il vous plaît.

5190   LA SECRÉTAIRE : Bonjour, Monsieur le Président. Good morning, all.

5191   We will start today with the presentation by Media Access Canada, MAC, on behalf of Access 2020 Group of Accessibility Stakeholders.

5192   Ms Beverley Milligan will start by introducing her colleagues for the record, please, and you will then have 25 minutes for your presentation.

PRESENTATION

5193   MS MILLIGAN: Thank you, Madam Secretary and good morning.

5194   For the record, my name is Beverley Milligan of Media Access Canada. MAC was created by and its Board of Directors consists primarily of national disability organization across Canada that benefit from accessible media. The goal is to achieve full accessibility in Canada's communication systems by 2020 through participation in hearings such as this and speaking as one voice on issues concerning accessibility on behalf of Canadians with disabilities.

5195   Through this process of working together, we are able to develop the necessary expertise to better communicate key issues to all stakeholders. We educate our members and other stakeholders with the goal of collaboration and participation in ensuring access to media.

5196   We continue to grow and expand to include all disability organizations representing and serving the interests of Canadians with disabilities. It is my pleasure to introduce some of our members today.

5197   To my immediate right is Dr. Gary Birch, our telecommunications subject matter expert and CEO of the Neil Squire Society;

5198   To his right is Laurie Alphonse, Regional Manager for the Disabled Women's Network;

5199   To my immediate left is Robert Corbeil, Executive Director of the Canadian Hard of Hearing Association;

5200   To his left Gary Saxon of the Canadian Council of the Blind;

5201   And Michel David, Regional Director for the Canadian Hearing Society.

5202   In the second row, from your left to right, is Lui Greco of the Alliance for Equality of Blind Canadians;

5203   Christine Robbins, representing CNIB; and

5204   Mary Frances Laughton, Senior Researcher for MAC.

5205   Commissioners, Commission Staff and members of the audience, good morning and thank you for the opportunity to appear before you today to speak as one on behalf of the millions of Canadians with disabilities.

5206   Our objective is to discuss the recommendations in our written submission and, more specifically, make the Commission aware of the issues that are of top priority to the disability community as regards the Code of Conduct being discussed in these hearings.

5207   While people with disabilities have all of the same concerns as other consumers and are similarly effected in detrimental ways by specific policies put in place by the telecommunications industry and the individual wireless service provider in particular, there are specific issues and concerns unique to the disability community.

5208   Historically the concerns of the disability community have been dealt with in a separate process by the CRTC. The CRTC has provided specific accommodations to support the needs of people with disabilities. However, we urge the Commission to formally recognize these accommodations and create a framework for additional accommodations through the creation of a separate section within the overall Wireless Code of Conduct specifically addressing the unique needs of Canadians with disabilities.

5209   In addition, we ask this not be deferred to a separate disability hearing at some time in future, but that it be addressed at once to ensure the same or "equivalent" rights as for all Canadians.

5210   MR. BIRCH: Good morning and thank you for this opportunity. In fact, we believe this hearing is an opportunity, through the creation of a mandatory Wireless Code of Conduct, to create a mobile system that is fair to all stakeholders including Canadians with disabilities.

5211   In the filing, MAC pointed to a precedent in other jurisdictions and introduced the concept of a specific section in a Code of Conduct dealing with issues unique to Canadians with disabilities.

5212   We recognize that with the advent of Smartphones all Canadians are using their phone for more than just talking to each other. For Canadians with disabilities, the ability to communicate wirelessly has fundamentally changed their ability to access Canada's telecommunications systems.

5213   We also recognize that the pace at which technology is changing has created a technology gap that has left many people with disabilities behind.

5214   One of the fundamental causes of this gap is the slow pace at which regulations and policies change. In the 2008 Accessibility Hearings the CRTC acknowledged the obligation for wireless service providers to provide accessible products and services extended to new services such as texting, e-mail and Internet browsing.

5215   In the past, wireless service providers contended that their only obligation extended to the older definition of services, essentially voice-based telephone services. Other jurisdictions, such as the United States, have also recently expanded the definition of services through their own legislation. The need for this expansion is a result of the unwillingness of the wireless industry to redefine their obligations voluntarily in the area of accessibility.

5216   MAC strongly feels that any Code of Conduct should formally recognize the obligations that the CRTC has imposed on the wireless service providers in the area of accessibility.

5217   Furthermore, we would recommend the Code of Conduct should be flexible enough to accommodate the changing nature of the products and services offered by the wireless service providers so that formal hearings are not required every time a new service not explicitly referred to in the Code of Conduct is added.

5218   The wireless industry has suggested that the Code of Conduct under consideration may function to streamline processes so that they don't have to deal with varying consumer rights in each region of the country. Similarly, MAC feels that it is important to streamline the process in regards to defining the obligation of wireless service providers to provide accessible products and services to people with disabilities in light of the rapidly changing technology.

5219   Thank you.

5220   MR. CORBEIL: Bonjour.

5221   I would like to discuss including a requirement to provide à la carte services to Canadians with disabilities. And it really boils down to one question, which is: Should Canadians with disabilities have to pay for services which they simply cannot use?

5222   To state the obvious, a deaf person cannot use audio capabilities of a :telephone:; a hard of hearing person who can use the audio will often choose not to as one could liken it to someone who needs reading glasses trying to read without them. Not fun. A blind person cannot easily, or simply may not want to use texting or e-mail on their phone. Very little video or audio is captioned or described on Web sites, so data plans relative to access are more expensive. My few examples don't consider the larger spectrum of disability, or discuss Canadians with cross disability issues.

5223   These issues have been reported over and over again to wireless service providers, but to date our own research of the marketing material of the wireless service providers and inquiries through the customer service channels of the wireless service providers indicate there is no wireless mobile plan in existence that addresses the need for flexibility required by Canadians with disabilities -- none -- not one.

5224   The WSPS have had the knowledge and the opportunity to voluntarily address in their service plan contracts accommodations for Canadians with disabilities and they have failed to do so. For this reason, we ask that the Commission ensure a mandatory requirement for à la carte services for Canadians with disabilities.

5225   MS ALPHONSE: Good morning, ladies and gentlemen.

5226   I have a story for you. In the summer of 2009 I decided to upgrade my cell phone. The sales clerk was very nice when I explained that I needed something durable because when it comes to my co-ordination and dexterity I knew that the phone was going to get dropped over the course of its lifetime. And I wanted to keep a phone for a little while so I said, "Well, I wouldn't mind paying a little more for the newest technology because I want to keep it for a while."

5227   Well, it took a little less than a week and I was back at the wireless provider asking to replace the phone. Now, when I originally signed up for the phone they said, "Well, we can offer you a warranty plan", so I said, "Great". He says, "Well, pay $7.00 a month and you can -- if your phone breaks we will replace it." So I said, "Great."

5228   I go back a week later and the same gentleman says to me, "Your warranty plan is great, but we need $150 from you." And I said, "But wait, I paid $7.00. I know I just started paying it, but what is the $7.00 a month for?" And I asked, "Well, if I waited a couple of months, does the cost go down?" They said, "No".

5229   So I had no choice but to pay $150. And I asked, "Well, if I went and got out of my contract, would that help me any?" And they said, "No, you would have to pay the balance of the contract."

5230   I had no idea that I had any recourse anywhere. I paid my $150 and in three days I got a new phone, but I was unsatisfied because I don't think I was given clear instructions as to why my rights were.

5231   MR. GRECO: Good morning.

5232   We have already talked about how wireless devices have transformed the way we do business, entertain and inform ourselves.

5233   As a person being blind from birth, when this technology started to emerge I viewed it as an opportunity for the playing field to be levelled. Unfortunately, at the speed at which innovations and new technologies are introduced, I still feel that I'm several years behind.

5234   For instance, it wasn't until about 2005-2006 that I, as a person who was blind, was able to purchase an accessible device and not at the discounted rates that some of the more consumable phones would be offered to people without a visual disability.

5235   Things are changing dramatically as manufacturers begin to include accessibility as part of the operating system. The best example of that is Apple and what they have done and how they have changed that.

5236   Now other manufacturers, like Google and the Android operating system, also include text-to-speech, large print and a variety of of other accessibility accommodations so that I as a person buying my device over the counter can have full accessibility "literally out of the box".

5237   The challenges that although I, as someone who readily embraces and seeks out the frustrating challenges of adopting and harnessing new technologies, many people who are blind or visually impaired are perhaps overwhelmed by the complexity of both the software that it takes to make the device accessible to them, never mind the nuances involved in harnessing and using some of the features that come on their devices.

5238   People who write the manuals for the wireless devices very, very seldom -- and I would probably not be too much at risk in saying that never take into consideration people that rely on alternate format media to be able to use their manuals.

5239   The Internet is a wonderful tool, but unfortunately trying to find answers to how do I use this thing and how do I make it work are very, very seldom just a click away.

5240   The answer, or one of the suggestions that we have, is that take into consideration that not all people learn at the same rate and yet when you compound that by introducing the nuances of accessibility software and a system typically not designed with the needs of consumers with disabilities in mind, the buyer's remorse period tends not to be an adequate period of time for people to fully be able to harness the technology that (a) they have purchased and (b) has the opportunity to mitigate some of the barriers that they are facing.

5241   In recommendation 3 what we are proposing is that this period of time be expanded a little bit to allow people of various learning capabilities the opportunity to do that.

5242   I am not in a position to tell you what we think that period of time should be, but perhaps one of the suggestions might be to incorporate a honeymoon period into the contract terms that allows for and compensates for the accessibility barriers that people face.

5243   Not doing so and simply relying on consumer protection through the buyer's remorse period is costly both for consumers and the industry.

5244   If I purchase a phone, as I did last week, and I have to bring it back within two weeks because I can't find the resources that I need within that short period of time to fully be able to use it, I lose as a person with a disability because I continue to feel disenfranchised from things that other people -- or opportunities that other people have, the industry loses because restocking those products isn't free, and the large community loses because those costs that the industry incurs through the dealer networks and the actual service providers are obviously passed along to their consumers.

5245   MS ROBBINS: Good morning.

5246   At CNIB our staff often hear from our clients regarding the challenges they face when they purchase a mobile device or service that was accessible when they purchased it but later becomes inaccessible because of an upgrade that's introduced new technology that breaks the built-in accessibility features in that product or service.

5247   So today I just wanted to highlight one of our clients' stories to show how important recommendation 4 is in appropriate cancellation measures.

5248   So this one client we have uses Shaw webmail to access her personal e-mail when she is travelling for work. So she uses her phone and her laptop to access it.

5249   However, on one such trip, Shaw had upgraded their webmail in a way that made it inaccessible to her. So her screen-reading device couldn't read the e-mails or even access the Web site. So she was unable to communicate electronically for several days.

5250   When she came home she called Shaw and they found a solution. But if a wireless service provider were ever to change their service in a way that would make it inaccessible to a blind or partially sighted person, for example, changing their Web site so that online account information is no longer accessible, then there should be a stipulation in the contract to be able to cancel without penalty.

5251   Thank you.

5252   MR. SAXON: I can only reiterate what Christine has mentioned. The fact that I too have been vision impaired since birth, and the senior member within our group apparently, one of the things that happens is that very quickly things change and who knows where I will be down the road. Yet, I am locked into a plan that somewhere, one month, two months down the road, may no longer be usable for me.

5253   There are several instances where set rulings are outside the Code. They are there as guidelines. These guidelines need to be instituted within the Code so that all carriers are aware of their ability and obligation to deal with the disabled community.

5254   Each and every one of us is aging and each and every one of us cannot do what we did a year ago. Please consider when you avail yourself of all this information the importance that the disabled community has and needs to have rules within the CRTC guidelines to assist us as each and every one of us, disability or not, age.

5255   Thank you.

5256   MR. CORBEIL: The Canadian Hard of Hearing Association regularly passes on questions to our experts at MAC from hard of hearing clients needing help resolving both telecommunications and broadcasting issues. Such issues are not easily resolved and our clients require someone who has an expertise in accessible devices, accessibility policies, broadcast and telecommunications engineering and more.

5257   Each Canadian who lives with a disability is an expert on why they need accessibility, but getting that accessibility requires trusted experts whose interests are squarely in line with those of our community.

5258   While we recognize the Commission has, in their proposed draft of the Code, established a process for complaints, we feel it is insufficient to meet the needs of people with disabilities as the staff and agencies that deal with these complaints do not have the requisite knowledge.

5259   Canadians with disabilities need expert advocates who understand the disability within the context of enforcement structure. They need a trusted central source that can both explain to them what is happening in the area of their concern as it affects accessibility, why or why not the WSP is accountable and ensure proper representation of their concerns. We strongly recommend that an office of disability issues be established for that purpose.

5260   THE SECRETARY: Can you please turn your microphone on?

5261   MR. DAVID: Yes, I will.

5262   Good morning.

5263   My name is Michel David. As a hard of hearing individual in charge of the Ottawa office of the Canadian Hearing Society, I work every day on the front line with people who are deaf and hard of hearing.

5264   We have 27 offices across Ontario and we are there to help these people deal with the crisis of sudden hearing loss, sometimes supporting them with job placement, hearing aids and other aids that allow them to fully participate in everyday Canadian society.

5265   We provide a wide variety of accessibility services, hearing healthcare services, counselling and education programs. In other words, we know the problems they experience from day to day.

5266   It is not going to surprise anyone here that Canadians with disabilities are going wireless in the same way as all other Canadians, but for those with disabilities trying to get clear information and answers to questions and to just dig around through the Web site of service providers for information is a nightmare at times.

5267   I have given up more than once and asked my wife to call or go to the nearest store to try and clarify an issue. I have a wonderful example of this that happened to me last week and I would be happy to share it with you during the question period. It's not part of this presentation but it's very, very apt.

5268   Accessible consumer information is consistently not available in the retail stores, online and over the phone. I do understand why this is the case as each and every wireless service provider would have to be constantly training and updating a large staff to address their own changing services and products as well as those of the accessible device industry, an industry they know very little about.

5269   Canadians with disabilities therefore not only need a central source for enforcement, that same source could eliminate both the redundancy of each WSP having to develop expertise in this area by establishing a central source for accessible information and enforcement either within the CRTC or at an arm's length agency.

5270   MS MILLIGAN: To conclude, Mr. Chairman, Canadians with disabilities have a unique relationship with wireless devices. It has dramatically opened up the opportunity to communicate, but those same individuals are forced to pay for services they simply are incapable of using.

5271   They are not given the time or support to properly test new equipment for compatibility with their new devices and they have no central source to go to for support at the retail level. As the range of wireless activities continues to expand, the gap between function and access will widen.

5272   Unless steps are taken to introduce a Wireless Code of Conduct that supports the needs of all wireless users we feel the technology gap will widen and a significant segment of the Canadian population will be left behind and further isolated.

5273   We have provided a few examples of the thousands of stories again and again told to wireless service provider representatives at stores and through call centre operators. There has been no voluntary action on the part of the wireless service providers to address these important issues.

5274   Therefore, we respectfully request that as a top priority the Commission include a section in the Mobile Wireless Code of Conduct to address the wireless usage rights of Canadians with disabilities.

5275   Thank you. We welcome a discussion with you.

5276   THE CHAIRPERSON: Thank you. It's Jean-Pierre Blais speaking. Thank you very much for your presentation. It's very useful.

5277   Before I get into my general questions, Mr. David, you've created a curiosity. Would you please explain about this personal experience you didn't have enough time to speak about in your presentation today?

5278   MR. DAVID: Thank you, Mr. Blais.

5279   THE CHAIRPERSON: Your microphone, please.

5280   MR. DAVID: That's what happens when you don't hear.

--- Laughter

5281   MR. DAVID: Thank you, Mr. Blais.

5282   Last week I went online to MyRogers site. I had a question about data usage. I wanted to know how much data usage I was using and why. Now, on the site it's very clear : You want more information, press here. Each and every time I pressed here I was relayed to another page asking me to sign up for paperless billing. It had nothing to do with getting my data usage. They wanted me to sign up for paperless billing.

5283   So, okay, I'll try to contact them. Where's the "Contact us" section? I don't know if you've seen the Rogers site but they have tried to cram as much information there as possible. It took me 20 minutes to find it way at the bottom of the screen in something like a minuscule font, maybe .5, grey, very light grey.

5284   It would be impossible for someone with a vision impairment to find it.

5285   There is was: "Contact us."

5286   Well, click on that, something comes on. I have an opportunity to chat or to call by TTY.

5287   Click on the chat line: Thank you for calling us. You are in line. It will take 15 minutes for someone to come to the phone and talk to you.

5288   Fifteen minutes. Well, you know, you might go ahead and work; if somebody comes online you are here.

5289   I have to stare at the screen for 15 minutes? No, thank you.

5290   I tried to call by TTY. Wow, I was surprised, I actually got an answer: Please leave a message. We will get back to you as soon as possible.

5291   So I said: Okay, maybe under "Accessibility Services".

5292   I tried again to find the Accessibility Services page on the Rogers Web site. Look, look, look, look, look.

5293   I finally did find it. Back to the home page. You know that little grey section at the bottom? The very last item on the right, the second line, "Accessibility Services".

5294   Of course that was very general information. There was no information there to answer my questions.

5295   This is just to give you an example of how bad it can be for us to access information.

5296   I went to the Bell Canada site, just to compare. Bell Canada, very clear. Everything is black and white, easy to find.

5297   I went to the Vidéotron site. Absolutely no information on accessibility there.

5298   I went back to Rogers. I was looking at the home -- residential page. Click on the business page. Guess what? The business page is very clear. Everything is black, large fonts. They not only gave you one number to call, they gave you three.

5299   They know which side their bread is buttered on.

5300   That was my experience, and it's very, very frustrating.

5301   THE CHAIRPERSON: That's interesting. It actually brings me to ask a question. To what extent, then, do your various associations, or you as a group, actually point out to your members who is doing a good job and who is not doing a good job?

5302   Because if companies are motivated at keeping and attracting customers, surely they will be sensitive if you, as potential customers or existing customers, are not pleased with it.

5303   So how do you, in terms of accessibility of the site, the ability -- the clearness -- I mean, you suggested that one provider was perhaps providing you a better service in terms of information on the Web site.

5304   Do you actually monitor that and underscore the company that has the best practices, and perhaps suggest to people that that is a company that you endorse or support?

5305   MS MILLIGAN: No, we don't do that. We certainly would like to be able to do that, but, of course, that would -- you know, it's spread thin. All of these things -- but to the point, that does need to be done.

5306   Again, this idea of some kind of central service, that would definitely be one of the things that we could direct anyone that called in that needed, you know, an interview -- and when I say "we", I mean this organization, or whatever the service -- that they could direct and listen to the unique issues of that person experiencing that particular disability, and be able to make suggestions as to which of the service providers is currently offering that type of product, which would better accommodate their particular needs.

5307   Again, Canadians with disabilities don't have that source.

5308   And it is always important to remember -- and this has always been the challenge -- that every disability is different, and then there are cross-disabilities.

5309   So it has always been very challenging, confusing -- oh, well, we can't come up with a solution.

5310   Well, we can, it's just that we need some expertise in this area. And to ask each and every WSP to develop that expertise has not worked.

5311   The other side to that is, you know, we are suggesting that market forces may correct that. They haven't yet.

5312   And I think that we have seen a lot of precedent in and around telecommunications and broadcasting, and so on and so forth, of inaccessible communications, where market forces are in no way impacting the decisions that are being made around accessible policies on a volunteer basis.

5313   I believe that Laurie also wanted to address that question.

5314   MS ALPHONSE: I think one of the issues -- in the story that I told you this morning, my issue was that I didn't know who to complain to. So, yes, I did complain to my provider, and the provider I am using is Bell. They didn't have much sympathy for me, because they said: Well, you signed the contract.

5315   But if you have ever seen a wireless contract, it is 8 pages long, or more, and you are not going to stand there while you are purchasing a phone to go through the wireless contract.

5316   The other problem is that I get the distinct impression that the representatives in the stores -- they want to help you, but they also want to make a sale. So they are not going to tell you -- they are not going to always tell you the drawbacks of the limits of the contract.

5317   And I don't blame the salespeople, I blame the provider.

5318   There needs to be some sort of way -- because, I will tell you, complaining to Bell took probably half a day, to find out who I was supposed to complain to, or how I could get to the right person to complain to.

5319   And the other side of it was, I complained on the phone, and then they said: No, you also have to fill out the complaint form.

5320   Well, gee, that took another half-day, because of the limitations of my disability, and I am still not feeling warm and fuzzy about the fact that I got my question answered to my satisfaction.

5321   We talk about customer service, and in the area of accessibility, customer service, in whatever vein you want to discuss it -- sometimes I think the wireless service providers tend to know -- they know that they have you over a barrel, and they really are not demonstrating that they feel like there will be any repercussions to bad behaviour.

5322   THE CHAIRPERSON: It strikes me that, in a sense -- and you said it at the beginning of your presentation -- you share the same perspectives as any consumer in the marketplace, but you also have additional complaints, or preoccupations, because of your particular circumstances.

5323   I am going to assume that in the written process that follows, you would be able to make comments about the working draft from a general perspective, if you have any comments on the draft, and it is evolving, but today I would like to focus on your special requirements. They are a bit unique, and that way we will focus our discussion.

5324   Now, clearly, you have asked that there be a specific section in the code to deal with your issues. As you may have seen in the process, issues are emerging, and there is building consensus about certain provisions in the working document.

5325   Is it your intention to actually provide -- perhaps writing a section that would address this sort of content specifically?

5326   Because we are at the stage now where we are drafting, in a sense -- and I think, in all fairness to other parties, they would like to be able to see what you are thinking about, in terms of a specific section, should we go down that road.

5327   MR. BIRCH: Thank you for that question. Honestly, I wasn't expecting that.

5328   But, yes, indeed, I think if we had the resources -- because it would take time to craft a draft of the code -- a special subsection of the code relating to persons with disabilities.

5329   But, indeed, we would welcome that opportunity.

5330   THE CHAIRPERSON: You see, we have to ensure a certain amount of procedural fairness. So you need to help us help you, if you want us to go down that road. At the very least, in the comment period on the 1st of March, so that others could reply to it, it would be important for you to put something on the table, in the window, so that people could react.

5331   It would be better even earlier.

5332   And I know that it is a burden, but it is, unfortunately, the only way that we are going to get to this issue.

5333   MS MILLIGAN: Yes, we will provide that documentation.

Undertaking

5334   THE CHAIRPERSON: Thank you.

5335   In a sense, the members, the group -- I mean, you have disposable incomes. You are a subsection of the marketplace. Why do you think, based on your experience, you are not seen as potential revenue sources, in a sense, and service quality and customer care, and all that, isn't being addressed?

5336   We had discussions yesterday with other service providers, and they obviously think about subsections of the market -- the youth, the elderly.

5337   Why do you think you are not on the radar?

5338   MR. GRECO: I think the answer to that is quite straightforward.

5339   First of all, the people with -- or the individuals, the senior management team within industry is not reflective or representative of this segment of the population. I'd like to suggest that you look around the table at the CEOs of the major telecoms and wireless providers in this country and ask them to -- how reflective is their management team of persons with disabilities. If we work with the understanding that policy comes from the top down and is executed on the front lines, then it's -- there's never going to be that awareness so that the individuals responsible for the actual crafting of the business policies and procedures and offerings to tailor to this -- or to cater to this market is never going to happen. And I think that until that changes, until you see more people with disabilities around the table when decisions are made and directions are determined, there will be no change.

5340   It's very well documented that one person with a disability influences a disproportional amount of spending through their networks. The Royal Bank did a study several years ago that said that in -- I think it was in 1990 dollars that persons with disabilities influenced or directly controlled $25 billion of spending. And as a result, the financial services market has started to implement changes because of that awareness, and for some reason the telecom sector just hasn't got it yet.

5341   MS MILLIGAN: I think it's also important to mention that traditionally we've had great success in moving policy forward and creating awareness within a corporate culture when a senior official has a child or relative who has a disability. It's -- they suddenly get it. They are empathetic toward it and they understand it. And so it's also education, I think, you know, that there's a stigma corporately associated with disability. They don't look at Canadians with disabilities as a market. They look at it as social marketing and that has to change, but that -- we're not interested today to talk about how we could go about changing that as much as we are interested in saying, well, let's teach them by, you know, creating these mandatory rules and then they'll begin to get it because they'll have apparent that experience with disability sooner rather than later.

5342   THE CHAIRPERSON: Right. Would you actually be surprised if the service providers in their comments drafted and proposed to all the interveners a subsection dealing with people with disabilities?

5343   MR. DAVID: I would be. Very much so. As you mentioned, best practices, we should talk to them and say, Hey, this is not right, what you're doing on the Web site. But, Monsieur Blais, our society has moved to the point where access to information is no longer a best practice issue, it is a right.

5344   THE CHAIRPERSON: M'hmm.

5345   MR. DAVID: We have strong expectations now. We expect, especially in Ontario with AODA, we expect accessible information.

5346   THE CHAIRPERSON: Right. And I don't want to dismiss that. What I'm saying is if -- let's look at it from a market perspective and a business perspective. If indeed you are a part of their market, you would have expected, and perhaps I'm going to be optimistic and hope that in fact that's what happens, that in their comments they actually propose something that's specific to your needs in the next rounds of comments.

5347   MS MILLIGAN: You know, I wouldn't be surprised if they did because --

5348   THE CHAIRPERSON: They might actually after we have this conversation.

5349   MS MILLIGAN: Because we've been here today, we've -- you've been very generous in giving us the time to explain some of the issues. So they may very well, but I think it's really important that in doing anything -- one, that we'd like to see it mandatory and so that that would -- you know, that's key, but also that, you know, we'll start working with them tomorrow and help them do that, that there is collaboration. And I think it's really important that everybody understand collaboration and consultation is not simply listening to us and then doing whatever they want and -- but, rather, it's really allowing us to lead and participate so that we come to something that we can both feel very good about. So collaboration would be great and, you know, we'd all be prepared to start that tomorrow.

5350   THE CHAIRPERSON: Okay. I -- just one of the roles the Commission has is what I sometimes describe as a convening function. That is, we bring people together.

5351   MS MILLIGAN: M'hmm.

5352   THE CHAIRPERSON: And I have been positively impressed by the fact that -- the fact we've had this process on other issues has actually brought people to have conversations and build consensus, and it seems that there may be some opportunities here on that.

5353   But I'd like to have a better sense of your perspective on certain issues. You raise the issue of buyer's remorse and the working document has some provisions about that. And, you know, in a sense it's a variation on your theme, people are saying there is a period of time where you have to go and check whether the equipment actually is functional because for whatever reason does the service area cover, for instance, where somebody's home is. And you're saying, well, we have additional needs because we have to make sure that it's sometimes compatible with the sort of specific equipment that you're using.

5354   It would be very useful for us to understand, I know you hesitated to say how long that would be, but certain -- what is an adequate period of time? Some of the service providers say, well, you know, as long as you don't -- they don't seem to put caps on data, but, you know, you can't go beyond 30 minutes of talk, for instance, in the case of one carrier. So that may not meet your needs, so could you help us --

5355   MS MILLIGAN: Sure.

5356   THE CHAIRPERSON: -- understand how long that would take? How much of -- to accommodate your special situation, how much additional remorse time, in a sense, would be required?

5357   MR. BIRCH: Well, thank you. I think in our actual submission we suggested 30 days. And again, it's going to vary a lot by disability type. And, you know, remorse is an interesting question -- or word to use. It's more of a trial period because there's a lot to, in many cases, figure out and make sure it works with the different assistive technologies. Sometimes it takes a bit of time to arrange the trial of the assistive technology, that because it's a new phone they may need a new type of assistive technology. And it takes a while to figure out whether that combination of technology is actually going to work for that individual. It may include mounting the phone, et cetera, et cetera. So there -- it can be a time-consuming process and so 30 days was thought to be reasonable.

5358   THE CHAIRPERSON: Right. Are you envisioning, therefore, that there may be a general regime -- buyer's remorse is just -- it's a bit of a trial period as well. It's just a technical language that comes out of consumer protection legislation. But would you imagine that there be a general regime applicable to the sort of situation for all consumers and then have a special accomodation for your members as part of that second section, or are you of the view that the longer period should apply to all because to accommodate your needs within the larger period?

5359   MS MILLIGAN: Well, I think that if the period were extended to 30 days, then we wouldn't have to necessarily address with the Canadians with disabilities on that particular issue; however, it is important that there be something in there. As Gary said, you know, this concept of flexibility is really important for Canadians with disabilities and some with mobility may in fact have to mount that, depending on other people, to be involved in that, which could take weeks and weeks and weeks. And I think there should be an opportunity for anyone with a disability, if they self-identify that they're going to need longer, that they be given the opportunity to have that period of time.

5360   MR. BIRCH: I think that may be the key, the self-identifier, if they self-identify as a person that requires the extra time.

5361   THE CHAIRPERSON: Right. Because the service providers may be a bit concerned that every customer --

5362   MS MILLIGAN: Right.

5363   THE CHAIRPERSON: -- has 30 days because --

5364   MR. BIRCH: Right.

5365   THE CHAIRPERSON: -- that creates a great deal of uncertainty and unpredictability for them.

5366   MS MILLIGAN: Yeah.

5367   THE CHAIRPERSON: Whereas we could perhaps have a more focused approach on --

5368   MS MILLIGAN: Right.

5369   MR. BIRCH: I think that's reasonable, yeah.

5370   THE CHAIRPERSON: Okay. That's maybe something you would want to think about in a drafting situation so others could react to it.

5371   MS MILLIGAN: I think Gary had something to add to that.

5372   THE CHAIRPERSON: Yes, please.

5373   MR. SAXON: If I might. If I'm ... Thank you.

5374   One of the things that has come across here clearly this morning is the fact that each carrier offers up different expertise. Each customer relations individual wishes to serve and sell to the best of their ability. They want to do what they can for any and all of their clients; however, the disabled community have what you would classify as somewhat varied needs and the clerk isn't always aware.

5375   One of the recommendations that we're looking at would be to have a centralized let's call it a help number, where I could call and say, hi, I'm using an iPhone 4S. That means I'm using Siri, I can talk to my phone, but it seems to be giving me some difficulty in these areas. The person that I'm speaking to at the regular counter doesn't have a clue because they're not using 4S. Whereas if I were able to go to a help number, they could say to me, okay, you aren't the first person to talk about that and this is what we've walked them through and it seems to have been satisfactory for them.

5376   I'll give you a further example, if I may, and this doesn't do with wireless but it does do with history and aging.

5377   When I was in the education field, I was a vision impaired vice-principal. In the public system and when we switched from DOS to Windows, my life went upside down. I was able to do anything with a keyboard using keystrokes and then some idiot decided to invent Windows.

--- Laughter

5378   MR. SAXON: What happens now is I have computer experts who are going out to all of the schools working with me in my office not only during the day when they can find time but on a social evening over a couple of coffees. They are trying to show me how to adapt to the new Windows system because once a new program is introduced the old ones are very quickly shunted aside.

5379   So I'm working and working and working and nothing is happening. And the guy says, "Well, you take the mouse and you do this and you take the mouse and you do that." Right, okay.

5380   Now, here's my world. I turned off the screen. He didn't have a clue. I mean, the mouse is great as long as you can see, but if you cannot see the mouse is useless to you.

5381   So lo and behold, if I wasn't contacted by -- a slight plug here -- Frontier Computing which is an adaptive device provider. They sent out an individual who, like myself, was totally blind and had learned how to use the mouse except he used it with the keyboard. All the strokes, all the movements that were necessary through the mouse could be done once learned on the keyboard.

5382   So in one day I learned more from that individual in my shoes than I did in the five years of suffering with my sighted compatriots. It does change so quickly and I want to be around a long time to enjoy each and every part of it.

5383   Thank you.

5384   THE CHAIRPERSON: Well, you bring me to a subject matter I didn't want to delve into, and it's how you interface with the service providers. I just want to have a better sense of exactly what you're suggesting.

5385   Yesterday, I was talking to some other folks and talking about the front line employees being sort of the future ambassadors of this Code and how will they be able to integrate this and be the face of the Code to the Canadian population.

5386   I take it from your comments that it would not -- your view would be it would not be reasonable that every service representative in the country would be able to have -- it might be great but it's not practical perhaps to get every service representative in the country being able to serve and be knowledgeable about your specific needs.

5387   I take it your position is you would rather have a single point of contact, un point de chute within the providers. Is that correct?

5388   MR. SAXON: That's my personal opinion. I'm not sure of the rest of the people because I just, in listening to this, decided that that was worth stating.

5389   But the truth of the matter is no one can be the be all and end all to every question offered. However, if we narrow it down to a centre where there are individuals who have lived your life, who have experienced what you have gone through, then it is far easier for them to empathize with you and go through the steps with you.

5390   I also believe it's far simpler to have a centralized source where all of the wireless providers join in together to assist. It's kind of like your community cable, if you will, where the general public is -- sorry -- the disabled public is able to go to the source that knows the answers.

5391   MS MILLIGAN: There's really two sides to the issue. One is, you know, making sure that Canadians with disabilities know where to go to and that's important, you know, to be able to get that information out clearly, consistently one source: This is really working for Canadians with disabilities.

5392   The other side of the issue is it may not make sense given the accelerating change in technology that there be expertise with every single WSP not only knowing the layer of, you know, what the new product is and technically what that means but also that secondary layer of the accessible devices, the accessible software, the changes in the software and the new upgrade for accessibility specifically. And that becomes really important to know that.

5393   So there is the two sides of it which, you know, both a financial side to it or just, you know, the reality of being able to actually provide that service to Canadians with disabilities and ensuring that Canadians with disabilities know where to go to. So some consistency there.

5394   THE CHAIRPERSON: Okay. So, there's actually three ways of implementing, right? One could say that all the front line employees would have to be knowledgeable.

5395   There is another option where each provider would have to provide sort of a point de chute, an area, a single point of contact to deal with it.

5396   And I take it what you're saying is that there should be -- this notion of an office of disability is one that provides that single point of contact, not on a per service provider basis but for the entire industry.

5397   MS MILLIGAN: Right. So they could have a private conversation with that person with a disability where they could know their rights, self-identifying privately.

5398   And the question would be asked: What service provider are you with? So that they could cater to and discuss the specific issues associated with that particular service provider and understand the service. Because every platform is different and so and so forth, depending on the phone and all of these things, and be able to really customize and cater to resolving the access issues for that Canadian with a disability.

5399   THE CHAIRPERSON: Do you have thoughts about who finances it, how it's implemented? Have you had discussions with, say, with the Canadian Wireless Association to see whether this is something that they think is a good idea or a bad idea?

5400   MS MILLIGAN: We haven't had those discussions yet, but we would very much look forward to those discussions. I think you know there is funds in the ILEC funds.

5401   There is also -- it's a cost of doing business, I would hope, with each and every WSP and that it would make sense to reduce costs by central sourcing one place for this type of service.

5402   THE CHAIRPERSON: With respect to complaints and the complaints process, there seems to be a consensus that the CCTS would be the means by which one should administer the complaints process.

5403   Have you or your members or the people you represent had experiences dealing with the CCTS? Have you had exchanges with them to see to what extent the CCTS could accommodate your needs?

5404   MS MILLIGAN: No. No, we haven't. In fact, none of the members -- what we did in advance of this in preparation was we sent out through listeners and through our memberships and associations, you know, "Please send us stories. Please send us stories. We need stories" and from those stories we can build and sort of boil down what the issues are and, you know, try and package that together and so and so forth and truly understand this area.

5405   Nobody ever mentioned that they were aware of this service, that they existed.

5406   THE CHAIRPERSON: Right.

5407   MS MILLIGAN: And by the time they even found, or if in fact they were lucky enough to speak to somebody at the -- you know, to their service provider, the frustration, the level of frustration it was a give up. To take it yet to another place just didn't seem an option.

5408   THE CHAIRPERSON: Right. But regardless, the people you represent will have, even if it's not a meaning that's special to them, the ability to deal with complaints like everyone else on billings.

5409   So to the extent that the CCTS can meet your needs in terms of interaction, knowing your special needs and the special realities your members have, I would have thought that that's something that would be important to you.

5410   MS MILLIGAN: Well, I think it's an important discussion to have and, in fact, you know, that could be. I mean, it could be consistent within that framework that there is somebody there that has this expertise. And that conversation definitely should be had.

5411   But we also see the logic and the -- just to finish that story. So there were a number of stories that came in that, you know, we would go, "Hey, we can act silly. Help this person" -- easily, easily.

5412   So that was really the point of that and that's where we began to think about that one.

5413   First of all, we can prevent a lot of that first and foremost by being able to help these people. But on the other side of it, it could very well be that that's -- you know, that they developed the expertise there for enforcement and we establish relationships and partnerships and continue to talk to them and so on and so forth.

5414   THE CHAIRPERSON: Right.

5415   MS MILLIGAN: Absolutely.

5416   THE CHAIRPERSON: It would seem that we haven't had any problem galvanizing Canadians to point out the problems. We are now at the point where we are trying to find solutions and pragmatic ones and practical ones.

5417   MS MILLIGAN: Sure.

5418   THE CHAIRPERSON: And I think it would be important for you, and Mr. Maker from the CCTS is actually sitting in the audience. Perhaps at a break you can have a discussion with him or his representatives about how, you know, they would deal with the special needs of your organization in terms of when we get -- assuming we have a Code in place -- to deal with the special needs of your members if and when there is complaints.

5419   Because the whole underlying process here of the complaints is that you first deal with the service provider. And we've talked about how you interfaced with the service provider, but sometimes it escalates to the CCTS. And how you interface with the CCTS is a second-level issue.

5420   So what I'm trying to get is, can we get concrete solutions and address that in a very practical way? You may discover that perhaps they are able to do that and perhaps they already do that already for your members and you might not be aware of it.

5421   MS MILLIGAN: I think it's really important that -- our first and foremost priority is inclusion and streamlining.

5422   THE CHAIRPERSON: Sure.

5423   MS MILLIGAN: So that would be, of course, our first choice.

5424   I thin Lui had something to say.

5425   MR. GRECO: I did, thank you. I'm not quite sure how to best get people's attention.

5426   I just want to go back to the previous point about the expectation that the service providers have all the information.

5427   As a customer I expect the people who are getting my money every month to be able to deliver the service. And if that service means replacing my device or making me aware either via email or on the Web site or at the end of the phone, some solution that I can't find myself, that's what I pay for.

5428   Now, we have to balance that against the reality that these companies are facing. And I think there are a multitude of examples that exist both within this industry and every other industry where there's a sharing of expertise. And I think what would work exceptionally well is a similar model so that I, as a customer of carrier X, don't have to go out and find my solution but that the multitude of carriers and growing number of carriers that are coming to this country accept the responsibility of serving all of their customers, including those with disabilities, by looking at pooling experiences and knowledges and resources to establish a central point that, when questions around accessibility, regardless of the disability, are posed to their front line agents and make -- the complaints make their way through their processes that they collaborate in trying to put the resources in place that the front line staff need to -- to resolve the issues.

5429   The end result would be is that my relationship with my carrier is going to be less acrimonious, that the knowledge around disabilities is going to become more widely proliferated and that we don't have five or 10 or 20 or 30 organizations duplicating the same type of resources in trying to build that -- you know, that knowledge pool.

5430   THE CHAIRPERSON: I appreciate that. And in fact, one would think -- and they've said so -- that even the providers have every economic incentive and business incentive to be providing their customers with a good experience rather than a frustrating experience.

5431   So I'd suggest to you perhaps you should take them at their word at this particular juncture as we convene this hearing and have conversations between now and the tabling of the first round of comments on the 1st of March and see how you could move that along. That would be good.

5432   So those were my questions. I was wondering if other Commissioners would have some.

5433   Oh, Mr. Simpson? Okay. Madam Poirier, then.

5434   COMMISSIONER POIRIER: I was wondering -- I'm Louise Poirier, okay, and I'm pleased to hear you. I feel that you've been very patient up to now with your wireless service providers. And I'm touched by your situation, and I hope things will change, okay.

5435   But I was wondering if you looked at other models that exist elsewhere in the world.

5436   Usually, you know, we tend to look at the United States, what's going on there, or the country that is doing the best to serve the handicapped people into the coast.

5437   So I was wondering, did you have a look at what's going on elsewhere? Are you presenting a solution that has been applied elsewhere?

5438   MR. BIRCH: Yes. We have looked at other jurisdictions as carefully as we can given the resources we have. In fact, we do follow the United States most closely because they do have some of the most progressive regulations in this area.

5439   They recently passed the 21st Century Act, for instance, and they're recognizing that market forces, for instance, are not meeting these needs and are requiring the carriers to address the very issues that we're talking about today.

5440   And through other pieces of legislation, too, the FCC has, for instance, some time ago required that a certain number of handsets be accessible to hearing aids. And it was only through that process that you can actually go to a retail outfit and buy a cell phone that actually has that capability on it.

5441   If it hadn't been for that regulation, that would have never happened.

5442   So yes, we track as much as we can, and I believe -- well, I could get back to you on this, but I'm pretty sure that this is part of the emerging trend in the U.S., too, is to have a single -- like an office of disability issues that can address much like we're talking about this morning.

5443   Sorry; did that answer everything you asked? I think --

5444   COMMISSIONER POIRIER: Yes, it does, but I'm trying to see in the perspective of this hearing, it's related to a Code, okay. And it's not related to making some new rules to support some of your requests.

5445   So I was wondering if there is --

5446   MR. BIRCH: Okay.

5447   COMMISSIONER POIRIER: -- a Code over there, too, because yes, you're giving me partly the answer I was hoping to receive. But if we try to stay in the scope of this hearing, are there some suggestions that comes from the United States or elsewhere that we could apply in this particular hearing?

5448   MS LAUGHTON: The U.S. Telecommunications Act has a section, which is Section 255, which talks about accessibility of systems and services. And the regulations around that mirror a disability wireless code of conduct.

5449   So I mean, there's much that could be taken from that. And much of what the written submission that we put forward does, in fact, talk about that -- those regulations.

5450   MR. BIRCH: Yes. Just to add on, I think part of what we saw this Code doing was actually codifying some of the things that the CRTC has actually required in the past of wireless service providers as well as some of the things that have been done by wireless service providers to accommodate. But those things sometimes come and go and are not consistent across wireless service providers.

5451   So it was recognized that the Code was not the way to introduce new policy, but it was certainly the way to very much codify what's already out there and to make sure that it's very clear exactly what the responsibilities are.

5452   COMMISSIONER POIRIER: Okay. So if I understand you well, Mrs. Laughton, there is a specific Code for handicapped in the United States?

5453   MS LAUGHTON: Yes. The -- Section 255 of the U.S. Telecomm Act is a Code for telecommunications for people with disabilities, and that's a set of regulations that were put forward. And it is, in fact, what the FCC uses for putting forth its rulings with respect to disability access.

5454   COMMISSIONER POIRIER: Okay. So is there anything you can grab into that Code and make sure in your discussions with the Association that you provide some input that could be going in the same direction as they are going if you're satisfied with what they are doing in the United States?

5455   MS MILLIGAN: We would certainly take anything that -- from that Code and certainly the wording and so on and so forth and apply it to both a discussion and, hopefully, the document that we submitted. We would, of course, customize it to reflect the objectives of this hearing, which are quite specific.

5456   The FCC, of course, is looking at manufacturing and other things.

5457   But yes, of course, we would look at that and any other information out there that we could adopt into our submission.

5458   COMMISSIONER POIRIER: Okay. And my last question is to Mrs. Alphonse.

5459   You mentioned that you had to pay, I think, $150 as an early termination fee.

5460   MS ALPHONSE: No, no.

5461   COMMISSIONER POIRIER: No?

5462   MS ALPHONSE: It was a replacement fee.

5463   COMMISSIONER POIRIER: Okay

5464   MS ALPHONSE: Okay? But my understanding when I -- just to clarify, my understanding when I signed up for the phone is that the $7 a month was going to cover any replacement costs I would have.

5465   I go back a week later and they said, "Well, you pay the $7 and continue paying the $7, but we're going to charge you $150 to replace the phone".

5466   And I said, "Well, why am I paying the $7?"

5467   COMMISSIONER POIRIER: Okay.

5468   MS MILLIGAN: Can I just mention there that what's really important in her example is that she self-identified. She told them what the problem was going to be. "Because of my disability, it is likely I am going to drop this phone. I need that accommodation".

5469   They sold her a warranty for $7 and didn't tell her it was going to be another 150. They do that to -- they may or may not do that to anybody else, but she self-identified. She went in there and self-identified.

5470   She needed to be accommodated, and she was not.

5471   COMMISSIONER POIRIER: So should there be some kind of a provision in our Code mentioning that when you're self-identifying yourself as being a person who has a physical handicap, you should get some other, I don't know, information or --

5472   MS ALPHONSE: One of the issues I have and had in that entire process was, again, like Beverly says, I self-identified. And I expected that, with that self-identification, would come a process that I could follow in making sure my needs were met.

5473   Instead, I -- the whole thing was met with frustration because I had to pay more money and I said, "Well, give me some options as to how I get" -- because I realize it's only a very short period of time. "Can I get around, you know, as if I -- can I do something else? Can I cancel the contract and go to a pay as you go?"

5474   And they said, "No, no, no, no. You have to pay out the" --

5475   COMMISSIONER POIRIER: Yeah. You took your responsibility --

5476   MS ALPHONSE: Yeah.

5477   COMMISSIONER POIRIER: -- as a consumer.

5478   MS ALPHONSE: Exactly. And with the self-identification, I'm thinking I don't want anybody to feel they should do something on the basis of my disability, but I do want my disability to be taken into account.

5479   MS MILLIGAN: She -- yeah. Just, you know, it boils down to she self-identified as a person with disability. She articulated clearly what her disability was and requested accommodation.

5480   They did not have the ability, clearly, to accommodate her disability. That needs to change in a Code of Conduct.

5481   MR. BIRCH: And nor did they make it clear to her what all the fees involved were.

5482   COMMISSIONER POIRIER: Thank you very much.

5483   COMMISSIONER SIMPSON: Good morning, Commissioner Stephen Simpson here.

5484   I'd like to use this opportunity while you're in front of us to get an update on the device side of this conversation.

5485   We've been talking about the provider, we've been talking about terms of the Code, but going back to the accessibility hearing that I was a participant in, I was struck by, and I'm still struck by a comment that was made by one of the interveners about the relationship they have with their device. It's a highly personal relationship when they finally find a device that works to their specific issues and needs.

5486   And what strikes me with this hearing is that we're seeing that the device and the provider of the device are separate and devices are becoming much more retail, not necessarily provided by the carrier, and I guess this also goes to your views on locking versus unlocked devices.

5487   But here's the first question. We've talked to device manufacturers and they say that most of the features that would be greatly beneficial to all consumers with disabilities are available, but the carriers don't ask for them.

5488   And is this stimulating, in your mind, a more direct relationship with that, let's say that 10 percent of the world population, to start having a more direct relationship with device manufacturers so they can actually make their hardware choice to their specific needs and take those devices to the carrier.

5489   I know, Dr. Birch, you've done a lot of work in this area.

5490   MR. BIRCH: So, okay. Thanks.

5491   Well, if I understand your question correctly, it's very difficult, frankly, to have discussions directly with the manufacturers.

5492   So, the first point that I'd like to make, from those hearings, we did go out based on -- I should be able to quote it exactly -- but, you know, part of the ruling was about going out and talking to the various wireless service providers to ensure that they have the appropriate, at least one handset that would be appropriate for every person with a disability.

5493   Frankly, those discussions have been very, very frustrating and, in some cases, the vendor didn't do some discussion, but we've really not seen much progress and they usually wash their hands and say, well, we're not -- you know, we have nothing to do with the hardware.

5494   But I strongly believe that that's not true. They may not be manufacturing the hardware, but they certainly have procurement power. They like to underplay that, but I also believe that their procurement power is significant and that's the best and strongest way to send a signal to the manufacturers.

5495   And I believe part of what you say is true, the manufacturers are getting more and more aware, I think because there's world wide regulations of different flavours coming across, particularly in the U.S., but in other jurisdictions, so they are paying some attention, the iPhone being one example, but they're not hearing the consistent message from the wireless service providers about these various things that they need.

5496   An interesting example recently was one of the more recent Samsung Galaxy phones -- I can't quote the exact model today -- but it by chance, I say by chance, they didn't do it I don't believe for accessibility reasons, actually implemented a standard on their USB called USB To Go.

5497   That allowed actually any assistive technology device that used a USB port to be plugged into the phone and be instantly useable by, say, a person with a severe mobility impairment.

5498   There's still a few other software issues to get around, but there's an example of a phone having that kind of feature.

5499   They're not asking for those kind of features, they're not saying my next set of phone that I buy from you must have that standard in it, or must come with a screen reader. We're not seeing that kind of dialogue.

5500   COMMISSIONER SIMPSON: Sorry. I was just going to follow on by saying that, you know, with respect to Ms Alphonse's situation, you know, there are ruggedized phones out there that are for military and industrial use.

5501   And, again, I'm trying to understand if this type of technology is directly available to you and, if it is, would it be beneficial to the community to have a unique provision for being able to deliver an unlocked device to a carrier so that they can make the device choice independent of their carrier choice?

5502   MR. BIRCH: That has been raised before as a potential solution and, indeed, sometimes a carrier doesn't carry the exact phone that someone has identified as being, well, this is the ideal solution for me.

5503   So, and there has been problems, you know, if they purchase that phone to bring it and a carrier not being able or willing to unlock it and put it on their system.

5504   The other problem there is the whole affordability side of it. Buying some of these phones outright can be very, very expensive and then not being part of the package that most of us enjoy by paying on a regular -- as part of our bill, we are able to pay for the devices.

5505   COMMISSIONER SIMPSON: Ms Milligan, last question. In talking with one of the groups recently, it was brought to my attention that individuals with disabilities have some form of distinctive accreditation with respect to the Canadian Revenue Association -- revenue service, that they can expense certain costs if they are designated by the CRA.

5506   So, would that help the issue you just brought up, Mr. Birch?

5507   MR. BIRCH: Did you mean in terms of being able to identify people that --

5508   COMMISSIONER SIMPSON: I'm thinking about whether it's possible --

5509   MR. BIRCH: -- almost like a gate --

5510   COMMISSIONER SIMPSON: -- for an individual to get a tax deduction if they are accredited by CRA. And I'm presuming, or I'm hoping that certain expenses associated with a disability are expensable, or am I misled?

5511   MS MILLIGAN: Go ahead.

5512   MR. BIRCH: Yeah, there's a couple of problems with that. Not every person with a disability fits that criteria, so it would be very narrow, and that criteria is really -- yeah, it has been used as a gatekeeper for other things, but we're really looking for something that's much more as people with disabilities are of the mainstream system and not relying on other gates that are designed for other purposes, and I don't think that would meet the needs.

5513   MS MILLIGAN: Well, I also think, just to point out, that Gary gave the example of the Galaxy phone and, you know, but likely -- possibly not purposefully, but a huge benefit in terms of access.

5514   So, it's important that, you know, that Canadians with disabilities stay within the system and the phones and as they are -- you know, if we dedicate one phone to accessibility in the way that, you know, and text credits and, as Gary put it, gatekeeping it, gatekeeping a phone, we're just -- the gap is going to really lose.

5515   I don't think that -- and I don't think any of us here would think that that would be the approach, but Lui has a comment.

5516   MR. GRECO: Thank you.

5517   I think -- sir, to address your previous question to the issue of the disability tax credit, three things: Apple, Google and BlackBerry.

5518   If you look at the approach that's been adopted by those three manufacturers, it pretty much is indicative of sort of the trend.

5519   Apple introduced accessibility as part of their operating system several years ago. Google, not wanting to be the poorer cousin, has done the same thing. BlackBerry in their recent highly publicized release chose not to do it.

5520   What has to happen in order to bridge the gap or to narrow the gap for -- I can only speak for people who are blind or visually impaired -- is that the buying power, as Gary stated, that the carriers have is significant.

5521   If manufacturers knew that in the next 10 years if they wanted their product to be peddled in Canada it had to have a minimum standard of accessibility provisions for hearing, for sight loss, for mobility, for learning comprehensions, for learning disabilities, I think what you would see is that both through the Open Source Development community and through the funded initiatives of the manufacturers themselves, there would no longer be a device in this country that didn't have ready accessibility to it.

5522   The disability dividend, as I call it, is huge because what you do for one group, what accommodation you provide for one group has all kinds of unforeseen benefits that go way beyond the disability community.

5523   Look at text to speech, for instance, something that was specifically designed for people who can't see. With the distracted driver legislation that's coming out across the country, the ability for people to operate their phones safely while operating a car is a direct result of that accommodation.

5524   Where does it stop? What are the limits of how accommodations for people with disabilities can benefit all of society?

5525   And just secondly, speaking to the question of tax credits, they're so nominal the end result, the end impact on a person's bottom line, if they're modestly employed or if they're making a subsistence income are almost counter productive.

5526   If you're of moderate means, it's hardly worth the paperwork that it takes to file, and I'm talking about people that have significant disability costs, in the thousands of dollars, the net impact on their taxable income is marginal.

5527   MS MILLIGAN: It's also important to mention, I think, that a number of us sitting on this panel here today participate in international standards committees in this area, in the handsets, both with the International Telecommunications Union, ISO, International Standards Organization and the Consumer Electronics Association.

5528   So, we're having those discussions and we're lending our expertise on behalf of Canada to these particular organizations and, also, we're working with Industry Canada to ensure that, you know, there's a streamline and there's always communication throughout to ensure that we have some -- you know, that accessibility stays front and centre in the development of standards in the area.

5529   COMMISSIONER SIMPSON: Thank you very much. Those are my questions, Mr. Chair.

5530   THE CHAIRPERSON: Commissioner Duncan.

5531   COMMISSIONER DUNCAN: Good morning.

5532   I'm very interested to hear the progress you've made and see the progress that's been made since the last time we had the hearing on accessibility.

5533   I'm just wondering, I know that you've undertaken to put your ideas forward as per the Chairman's request, I'm just thinking that because everything can't be done at once, you know, and you're certainly a good example of that, it's a long, tedious process, but in the interest of accomplishing as much as we can, as quickly as we can, if you shouldn't try to maybe put forward, or if you couldn't put forward your ideas along the lines of what can be done in the immediate term, short term, medium, long term and if a discussion in advance with Bernard Lord and with Howard Maker at CCTS would you be useful to you to sort of determine what might be practical?

5534   I mean, they're not going to be in a position to decide on the day you meet with them, but still, I think it would be useful to talk to them and to see what their roles might be.

5535   So, that's just a suggestion. I mean, I think it's wonderful, your suggestion of an office of disability but, you know, what could we do to gradually get to that point?

5536   MS MILLIGAN: Mm-hmm.

5537   COMMISSIONER DUNCAN: If it can't be done, how could it be financed? These are people who may have some suggestions there as well as to how that might operate and what might be practical.

5538   And the other thing I just wanted to mention is that, if the members of your various groups have problems with their wireless devices and they call the CRTC office to make those complaints known, they will refer them to the CCTS and, so, that's another source for them if they're having problems. If they come to us, we'll move it on and see if we can help.

5539   But, anyway, that was just a suggestion.

5540   MS MILLIGAN: Thank you very much.

5541   THE CHAIRPERSON: Thank you very much. Those are our questions.

5542   But I do want to reiterate that it would be very useful for us for you to put on the record --

5543   MS MILLIGAN: Mm-hmm.

5544   THE CHAIRPERSON: -- exactly what you're thinking about when you say you want a specific section within the Code, because we are here about putting together a Code for all consumers, including the members your various organizations represent, and that would be important to us.

5545   MS MILLIGAN: We will, and we will do it as soon as possible.

5546   THE CHAIRPERSON: Okay. Thank you very much.

5547   So, we will now change -- we'll take a short break, I think that would be appropriate at this point. So, we'll come back at 10:15 with our next presenters.

5548   Thank you.

--- Upon recessing at 1003

--- Upon resuming at 1017

5549   LE PRÉSIDENT : À l'ordre, s'il vous plaît.

5550   We will now hear from DiversityCanada Foundation.

5551   Please go ahead. You have somebody joining you from a videoconference, I believe.

PRESENTATION

5552   MME SANKAR : Oui. Bonjour...

5553   LE PRÉSIDENT : Ah, pardon. Désolé.

5554   MME SANKAR : Bonjour, Monsieur le Président. Bonjour à tous les membres du panel. Merci beaucoup pour cette opportunité de vous adresser.

5555   Alors, je me présente. My name is Celia Sankar and I am the lead plaintiff in a class action lawsuit against Bell Mobility. A disclaimer here: I speak in my own personal capacity as a prepaid wireless customer and my comments are not necessarily -- my comments do not necessarily reflect positions that will be taken in the class action lawsuit and do not intend to bind any putative members of the class.

5556   I am here under the auspices of the DiversityCanada Foundation and also appearing on behalf of DiversityCanada is Dr. Srinivasan Keshav, Professor at the University of Waterloo. He is joining us by videoconference.

5557   THE CHAIRPERSON: There we go.

5558   MS SANKAR: Before we start I would like to request the panels' permission to present evidence recently available to me, just recently, that support statements I have already put on the public record.

5559   THE CHAIRPERSON: What is the nature of the evidence?

5560   MS SANKAR: They include an affidavit from the class action lawsuit; there is an article from a consumer protection agency in another jurisdiction that sheds light on the matters in the class action -- or Bell's handling of its services; and there is evidence about the offerings by -- of prepaid wireless offerings by service providers in Canada.

5561   Yes, those are the three bits of evidence. I had provided --

5562   THE CHAIRPERSON: And you became aware of these documents at what point?

5563   MS SANKAR: It was on Friday that I had clearance that the affidavit would have been available to be used. There was some question as to whether that was so. We have been able to speak with -- we were able to clarify that only on Friday.

5564   THE CHAIRPERSON: Right. And your view is that it's not harmful to other parties because it just supports your existing position?

5565   MS SANKAR: Yes.

5566   THE CHAIRPERSON: Okay. We will take it under advisement, but we will rule on it later.

5567   Thank you.

5568   MS SANKAR: Okay. Thank you.

5569   I am proud to be a Canadian, I am proud to live in a nation with a Charter of Rights and Freedoms which recognizes that every individual is equal and therefore must be given equal protection under the laws of this great land of ours. The Charter provides the framework upon which all Canadian public policy must be built.

5570   In this consultation industry representatives have suggested that the national wireless Code should exclude prepaid customers entirely and others have said it should include only the slightest reference to prepaid customers, which would effectively deny them a range of protections available to post-paid customers. This approach of course must be rejected. It must be rejected.

5571   Prepaid customers may contribute less revenue to the coffers of wireless companies, less than post-paid customers, but prepaid customers are equal human beings and deserve equal protection under this new National Wireless Code.

5572   I will therefore look at a few key issues for prepaid customers from an equity perspective.

5573   The most critical is the expiration of prepaid account balances and I will therefore use most of my time to address this fully.

5574   Balance expiry amounts to disconnection because prepaid customers can only use their device if there are funds on the account. The Draft Code contemplates protection post-paid customers from unfair disconnection under considerations such as if there is less than -- the amount owing is less than $50.

5575   Contrast that with the plight of prepaid customers who are not owing anything and who in fact have had account balances as high as $200 seized and their service cut off under the pretext of balance expiry.

5576   From the perspective of equal treatment alone, if the Code offers post-paid customers any protection from unfair disconnection, as it is to be hoped the final document will, then the expiration of prepaid balances must be prohibited.

5577   Moreover, the application of expiry dates to prepaid wireless balances must be banned in keeping with consumer protection legislation in every single province outlawing the expiration of what are variously known as gift cards or prepaid purchase cards.

5578   Wireless companies have been hiding behind the industry's sleeping watchdog to try to escape the net of provincial laws. They have argued such laws do not apply to them because they are federally regulated. Meanwhile, the CRTC of the past adopted a hands-off approach, saying that market forces were enough to regulate the industry.

5579   Well, time has run out on that game. The jurisdiction argument is not available to the industry, not here, not now, not before a reinvigorated CRTC which places new emphasis on serving the public interest. It is incumbent on the CRTC to now provide the protections that consumers have clamoured for and for which every province agreed they deserve when they acquire prepaid purchase cards.

5580   Provincial laws make an exception and they allow expiry on prepaid purchase cards where the payment is for one specific good or service, such as a manicure. The wireless sector seems to be trying to use this exemption. The industry's representative buddy, the CWTA, has put forward what can only be described as a myth that the prepaid wireless providers today are involved in selling airtime, a single service, and that that their offer is that of a time-plus-usage business model similar to that of a car rental or golf membership.

5581   In a true time-plus-usage business model all funds paid are used strictly for the service purchased. You can't use any portion of your car rental payment, for example, to buy a map or to buy music for your trip.

5582   The myth that wireless providers are selling strictly airtime in a time-plus-usage business model is completely debunked in the Web site printouts and a web chat transcript showing a sample of current prepaid wireless offerings, which I have included as evidence.

5583   As can be seen from this evidence, the wireless providers tell consumers that they will be able to use their prepaid balances not only to make and receive calls but to also purchase a wide variety of goods and services, including texting, video messaging, Internet browsing, ringtones, wallpapers, music, games, apps. It goes on.

5584   This puts prepaid wireless offerings firmly in the same category as retail prepaid purchase cards and this fact renders the industry's argument about activation in relation to balance expiry totally meaningless. That's a bogus argument. I would respectfully request that we address this during the question period.

5585   It's immaterial that many retail prepaid purchase cards are rectangular pieces of plastic, whereas prepaid wireless top-ups are simply recorded as electronic credits on a customer's account. What matters is that in both cases a future performance agreement is created when the customers pay the full cost upfront and that amount is used sometime later as a credit or cash balance or cash equivalent to select and purchase goods and services from among a variety of goods and services offered by the supplier. Cash does not expire nor should a cash equivalent such as a prepaid wireless top-up.

5586   On behalf of some six million prepaid wireless customers across Canada, among whom are those who can least afford to have their already limited funds taken only to have their wireless service cut off -- and we're talking about pensioners, youth, minimum wage workers, the unemployed, newcomers -- I urge the CRTC to put an end to wealthy foreign companies grabbing cash from the accounts of these customers under the pretext of balance expiry.

5587   Returning to the issue of equal treatment within the context of the National Code, I had originally intended to discuss the 30-day advance notice of changes. However, after hearing members of the industry state that they also agree that such notices should be given for pay-per-use services, which of course directly affects prepaid customers, I'll just leave that discussion for the question period.

5588   A final concern. It is a given that post-paid customers receive an itemized bill which provides justification for each charge. Some telecoms do not provide prepaid customers with any information about their charges. This is manifestly unfair as it leaves consumers with no means of querying their account.

5589   In order to respect the principle of equal treatment, the National Wireless Code must require that service providers furnish prepaid customers with an itemized bill.

5590   My previously articulated positions on all of the aspects of the Code remain unchanged and I would welcome discussion on those during the question period.

5591   Concerning the final document, it may be best to split the Code into two separate versions, one to be presented to post-paid customers, the other to prepaid customers, because having everything in one document may prove confusing to some or perhaps many customers as to what does and does not apply to them.

5592   Now, whether it sets down the Code as one or two versions, the Commission would be well advised to lean more on the side of comprehensiveness in the final version. The final Code must be -- has to be more detailed than the draft if it is to succeed in reigning in the wireless sector.

5593   I say that because experience has shown that unless a practice is expressly prohibited, some of Canada's wireless providers will foist it on a largely defenceless public even if common sense and basic human decency would tell a casual observer that the practice is patently unfair.

5594   I will give a specific and concrete example. I have included an affidavit presented by Bell Mobility in the class action lawsuit for which I am the representative plaintiff. It provides incontrovertible proof that Bell Mobility is effectively operating with two different expiry dates, one purported and one communicated to consumers.

5595   At paragraph 39 in the affidavit Bell describes its operations and I quote here:

"Whatever method customers use for making a top up payment..."

5596   I'll skip just a bit here.

"...customers are given and notified of a date and time when their account will become inactive that is one day after the end of the time of their active period. For example, in the case of a customer who makes a top up payment corresponding to a 30 day active period, the customer is notified that their account will become inactive 31 days after the date of the payment..."

5597   Further evidence provided by Bell in that affidavit shows that these notices use terminology such as "expires" and "balance expiry date."

5598   Now, Bell uses language in a certain way to try to cloud the matter, but just to clarify, as the company itself has explained, Bell tells customers their balance expiry is the 31st day after purchase.

5599   When we read that message, many customers believe, like I did, that our balance expiry is indeed the 31st day after purchase. To us that's the only valid expiry date. But when we try to top up or use our phone on the 31st day, to our horror, we realize that Bell has already seized our funds and cut off our service and tries to justify its actions by purporting that their terms state the expiry is 30 days after the purchase.

5600   Further details about all of this can be found at our Web site bellgiveourmoneyback.com, for short bgomb.com.

5601   Bell's conduct sets a dangerous precedent and threatens the integrity of the entire Canadian marketplace. As Canada's largest telecommunications company, Bell occupies a prominent and influential position. Think how dangerous it would be for Canadian consumers if other suppliers followed Bell's example and they then operated with two different expiry dates, other suppliers such as providers of baby food, for example.

5602   Now, that isn't quite a far-fetched scenario. It actually happened in the African nation of Zambia. According to a newspaper column which I've presented to the Panel, a column by a representative of the Zambian Government Competition and Consumer Protection Commission, that agency became aware shortly after Christmas of 2010 that a supplier was selling baby formula with two different expiry dates.

5603   Mere days later, on the 31st of December, that agency swooped in, took all the products with two different expiry dates off the market, got a refund for the consumer who bought products with two different expiry dates and commenced action to prosecute the offending supplier.

5604   The representative from the Zambian Consumer Protection Agency wrote, and I quote:

"Having two different expiry dates on one product can mislead consumers as it becomes difficult for them to know what the correct date is and is therefore likely to distort their purchasing decision."

5605   It is scandalous that a prominent and influential Canadian company as Bell doesn't have the same understanding and is currently reaping enormous profits from some of the most vulnerable consumers through this deceptive practice right here in the Canadian marketplace. Surely Canadian consumers deserve as much protection from this unfair practice as consumers in Zambia have received.

5606   By entirely banning expiry dates on prepaid wireless balances, for the reasons I've already outlined and for reasons my co-presenter will now share, the CRTC will be stepping up to the plate and will eradicate the serious threat to the integrity of the Canadian marketplace which Bell poses by effectively operating with two expiry dates.

5607   To conclude I will say, prepaid wireless customers look forward to the CRTC taking action on this issue to ensure that consumers in this great land of ours have the level of protection that they deserve.

5608   Thank you.

5609   THE CHAIRPERSON: Thank you. Just to be clear, whether or not we accept the additional evidence you have provided today, the fact remains that we are not going to have a trial within a trial, so I don't know if those affidavits have been cross-examined against or not or anything like that.

5610   MS SANKAR: Yes, we had the cross-examination.

5611   THE CHAIRPERSON: Well, it's not relevant actually --

5612   MS SANKAR: Okay.

5613   THE CHAIRPERSON: -- because I actually don't want to get into testing that. The point is we're here in a policy proceeding. I understand your point on that and that's what we will be focusing on.

5614   Commissioner Molnar will have some --

5615   THE SECRETARY: Excuse me, Mr. Chairman. We have Dr. Keshav by videoconference. Before we start --

5616   THE CHAIRPERSON: I'm looking at the clock and I think we're well into the 20 minutes already, are we not? You will have to make it short, please.

5617   THE SECRETARY: Dr. Keshav, please go ahead.

PRESENTATION

5618   DR. KESHAV: Yes, thank you.

5619   Thank you for giving me the opportunity to give my feedback on the Draft CRTC Wireless Code.

5620   My name is Srinivasan Keshav and I'm a professor of computer science at the University of Waterloo. My interest in pricing the cellular phone services is longstanding and I just want to take a moment to talk about the ethical aspects of the cost of maintaining inactive prepaid customers.

5621   Wireless providers in Canada argue that it is not cost-effective to maintain inactive prepaid subscribers, which is why the subscription plans expire after a certain time period, with any unused balance forfeited.

5622   There are three operating costs to maintaining inactive subscribers that I want to discuss. First, there is a cost to maintain subscribers in a customer database called the Home Location Register.

5623   Given today's technology, the cost of maintaining a single subscriber entry in a database is almost too small to measure.

5624   For example, if this database were to be maintained at Amazon's S3 cloud-posting infrastructure, I estimate that holding 1 million inactive subscribers would cost about $360 a year, or .36 thousandths of a cent per year per subscriber.

5625   Even if the measurement is off by 10,000 percent, or a factor of 100, this would still amount to a mere 3.6 cents per subscriber per year.

5626   Secondly, there is the cost of tracking an inactive subscriber's cell phone, so that a call can be delivered to it. This cost is also tiny, although harder to estimate.

5627   Wireless providers charge prepaid subscribers much higher permanent charges than post-paid subscribers, about 25 to 30 cents a minute, instead of 2 to 5 cents a minute. This difference is likely to cover the additional tracking charge.

5628   At any rate, the cost could be avoided if subscribers were to turn off their handsets completely.

5629   Therefore, wireless providers need not charge prepaid subscribers for periods when their handset is off. This is already the case in some European countries.

5630   The third and final cost is that inactive subscribers use up a phone number that could potentially be assigned to some other subscriber. If subscribers were to obtain a new telephone number with each prepaid subscription and stay inactive for extended periods of time, the wireless provider could conceivably exhaust the supply of phone numbers.

5631   At first glance, this appears to be a plausible concern. However, it may be overstated. Subscribers have a strong incentive to keep the phone number the same as long as possible, so that they can be reached by their friends and family.

5632   Moreover, if a subscriber is indeed inactive for an extended period of time, the wireless provider could reclaim the inactive number by reimbursing the subscriber for the unused balance.

5633   To close, let me quote from the response from TELUS that maintaining a zero usage account indefinitely creates a perpetual entitlement, contrary to legal principle. In fact, I believe that prepaid wireless subscriptions represent an interest-free loan from subscribers, typically drawn from the poorest sections of society by some of the richest and most lucrative corporations in the country.

5634   Thus, not only is there no violation of a legal principle, in my opinion, aggressively expiring prepaid accounts does not appear to be justifiable on either ethical or moral grounds.

5635   I, therefore, urge the CRTC to act promptly on this important matter.

5636   Thank you.

5637   THE CHAIRPERSON: Thank you.

5638   Commissioner Molnar...

5639   COMMISSIONER MOLNAR: Thank you, Dr. Keshav.

5640   Have I said that appropriately?

5641   DR. KESHAV: That's fine, thank you.

5642   COMMISSIONER MOLNAR: Thank you, and Ms Sankar.

5643   I am going to begin, if it's okay, with Dr. Keshav, just following up on the three points you have made here in rebuttal of, essentially, the arguments that the carriers have put forward, or the wireless providers have put forward, as to why these would expire.

5644   I first want to know, when you are talking prepaid, there are many different prepaid business models out there today. We have called some of them pay-in-advance monthly service, just to try to somehow differentiate it from what is normally just the bucket of minutes type of service.

5645   Now, when you are talking about this expiry, and not allowing prepaid to expire, are you talking about all prepaid services?

5646   DR. KESHAV: I am talking specifically about the prepaid services where you would buy a certain number of minutes in advance.

5647   Typically it is a certain number of dollars in advance. You pay for a $10 card or a $30 card.

5648   And today these are associated with a certain time period, 30 days or 60 days or one year.

5649   Those are the calls I am talking about.

5650   MS SANKAR: If I may, earlier in the session you were quite right in asking the industry about the difference, and there are two types. You have the pay-per-use service, and there are also the prepaid monthly plans.

5651   And it is true that there would need to be some sort of assessment of these two models.

5652   However, as we heard from TELUS, they also indicated that even when you have a monthly plan, your prepaid balance can also be used to add other services, and they called them boosters.

5653   So your balance can be used to select from the menu of services that they offer, even when you have a monthly plan. With the pay-per-use services, that is very clear, that is very direct. You are not actually purchasing minutes.

5654   In my submission, the evidence shows, of the offerings, that they don't sell you minutes. They tell you that you put your balance and you can use your balance for a range of services and goods that they offer.

5655   COMMISSIONER MOLNAR: I understand. Just help me understand why we should differentiate the two models of prepaid.

5656   In both cases there is a cost of accessing the network, and then there is usage of services, and it's paid upfront. So why are we differentiating, or what would be the key to differentiate these two?

5657   MS SANKAR: I am saying that the two of them are, essentially, the same. With the pay-per-use, it is very clear that you are paying an amount to put on your balance, and then you use that balance to purchase individual services, such as 1 minute for a call, 20 cents, or 20 cents for a text message.

5658   So that's very clear.

5659   The monthly plans come as packages, but these monthly plans, as well, operate in the same way as the pay-per-use services. From my understanding from what TELUS told us, you have the monthly package, which has built into it certain usage, but when the customers put funds on their prepaid account, which has a monthly plan, they can also use those funds to purchase add-ons, or additional services.

5660   Rogers, also in their document that they presented, has that. They call their trademark -- they have their trademark Pay As You Go, and if you have -- I'm sorry, that falls into the first category, so TELUS is the example I can give you.

5661   Even though you have a monthly plan, with your prepaid account you can also purchase services, which they call boosters.

5662   COMMISSIONER MOLNAR: Just to be clear, your position is that, under either of those scenarios, nothing should be able to expire.

5663   MS SANKAR: Under the provincial legislation, prepaid purchased cards should not expire. It's banned. It's a banned practice.

5664   If I may, this brings us right to the argument of -- that bogus argument, as I call it, of activation and access to the system.

5665   In presenting the argument about activation and activation justifying the balance expiry, that is the industry trying to pull wool over the eyes of the Commissioners, and I have full faith that they will not succeed in that ploy.

5666   What is activation and what is it not?

5667   If we could take a bit of time to look at that, let's look at what it is not by comparing it to real activation or real system access plans.

5668   The industry is saying that activation justifies balance expiry, because when you activate the phone, you are accessing their system for a set period of time, and when you come to the end of that set period of time, they are, therefore, justified in taking funds out of your account.

5669   The prepaid wireless offerings are not access to system offerings.

5670   If we look at a true access to system offering, you just have to look at the landline business model. With that model, it is absolutely clear. If you want to have access to the telecom network, you pay $35. I think that is perhaps the residential rate now. You pay $35, and that gives you the means to use their landline service.

5671   The $35 that you have paid is used strictly for accessing their service.

5672   There is no question or no intimation or anything that that $35 can be used -- 20 cents for this particular use, 30 cents for another particular use. With $35, you have access to the service.

5673   That is a true model.

5674   That is not what the prepaid model is at all. They do not offer you that your $15 will be for access to the system. The $15, they say that that amount is to be used to purchase from a selection of goods -- to select and purchase goods and services.

5675   So the $15 is a cash balance that you put onto your account, so that you can use the goods and services.

5676   Additionally, it is not for it to be considered a true access to the service business model. Then the service providers would have to make the offer, and the consumer would understand that the offer is: My $15 will be for that proposal of $15 being for access to the service, but that's not the offer. That's not the offer that is accepted by the customers. What the customers pay their $15 for is to be able to use that balance on specific goods and services within the system.

5677   One final point on that. We were saying let's look at what it is and what it isn't. We have just looked at what it isn't. It is not access to the system. What --

5678   COMMISSIONER MOLNAR: Just to be clear and I did really want to give you the opportunity. I know this is your reason for being here is really your key point and I wanted to give you the opportunity to comment, but I do just need to, I guess, chime in here a little bit when you say this is very different than wireline local access because you're paying $35 for access. Well, you're not just paying for access, you're paying for unlimited local calling, the right to make and receive calls, access to 911, you know, and access to a host of services. So where you're -- under your model you are paying per call, in the landline model that you've put there, you know, you're also paying for unlimited calling. So --

5679   MS SANKAR: That's --

5680   COMMISSIONER MOLNAR: -- I don't know that you've necessarily made the proper distinction there, but I did want you to be able to make your point.

5681   MS SANKAR: If I may, that is precisely the point. That is precisely the point. When you pay your $35 for access to the landline, they do not tell you that 15 cents would be for every local call that you make on your landline and you can use only up to 15 -- $35 worth of calls on your landline. That is a true access model. On your access -- on your landline you pay $35 to access the network, to access their system.

5682   When you contrast that with the pre-paid wireless model, you -- they do not tell you the offer that they present to you and the offer that is -- that you pay $15 as consideration for is not that you are going to pay to access the system. What they are offering is the same as a retail pre-paid purchase card. You give us $15 and then you can use that cash balance of $15 to select from a range of goods and services that we offer. That is -- the evidence that I presented to you shows that clearly that's how they phrase their offer, that's the offer that the consumers understand, and that's the offer that consumers accept by paying their $15.

5683   Now, when that consideration is handed over to create that binding agreement between the wireless provider and the customer, that consideration cannot be used for anything else other than what it was used for to make the binding agreement. So the notion that that $15 can be used for -- if it were the case that it was system access, then there would be no notion of telling the customers that 15 -- out of the $15 you would use 20 cents for a text message, 20 cents for a local call, 20 -- $2 for a ringtone download. So the wireless providers have offered bogus argument to the commissioners that the balance, the pre-paid balance, is for system access. That is not the model they're using.

5684   If we can look at what the system ... If we can look at what the activation is. As I just said, they are trying to say that the activation justifies balance expiry because activation sets that access model into play. It starts the clock ticking. I just went through the argument saying that the access model is not what is offered by the wireless providers when they offer the pre-paid wireless services.

5685   What is activation? Activation is simply a process by which the wireless providers associate an account balance with -- a top-up amount with an account balance. That's all it is. It's registering the -- a particular account -- a particular sum with a particular amount. So it's simply identification of a pre-paid purchase top-up with an account holder.

5686   So if we were to look at the model ... If we were to look at a brick and mortar store where they sell the pre-paid purchase cards, if we were to put the same argument that the wireless providers are giving into that brick and mortar model, that would be -- if the -- if you look at that scenario, that would be as if someone who had purchased a pre-paid purchase card walked into the store, showed their card at the counter, and the store registered, okay, you purchased a 25 dollar gift card or pre-paid purchase card, you have provided your ID, I know who you are, because you have done that, you have said I have purchased this amount, you, therefore -- the clock starts ticking on you and you cannot use this card beyond 30 days after this time that you have identified yourself. Now, that's ludicrous, is it not? And that is actually trying to run around the provincial legislation that says there can be no expiry on pre-paid purchase cards. The activation is simply associating the top-up amount with an account. And because, you know, when you purchase your pre-paid card --

5687   COMMISSIONER MOLNAR: Thank you.

5688   MS SANKAR: Okay.

5689   COMMISSIONER MOLNAR: I think you've made the points.

5690   Dr. Keshav - I want to make sure I say that right. Keshav?

5691   DR. KESHAV: Yes.

5692   COMMISSIONER MOLNAR: Okay.

5693   DR. KESHAV: Keshav, yeah, that's ...

5694   COMMISSIONER MOLNAR: Keshav. Okay.

5695   DR. KESHAV: Yeah. Thank you.

5696   COMMISSIONER MOLNAR: I just want to understand -- you identified three costs -- three costing arguments made by WSPs or wireless providers as it regards the cost of these inactive pre-paid subscribers. And I'm not certain that I understand what you mean in the third one as it regards the numbers. So you have heard their argument that this is -- that numbers are a scare resource and where they're not being efficiently used obviously, but you end here saying, "If a subscriber were indeed inactive for an extended period of time, the wireless provider could reclaim the inactive number by reimbursing the subscriber for the unused balance." So are you suggesting that that customer somehow owns that number? Is that what you're saying or are you saying something else?

5697   DR. KESHAV: I'm saying that the number is given to the subscriber in, you know, for -- because in return for some exchange of cash, you know, like, you give a certain amount of money or whatever it is. And if for whatever reason, you know, one -- if you buy into the argument that numbers are scarce, they really, really need it and it's been some time -- let's say a year since the subscriber was active -- then you could say, okay, here's your money back, I want my number, you know.

5698   And are you saying are they owning it? Well, it's a question of who owns those numbers anyway. These numbers aren't owned by anybody. They're assigned by the North American numbering authority to the different providers. So it's not owned by anybody per se. It's become a scarce resource and I guess it would be fair to say, okay, here's your money back, I want my number back.

5699   COMMISSIONER MOLNAR: And do you believe it's practical that the wireless provider would have the information on each wireless card subscriber, if you will, in order to do that, in order to refund?

5700   DR. KESHAV: Certainly for purchases that are made with a credit card that's very straightforward. That is, this credit card number would be -- is stored in the database, that's what is used for post-paid customers, to bill them. So this would be very straightforward. For those purchases that are made in cash, I agree with you it would be difficult, and so, you know, maybe you don't want to expire those in the first place. But the fact remains that these numbers are not owned by anybody.

5701   COMMISSIONER MOLNAR: Yes. Okay, thank you.

5702   I want to move on to other elements of the wireless code and how they would pertain to pre-paid. It's clear from your comments that you have been following what's -- the conversation that's been going on for the last couple of days. You've had a look at the proposed draft code that the CRTC put out for comment. What I haven't seen in your comments here today, I don't believe, is your views on what particularly in the code should or should not apply to pre-paid.

5703   MS SANKAR: Okay. So certainly what should apply is the balance expiry. We have also looked at the 30 day notice that should apply to pre-paid. I tried to get some sort of clarification from Mr. Lord and his team. And what I understand from my conversation with them is that they see that when they talk about pay-per-use they're not talking only about post-paid, pay-per-use services, but pay-per-use as it pertains to pre-paid wireless customers.

5704   So that's certainly -- the notice has to be there.

5705   The Code in its definition refers to billing of post-paid customers and it is essential, it's imperative that pre-paid wireless customers also have an itemized bill so that they can verify/query/challenge particular charges.

5706   COMMISSIONER MOLNAR: I'm sorry. Where in the Code do you see itemized billing?

5707   MS SANKAR: In the definition it refers to Option -- A3, Option 1. In parenthesis there is reference to receiving a bill. Well, these bills are itemized bill -- pre-paid customers. Some wireless providers don't even provide anything to pre-paid customers.

5708   COMMISSIONER MOLNAR: I thought it was in interesting idea that you had that perhaps the Code actually be -- there be a draft for pre-paid and a draft for post-paid just so that when it's shared with customers they see something that's really more relevant to the services they have.

5709   I wonder if you would consider taking the time between now and when we are at the next point of comment to consider what are specifically those sections that should make up that. You know, if we were to take that kind of approach, which of these sections would actually make up the pre-paid?

5710   MS SANKAR: That's an excellent suggestion and it's always been my intention to present a draft pre-paid wireless Code.

5711   You know, I think the best point -- I had thought the best point to do that is at the end as the final submission, having taken into account everything that came out of the consultation.

5712   So for March the 1st --

5713   COMMISSIONER MOLNAR: Yes, and that's the next --

5714   MS SANKAR: Yeah.

5715   COMMISSIONER MOLNAR: -- opportunity.

5716   THE CHAIRPERSON: The 1st of March.

5717   COMMISSIONER MOLNAR: Right, the 1st of March.

5718   MS SANKAR: March 1st.

Undertaking

5719   COMMISSIONER MOLNAR: There is then a reply. That's not where you do it. You have to do it in the next --

5720   MS SANKAR: For the 1st of March?

5721   COMMISSIONER MOLNAR: Right, yes. Thank you.

5722   Given that you're going to be providing that to us, I am going to you know leave some of this because I'll be able to look at what you're going to provide.

5723   But I did want to ask you, your thoughts on how the Code could be promoted. What do you believe are effective tools to ensure that the community of users that you're speaking of would understand, would be aware that the Code exists and, you know, be able to understand it? How do you see that occurring?

5724   MS SANKAR: That's an important point.

5725   So as included in previous submissions, I believe it's necessary that the Code be promoted by the wireless providers at all points of contact or specific points of contact with the consumer.

5726   Right there they can be the front line. They should be the front line for the Code so that customers when they purchase their pre-paid wireless -- and I take it we're speaking particularly about pre-paid wireless customers -- when they purchase the --

5727   COMMISSIONER MOLNAR: I am, because I believe that's your particular interest here.

5728   MS SANKAR: Okay, yes.

5729   So as a retailer at the brand stores online wherever there is an interaction between the customer and the provider or the provider's representative, the customer should be made aware of the Code and made aware of the fact that if they cannot resolve their complaints with the provider they can then go to the Ombudsman created by the Code.

5730   So that's at the point of purchase and additionally at the point of complaints, even in the first instance of the complaint.

5731   COMMISSIONER MOLNAR: Are you comfortable with using the Commissioner for complaints as the means of enforcement?

5732   MS SANKAR: It would seem for practical reasons if we want to implement this as soon as possible, this is a good entity to rely on.

5733   There are some -- I have some reservations as to how effective that body can be, whether it has investigative powers, whether some sort of procedure would have to be put in place or some measure would have to be put in place to give the CCTS the mandate to conduct investigations where they have a number of similar complaints about one particular company, the resources of that body.

5734   So it's something like 60 percent of their complaints are about wireless services. This is going to -- if they are going to enforce the Code it is -- one can imagine that their percentage would increase greatly if we are also promoting the Code aggressively.

5735   So certainly we would have to -- the Commission and the CCTS would also have to look at the resources and whether they have the capacity to enforce the Code and to respond to the complaints that would result from the Code.

5736   COMMISSIONER MOLNAR: Thank you very much. Those are my questions.

5737   THE CHAIRPERSON: It looks like those are our questions. Thank you very much, you both, for participating in the hearing.

5738   Thank you.

5739   MS SANKAR: Thank you for the opportunity.

5740   THE CHAIRPERSON: Thanks. We'll move without a break to the next presenters.

5741   THE SECRETARY: We'll then invite Eastlink to take place at the presentation table, please.

--- Pause

PRESENTATION

5742   MS MacDONALD: Good morning Mr. Chairman, Commissioners, Commission staff.

5743   I am Natalie MacDonald, VP Regulatory for Eastlink, and with me here today is Denise Heckbert, Manager of Wireless Regulatory.

5744   We had planned to also have Matthew MacLellan, Eastlink's President of Wireless, with us today to discuss this important matter with the Commission. While Matthew wanted to be here today, we are pleased to explain that the reason for his absence is that this week Eastlink is launching our wireless business and Matthew is currently in Halifax briefing the local media about our product line-up, our service plans, and our new network.

5745   Eastlink acquired our Advanced Wireless Services spectrum in 2008 and we have been working to develop a wireless business that will be competitive for the long term.

5746   Eastlink's focus on high quality products and exceptional customer service, all on a state of the art network has meant that, while we have been a little slower than some new entrants to get to market, we are going to get it right for the long term, all to the benefit of competition and to consumers. We are excited to launch our service in the next couple of days.

5747   We are also pleased to be here to provide Eastlink's comments on the wireless consumer Code proposed by the Commission.

5748   Eastlink notes at the outset that we fully support the Commission's initiative under this Consultation to establish a consumer Code for wireless subscribers. We generally support policies that make it easier for consumers to take advantage of competitive offers in the market.

5749   On the wireline side of our business, we do not use term contracts, early-termination fees or 30-day notice requirements. Instead, we work to win our customers' business every day. While it is difficult to compete against service providers that do rely on contracts and notice periods to maintain their customer-bases, Eastlink believes that consumers appreciate our approach and it has worked well for us.

5750   Eastlink submits that much of the Commission's proposed Code is in line with our existing business practices and those we will be employing in our new wireless business. This has been our experience with the provincial codes that have affected us, such as Nova Scotia's which we supported when it was passed last year.

5751   We further note that there is a general consensus among consumers, consumer groups, and wireless service providers on many of the provisions in the Commission's draft Code.

5752   For example, all parties seem to agree that wireless services offered as part of a bundle would be covered by the Code, and that service agreements should be written in clear, easy-to-understand language.

5753   We will address all areas of general consensus in our final written comments and will also attach to those comments our final proposed Code with explanations of any variation from the Commission's draft Code. Our comments here today will instead focus on a few key issues, but we would be happy to answer questions regarding any aspect of the Code.

5754   We should also note that at this critical time for us, given that our launch is just two days away, we will not be able to discuss our marketing plans or service offering in any great detail today. However, the benefits that Eastlink will be providing to consumers will be announced publicly this week. We will provide additional detail as necessary in our final written comments or where requested by the Commission on any earlier date.

5755   As noted earlier, Eastlink supports the provision of the Commission's draft Code that would reduce the cost to consumers of switching service providers.

5756   Specifically, we proposed in our earlier comments and are happy to see included in the draft Code a provision that would require termination to take effect on the date a consumer provides notice or, presumably, the date noted in a port request. This will eliminate the need for consumers to call their current providers before switching, it will eliminate the unfair practice of charging consumers for services not received from the former provider, and it will improve the number porting process.

5757   Eastlink submits that the Commission could go further by prohibiting any termination fee in cases where no device subsidy was provided under a fixed-term contract. The Code currently allows for a fee of up to $50, but Eastlink submits that this fee raises the cost of terminating service and, therefore, discourages consumers from switching service providers.

5758   And I'll pass it on to Denise.

5759   MS HECKBERT: On early-termination fees, Eastlink supports the Commission's approach in its draft Code to limit such fees to the amount outstanding on the device. We believe that this makes the cost of terminating service clear for consumers. However, in the case of the draft provision for indefinite-term contracts, or monthly contracts, the Commission's decision or proposal to tie such contracts to a fixed time period could inadvertently limit carriers' ability to innovate and offer new, additionally consumer-friendly device subsidy programs. We therefore believe that carriers should have flexibility in managing device subsidy reductions under indefinite-term contracts as long as those carriers clearly explain the termination fees to consumers before purchase.

5760   Eastlink also agrees with other comments made by parties to this proceeding that the notification of additional fee provisions may be too prescriptive.

5761   In our initial and reply comments, Eastlink stated that we believe it is important to help consumers monitor and track their usage to avoid surprising bills. We further support a requirement to provide consumers access to usage monitoring tools and a requirement for wireless service providers to notify consumers when they have reached certain thresholds of their usage limits.

5762   However, we do not believe that those thresholds should be defined in the consumer Code. It may be appropriate to provide notifications at varying thresholds depending on the type of service, and service providers should have the flexibility to modify those thresholds based on consumer feedback and technical limitations.

5763   At the same time, Eastlink has concerns with the Commission's draft provision that would require all wireless service providers to cap all consumer accounts at $50 above their monthly fees and to suspend service when the cap is reached.

5764   There may be many reasons that a consumer occasionally knowingly occasionally spends more than $50 above their minimum monthly amount as described in their service agreement. For example, they could be travelling, even within Canada, or there could be an unusual event in their lives that requires a larger amount than -- a larger than normal amount of calling and/or data usage.

5765   It would be unfair for a service provider to deny those consumers access to the service they are paying for simply because the consumer has reached a spending limit imposed by the Commission. This is particularly so in the growing number of cases where consumers' only means of communications is their wireless service.

5766   Eastlink understands the desire to protect consumers from bill shock. However, we believe that the notification requirements we support, paired with programs offered by many service providers to help consumers pick plans more suited to their needs, are sufficient to protect consumers from unexpectedly high bills.

5767   MS MacDONALD: As we stated at the outset, Eastlink strongly supports the development of this consumer Code. If care is taken to ensure that consumers' rights to reasonable and clear terms is balanced with their right to choice and control over the plans they want, this Code will benefit consumers by making it easier to take advantage of competitive options and by helping to ensure they fully understand the terms of their service arrangements.

5768   We believe the Code is generally in line with our existing business practices and our approach to winning our customers' business every day, and we look forward to its implementation upon completion of this consultation.

5769   This concludes our presentation, and we would welcome any questions.

5770   THE CHAIRPERSON: Thank you both for that presentation.

5771   Commissioner Simpson will be asking you some questions to start off.

5772   COMMISSIONER SIMPSON: Good morning. I am again wanting to thank all of the providers and WSPs who have been very helpful in organizing their thoughts with respect to either tables or very specific language that applies to each section of the Code. It's making our job tremendously easy on that regard and it gives us more opportunity to understand some of the individual nuances and interpretations of customer policy of the carriers to date.

5773   I'm going to rely a lot on the written submission that came in, the Part 1, from earlier, and first off ask if there's any difference, substantial or nominal, that has occurred between your written submission and your statement today.

5774   MS MacDONALD: Well, our written submission does address a few points that, you know, since having reviewed the Commission's Code we -- you know, in revisiting it, we really framed our position based on what we've seen in the Commission's Code.

5775   So in that respect, I would say that we haven't really varied our position that significantly, but we do see some of the examples and some of the proposals put forward and we've modified them slightly.

5776   One example of that is while in our written submission we reference advertising clarity and we speak to, you know, the question of whether there needs to be something defined in the Code with regard to that, having seen now what was in the proposed Code, we absolutely agree with that and we take no issue with it.

5777   So that is one example.

5778   As well, you know, for the most part we do agree with the proposed Code, but the main area where I would say we continue to take issue -- so it's not a change from our position -- but really does have to do with just not overly prescribing in some cases, and particularly with regard to the proposals on notifications that are in the current proposed Code and also with regard to calculating the method of payout of subsidies on indefinite-term contracts.

5779   COMMISSIONER SIMPSON: Wonderful. And I presume the rest of the detail is just more precision to your thoughts. Okay.

5780   I'm going to start out with asking you a sort of a high-level question with respect to the generality of the Code in that you've stated that you agree with it in principle.

5781   There are areas where you're requesting more precision, but in generality, would you say that it's Eastlink's position that the Code should aim as high as possible to capture all of the intent of the provincial legislations or would you have an opinion that there are costs -- if we don't that there would be unmanageable costs in having to navigate through the individual provincial Codes?

5782   MS MacDONALD: So --

5783   COMMISSIONER SIMPSON: Which way do you go?

5784   MS MacDONALD: Okay. So to give you a bit of insight as to where we were coming from because in our written submission, we do actually speak to a preference that this be a streamlined so there's one national Code.

5785   We continue to think that makes sense today, but we can say with certainty that before this proceeding was announced and when we were faced with reviewing the various provincial Codes we worked very closely with the Nova Scotia government in relation to their proposed Code and we were in full support of it simply because the underlying principles that were being put forward, regardless of any Constitutional questions, those principles we accept and we really choose to abide by as a company.

5786   So we worked very positively with the government and we were in full support of it.

5787   In that respect, I would say that our intentions and our plans and our business plans are in line, for the most part, with what the provincial Codes will require. And when we heard of this proceeding and we started to review the notice, we felt it was a great opportunity to streamline that because in the process of reviewing the various provincial Codes we would arrive at, you know, seeing differences and trying to assess, well, what does that mean for our operations and do we do it in -- you know, in Newfoundland, for example, there's a requirement to provide a paper copy. In Nova Scotia, there's not.

5788   Then we have to grapple with the issue, well, what about customers who don't want to receive a paper copy. But we're in default of the provincial Code in Newfoundland if we don't provide the paper copy of the bill.

5789   So that would be an example of where we would have to assess, well, what, are we going to have a different system for Newfoundland.

5790   And so absolutely, I think that a national Code makes sense. And when we think about the purpose of this proceeding, it's an opportunity for all carriers to provide input, which we're getting today and through this week.

5791   And I think that, overall, it creates efficiencies in operation. And if we can create efficiencies in operations through one national Code, we can better focus our efforts elsewhere.

5792   So that's where we're coming from.

5793   We do think that if the Commission is intent on trying to manage both provincial and national Codes, there are going to be some challenges. And there are going to be conversations in the offices, well, what do we do here, how do we address this system, what is the best interpretation.

5794   And you know, there are issues that will come up and that will make it challenging, so clarity, I think, is really important to have an efficient process, to have a clear understanding among consumers everywhere and, really, to allow us to focus the business on moving forward from the Code and actually implementing some of what the Code is looking to do.

5795   MS HECKBERT: Yeah, I just wanted to add, it's not always a case of aiming for the highest standard and then just reaching for that. There may be cases where, as Nathalie said, it's ambiguous as to which is better. Is it better to force consumers to take paper contracts, is it better to give them the choice or, if there's slight variations between the Commission's Code and, say, various provincial Codes on notification requirements for changes to contracts, you only have to notify with material or you have to notify in all cases.

5796   So there may be cases where it's not a matter -- it's not something you can reach for a highest standard because a highest standard is subjective.

5797   So those are the cases where you think, operationally, having one federal Code makes sense.

5798   COMMISSIONER SIMPSON: So just to put a fine point on this, to take -- let's take a specific example.

5799   Nova Scotia has, in their legislation, what I believe is a rather unique view on termination. And how -- if our Code did not incorporate that and it was not an accepted practice in the other provinces, how do we deal with that?

5800   MS HECKBERT: That's actually a perfect example of what we're talking about because some regulators in Nova Scotia may see terminating consumer service at the end of a fixed-term contract as a consumer protection, whereas the federal Code -- or the Code we're developing here and other provinces may say, well, no, especially in cases where a consumer relies on that as their only means of communication to talk to their family or friends or whatever, terminating automatically is not consumer friendly.

5801   So that's exactly the type of subjective "Which is better?" question that really can only be resolved if there is one federal Code that would supersede the others, although I will say maybe there is room to work with Nova Scotia on that and certainly we support the Code, but I think that is a great example of where one federal Code is easiest.

5802   COMMISSIONER SIMPSON: The next area is to do with bundles. We haven't had a lot of conversation on this, but in your particular instance -- not to get into the competitive strategies, but bundles are important as they are comingled between wireline and wireless services and in your written submission you had said very categorically that you do not believe the Code should have any imposition on wireline services as they presently exist.

5803   But at the time you are arguing in favour of termination policies, for example, that -- or a suspension of service policy that reflects the wireline policy because it is understood by the consumer.

5804   So how does the consumer, if we are trying to help them understand that a phone is a phone regardless of whether it's wireline or wireless with respect to termination or cancellation or suspension of service, how do they understand how the bundles break apart?

5805   MS MacDONALD: I think with respect to the bundles, our position is when the question came forward in the Notice how should the Code apply to bundles, and we absolutely agree, because this is a Wireless Code, that wherever that wireless service is provided it would be provided in a bundle. No dispute about that.

5806   What we had said was, the provisions of the detailed Wireless Code should not then automatically apply to the other non-wireless services that are in that bundle, for various reasons. Operators may operate systems differently between the wireline side and that the wireless and although are fully equipped and prepared to deal with the Code and apply it to all wireless services wherever they may be provided, or however, it may present some problems and other difficulties with the operational systems on the wireline side.

5807   So that's really where we were coming from.

5808   COMMISSIONER SIMPSON: Do you think the language of the Code properly identifies this issue for the consumer and makes them aware of the fact that they have to understand the difference between those two services within a bundle and that, on the other hand, the providers have to be more explicit in their contracts and their marketing material when they market bundles which are subject to Code and which aren't?

5809   MS MacDONALD: I personally think that what is being proposed here will actually and should have that effect. This is the greatest opportunity to make sure that that's made clear to consumers. But because this titled "The Wireless Code", you know, consumers who are purchasing wireless services are in that situation, whereas we have learned, you know, throughout this proceeding it can be very complicated for consumers and the wireless technology, the devices, the different plans, they change so quickly that this -- this is definitely a focused area where consumers need that clarity.

5810   I think having the Code set out as a Wireless Code and it's part and parcel of the contract process will be the simplified contract form or the summary page. We believe actually that it should be as part of the contract and our version today that we are building out actually has the summary on the front page of the agreement as we speak.

5811   But we don't think that there is going to be any issue and, as well, the existing systems in place for the wireline side of the business, we obviously still strive to ensure that our customers are absolutely fully aware of their rights on the wireline side of the business as well, so there is no issue there.

5812   COMMISSIONER SIMPSON: Okay.

5813   MS HECKBERT: Yes. I would say looking at the same issue from the other side, the reason that we thought it made sense to apply the DISCO part of the Deposit and Disconnection Code was specifically to address that, where maybe you have wireline phone service in a bundle and you already have a certain expectation about when that phone service can be disconnected, this was to bring wireless in line with that rather than trying to bring all the other services in line with wireless.

5814   And then a lot of the other stuff in the Code would not be relevant for wireline. For example, you don't get devices the same way you get them for wireless, so changes to managing earlier termination fees and things like that. It's more that this Code would have additional provisions that only apply to wireless, but we align them with wireline where possible.

5815   COMMISSIONER SIMPSON: Excellent.

5816   Getting into your written submission, previous submission, could you clarify something for me?

5817   In the language that was used in the submission -- and it's in a few areas, but you make reference to indefinite term contracts in a way that is not consistent with other submissions. Do you look at indefinite term contracts as simply what happens when a fixed term contract ends and it reverts to a month-to-month or do you have a plan in mind that allows someone to go month-to-month from the beginning?

5818   MS HECKBERT: I think an indefinite term contract in our mind would be any contracts of any type that is not under a fixed term.

5819   COMMISSIONER SIMPSON: Okay.

5820   MS HECKBERT: So whether that is at the end of a fixed term or starting out from scratch month-to-month, whatever it is.

5821   COMMISSIONER SIMPSON: So if I jump into a month-to-month --

5822   MS HECKBERT: I'm sorry, I should say any post-paid.

5823   COMMISSIONER SIMPSON: Oh, okay.

5824   So if I jump into a month-to-month contract at the outset -- and again, I'm trying to stay away from marketing here to respect your request -- would you have a plan that's month-to-month from the outset that would involve the subsidized handset?

5825   MS MacDONALD: I guess it is one of those questions around getting into the details of what we may be providing and making available in the market this week.

5826   COMMISSIONER SIMPSON: Okay. Okay.

5827   MS MacDONALD: But, you know, certainly I can speak to our wireline side today and we don't tie our customers in to any contracts. In fact, if they seek to terminate, we don't hold them to a 30-day period where they are paying for 30 days even though they didn't receive the service.

5828   So we fully support that if you are not offering a fixed term contract that customer can terminate at any time. So in the wireless context we support the principles of, you know, establishing a mechanism for pay out of a subsidy, but we do not support imposing fees beyond the date of termination.

5829   COMMISSIONER SIMPSON: So the calculation of the balance owing on the subsidized set would simply be retroactive to how many months had already been paid as opposed to how many months there are to be paid.

5830   MS MacDONALD: Yes. And that is= in the case of a fixed term contract --

5831   COMMISSIONER SIMPSON: Yes.

5832   MS MacDONALD: -- we think that calculation based on the number of months makes sense.

5833   With regard to an indefinite, while we can work within the framework of the options that were put forward in the Draft Code, we believe that there should be opportunities for competitors to consider innovative other offers as well.

5834   So that is where we would say in an indefinite term contract it may not be the right way to go to prescribed fixed term calculations and hence putting that particular contract into more of a fixed term definition.

5835   COMMISSIONER SIMPSON: Thank you.

5836   Do you have any views with respect to the testimony we have had so far regarding what happens at the end of a fixed term contract specifically with the continuation, the practice of continuing to bill the customer for an amount that is equivalent to the subsidy amount on that monthly basis unless the customer specifically asks to have that charge removed.

5837   That is testimony we have heard and I'm wondering if you think the Code needs to deal with that.

5838   MS MacDONALD: Well, in our view, first of all on the topic of when, say, a fixed term contract is coming to termination, when you look at the draft proposed Code in all cases, whether it's a longer term fixed term contract, whether it is a month-to-month, the proposal seems to be that it would just go into a month-to-month term. So in many ways by giving the notice to the customer they are just migrating into the next month.

5839   Whether or not they should continue to be billed for a subsidy amount, I would say that depends on do they still owe for the subsidy, if one presumes that their subsidy has been paid off. And so I think it really goes to the clarity of the contract, what was the subsidy, how was it calculated, what is the customer's obligation. And if there is a subsidy component that is defined and it has not been paid out, then it may make sense that the customer is still responsible for it, but ultimately I would say that, you know, the customer would move back into just the month-to-month term and they can make that decision in very short order how they want to continue, whether it be renew or choose another provider.

5840   I don't know if that answered your question.

5841   MS HECKBERT: And as for the rate, this goes back to what we said earlier, that what we would like to see is flexibility for carriers to offer different ways of handling it.

5842   It seems the idea that the rate would step down once the device is paid off assumes a mechanism or an approach whereby that subsidy is treated as a loan, something more in line with what T-Mobile is doing now.

5843   Certainly we think that should be an option that carriers can offer. It seems that I think TELUS and Bell are providing a SIM-only plan, so that may be something that picks up popularity in the market and that can be looked at and carriers should have the flexibility to do so.

5844   But based on the fact that I believe both TELUS and Rogers said they couldn't calculate what early termination fees their existing customer base would be able to provide, it seems that the historical approach -- we are new to this market -- but it seems like the historical approach may not have been to consider those as like loans as much as maybe a cost of acquiring a customer or an incentive.

5845   What we would like to see is, we will always -- Eastlink has always committed to offering the most consumer-friendly -- what consumers want, we want to provide it, but it's about giving carriers the flexibility to treat the device subsidy in different ways and then let consumers decide what's makes sense for them, the key always being to ensure that how it will be handled is clearly explained to the consumer at the time or before they actually sign the agreement or purchase a device.

5846   THE CHAIRPERSON: Yes. I asked that question because in your written submission you had said that there is great benefit to the consumer in having standardized language in the Code, but you had said that:

"However, general principles should be consistent across the industry."

5847   It was those "general principles" that that question came from.

5848   Because the Code itself is trying to move the needle to the middle so that there is a healthy relationship and understanding between the provider and the consumer, understanding that there are obligations and expectations on both sides and the issue that we wrestle with all the time, which is how much do we have to be prescriptive to the industry versus the industry practicing some form of self-control or self-regulation. It seems to me that if something is financially beneficial and not specified otherwise in regulation or this Code of Conduct it becomes the standard within the industry, and, you know, I found that concerning and that was an area of specific concern that I mentioned.

5849   Talking about enforcement, you have taken the tack that the CCTS is the appropriate agency to enforce the Code and I want to ask you, did you mean enforcement as opposed to administration?

5850   MS MacDONALD: Yes. I think perhaps really we intended to mean that. What the CCTS provides today on the wireline side, it could also do on the wireless side in relation to the Code. So to answer your question, yes, we agree that it's really to apply the Code and to administer it -- the issues on the Code.

5851   MS HECKBERT: Yes, but ultimately the Commission would still perform its role for the wireless carriers.

5852   MS MacDONALD: Yes.

5853   MS HECKBERT: It's more that the CCTS would just continue doing what they do today.

5854   COMMISSIONER SIMPSON: Well, there was some discussion yesterday about using the analogy of occupying fields and it was the position of some carriers that enforcement should rest squarely with the Commission and administration with the CCTS, and I was trying to understand where the line is drawn in your eyes.

5855   MS MacDONALD: And I think with regard to that -- so I noted earlier in the proceedings there as some suggestions, for example, where groups of people could bring complaints, and, you know, I think the role of the CCTS is to be familiar obviously with the Code and address complaints with relation to compliance with the Code.

5856   In terms of policy-making and if there's a systemic problem that is not specified in the Code, I think that's a role for the CRTC to address, whether it be on a case-by-case basis or in a future review.

5857   COMMISSIONER SIMPSON: Okay. I'm just gathering my thoughts.

5858   Let's talk about consumer tools now. It may be buried in your submissions, but my mind is not able to reach back into what I've read right now.

5859   Do you have a view as to when an appropriate timeframe would be to introduce monitoring tools and also what would those tools look like online, on board device, both?

5860   MS MacDONALD: And so I'll start and then if Denise can add some further detail, that would be fine.

5861   So basically, in our original submission we did speak to a very fast-paced implementation period, but we note that was based on the Code that we had proposed at the time, which, in our view, was very consistent with the existing provincial legislation.

5862   And also, in relation to monitoring tools, many carriers, most carriers today have methods already available for consumers to manage their usage, monitor their usage and that sort of thing.

5863   So in light of that, absolutely, we felt that it would be reasonable for a very fast implementation.

5864   With the new proposed Code there are some proposals that go further and propose a more prescribed monitoring approach, and if that is the way the Commission does go we will have some challenges because, you know, we have just built our processes, built our systems, and requiring more detailed or rigorous monitoring as prescribed would be something that would require a significantly longer implementation period.

5865   MS HECKBERT: Yes, it's really a sliding scale because if -- what we proposed was we support the poll methods where -- you know, either apps or online tools -- and we further supported push notification because we do think it's helpful for consumers, but we did not suggest any mandated thresholds and we would support the poll methods whereby we explain to consumers, if you are doing certain types of roaming it may not be reflected right away, please be aware and pay extra attention to how much voice or SMS you're using while you're roaming, things like that. That's when we expected that it could be implemented more quickly.

5866   If the push notification thresholds are mandated at certain levels, that will require certain system changes. If the cap is imposed and we have to, in some sort of real-time way, cut off service, then again that extends the time.

5867   So it really depends how it ends up, but based on what we proposed we think it could be relatively quick.

5868   COMMISSIONER SIMPSON: Taking full advantage of your relative newness into this business, I'm curious as to what you've learned in how roaming charges are billed by an international WSP, because we've heard so many times from incumbent WSPs that a lot of these charges come as a complete surprise not only to the customer but to them.

5869   I'm curious what you've learned and what an agreement looks like between yourself and an international roaming carrier in terms of disclosure and in terms of complying with some -- not only disclosure but in terms of the financial arrangement.

5870   Do you feel that you have a responsibility if you have an agreement with that provider to take more responsibility for the conduct or the practice of that WSP?

5871   MS MacDONALD: Well, in regard to conduct and that sort of thing, clearly, those agreements would establish -- include provisions that would address behaviour of the users and authentication and those sorts of issues and as well as illegal or inappropriate activity that could harm the network. So that's the typical thing that you would see and expect in any Canadian arrangement as well.

5872   But, you know, certainly, when the carriers earlier this week were speaking about some of the issues around roaming, I think it is a valid statement that there may be some challenges in terms of time delay for getting real-time access to bills and that sort of thing.

5873   Now, certainly, you know, roaming has been around for a long time and there's literally hundreds of providers and so I would be inclined to say that, you know, the agreements, although probably fairly consistent in terms of the operational aspects, I'm not sure if, you know, from one international provider to another there may be some variations in their systems and how to provision the detailed accounting records to make it through to the bill.

5874   But I would say, you know, absolutely it may present some of its own challenges in getting real-time access to data to sort of have that cut-off if the Commission is looking at prescribing something like that.

5875   COMMISSIONER SIMPSON: Now, let me ask it another way.

5876   As you put together your interconnection agreements for provision of service beyond your service area, you will have pretty explicit knowledge about where your phone will work and where it won't.

5877   Do you think the Code needs to deal with domestic WSPs providing on their Web site, for example, easy-to-get information as to what the customer can expect when they travel?

5878   MS MacDONALD: I think absolutely that the customers need to understand once they leave their carrier's network that they're going to be roaming and I think the systems are already in place to provide for that, you know, through -- everyone is familiar with -- you move into a new territory and you get the pop-up message that you're roaming now and then it includes the rates and the customers are aware of that.

5879   Certainly, customers need to understand when they're buying the product what coverage they have because they need to know that in advance so they know that they're not going to be roaming everywhere they use the product every day.

5880   Plus there would be some limitations as well in that, you know, carriers should be providing their services primarily in their network.

5881   So I think it really does go to yes, consumers do need to know. It needs to be clear to them. They need to understand where the network limits are and also there's various mechanisms in place now to let them know when they have passed the network boundaries.

5882   MS HECKBERT: Yes. And certainly, I can say EastLink has undertaken a great amount of effort to try to make our communications upfront and on our Web site as clear as possible about what happens internationally, domestically and within North America so that consumers know what to expect and we use all the other tools.

5883   Does it need to be mandated under this Code? I would say if it was going to be included in the Code, it wouldn't need to be anything more specific than carriers should make clear to consumers or make information available to consumers about international roaming.

5884   Anything more prescriptive than that I'm not sure is necessary, but, as I said, we're more than fully compliant with things like that, so we don't feel strongly about it.

5885   COMMISSIONER SIMPSON: Thank you. Nice segue back into another question on compliance.

5886   Going back to the CCTS and your position on enforcement, do you feel that the penalties that are currently in place, the tools they have to work with, that they're sufficient to give us as a Commission a warm fuzzy feeling that it will keep the members in check with respect to compliance?

5887   MS MacDONALD: I do think so. We're dealing with -- the CCTS is dealing with complaints on an individual basis and so I think, you know, certainly in the experience on the wireline side I don't want to see anything come through the CCTS and we want to get those resolved as soon as possible for all kinds of reasons, including the very basic one that we have a customer who hasn't been happy and they've gone to a third party to try to get satisfied.

5888   So I think that in and of itself is quite a strong reason, you know, just the existence of the CCTS itself and knowing that a customer can go there. We don't want our customers going there.

5889   But aside from that, because the cases are dealt with on an individual basis, I think the mechanisms and the remedies are sufficient to address issues that come up.

5890   COMMISSIONER SIMPSON: In questioning of other interveners I'm led to believe that they think that it's possible to segregate customer issues that are of a financial nature from those of a service nature or a dissatisfaction with equipment or service so that the CCTS could see more readily when there's a problem that's instigated more from consumer financial failure to perform versus the carrier.

5891   Now, with that in mind, do you think it's something that should be considered that there be some name-and-shame type of mechanism so that those non-financial-related service issues that we see all the time because of our activity in monitoring consumer complaints becomes a little more public for the consumer to help aid them in their decision as to a carrier?

5892   MS MacDONALD: I'm not entirely clear on, like, what an example -- like, if you would be referring to financially related or the service-related issues being public, but what I will say is, I don't generally think that that approach is necessary or that it may be the right approach in terms of complaints.

5893   I say that mainly because there are so many different types of issues, and they really are on a case-by-case basis.

5894   What may look like the same case coming to the CCTS on what sounds like the same issue is not always the case. And to make an assumption that that same issue is evident and deserves to be made public because there is a more systemic problem, I think that could be dangerous. Maybe "dangerous" isn't the best word, but I do think that there are so many unique and different circumstances that sometimes apply to a given case that explain why the customer has had that experience.

5895   That doesn't mean it shouldn't be addressed. It absolutely should be, but I don't know if it's as easy to categorize some of those individual complaints, and I think that the proper forum for that is -- if there appears in the CCTS reporting to be a problem that looks like it is a consistent problem, then maybe there is room for the CRTC to say: Hey, what's happening here? Is there a pattern? Is something happening?

5896   And maybe that's where it should be investigated.

5897   COMMISSIONER SIMPSON: I am asking it from the viewpoint that it is part of consumer education, which is what we are trying to ascertain here.

5898   I gather that you are saying, very delicately, that it would not be a good idea to have consumer information on carriers that give some kind of metric as to the difficulties they have had. So I gather that's a no, it's not a good idea.

5899   MS MacDONALD: In terms of consumer education, I know that the CCTS does put out an annual report, which sort of has more metrics.

5900   But, certainly, if the CCTS, for example, felt that there were issues, or there were example scenarios where there may be a problem in how it was addressed, I don't see an issue with that.

5901   I think that a little bit further detail and consideration of the exact nature of that disclosure would probably have to be considered, but I certainly think that anything that makes consumers more aware of an issue, if presented in a way that it actually does provide that information to consumers, certainly could help the industry.

5902   I just think that we need to be careful to really understand what would be proposed, and have an opportunity to think that through.

5903   COMMISSIONER SIMPSON: I just have the niggling feeling that $5,000 is not a lot of money to a major carrier, and that's where I was coming from.

5904   My last few questions have to do with cancellations or upgrades to fixed-term contracts, and I am wondering if I could get your views here.

5905   They are, obviously, views going forward, and if there is an area that I get into that is sensitive, just let me know, and maybe you could think about putting your views in confidence to us in another form.

5906   What other circumstances, other than the expiry of a fixed-term contract, could trigger a contract renewal?

5907   Would, for example, a handset upgrade, in your mind, trigger a renewal?

5908   MS MacDONALD: I think that does, in fact, happen today. We have heard some carriers speaking to that, so I know that it does, in fact, happen in the market today.

5909   I guess I would say that we also have heard from some consumers, and while some have very strong positions about certain elements of the longer term fixed-term contracts, there are others who -- one of the presenters yesterday said that he enjoys and relies on -- maybe not enjoys, but relies on that three-year term in relation to the fact that he is always going to have a phone.

5910   So I think a little bit of that may go to consumer choice, and I think that if the market is providing those opportunities where it would result in a new device, and because most of -- in this proceeding, everything that relates to a fixed-term contract now appears to be applicable because of the device subsidy, and realistically, when we talk about the device subsidy and how that should be paid out, it almost makes the question of a fixed-term contract moot, because, really, it is tied to how long the subsidy is paid out.

5911   And if a consumer has an option that they wish to choose, and it's available in the market, that would say, "Before that term expires I want to renew and make a choice to upgrade my system," or my phone -- my device -- then I do think that there should be an opportunity for a customer to be able to do that.

5912   MS HECKBERT: The key is always just to make sure that it is fully made clear to the consumer at the time, "If you make this change, this is a renewal," and then made clear, "This is what you would now owe to terminate the contract, if you wanted to terminate tomorrow," and the related unlocking policies.

5913   As long as those provisions that are included in the code that we support are made clear at the time, then, as Natalie said, it's not as much of a concern now, given the additional protections.

5914   COMMISSIONER SIMPSON: Are there any other -- and, again, this is a go-forward question. Are there any other instances where you think the cancellation of a fixed-term contract is justifiable?

5915   I am wondering if there are any specific circumstances that you can think of where the cancellation of a contract should be permitted without a penalty or a cancellation fee.

5916   MS MacDONALD: Cancellation by the consumer?

5917   COMMISSIONER SIMPSON: Yes.

5918   MS MacDONALD: We have heard some of the stories -- you know, experiences that people have presented over the last couple of days, and ultimately I would say that if you have a fixed-term contract and you are expecting to get certain services under that, and you have contracted for it, if there has been a material change to what you bargained for, then they should not have to stay in the contract.

5919   I think that's where it really is: Is the service that this customer is getting what they bargained for.

5920   Now, if the contract clearly sets out at the beginning: These are the terms -- and a good example of what may change in a contract is roaming rates, international roaming rates. So the contract may say, "Here are your terms of contract. Roaming rates may be subject to change," because, obviously, that is out of the power of the provider.

5921   In those cases, those things can be changes to the contract, but ultimately, I think, it is all about what the customer bargained for.

5922   There was an example provided earlier today by one of the presenters with regards to a Shaw service that changed, and the individual really relied on that service.

5923   Now, as she described, it ended up being resolved, but certainly, if a customer is presenting that they need the service and they are relying on a certain element of it, and that service is taken away, then that customer should have the right to terminate.

5924   But I think the question of termination will be made very clear when this code comes into place, because it really does provide that everyone has the right to terminate.

5925   No one should be tied to their contract. It really is about the subsidy, the device subsidy, and the arrangement for the payout of that subsidy.

5926   That is what I have been seeing, anyway, through the proceeding. Although we are talking about terms, all of the terms have a payout based on the payout of the subsidy, and customers can make that choice at any time, based on the mechanism provided for the payout of the subsidy.

5927   COMMISSIONER SIMPSON: This may be my last question.

5928   As a follow-on to what we have just been talking about, if, through loss or theft, a customer loses a very expensive Smartphone and, because of financial considerations, has to downgrade the replacement phone, because they still have an amount owing on the original one, is it reasonable or unreasonable for them to ask for a downgrade in the service, if that service was geared around Smartphone usage and they are in a situation where they are not going to be availing themselves of all of the benefits of the previous package?

5929   And would that be a new contract or would it be a downgrade of an existing contract?

5930   MS MacDONALD: I don't see why it would make sense for a consumer to be tied to a high-paying contract if they aren't able to use the service.

5931   But I think that is also where the code does propose a mechanism. There is a subsidy, and there is a calculation for that customer, and under that arrangement the customer could actually entirely terminate the service and deal with the issues related to the phone separately.

5932   MS HECKBERT: I even think, in that case, there almost is a pseudo-automatic termination. If you lose your device, you are going to have to pay the outstanding balance. It is almost as if you are ending that contract in the eyes of the carrier, I would think.

5933   So they would be fully entitled to have a new device, a different plan, and start from scratch, if they wanted to. If they wanted it to continue, I guess -- I am not exactly sure how each carrier would handle that.

5934   But since you would have a different device, and potentially a downgraded device, you may not even have to sign a contract at that point. You may want a renewal.

5935   COMMISSIONER SIMPSON: The figure that is sticking in my mind right now is that about 430,000 phones a year are going missing, through theft, through loss, and that is a large universe of phones, and it's a question that I was just asking if the code should consider.

5936   I think, Mr. Chair, that I am going to relinquish the rest of my time to other Commissioners' questions. Thank you.

5937   THE CHAIRPERSON: I will see afterwards if other Commissioners have questions, but there are a few specific ones that I wouldn't mind dealing with right now, in about six areas.

5938   In paragraph 3 of your presentation today you talk about, on the wireline side of your business, that you don't do contracts. You don't do termination fees, 30-day notice.

5939   Now, a large segment of the wireless market has developed, for whatever reason. It seems to be that a large part of the market has now gotten term contracts, termination fees, all of this.

5940   Then you go on to say that it's difficult to compete.

5941   I understand it is difficult, but is it, hypothetically, possible that somebody enters the marketplace with a completely different model?

5942   You are just launching, since you got the spectrum. Thinking about this, is it possible to have a viable business, hypothetically -- not necessarily you -- for a potential entrant that would be largely based on a business model that is not term contract, but is based on that philosophy that you had on your wireline side?

5943   MS MacDONALD: I think it is possible.

5944   And when we say that it is difficult to compete, I think what we are saying is that the existing mechanisms in place make it harder for a customer to switch, and that sort of thing.

5945   But, certainly, we think that it is possible to provide a service in the market and compete without tying customers to contracts, long-term contracts.

5946   MS MacDONALD: Yeah. Yeah. It's when there are those added protections in place on the wireline for the other carriers that have, you know, with fibre to the home or whatever, have three-year contracts and to maintain their customer bases, and then our cable and internet business does not, it's -- it requires more effort on a daily basis for us to win that business every single day, since there's no penalty for switching. And but we -- yeah, we absolutely think it's going to be difficult but -- or it could be difficult, but we absolutely think it's possible and consumer friendly to do so the same -- follow the same principles for wireless.

5947   MS HECKBERT: And just about the comment "win the business every day", that is really one of our core philosophies, it's exceptional customer service. And without the -- you know, having the customer tied into the contract, it's about you need to make sure that every day that that customer doesn't want to leave. Because they have the right to leave and we've given them the right to leave at any given day with their services, so ... So that's really what that is about.

5948   THE CHAIRPERSON: I'm trying not to ask the question I'm really wanting to ask. I guess I'm going to have to wait to see your launches and perhaps you could update us exactly on what you're proposing as a result of your launch on -- by the 22nd of February?

5949   MS HECKBERT: Sure. Definitely.

5950   MS MacDONALD: Yeah. The timing is kind of unfortunate because we're actually really excited about our offering, what we're going to be launching on Friday, so ...

5951   THE CHAIRPERSON: Yeah, but I'm respectful of not -- you know, just because we happened to schedule a hearing this particular week, that I don't want to get in the marketplace and influence your own strategies.

5952   Page 8 -- paragraph 8 you talk about these termination fees and I think this builds on the point you were saying that this 50 dollar -- up to $50 could be another, especially as an entrant into this particular marketplace, it provides a certain barrier I think I'm hearing you say.

5953   MS HECKBERT: Yes. So what our view is on that, we note that the proposed code includes it as an automatic right. So that becomes one of the termination charges. And we're simply saying that because the termination calculation is clearly about paying out the device subsidy, this is an additional charge for terminating. And having it in the code as an automatic charge we don't necessarily think makes sense unless there's a justification for the extra costs that needed to be incurred.

5954   THE CHAIRPERSON: That's actually where I want to bring you. In your view are there actually hard costs associated for a wireless carrier to terminate?

5955   MS HECKBERT: I think as with anything --

5956   THE CHAIRPERSON: There's some --

5957   MS HECKBERT: -- there's -- as with any step in a process, whether it be to initiate or to terminate service, there's obviously, you know, some component of cost, but I guess the point is we would say that -- oftentimes one might say, well, if there's an additional incentive or something, that that 50 dollar fee may make sense. But we think if it's just a matter of terminating the service, that there's really no payout based on additional incentive, it shouldn't be charged.

5958   MS MacDONALD: Well, and especially --

5959   THE CHAIRPERSON: And those -- and if there are costs, I take it you're saying they should be blended into the service charge, the overall service charge that the service provider --

5960   MS HECKBERT: Yes, when our customers on the wireline side, for example, terminate service, we don't charge them a termination fee. They terminate service and we give them back any pre-paid amounts that they didn't use for the balance of the month.

5961   THE CHAIRPERSON: Right.

5962   MS MacDONALD: Well, and especially in this case where this 50 dollar fee applies only in the case of fixed term contracts and only in the case where no device subsidy was provided. And we fail to see any additional costs that would only be incurred in that circumstance compared to, say, indefinite contracts or fixed term with a device subsidy. So that's where we just weren't really sure that it was necessary.

5963   THE CHAIRPERSON: Right. I bring you to paragraph 9 of your submission -- your presentation today. I believe it -- you might have heard me ask some questions of other service providers about, you know, assuming a three-year contract, what happens in the 37th month. Is that what you're trying to address here, that we should stay away from that for some reason because it -- you -- because in a sense at the -- when that three-year contract ends, according to the working document, it rolls into a monthly. So in a sense it becomes indeterminate, does it not?

5964   MS MacDONALD: Well, what we were more trying to address is, say, the monthly contract. Right now one of the options for calculating early termination fees has it broken out by term contracts, fixed term contracts and monthly contracts. And we're saying for a monthly contract including cases where right from day one you're not subscribing to any fixed term, for example, there are device subsidy reduction mechanisms that are tied more to a percentage of your monthly bill rather than a set period of time, we're saying in those cases it may be too prescriptive to then apply a time period to those types of device subsidy reduction mechanisms. Because then essentially all device subsidy reduction mechanisms whether -- that are in the market today or may be created in the future would have to be tied to a straight line declining balance time-based approach, which we want to make clear we are -- we're more than compliant with and we've got a consumer-friendly approach that we're not concerned about this provision as it affects us today, but we just -- we're concerned that it is potentially limiting to future non-time-based approaches.

5965   THE CHAIRPERSON: Okay. That would even be better for consumers depending on how the market evolves.

5966   MS MacDONALD: Exactly.

5967   MS HECKBERT: Exactly.

5968   THE CHAIRPERSON: All right. You haven't done your launch yet, so you may have heard the discussion I've had precisely on that, what happens in the 37th month, and service providers -- Rogers did not yet have something based on a SIMs card option. You might be working on something like that. I'm not asking you to tell me now whether or not, but could you tell me what your approach would be to -- if indeed -- assuming you're going to go towards long-term, let's say, three-year contracts, all hypothetical because I don't want -- I'm trying to protect your marketing, assuming you are going down that road, what will you do in terms of that blended -- on the three-year contract there's an element that's the service and then there's an element that's the subsidy. What kind of push marketing will you do on that 37th month? Will you be intending to reduce the fee because the subsidy, in a sense, has been paid out, arguably, according to some of the consumers that have commented on this, what will your -- what will your practice be on the 37th month?

5969   MS HECKBERT: So what we can do is we can provide for the 22nd --

5970   THE CHAIRPERSON: Yes.

5971   MS HECKBERT: -- more details with regard to our plans and I think it will address -- it will definitely address that question.

5972   THE CHAIRPERSON: Okay. It's interesting --

5973   MS HECKBERT: Okay.

5974   THE CHAIRPERSON: -- hypothetically asking questions here, but ...

5975   All right. The implementation. You talked about certain costs associated with operational and updating technical systems. Would it be possible for you to provide by the 22nd, like I've asked others, based on the current working document, which elements of the code could be implemented immediately --

5976   MS HECKBERT: Yes.

5977   THE CHAIRPERSON: -- assuming the current one, which would have to be delayed for the sorts of reasons you mentioned, operational, technical, and explain those. And as well for those that would have to be delayed, how long would that practical delay have to occur assuming the current draft?

5978   MS HECKBERT: Yes, yeah.

5979   THE CHAIRPERSON: Okay? Is that --

5980   MS HECKBERT: No, that's fine. Yes, we can do that.

5981   THE CHAIRPERSON: Second to last issue and then I'll ask my colleagues if they have any questions. It's been suggested in the -- for the personal information summaries that for -- that the total -- for fixed-term contracts that the total cost of that fixed-term contract be part of the personal information summary. A bit like, you know, for three years this is the total amount you'll be paying, consumer. Do you have views on that?

5982   MS HECKBERT: Well, I don't know that it's necessary and I don't know in all circumstances how easy it would be to do. In the sense that depending, I guess, on the nature of the contract and, you know, where there are some elements of fixed pricing plus usage, I think it actually may create scenarios where you're running into disputes because a customer has a piece of paper that says one date but the terms of the contract are clearly indicating that there's usage-based costs as well. So that will be a scenario that I think could happen and it could create a challenge for people at the frontline dealing with a customer and filling out those forms to try to, you know, set out the terms. Now, obviously one could say, well, if there's a definitive rate and then they qualify that number based on the variations, but I don't really think that helps either. So I think really the key is to ensure that the summary sets out the terms, the rates applicable, where there are usage-based rates, what those are, and provide the appropriate notices pursuant to the code that's ultimately established if there should be any permitted changes to those rates. And I think that provides a customer with a better service.

5983   THE CHAIRPERSON: Okay. My last question. You're, in a sense, a new entrant to this particular sector and you -- I believe you were in the room this morning when we heard groups representing Canadians with disabilities. When you were trying to set up your systems, build the model, think about Canadians with disabilities, did you take that into consideration --

5984   MS HECKBERT: Absolutely.

5985   THE CHAIRPERSON: -- and could you give me more about that, and how you did it and what offerings in fact you created and sorts of consultations you had.

5986   MS HECKBERT: Okay. Well, absolutely we did take that into consideration. I can say that, you know, we were absolutely fully compliant as well with the Commission's 2009 decision with regard to that. And in fact, we will say that, when presented in the market on Friday, we've gone a step further than that decision in terms of some of the options that are available. So I can let Denise, if there's anything further, to speak to that.

5987   But during the presentation this morning, I will say that, you know, I was going through our own Web site and, you know, looking up. And on the very front page, the homepage of our Web site at the bottom there are links and there's one specific to accessibility. And at every page the customer goes to, it includes that information. So just to clarify as well that we've ensured as well that we have very clear information available to consumers on our Web site. And that will be updated over the next of days to also provide some very specific information with regard to the wireless service as well.

5988   MS MacDONALD: Yes. We can't talk too much about our device lineup obviously, but we can say that our devices do have the features that have been identified, as far as we know and we've read in their various filings or communications, for those types of groups as being helpful. So we think our device line-up is solid.

5989   And, as Natalie mentioned, we make sure our Web site is easily accessible and links that are on every single -- the bottom of every single web page to information on accessibility services; a live chat link that's on the side of every single web page of our site, and that we have implemented certain measures that we were not obligated to implement but that we think are important.

5990   THE CHAIRPERSON: The Media Access Canada group was also mentioning the à la carte approach. Obviously, somebody with a visual disability doesn't necessarily want a service with text. Similarly, somebody with an auditory disability, not particularly interested in voice.

5991   Were those -- did you offer programs to adapt to those sub-sectors in the market when you were setting up your new business?

5992   MS HECKBERT: We can provide maybe more details next week, but what I'll say for now is I think our plans that we will be bringing to market will be -- they are so consumer-friendly that I think they will address a lot of those concerns but we'll provide more details.

Undertaking

5993   THE CHAIRPERSON: Okay. I appreciate that it's difficult for you to get into that, but it would be helpful just to give us a microcosm of what could be a practice.

5994   Thank you.

5995   Yes, Commissioner Duncan, please.

5996   COMMISSIONER DUNCAN: Good morning. I have a couple of questions.

5997   And I believe in a local paper recently they talked about Eastlink launching their wireless in Nova Scotia. Are you able to say if it's broader than that or is it just Nova Scotia?

5998   MS MacDONALD: Well, we can say that we are launching and our initial markets are in the Maritimes. And of course, that is where Matthew is today, so with the local media as well.

5999   COMMISSIONER DUNCAN: Okay. Thank you.

6000   In paragraph 10 you refer to the usage monitoring tools. You say that you support them but you don't think in the next paragraph they should be defined in the Code.

6001   But I'm wondering, would you agree that we could define minimums and you could always exceed that?

6002   MS HECKBERT: Well, what we meant is the threshold. I don't -- like, I don't know that defining minimum thresholds would be any more beneficial than defining the thresholds themselves just because it varies by technical capability. But more importantly, it varies by type of service.

6003   You may want notifications at different thresholds for data, as you may want for text messaging or voice, just for consumers to manage their own usage.

6004   So what we were just saying is we like the idea of the push notifications but carriers should have -- as long as that's in the Code saying that their push notifications are specifically for data, as the other carriers mentioned yesterday -- as long as that's included then carriers can set the thresholds based on their own consumer feedback based on the technical limitations of the system and that that could be adjusted based on service type.

6005   COMMISSIONER DUNCAN: So I guess -- I understand. So what you're saying is the market is competitive. If somebody is not happy with the threshold at X they can go to Y especially with the disconnection terms as were discussed?

6006   MS MacDONALD: I agree with that.

6007   Also, we like to think that -- you know, we take a lot of time to know our customers. What we may experience from our customers in a market may result in different requests in terms of how we fill those needs for notification.

6008   And I would assume other carriers would have similar wishes as well because they may have a different customer experience.

6009   COMMISSIONER DUNCAN: Just moving on then to paragraph 12 where you talk about the cap, and you think that there may be instances where $50 is not adequate. So what would be your approach, absolutely no cap and just rely on the other notices?

6010   MS HECKBERT: Yeah, we feel basically that a cap is just not necessary or necessarily the best approach for managing bill shock. Just because consumers may occasionally -- I, for example, occasionally go a certain amount over my plan. I know I'm going to do it. It happens. But I only have a cell phone. It's my only means of communication.

6011   So capping at any level may not be appropriate but also may not be necessary.

6012   In our opinion it's not necessary because you have the notifications which we fully support so that they know when they are approaching the limit. You have the online tools to track usage. Especially now with the added protections of ability to change your contract or switch providers those extra protections -- and with prepaid, of course, there is so many options in the market to protect those consumers.

6013   And furthermore, the protections around data roaming where you can call in and have it blocked where you don't to it automatically or some carriers default it to block where you have to actively call in and buy specific amounts of data.

6014   There is a lot of protections where it's just not necessary.

6015   MS MacDONALD: And I think the learning from this week as well, and through this whole process is, where there are issues all of these mechanisms are in place. It seems to be a great part of the challenge is in the communication and clear understanding.

6016   I think that we would hope the outcome of this is a very clear Code and also that carriers will continue to work toward constant improvement and simplifying and making clear the terms and conditions that establish what those rates are so that there is no shock as well.

6017   So aside from the mechanisms there needs to be for sure -- carriers need to be responsible to provide clear terms for consumers.

6018   COMMISSIONER DUNCAN: Just two other questions then. Thank you for all that.

6019   And I apologize if it was already asked, but with respect to the Personal Information Sheet, TELUS had suggested that they would like to have it incorporated in the contract but be at the top of the contract, as opposed to a separate document.

6020   MS HECKBERT: Yeah, we were -- we were kind of surprised when we read the draft Code, because I haven't really seen other carriers' contracts, but that is Eastlink's first page of our contract with a few minor modifications. It already is the first page. So we think that makes sense.

6021   But we're fine either way if you want it to be a separate document. We can accommodate that. But it certainly already is something that we have right --

6022   COMMISSIONER DUNCAN: And it works well for you now, then?

6023   MS HECKBERT: We'll find out.

6024   COMMISSIONER DUNCAN: Right, true.

6025   So just one other question. I know Commissioner Simpson talked to you about this, but with respect to in TELUS' document, and I'm sure that you read it, they have what they call great concern with the rule enacted in the Nova Scotia legislation, soon to be proclaimed that the service will be automatically cancelled if the customer doesn't respond.

6026   And I believe that you talked to Commissioner Simpson and -- as long as it's clear, but specifically then in Nova Scotia if this is passed, you would cancel the contract?

6027   MS HECKBERT: Well, in my discussions with the province about that provision, it's not -- I think the concern of the other carriers, and I certainly understand it, is that this is not captured anywhere in the legislation or the draft regulations we've seen.

6028   But certainly, my discussions with the regulators there is that as long as in the contract that the consumer signs at the time of purchase they stipulate when this contract is over it will go month to month, that the province would consider that compliant.

6029   COMMISSIONER DUNCAN: Okay.

6030   MS HECKBERT: So it's not captured in the regulations which I think is the carriers' concerns. But that is something that the province has said would be considered compliant.

6031   COMMISSIONER DUNCAN: So then can we assume then, because you did indicate that you were working with the Nova Scotia Government on the development of this, that you would be going back and asking for that clarification?

6032   MS HECKBERT: Well, I know a few carriers already have in the CWTA and we've had discussions about that.

6033   Well, the final draft regulations we haven't seen, so it may be addressed in there.

6034   COMMISSIONER DUNCAN: Okay, okay. Thank you very much.

6035   Those are my questions, Mr. Chair.

6036   THE CHAIRPERSON: Madam Poirier?

6037   COMMISSIONER POIRIER: Good morning. I'm happy to have 100 percent of women on this panel representing a wireless service provider. It rarely happens. So congratulations for Eastlink.

6038   I was wondering in the perspective that Nova Scotia is going to have its own provincial law, are there going to be punitive penalties?

6039   MS HECKBERT: Nova Scotia law, I don't know if there are, actually.

6040   MS MacDONALD: Yeah, we would have to look into that. I'm not aware at this point today.

6041   COMMISSIONER POIRIER: Okay. And Commissioner Simpson believes so.

6042   Staff, do you know if there are going to be punitive...?

6043   Because my question -- and it applies in Quebec. Quebec, for example, is able to levy fines up to $100,000. I don't know about Nova Scotia. Whereas, Commissioner of Complaints for Telecom who will administer the Code cannot levy punitive penalties. So I was wondering because the Commissioner can only order a compensation of $5,000.

6044   Isn't it an element, awaiting a law in your position, to be more supportive of a national Code than of a provincial law applying punitive penalties?

6045   MS HECKBERT: Sorry?

6046   COMMISSIONER POIRIER: Do you understand the meaning of my question?

6047   MS MacDONALD: If you could just repeat the question once again, that would be helpful.

6048   COMMISSIONER POIRIER: Okay.

6049   Well, in some provinces' law they will apply punitive penalties up to $100,000 while the Code being applied by the Commissioner of Complaints won't be able to do that. No penalties. The only thing he will be able to do is order a compensation of $5,000.

6050   So if I would be a wireless service provider, I would prefer to have the national Code apply and no provincial laws because there is no punitive penalties in our process.

6051   MS MacDONALD: Well, I understand what you're asking. Really, we -- I mean, we don't even know the penalties at this point in time. We'd have to check to see what they are.

6052   MS HECKBERT: I just want to say one thing quickly. The reason that we don't -- that I don't know offhand what the penalties are, is because we read the legislation and we're fully compliant. In fact, we're additionally consumer friendly to what's in there. So that's why we haven't focused as much on what the penalties are.

6053   MS MacDONALD: And I think the reason I said that was to explain that we're not concerned about that. We are fully supportive of a consumer-friendly Code. So for us when we -- we don't look to the penalty and say, "Oh, we prefer one code or another." We look to the practicality of the business and what makes sense.

6054   You know, we absolutely supported what Nova Scotia was doing with the proposed code before this proceeding came into play. Really, it's about we absolutely want to provide consumer-friendly service. That's our whole focus. That's our business. So we will be compliant.

6055   But it's really about the efficiency and the practicality of a national Code that allows us to manage the business efficiently, practically, ensure our customers know what their rights and obligations and our obligations are and then to move on with the business and actually implement the services.

6056   So I don't think that persuades --

6057   COMMISSIONER POIRIER: It's only about the consumers, not about penalties.

6058   MS MacDONALD: It's about consumers and balanced against the efficiency and the practicality of operating our business.

6059   COMMISSIONER POIRIER: Yeah. Okay. About locks, okay. Are you ordering locked devices from the manufacturers?

6060   MS MacDONALD: What I can say about that, because we -- we apologize again, for not, you know, speaking about the actual devices, but what we can say is that we have no problem with the proposals put forward with regard to unlocking.

6061   We absolutely will agree that whatever the Commission decides on the unlocking, we will abide by that and, I mean, that's -- I think that's -- you know, that's our position with unlocking.

6062   So, we really take no issue with the proposals in relation to the unlocking.

6063   COMMISSIONER POIRIER: I'm sorry, but that's not answering my question, okay. I'm asking, are you ordering locked devices from manufacturers?

6064   MS MacDONALD: We don't -- we are often at the mercy, in the negotiations with the manufacturers, given our size, we don't necessarily have the negotiating ability to dictate how the devices come to us.

6065   So, I can say that we -- when we order our devices, we are getting devices based on what we have been -- what the manufacturer has told us they would be providing in terms of locked or unlocked.

6066   MS HECKBERT: Yeah.

6067   COMMISSIONER POIRIER: So, let's ask it differently. Could you order unlocked devices? Could you do that?

6068   MS MacDONALD: I would say yes, there are, but I don't know that we would have the choice on a per device basis.

6069   MS HECKBERT: Yeah, what we're --

6070   MS MacDONALD: I think there would be restrictions. So, I don't know the answer entirely for every device. I would say that there would be some devices, I am sure, that you could order unlocked.

6071   I would say that there are some devices that we may not be permitted or able to order unlocked and those -- you know, the manufacturer would dictate those terms, so...

6072   MS HECKBERT: Yeah. We're just saying, regardless of what we -- as a small carrier, regardless of what we ask for, we get what we get.

6073   COMMISSIONER POIRIER: Yeah. I'm really surprised nobody can answer that question, okay. Nobody knows exactly.

6074   It seems like manufacturers are the ones having the most power in this industry, you don't seem to have a lot of power, and it disturbs me a lot, meaning that they maybe should have participated in this hearing because I would have loved to know why they lock cellular phones and why they seem to make that kind of arrangement with all the wireless service providers and you don't seem to have power over that.

6075   I don't understand, you're the client, you're the one buying.

6076   MS HECKBERT: Yeah, I agree it would have been interesting for more manufacturers to participate.

6077   You know, they sell devices around the world, the U.S. is obviously a much bigger market than Canada, and then within Canada there are obviously certain carriers that are much bigger than Eastlink.

6078   COMMISSIONER POIRIER: Yeah. But in some countries, it's not allowed to sell locked phones, so there is a possibility. In Europe for example, that there are plenty of citizens in Europe and all of the devices have to be sold unlocked.

6079   So, why couldn't that happen here in Canada?

6080   MS HECKBERT: Well, I would say the EU is maybe a bigger market than the Canadian market, so when carriers there are telling a manufacturer you have to do something to sell your device in our market, that manufacturer says, okay.

6081   MS MacDONALD: It's a very good question.

6082   MS HECKBERT: Yeah.

6083   MS MacDONALD: Yeah.

6084   COMMISSIONER POIRIER: Yeah.

6085   MS MacDONALD: I know we have heard some of the comments of the carriers as well with regard to fraudulent activity and that sort of thing.

6086   COMMISSIONER POIRIER: Yeah.

6087   MS MacDONALD: And, you know, certainly some of that makes sense as well, but it is a good question.

6088   COMMISSIONER POIRIER: Yes. So, I hope Bell is going to be able to answer that question, because they are the biggest one in Canada, so they have market power I'm sure.

6089   Okay. So, be aware of that, I'll be asking the question again to the biggest in Canada.

6090   I was wondering, in your billing system, do you separate subvention, okay, from the service, so your client can see I'm paying that amount for my device and I'm paying that amount for my service?

6091   MS HECKBERT: I will probably have to answer that one next week because it's specific to our approach --

6092   COMMISSIONER POIRIER: That's a sales pitch you're doing today?

6093   MS HECKBERT: We think that we -- well, it's -- we have been building this business over the last few years and we're very excited to launch it in the Maritimes where our consumers are and where we've been focusing and --

6094   COMMISSIONER POIRIER: Okay. So, I'll ask the question differently. Do you think ISPs should separate subvention from service?

6095   MS HECKBERT: Well, as I said earlier to Commissioner Simpson, we think that carriers should have the flexibility to do so and to offer it as a way of treating the device subsidy and we believe that if consumers react positively to that, we would expect that carriers -- lots of carriers would pick it up as an option.

6096   We, though, continue to support flexibility for carriers to manage the device subsidy in different and creative ways so that consumers can choose what works for them, whether -- in some cases that would mean fixed-term contracts, in others it would mean a tab approach, or it may mean an approach more along those lines like T-Mobile is doing.

6097   COMMISSIONER POIRIER: Okay.

6098   MS HECKBERT: The key is to have the flexibility in the market so you're not limiting consumer choice.

6099   COMMISSIONER POIRIER: So, my last question is still related to that same issue. I don't really understand why the Telco industry has decided, contrary to other devices, that the subsidy is not a loan but an incentive. Isn't a handset like a good, like a car, like any other device?

6100   MS HECKBERT: Well, I think Rogers put it well yesterday, is that the service providers are service providers and haven't historically considered ourselves to be device resellers.

6101   So, it was more an incentive of signing up for service historically rather than we will offer service, incidentally, we also sell hardware.

6102   Not that there's anything wrong with that approach and that's why we support the flexibility to do it either way, but I think that that's historically how it's been, that we see ourselves primarily as service providers.

6103   COMMISSIONER POIRIER: Are you going to announce that you will be changing that next Friday and separating the bill into two?

6104   MS HECKBERT: Well, that's all we can answer. We can answer it next week, but just not --

6105   COMMISSIONER POIRIER: Okay. Well, thank you very much.

6106   THE CHAIRPERSON: Madame Poirier's journalism background comes out when she has great difficulty of not getting the answers so well.

6107   That's great. We love having her on this side of the table.

--- Laughter

6108   THE CHAIRPERSON: And I do notice that representatives of Bell have been following the hearing and will, no doubt, be able to help us later on.

6109   We're going to take a break, and during the lunch break -- as always happens in these hearings, we've reached now the tipping point where we're ahead of our schedule, so we're going to have to play around with the next presenters, and so there may be some conversations to see how we can make sure that we have panels for the rest of the day.

6110   So, we'll take a break until 1:30.

6111   But I do want to thank you both for your presentations and very useful, thank you, and look forward to all those updates on the 22nd.

6112   Thank you.

--- Upon recessing at 1232

--- Upon resuming at 1331

6113   THE CHAIRPERSON: Madame la secrétaire.

6114   THE SECRETARY: Oui. We are now ready to hear Item 22 of the agenda. It's Data & Audio-Visual Enterprises Wireless Incorporated, Mobilicity.

6115   Please introduce yourselves for the record, and you have 20 minutes.

PRESENTATION

6116   MR. LYONS: Thank you.

6117   Mr. Secretary, Mr. Chairman, Commissioners, my name is Stewart Lyons. I'm the President of Mobilicity.

6118   With me today are, to my right, Anthony Booth, the Chief Customer Officer, and to my left, Gary Wong, our Director of Legal Affairs.

6119   Thank you for providing us with an opportunity so share with you our views on the proposed wireless Code.

6120   Mobilicity -- and I apologize. There's a lot of syllables in that. Mobilicity is a new entrant that was incorporated as DAVE Wireless in 2008. We launched our services in Toronto in May 2010 and rapidly expanded into Vancouver, Edmonton, Ottawa and Calgary.

6121   We hold spectrum licences for high frequency AWS spectrum covering a population of just over 18 million Canadians.

6122   Mobilicity was granted a spectrum licence by the Federal Minister of Industry for the first time in February 2009 as a result of an express federal government policy decision to establish competition in the market.

6123   In the Associated Press release, the Honourable Jim Prentice, then Minister of Industry, stated as follows:

"We are looking for a greater competition in the market and further innovation in industry. At the end of the day, our goals are lower prices, better service and more choice for consumers and business. That is why we are setting aside a portion of radio spectrum exclusively for new entrants into the wireless market."

6124   Heeding this call, Mobilicity entered the market with the goal of offering customers an alternative to the fixed long-term contracts and capped and overage fee-based calling, texting and data plans of the three largest mobile carriers, which still control more than 90 percent of the market.

6125   Since its inception, Mobilicity has been dedicated to offering Canadians low cost talk, text and data services and has introduced a number of innovative products into the wireless marketplace. For example, we have pay in advance talk, text and data packages that are never subject to overage charges and our "my wallet" system for additional pay per use services.

6126   Together, the model adopted by Mobilicity offers consumers unprecedented bill certainty.

6127   With Mobilicity's pay in advance talk, text and data services, customers are given the choice of four simple plans that customers can purchase one month at a time. There are no minutes counted. You pay by the month, not by the minute, and therefore, no limits over which overage fees are charged. No need to worry about going over.

6128   They are simple and transparent and a true alternative to the plans of other carriers.

6129   One important distinction note here is that we are pay in advance services. We differ from pre-paid card services in that pay in advance monthly services are delivered the same way as post-paid, with the only distinction being that services are purchased one month in advance.

6130   Much of the conversation to date in this proceeding around pre-paid seems to relate to pre-paid cards that have minutes attached and so forth. Monthly pay in advance -- sorry. I should have stapled them.

6131   Monthly pay in advance services are different and the debate surrounding the expiry of pre-paid cards does not apply to our service.

6132   The Mobilicity "my wallet" system gives customers freedom and control over how much they want to spend on additional features and services such as roaming and international long distance.

6133   Since the customer alone controls the money in their "my wallet" account and can add money any time, this system gives consumers great flexibility which insulating them from bill shock. With Mobilicity, customers can never be billed more than they consciously put into their "my wallet" account.

6134   The foregoing and more were specifically designed by Mobilicity to enable the provision of wireless services at significantly lower cost than was previously made available in the market. For example, Mobilicity does not charge early termination fees in lieu of recovering handset subsidies, nor does it force consumers into long-term contracts. We don't offer paper bills, as all payment is made in advance, thereby limiting billing confusion.

6135   Along with the innovation of unlimited talk, text and data plans, it broke rein from the incumbents through unprecedented competitive pricing for wireless long distance and roaming, services that provide relief from the high wireless toll rates charged by the incumbents.

6136   Many of our plans also include Canadian and U.S. long distance as part of their package.

6137   As a result, on average, a Mobilicity customer pays approximately 50 to 70 percent less than a typical wireless consumer pays for a similar product offered by incumbent wireless service providers.

6138   Since entering the market, Mobilicity has continually challenged the status quo. The company provides itself on being a lean organization that is dedicated to growing its business, earning its customers' business each month after month, and working hard on behalf of Canadians to consistently lower the price of wireless services across Canada.

6139   That's why we are here today. We're here to voice our support for a CRTC wireless Code that promotes transparency and fairness without sacrificing the hard-won choice and innovation that new entrants such as Mobilicity have brought to the market over the course of the past few years.

6140   THE CHAIRPERSON: Can I ask you just to slow down a little bit because I think the translators are having difficulty keeping up with you.

6141   MR. LYONS: Sorry.

6142   THE CHAIRPERSON: So --

6143   MR. LYONS: That's my greatest weakness, is my fast talking, so I will slow it down. I apologize for that.

6144   THE CHAIRPERSON: Yeah. Just take a breath from time to time.

6145   MR. LYONS: Yeah, sorry.

6146   THE CHAIRPERSON: Okay, thanks.

6147   MR. LYONS: I'm running an auction. Sorry.

6148   THE CHAIRPERSON: Thanks.

6149   MR. LYONS: My colleague, Anthony Booth, will now address the key proposals in the wireless Code working document.

6150   Before Anthony begins, I would note that references that appear in square brackets throughout our prepared statement are to the corresponding items of the CRTC's working document.

6151   MR. BOOTH: Great. Thank you, Stewart. And good afternoon.

6152   So I will talk about the application of the wireless Code and Mobilicity's point of view.

6153   Mobilicity is generally encouraged by the proposals in the CRTC working document.

6154   The proposals set out in the working document demonstrate that the CRTC has, for the most part, listened to the concerns of the Canadian public. The Canadian public has expressed loudly and clearly the frustrations they feel with the lack of choice and the inertia of extremely expensive plans, hidden fees, unfair terms of service that have long characterized the provision of services by the entrenched wireless carriers.

6155   Over and over again, Canadians have voiced their concerns with respect to being trapped in long-term contracts with their punitive terms.

6156   To address the main concerns of Canadians, Mobilicity specifically encourages the Commission to adopt the four main proposals.

6157   Proposal No. 1. The Federal Wireless Code must apply retrospectively to all new and existing contracts for post-paid wireless service contracts and all new and existing contracts for pre-paid wireless services to the extent applicable.

6158   The issue of when the Wireless Code should apply to Canadian consumers is just as important as its content. Grandfathering the implementation of the Code would significantly limit the effectiveness and delay the expected benefit for a vast number of Canadians by up to three years, if not longer.

6159   This is simply unfair and, to be frank, Canadians have waited long enough for change.

6160   Proposal No. 2. Early Termination Fees, ETFs, should be limited to the outstanding device subsidy owed by a customer on a wireless service to a wireless service provider the economic incentive.

6161   Importantly, the Commission must ensure ETFs remain reasonable and are not unduly inflated by carriers.

6162   In addition to three-year contracts, Canadians are clearly concerned about the burdensome cancellation requirements and excessively Early Termination Fees associated with many post-paid services that are linked to the provision of subsidized handsets.

6163   Many wireless consumers, like Michael Ives of Burlington, Ontario, recognize the termination fees are really, in his words, "a bullying tactic by carriers to discourage consumers from switching providers or a means to punish consumers for cancelling services".

6164   Mobilicity could not agree more. In a competitive wireless environment, consumers should be able to cancel their post-paid wireless service at any time by notifying the service provider.

6165   Cancellation should take effect on the date that notice is received, subject to a reasonable Early Termination Fee. ETFs payable upon cancellation should be limited to what is fairly and reasonably required to compensate carriers for any device subsidies provided.

6166   The Commission must also ensure that ETFs are prescribed, remain fair and reasonable.

6167   We are mindful of the fact that there is a huge incentive on the part of the entrenched wireless carriers to game the rules by, for example, arbitrarily inflating the nominal value of the device and, therefore, the ETF payable for early termination.

6168   Unduly inflated ETFs are unfair and undermine competition, and must be regulated. Mobilicity has proposed a formula to cap the value of the handset subsidy to a sum of 20 percent of the recurring monthly rates before taxes payable by the customer.

6169   In order to make the right of early termination meaningful, Mobilicity encourages the Commission not to overlook this crucial detail of its oversight of ETFs for post-paid wireless services.

6170   Proposal No. 3. Wireless service customers must have the right to cancel a wireless service contract without penalty if the wireless service provider amends the contract.

6171   The arbitrary amendment of contract terms by wireless service providers is another area of concern for wireless consumers. Just as WSPs seek flexibility to amend terms in a contract, consumers should be able -- should be provided with the same flexibility to reject such amendment.

6172   Mobilicity supports the proposal to give wireless service customers the right to cancel a wireless service contract without penalty if a WSP amends the terms of a contract.

6173   As for the meaning of contract terms or essential contract terms, in Mobilicity's opinion, an amendment to any term affecting the monthly reoccurring charge and usage included in the plans should qualify.

6174   Proposal No. 4. Long-term contracts such as three-year contracts must be eliminated.

6175   The issue of a three-year contract was by far the most common complaint of Canadians in the CRTC's online consultation. In their words, they're unjust, outrageous, not practice, et cetera.

6176   This should come as no surprise. Let us be frank. Long-term contracts are specifically designed to prevent customers from switching service providers to take advantage of more innovative and lower-cost services in the market.

6177   Three-year contracts are all the more frustrating for Canadians because consumers are very aware that Canada is the only -- one of the only countries in the developed world where this contract length is still tolerated.

6178   Marcus Pads from Vancouver, British Columbia and Jason Paquette from Novell, Ontario, for instance, noted in their online submissions that 24-month contracts are the norm outside of Canada and three-year contracts are banned in the European Union.

6179   In consumer Kara Todd's words, quote:

"I resent that in order to get my son a cell phone for his first year of college, I must commit to a contract that goes to the end of his degree."

6180   Mobilicity agrees.

6181   Adoption of these proposed measures is essential to increasing consumer choice and relying on competition to the maximum extent possible to protect the interests of consumers. Where there are other measures around which, as significant consensus has formed, these are the non-consensus items which, Mobilicity's view, are key to establishing a truly competitive and fair wireless service market.

6182   My colleague, Mr. Wong, will now address the application of the CRTC Wireless Code to pre-paid wireless services.

6183   MR. WONG: Good afternoon.

6184   As stated above, Mobilicity entered the market with a business model built exclusively around pay in advance and the "my wallet" system of pre-paid, pay per use wireless service.

6185   At the outset of this proceeding, it was understood that the determination in this proceeding would pertain to post-paid wireless services. This proceeding was, after all, initiated at the request of the incumbent wireless carriers, all of whom built their business around post-paid, cap and overage charge based plans.

6186   Indeed, the vast majority of public problems in the online consultations seems to target the key characteristics of post-paid wireless services, multi-year terms, terminations and cancellation fees, hidden terms, unpredictable and expensive overage fees.

6187   In contrast, most of the incumbent directed -- most of the comments directed at pre-paid wireless service providers such as Mobilicity were positive in nature. For instance, Adam of Toronto, Ontario indicated that his average monthly bill before he switched to Mobilicity was in excess of $100 every month as a result of overage charges. In his words:

"Mobilicity was able to provide me with unlimited calling, messaging, data service and all options and a guarantee that my bill will never change for a fraction of the cost the incumbent WSP was charging me, all without the contract. According to the incumbent WSP, this was impossible."

6188   Many others like Robin said that they love what new entrants like Mobilicity have brought to the Canadian wireless customers.

6189   Nothing makes Mobilicity happier than positive feedback. It shows that customers like the alternatives that we are offering.

6190   As the proceeding was -- has unfolded, pre-paid services and the extent to which the CRTC Wireless Code applies to pre-paid wireless services such as those offered by Mobilicity have been considered as part of this proceeding.

6191   In Mobilicity's view, only the sections of the working document listed in Appendix A to this pre-paid statement -- sorry, to this prepared statement should apply to pre-paid wireless services. Simply put, that provisions of the working document that are, by definition, not applicable to pre-paid wireless services ought not to apply to pre-paid wireless services, as their forced application would undermine choice and competition in the marketplace.

6192   Measures to regulate ETFs. For one, the majority of issues that must be addressed in the contracts which are set out in Section D1.2 of the working document, while relevant to post-paid services where customers are prone to hidden fees and penalties, are quite simply not applicable in the context of Mobilicity's pay in advance services and pre-paid service in general.

6193   For instance, the requirement to address device costs in a contract is included primarily to inform post-paid customers of the device subsidy provided and the amount of device subsidy that is paid off each month. In turn, the purpose of this information is to calculate ETF.

6194   However, pre-paid wireless service providers do not impose ETFs to recover unrecovered handset subsidies; therefore, the requirement is not applicable to contracts for pre-paid wireless services.

6195   Similarly, information regarding payment terms and cancellation, expiration and renewal of contracts do not apply to pre-paid services. Multi-year contracts are, by definition, not applicable to monthly pay in advance services and pre-paid services generally.

6196   Consumers must pay in advance before receiving services, but the convenient result is that they may cancel service at any time.

6197   Measures to prevent bill shock. It is hard to say which Canadian dread more, visits to the dentist or opening their monthly wireless bills. More often than not, they're faced with unexpected overage charges which can run to hundreds of dollars per bill or, in some remarkable cases, thousands of dollars.

6198   The Commission has included anti-bill shock rules as follows to help prevent or protect consumers from unexpected overage fees:

6199   D5.1: Notification of additional fees;

6200   D5.2: Tools to monitor usage;

6201   D5.2: Ability to cap monthly bills; and

6202   D5.2: Ability to restrict features; upon request.

6203   These measures are arguably necessary in the case of post-paid wireless services. After all, the business models of the incumbent providers hinges on, first, capping usage included in the plan and, second, charging users overage fees over these caps. Naturally, then, their customers should be given the tools necessary to monitor the limits.

6204   However, in the case of Mobilicity, customers have unlimited usage over a 30-day period of talk-text-data and have total control at all times -- with Mobilicity. There is never a possibility of unwanted charges.

6205   As for additional pay-per-use options, where these are prepaid, as is the case with Mobilicity, customers already have the ability to self-regulate and can never be charged more than what they have prepaid.

6206   Therefore, the Code should not require push alerts to be provided in relation to the provision of prepaid wireless services. Such a feature would provide no added value to prepaid service customers, while potentially adding huge overhead costs in the form of specific software and billing system modifications that would have to be implemented by the wireless carrier.

6207   It would therefore be inefficient and serve no rational purpose to impose these measures on providers of prepaid wireless services.

6208   (c) Procedure to disconnect wireless services.

6209   Another clear example of the "disconnect" between certain proposals in the Working Document and prepaid wireless services are the requirements set out in D.10 in relation to Deposits and Disconnection Code.

6210   Again, customers of Pay-in-Advance and other prepaid services must pay in advance for services. If they fail to do so, they do not receive service. By definition, then, prepaid customers can never fall into arrears. Therefore, the first "condition" for disconnection would never arise in connection with prepaid services.

6211   If the Commission intends to apply the disconnection rules to prepaid wireless services, in our view, this would be equivalent to mandating Mobilicity to provide free services to customers as Mobilicity has no means of collecting back the $50 from the customer.

6212   The forced application of the Wireless Code to prepaid wireless services in the same manner as to post-paid wireless services risks significant impairment to the innovations that providers like Mobilicity have brought to the marketplace: Convenience, lower overhead costs, lower cost of service and absolute bill certainty.

6213   At the same time, there would be little or no corresponding benefits to customers to apply a majority of the provisions of the CRTC Working Document to prepaid services such as the ones offered by Mobilicity.

6214   Other Important Considerations

6215   Coexistence with provincial consumer protection legislation.

6216   Mobilicity supports the coexistence of the federal Wireless Code and provincial consumer protection legislation. The Commission has adopted the consumer-friendly rule of interpretation proposed by the Québec SPIC, which Mobilicity supported in its Reply Comments. The proposal to interpret conflicts, if any, between provincial legislation and the CRTC Wireless Code in favour of the consumer avoids operational conflicts between the Code and provincial legislation.

6217   In our view, the focus must remain on the interests of consumers. The concurrent application of the Code will ensure the Canadian public benefits at all times from the highest level of consumer protection available. Importantly, it will give consumers the choice between the streamlined, low-cost, informal complaint procedures of the CCTS and the more robust, formal, investigative and legal remedies that are available in the provincial legislation.

6218   The purpose of this proceeding, after all, is to promote the interests of consumers, not to take away from the measures already put into place by provinces.

6219   Device Unlocking.

6220   With regards to device unlocking, Mobilicity supports Option 1 in item D7.1 of the Working Document:

"Where a WSP has provided a locked device to a consumer, it must provide the consumer with the means to unlock the device after no more than three months or 90 days of service, at the rate specified by the WSP at the time that the handset is acquired or, in the case of post-paid services, in the contract or personalized information summary." (As read)

6221   WSPs should be able to set the unlocking fee in order to recover costs associated with the provision of the handset or services. If the WSP is, as we propose, required to fully disclose the applicable unlocking fee upfront, prior to the time when the handset is purchased, then the customer is fully informed and can make an informed decision between purchasing a locked or an unlocked device.

6222   In our opinion Option 2 should not be adopted because both of its scenarios clearly contemplate the existence of a device subsidy and/or long-term contracts and, therefore, the post-paid business model.

6223   Applying Option 2 to Mobilicity would be punitive, as its customers are not locked into long-term contracts and may terminate at any time and never have to pay ETFs.

6224   And while the Code provides post-paid service providers with a guaranteed ability to recover any unpaid device subsidies, there is no similar guarantee for Pay-in-Advance or other prepaid service providers.

6225   As a result, Option 1 is the only acceptable option that fairly takes into account the diversity of business models currently in the industry.

6226   Number three, Suspension of Service Charges during Repairs or for Lost or Stolen Devices.

6227   Finally, Mobilicity believes that the proposed requirement that service, and service charges, be suspended where devices are under repair or lost or stolen is uniquely based on the post-paid business models, dependent as it is on the provision of a handset subsidy that is amortized over the life of a long-term contract.

6228   In contrast, by definition, Pay-in-Advance customers purchase a month of service at a time, in advance. The result of this is that services may be suspended or terminated at any time by the consumer at the end of each month.

6229   It makes sense in a post-paid world to suspend charges during repair or in the case of lost or stolen phones:

6230   (a) because the carrier has expressly linked the provision of services to the purchase of the handsets; and

6231   (b) because the carrier has a guarantee that it will recover the unpaid handset subsidy through the mechanism of ETF.

6232   It makes no sense, however, for prepaid service providers to have to suspend services mid-way through a month because:

6233   (a) the handset is purchased separately from the service; and

6234   (b) no ETF charges apply.

6235   There is no possibility of ensuing prejudice to the Pay-in-Advance customer since the service can be terminated at the end of each month period simply by not paying for the next month of service.

6236   MR. LYONS: Thanks, Gary.

6237   In conclusion, we laud the Commission's initiative and rigour with which it is examining the contracting practices of the wireless industry.

6238   However, it is important to recognize the diversity of business models in the industry. The advent of Pay-in-Advance services fill an important gap and do not account for the main concerns of the Canadian public.

6239   Inappropriate application of the CRTC Wireless Code to Pay-in-Advance and other prepaid wireless services should be avoided by expressly identifying the provisions that apply. Otherwise we risk harming the innovation and choice and already delicate business models that Mobilicity and others have sought to bring to the market.

6240   We suggest that Mobilicity is part of the solution, not part of the problem, so we hope that the Commission keeps this in mind when determining how the Code will help shape a competitive wireless industry moving forward.

6241   We conclude by saying that we applaud the Commission for developing a Wireless Code in the interests of consumers and, in doing so, is listening to the concerns not only of the industry but of the consumers that it is mandated to protect.

6242   Thank you very much and we will take your questions.

6243   THE CHAIRPERSON: Thank you very much. Madam Poirier will start the questions off.

6244   Thank you.

6245   COMMISSIONER POIRIER: Yes. Good afternoon.

6246   I will start, but because you are presenting a completely different business model I'm sure plenty of other Commissioners will want to ask you questions.

6247   My first question is: Are there other companies having a business model like yours or are you the only one in Canada with that prepaid system way of doing business?

6248   MR. LYONS: No, there is -- so there were three new entrants that launched sort of in the Ontario and two in the west as well. There would be ourselves, WIND, who are speaking later in the week, and Public Mobile.

6249   Public Mobile has a similar model to ours, WIND has sort of a half similar to ours, half similar to more of the incumbents.

6250   COMMISSIONER POIRIER: Okay. And do I understand you well when you say, yes, you support the Code, but we need more flexibility because our business model is different from the major wireless service providers and it seems like the Code has been tailored around the model of the bigger ones?

6251   MR. LYONS: Yes, that is precisely what we are saying.

6252   You know, we have only been in business for a little over two years, we came out at a time where we are trying to be responsive to these concerns that were already present in the marketplace, so we believe -- we would suggest that we have taken some of these into account already, so therefore the Code needs to hopefully recognize that and allow us to continue to do those kind of things and at the same time be tailored to protect consumers that are probably more concerned with the way the post-paid environment is operating.

6253   COMMISSIONER POIRIER: So do you think the national Code will trigger or will reduce competition unless we make some arrangement as you suggest?

6254   MR. LYONS: Yes, that's effectively what we are suggesting. If it is tailored correctly it will help increase competition.

6255   COMMISSIONER POIRIER: Okay. But won't it bring all the wireless service providers onto the same level playing field?

6256   MR. LYONS: Well, I would argue that the playing field is not always going to be level as it is, given the fact that there are three very, very large players and a few small ones. That is point one.

6257   But point two is we operate such different business models the playing field can never be completely level. So I think what you need is a level field, a level playing field for the business model, not level playing field overall because I'm not sure that's possible to create.

6258   COMMISSIONER POIRIER: Okay. You're a member of the CWTA?

6259   MR. LYONS: We are.

6260   COMMISSIONER POIRIER: Okay. And what do you think of their viewpoint? They presented a completely different viewpoint from yours.

6261   MR. LYONS: We've been vocal about not always agreeing with what the -- the CWTA is not necessarily, you know, in line with the position of new entrants on any particular issue nor are they always in line with the position of incumbents on a particular issue. Their job is to represent, you know, what they believe is the majority of its members.

6262   So, you know, we've often been at odds with them over -- quite frankly, on this issue and on the provincial legislation regarding wireless contracts that have come out in Manitoba and other places. We were very, very vocal about being very much against the CWTA and their position on those, and, you know, we've been public about that. We've been public within and outside the CWTA about that.

6263   COMMISSIONER POIRIER: So let's talk about contract length. You don't have contracts?

6264   MR. LYONS: We do not.

6265   COMMISSIONER POIRIER: And it works?

6266   MR. LYONS: You know, it works for the most part. It works for the most part. We would like it to work better than it does but it does work for the most part.

6267   COMMISSIONER POIRIER: So if it works, how come it didn't become the model in Canada? It's because you're just beginning to implement that new model?

6268   MR. LYONS: Do you have an hour?

--- Laughter

6269   COMMISSIONER POIRIER: Well, I have 90 minutes with you, so you could use an hour.

6270   MR. LYONS: No, I'm being facetious. But no, it works -- part of the reason it doesn't work is, you know, as we said earlier, the playing field isn't going to be entirely level given the size of the big three and their control over the wireless industry and a whole bunch of other issues surrounding that.

6271   But look, as you've heard from some of the comments, the customers that we have, the customers that the other new entrants have, I think, are for the most part extremely happy.

6272   Anthony can comment on our satisfactory scores or our complaint scores to the CCTS Commissioner, which I believe are the lowest in Canada, and even proportionately the lowest in Canada, by the way, because obviously we have a smaller subscriber base.

6273   And, you know, our customers are quite happy with what we're doing. We just always want to attract more of them obviously.

6274   MR. BOOTH: Yes. I think I could say the model can work. It definitely takes time. I think Canadian consumers tend to be a little more, you know, resistant to change, a little more apathetic than other countries. So we've seen this model take off much quicker in the United States and Europe and other places. It will work in Canada over time but it will take longer than most people expected.

6275   But as Stewart commented, you know, our consumers think the model works great today. Last year we had only 43 complaints to the CCTS; it was the lowest in the industry. We have, you know, the second-highest-rated brand in customer satisfaction in our consumer ranking.

6276   So it works, it just takes time and it takes, you know, resources and patience, and it's very, very hard work.

6277   COMMISSIONER POIRIER: So the consumers, your clients, they enjoy having the handset purchased separately from the service?

6278   MR. BOOTH: Yes. So we only -- basically they are totally separate today. So we sell more or less unsubsidized devices most of the time. The consumer pays for the device, they pay for the service. They own the device outright.

6279   If they choose to leave the service in 30, 60, 90 days, a year, two years, they own their device, they can do what they want with it. They can keep it, they can sell it, they can take it to another carrier if they wish. It's their business what they do.

6280   We have customers who bring phones into our stores and we activate them with a SIM only sale as well. So we leave that to the hands of the consumer and let the consumer do what they wish with the device.

6281   COMMISSIONER POIRIER: And are your handsets locked?

6282   MR. LYONS: On that question -- by the way, although it will disappoint you that we're not women, we will answer that question for you.

--- Laughter

6283   MR. LYONS: So, no, our devices for the most part are locked. However, we have -- actually as recently as Q4 our lead handset was actually unlocked. So we sell unlocked and locked devices depending on the manufacturer's specifications and such.

6284   MR. BOOTH: Yes, and to add to that, you know, as Stewart was saying, in Q4 our number one selling device was an unlocked device. It had a significant subsidy in the hundreds of dollars on it, but we offer that to consumers in an unlocked fashion in a no-contract model. So it can be done.

6285   COMMISSIONER POIRIER: Okay. Do you see more fraud when you sell unlocked phones?

6286   MR. LYONS: It's not so much the fraud that we're concerned about, it's obviously the churn. I mean obviously, you know, given the fact that we subsidize, we commission salespeople, we have -- they call the call centre, they do all those things, and when they pick up and leave before you've had a chance to amortize some of those initial upfront acquisition costs, it's a problem.

6287   That's what creates, quite frankly, the problem in our business model, is the churn. That's our issue.

6288   COMMISSIONER POIRIER: Could it be the same issue for the bigger wireless service providers? Could it be also the churn instead of the fraud then that is the main concern?

6289   MR. LYONS: But for them, they don't have the churn concern because they have the contract. We don't have the contract. So for them, they want to be double-protected. So the locking is sort of a double protection on top of the contract.

6290   But the reality is when you have no contract, all you have is the locked device, which is not even the biggest impediment because, quite frankly, we all know you can do that on the Internet quite quickly, you can unlock a device. You can go to a shopping mall. It's fairly easy to unlock a device. It can be done fairly inexpensively and quickly.

6291   COMMISSIONER POIRIER: Yes. And how much do you charge to unlock a cell?

6292   MR. LYONS: We don't unlock devices ourselves just because -- for many reasons, the subsidies, the commissions, all those other -- we don't make it much of an impediment to do it. Oftentimes our dealers will direct people where to do it, but we don't encourage the practice for the simple reason that we're just trying to recoup our investment in the device and the acquisition of the customer. Given that we have no contract, that's really all we have.

6293   COMMISSIONER POIRIER: I was wondering why you -- one of your recommendations, recommendation 4 is:

"Long term contracts, such as 3 year contracts, should be eliminated."

6294   I don't understand why because it brings you clients, doesn't it? Clients who are -- consumers who don't like to go for three-year contracts prefer to go to your company, so it's good for you.

6295   MR. BOOTH: Well, it, you know, theoretically does but it also delays the ability of the consumer to make that choice for three years versus a much more reasonable number, which is two or even one. So we don't see a rationale to arbitrarily say it should be a three-year term.

6296   As we've heard before, a subsidy usually is eliminated before the three-year term. Frankly, devices never last three years. It doesn't matter how gentle you are with a device, rarely does a consumer get three years out of a device. It's a fairly arbitrary number.

6297   And, you know, we have a number of consumers who we talk to in the stores who say, "I would love to join you but I still have six months left on my contract and I can't afford to pay it off. So in six months I'll come and see you." And we think it's fairly punitive to lock those customers into a three-year contract when the economics could work perfectly find on the post-paid side in two years.

6298   COMMISSIONER POIRIER: Plus they have an ETF to pay, early termination.

6299   MR. LYONS: Yes. And that's the biggest source of inability for us to gain consumers more rapidly, is that a lot of them are locked into that three-year term and most of them who we would attract can't afford or don't wish to pay an early termination fee in the third year of their contract.

6300   COMMISSIONER POIRIER: So those two, okay, three-year term contracts and early termination fees, reduce the possibility for competitors to gain in the market?

6301   MR. BOOTH: Yes. And consumers, you know, are good at doing the math and figuring out how much they're going to save with us. So if we can service a consumer for $30 a month who's paying $75 a month, they realize they're saving $45 a month and they know the economics of being a Mobilicity customer will pay out for them over a course of time, but, you know, when they're forced to pay $300, $400, $500 to break a contract early, it's very difficult for consumers to come up with that much cash.

6302   And that's probably one of the biggest impediments that we see in our model, is the inability for a consumer to pay that off and then come to us and purchase a phone outright. It's a lot of cash outlay for the consumer in a short period of time.

6303   COMMISSIONER POIRIER: And that's why you also have recommendation 3, to make sure that:

"...customers must have the right to cancel a wireless service contract without penalty..."

6304   MR. BOOTH: Yes.

6305   COMMISSIONER POIRIER: Okay.

6306   In your document that I think was brought to us in December, I could read that if ever we go in the direction we're going, having a Code with contract terms, you're afraid carriers will be motivated to unjustly lure customers into signing longer term contracts before the effective date of the Code.

6307   Why are you afraid of that? Have you seen such a possibility with some customers up to now?

6308   MR. WONG: No, we've seen no evidence of this, but obviously logic would dictate that if the Code applies to only new contracts or renewed contracts, up to the effective date of the Code there will be promotions to try to attract consumers to sign up to longer term contracts, you know, to delay the application of the Code, so to say.

6309   COMMISSIONER POIRIER: And it would harm you naturally. So you want each party to submit to the CRTC as part of this proceeding the number of customers with existing contracts as of October 2012. Do you still support that?

6310   MR. WONG: Yes. That was an ask back then, but in general, I think we support that when the Code comes into effect it really should have the most effect on the most consumers, because, quite frankly, consumers have waited long enough for this Code and for consumer protection, and to have it come into effect and not affect a lot of already in contract consumers is something that could be disappointing to some consumers.

6311   COMMISSIONER POIRIER: Yes. In the possibility an ISP changes essential terms of a contract, you want the consumer to be able to opt out of the contract with no penalty. This is your position.

6312   So what are essential elements of a contract to you? You define some of them here but I'd love to have some more explanation of what are essential contract terms.

6313   MR. WONG: Yes. Essential contract terms is always hard to -- is always a very, very difficult decision because how can we define what's essential on behalf of the consumer, because we don't know, we're not the consumer, we don't know what is essential.

6314   But I think we should always include the monthly fee, the amount of minutes or data or text that's being included in the plan. You know, these should always be essential terms.

6315   But on the other end of the spectrum, on the very, very, very end of the spectrum, you know, whether or not roaming fees in Cambodia, for example, whether that's an essential term, I think that's -- maybe that's where we can't say that is an essential term.

6316   COMMISSIONER POIRIER: Okay. So let's move to prepaid services. You have a few pages on that matter, so it seems important.

6317   My first general question is, if the wireless code applies to prepaid services, as is, what impact could it have on your business model?

6318   MR. LYONS: Some of it would be pretty difficult for us to implement. Gary mentioned one of them, the rule that, if they haven't paid for 90 days, you have to shut off service. That rule doesn't really work in our model, because, as Gary mentioned, we have to effectively provide free service, and then we have no ability to make them pay for anything, because when they walk away -- since you pay in advance, and oftentimes our customers actually pay cash, there is no way of, literally, getting any money out of those people.

6319   That is an extreme version, but that example just doesn't work at all in our model.

6320   And then there are some other ones. We mention some of the monitoring information and things like that, which require some significant billing system changes. It may not be as big a deal for some of the big guys, but given where we are in our financial lifespan, it is very difficult for us to spend six or seven figures to implement a whole new customer-facing warning system of where they are on certain timeframes.

6321   MR. WONG: Just to add to that, on the notification side, quite frankly, our model is built around preventing bill shock. So investing millions and millions of dollars into system upgrades for something that consumers will not benefit from as much, we just cannot justify that.

6322   COMMISSIONER POIRIER: You are not supportive of notification because it's not your business model.

6323   MR. LYONS: Effectively, yes.

6324   We have some basic notifications. Like, when you are roaming, we tell you what the roaming rates are.

6325   We actually have whisper tones when you dial a number long distance. If it is not part of your plan, you have to pay per use. A voice will actually come on and say: You have dialled the U.K. The rates are $1 -- or whatever -- per minute. Do you wish to continue?

6326   We do things like that. We do everything in our power to make the customer very aware of what is happening if they move to the pay-per-use side of the equation, which is just roaming and long distance, effectively.

6327   But, other than that, there are no usage charges.

6328   COMMISSIONER POIRIER: Would it be helpful to limit notification to roaming and data only?

6329   Would it make it easier?

6330   MR. LYONS: I think it depends to what extent you are talking about. I mean, for roaming, that is just -- we already do that, so that's fine. If you were to say, "Notify customers of the roaming charges, and when they are roaming," all that kind of stuff we already do.

6331   So that, obviously, is something that we are in favour of. But I'm not sure to what extent --

6332   MR. WONG: Maybe I could add to that. Also, what we need to take into consideration is the size of our company. While millions and millions of dollars may be a small fraction of dollars -- of changes for the big three, it could have a more significant effect on us.

6333   On top of that, I think, like I said, we already have all of the mechanisms in place to prevent any sort of bill shock. So, really, it isn't a problem that is -- I don't think that any Mobilicity customer would come and say that they were shocked, you know. It isn't really our problem.

6334   COMMISSIONER POIRIER: What I want to relate to are some discussions that we had with other wireless service providers, maybe limiting notification to data and roaming usage, and not to voice and SMS.

6335   That is the kind of discussion we had.

6336   MR. LYONS: Right. We have no limits on voice or SMS, so that is not applicable. We don't even count minutes, so I don't even know how many minutes our customers use. I know it cumulatively, but I couldn't tell you what an individual customer's minutes were, because we don't count them.

6337   On the data side, we have unlimited plans, and I am sure that is another series of questions. Our data is, effectively, unlimited, but we do throttle after a certain usage basis.

6338   Our usage buckets are, quite frankly, a lot bigger than anyone else's, because we trying to emulate unlimited as much as possible in that regard, but we do have throttles on it, and it does slow down after a period of usage.

6339   COMMISSIONER POIRIER: But, in general, notification is something that is asked for by the consumers, so how could we have a national code with no notification in it?

6340   MR. LYONS: Well, it hasn't been an issue for us. I do believe that notification is what consumers are asking for when it comes to the post-paid environment, but we don't get that issue because, again, you are paying in advance. You are saying: I am going to pay for a month. I am going to get unlimited this, unlimited that, and I am going to get this.

6341   Every customer, pretty much, at our company, knows what they are getting, and they pay in advance for it, so there is no surprise bill at the end of the month. There is no, "Oh, look, you used this much roaming," it's all very straightforward.

6342   So we haven't had the issue where customers say: I didn't know about this. I didn't realize that it was to this level, and then you charge me overcharges.

6343   We don't have overcharges for anything. I mean, they don't exist. That is the whole basis of the model.

6344   So, while I agree with you, absolutely, that that is a concern of consumers, I don't know if it's a concern in this model.

6345   MR. BOOTH: I think the other thing on that, as well, is that we work very hard to keep the cost of our service as low as possible for the consumer, and we are very resistant to putting things into our business model that get passed on to the consumer in higher prices, right?

6346   And one of the things that we are conscious of is that we are in the second or third year of our company's existence. We have just set up. We have everything working well. Now, to impair the business with significant system costs and changes that our consumers will never use, where we will have to basically take that cost and pass it on to the consumer in higher rates, we just don't think is a great idea for Canadians.

6347   COMMISSIONER POIRIER: Okay. Thank you very much.

6348   One of my favourite subjects is locking and unlocking telephones, as you probably already know.

6349   You are supportive of Option 1, and you explained fully your reasons.

6350   I was wondering, again, are manufacturers requiring that the handsets you buy be locked?

6351   MR. LYONS: I don't believe so, and I am part of the group that actually buys the handsets. I am not a regulatory person, and I speak to the manufacturers all the time.

6352   We have actually asked for them to be locked when they are available, but as I mentioned before, sometimes they say: Look, this device cannot be locked because we sell it online, or we sell it other places.

6353   So we accept that, as well.

6354   But they basically give you the -- I am quite certain that if you asked for an unlocked device from a manufacturer, they would give it to you, even for a small purchaser like Mobilicity.

6355   COMMISSIONER POIRIER: I am surprised, this is the first time I get an answer to that question.

6356   MR. LYONS: Well, that's what we try to do, be transparent and we will tell you the way it is.

6357   All kidding aside, we have only purchased locked handsets, and the odd time, as I just mentioned, unlocked, but I have no reason to believe that they wouldn't provide them unlocked. It is just, really, the addition of a SIM locking PUK code and -- it is really not something that I think they would have a problem either implementing or not implementing.

6358   I think it is really your choice, especially for the bigger incumbents that have much larger order sizes than some of the smaller players.

6359   COMMISSIONER POIRIER: You said that you don't unlock the handsets. You don't do it at the company. That's what I heard. So your clients go elsewhere.

6360   How much, usually, do they pay to have their phone unlocked?

6361   MR. LYONS: It varies. It's between, probably, $5 and $30. You can look online. Whatever handset people have, they can just type "Samsung Galaxy S III - unlock code", and you will see about 10 Web sites pop up, and you just PayPal them $10, $20, whatever it is, and they e-mail you back the PUK code, which is a code that you put into the handset, and then it's unlocked.

6362   COMMISSIONER POIRIER: And then the guarantee still applies?

6363   MR. LYONS: That is the issue. To be honest, I am not familiar, off the top of my head, about warranty and how that is impacted and everything else.

6364   That is probably a lot of the resistance, as well, and that is part of the reason why we didn't get into doing that in our stores, because we didn't want to have dealers and salespeople fumbling with the handsets, changing things, and customers having issues with it, and dealing with warranty concerns and all that kind of stuff.

6365   So that was one of the reasons why we didn't offer it.

6366   But I don't know the answer to that question.

6367   COMMISSIONER POIRIER: Up to now I have heard of unlocking fees from $35 to $50 from bigger wireless service providers. Why is it so expensive, if it can be done for $5 to $30?

6368   MR. LYONS: Well, that I understand. It is because the carriers invest money, obviously, just like we do, in acquiring customers, even separate from the subsidy. There are commission costs, there are a variety of marketing costs, obviously, and associated costs to acquire a subscriber.

6369   So, for the same reason why we would say that our costs aren't $10 or $5 or $30, our costs are considerably more than that. We spend a few hundred dollars acquiring a customer.

6370   So if a customer has a good propensity to churn after you have unlocked their handset, obviously you would like to recoup as much of that as possible.

6371   COMMISSIONER POIRIER: There is one thing that I am not sure I understand fully. If all cellular phones were sold unlocked, personally, I believe it would help competition, wouldn't it?

6372   MR. LYONS: It's hard to say.

6373   If they were all sold unlocked -- it depends on what the unintended consequences would be. It would probably be good for companies like ours, but I don't think that it would necessarily be good for everybody, because the big folks would complain that churn rates would increase, because now they don't have the advantage of the contract plus the difficulty to unlock.

6374   It is hard to say who it would be good for and who it would be bad for, and whether the consumer would benefit overall.

6375   What I can say is, I think it would be better for a company like ours, because it would make it easier for customers to join our service.

6376   MR. BOOTH: It also depends on frequency bands, et cetera, as well. An unlocked iPhone will not work on Mobilicity because we are on the AWS spectrum, right?

6377   MR. LYONS: That's true.

6378   MR. BOOTH: So it doesn't mean the ubiquitous use of handsets across all carriers, it also depends on the frequency that the carriers work on.

6379   COMMISSIONER POIRIER: Okay. Transparency and billing.

6380   Imagine that I am one of your consumers and I buy a handset from you, plus I get the service. On my bill, do I get two different lines?

6381   MR. BOOTH: First of all, we don't issue bills at all. We don't issue any paper or any bill to the consumer.

6382   The way it would work is, you would come into the store, you would buy a phone for $200, and you would pick your plan. Say that you only want talk and text. It is $25 a month.

6383   You give us $200 for the phone and you pay for your first month, $25. We start it up, you leave the store, and you either pay every month, you come back and you pay, or you assign it to your credit card and it gets billed to your credit card every month, and that's it.

6384   COMMISSIONER POIRIER: And if I decide to move to another carrier, what happens?

6385   MR. BOOTH: You just stop paying your bill, or you just leave whenever you want.

6386   Say, if you signed up today, in 20 days you don't like us and you want to go somewhere else. Then you go somewhere else.

6387   You could wait until the end of your bill date. You could call our customer care line and cancel and say -- but the majority of our customers just don't pay on their bill date. We have no mechanism to go after them or try keep them at that point in time and they go and they go somewhere else.

6388   COMMISSIONER POIRIER: Okay. But if they decide to keep the handset and move to another carrier, they keep on paying their handset to your company?

6389   MR. BOOTH: No, they pay for the handset up front.

6390   COMMISSIONER POIRIER: Up front.

6391   MR. BOOTH: They own the handset from day one. So there's no --

6392   COMMISSIONER POIRIER: Okay.

6393   MR. BOOTH: -- we don't do any handset financing or tab or anything like that. If the handset is $200, you're paying $200 and as of that time you own the handset and you do what -- with it what you want.

6394   COMMISSIONER POIRIER: But you understand this model wouldn't work with people who are -- who have less credit, qui ont un moins bon crédit, those who are more vulnerable and earn less --

6395   MR. LYONS: No, that --

6396   MR. BOOTH: That's our customer.

6397   COMMISSIONER POIRIER: -- they couldn't --

6398   MR. LYONS: That's our core -- that's actually one of our core customer groups --

6399   MR. BOOTH: Yeah.

6400   MR. LYONS: -- because we have handsets as low as $50 or sometimes --

6401   COMMISSIONER POIRIER: Oh.

6402   MR. LYONS: -- even lower than that. So they come in, they buy a handset for $50, they buy our 25 dollar unlimited talk and text plan.

6403   COMMISSIONER POIRIER: Really?

6404   MR. LYONS: And, you know, they're in the game for $75 and their bill is $25 a month thereafter and it never changes. So those kind of customers actually really like our service because you don't need a credit check to join our service, you just pay the bill every month and away you go. And the handset is theirs. So if they decide to leave and go somewhere else, you know, that's their choice.

6405   COMMISSIONER POIRIER: I went on your Web site and I saw the word "unlimited", okay? And we had discussions about the use of that word, okay? What is "unlimited" for you or "limited"?

6406   MR. LYONS: So, voice, as I mentioned before, you pay by the month, not by the minute. We don't count minutes. I don't care if you've talked for a thousand minutes, 10,000 minutes, a hundred thousand minutes, we don't track it.

6407   COMMISSIONER POIRIER: So it's really unlimited?

6408   MR. LYONS: It's unlimited. In fact, we have people that use their phones for baby monitors. They literally put it next to the baby. It's a little bit of a problem, quite frankly, but anyways. They put it by the baby and then they go out and they use their phone for a baby monitor. So we have to -- you know, that's -- they're using it 24/7, you know. Sometimes we shut it off to see if they're actually awake and to see -- to come back and start the call again, but anyways.

6409   And texting, you can text, you know, a thousand texts, a hundred thousand texts, just go crazy. So that is completely unlimited. There is just no limit on it.

6410   As I mentioned, data is unlimited but there is a throttling impact. So our basic plan is 6 gigs of data, which I believe is more than any incumbent offers on a regular plan. They have some promo plans that sometimes get up to 6 gigs, but that's our basic plan. Our premium plan is 20 gigs, which is by far and away more than any carrier in Canada offers.

6411   So we offer an incredible amount of data as well. If you go over the 6 gig limit and if you're a basic plan customer, you get throttled back in speed but not in usage. You can still go and use and use and use but your speed will be reduced. So we believe that effectively that means it's unlimited because, a. you know, for voice for sure and texting it's completely unlimited. And even with data, it's still unlimited and 99 percent of our customers don't even hit the 6 gig threshold anyways because it's a pretty big bucket. And the ones that do can still go do what they need to do but they've just got a slowed speed experience.

6412   COMMISSIONER POIRIER: So we shouldn't forbid the word "unlimited" unless it's really unlimited?

6413   MR. LYONS: It's a key -- a very key component of our value proposition, as well as some of the other new entrants that I'm sure you'll hear from later on. Very key for us to say that.

6414   COMMISSIONER POIRIER: But you've looked at some of your competitors and you know that sometimes it's not used as unlimited?

6415   MR. LYONS: Yes, we -- we're well aware of that. We had a marketing campaign in Q4 that some of the other incumbents didn't like that made illusions to that fact.

6416   COMMISSIONER POIRIER: Okay. You -- in your document you also talked about roaming. The CRTC, you know, doesn't regulate tariffs and wireless industry, but you would want us to regulate roaming tariffs. Aren't the market forces serving better the consumers presently on that matter or it's still an element we should deal with in another proceeding?

6417   MR. WONG: Yeah. So understanding that this is not necessary part of the --

6418   COMMISSIONER POIRIER: Yeah.

6419   MR. WONG: -- part of the code obviously, but there is two aspects of roaming. There is one, the wholesale aspect of roaming, and, two, the retail aspect of roaming. As a new entrant we obviously have -- we obviously need to abide to -- you know, or to get -- to obtain roaming from some of our domestic partners from some of the incumbents. However, you know, the market force that's in existence, quite frankly, because there is only three new entrants really and there isn't really any market force which touches on -- you know, touches on roaming, so there isn't really anything that would drive -- from the market that would drive wholesale prices down, so which is -- which is what we -- you know, which is a problem for us because if the prices comes down for us we'll move it down for the consumers as well. So --

6420   COMMISSIONER POIRIER: M'hmm.

6421   MR. WONG: -- you know, therefore, you know, giving consumers better pricing.

6422   COMMISSIONER POIRIER: I wanted to bring in the topic only because plenty of consumers would love us to go into that zone in this hearing, but we will not and I wanted them to know why we will not. Thank you very much for some clarification also on your viewpoint.

6423   Let's go to the implementation of the code. You would be willing to apply it as soon as possible, I guess, okay, and you wouldn't prefer we grandfather some elements but not all of them?

6424   MR. WONG: We -- so we do understand that there are certain elements that -- you know, of the code that, you know, simply practically cannot be done. For example, you can't send out paper contracts to each and every -- you know, you can't rewrite the entire contract to each and every one of your subscriber base, right, but there are other aspects of the code that, you know, may be able to apply, which is why, you know, we understand -- we suggested that there are some aspects of the code should be -- should apply.

6425   COMMISSIONER POIRIER: In your document you precise all those elements, so ...

6426   MR. WONG: Yeah.

6427   COMMISSIONER POIRIER: Do you think if we write down in the document that applying certain provisions of the wireless code to existing contracts on a going forward basis would be a good formula?

6428   MR. WONG: Sorry, can you repeat the question?

6429   COMMISSIONER POIRIER: I will for sure. Applying certain provisions of the wireless code to existing contracts on a going forward basis, do you think it would be a good provision to add to the code?

6430   MR. WONG: Yeah, to the -- I think to the extent that -- you know, to the extent that it applies and to the extent that it applies or is practical because, quite frankly, you know, Canadians have waited very, very long for this to happen and, you know, it would be nice if most Canadians can benefit from the code.

6431   COMMISSIONER POIRIER: Okay. And you are supportive of both the national code plus the provincial legislation?

6432   MR. WONG: Yes, that's correct.

6433   COMMISSIONER POIRIER: Strongly?

6434   MR. WONG: I don't want to go into the Constitutional argument, but I would rather want to look from the view of the consumers and I think, you know, consumers would prefer this.

6435   COMMISSIONER POIRIER: Okay. Why?

6436   MR. WONG: Just in general I think consumers would prefer more protection than, you know, less protection.

6437   COMMISSIONER POIRIER: Wouldn't they be all mixed up because they would have the national code plus the provincial laws? We were told by some of the incumbents that it would be a major problem for consumers to understand which regulation they should use.

6438   MR. WONG: I can understand that view as well. It can -- in certain circumstances can pose some complexity to interpreting, you know, which code should I go to, but it's nothing unusual. It's nothing unusual. It's not the first time that two codes can apply. And, you know, the way -- I think the way that the CRTC has included the provision where, you know, the code should be interpreted for the benefit of the consumer, I think that's -- you know, that's a great workaround.

6439   COMMISSIONER POIRIER: Okay. But you're not in business in Quebec?

6440   MR. WONG: That is correct.

6441   COMMISSIONER POIRIER: Okay.

6442   MR. WONG: We're not.

6443   COMMISSIONER POIRIER: You're in business in Alberta, in Ontario, and presently there is no provincial codes where you're in business?

6444   MR. WONG: That is correct also.

6445   COMMISSIONER POIRIER: Okay. So you didn't have to fulfil two different requirements and you won't have unless you decide to go in business in the eastern part of Canada, plus if Ontario decides to proceed with --

6446   MR. WONG: Yeah. Yeah. So in anticipation of the Ontario --

6447   COMMISSIONER POIRIER: Legislation.

6448   MR. WONG: -- legislation, you know, we are prepared to live with both codes.

6449   COMMISSIONER POIRIER: Wouldn't it add a lot of work for you to have to comply to two different levels of government regulation?

6450   MR. WONG: The question is the highest level of, you know, strictness. So, you know, you just abide to the highest level, whether it is the federal code, whether it is the provincial code, and then, you know, and that's where we -- you know, we would set our standards.

6451   COMMISSIONER POIRIER: And complementarity too.

6452   MR. WONG: Yes.

6453   COMMISSIONER POIRIER: Highest level and complementarity.

6454   MR. WONG: Yes, m'hmm.

6455   COMMISSIONER POIRIER: Okay. So you don't have to disconnect people, that's wonderful.

6456   MR. LYONS: Well, it's a blessing and a curse. They disconnect themselves.

6457   COMMISSIONER POIRIER: That's it.

6458   MR. LYONS: Yes.

6459   COMMISSIONER POIRIER: That's it. That's also different from the usual model.

6460   So I think, Mr. Chair, I'm done. So I'll let the other commissioners ... Thank you very much, gentlemen.

6461   MR. LYONS: Thank you.

6462   THE CHAIRPERSON: Ms. Duncan.

6463   COMMISSIONER DUNCAN: I have a few questions. Do your customers get a contract when they come? I know you don't have long term, but do they get something that tells them what the terms are?

6464   MR. BOOTH: We have terms and conditions obviously that we review with the customer at the point of sale and they can get a copy of, but the customer usually will walk out of the store just with a set of terms and conditions if they want and they understand what -- their usage or what's included in their plan. But frankly, our plans are simple enough where we don't see a lot of confusion of our current customer base, where they didn't know they had a service and they use it or they try to use it and they're confused by it because we've just tried to keep it as simple as possible for our customers.

6465   COMMISSIONER DUNCAN: So if I looked on your Web site, would it be on the Web site then?

6466   MR. BOOTH: Terms and conditions? Yes. Yeah.

6467   COMMISSIONER DUNCAN: And I just -- I notice that you mentioned that their bills never change.

6468   MR. BOOTH: Correct.

6469   COMMISSIONER DUNCAN: Never change is a big commitment.

6470   MR. BOOTH: Well, we --

6471   COMMISSIONER DUNCAN: So you've never had a rate increase?

6472   MR. BOOTH: Yeah, so there's two aspects. One would be any regular rate plan. Like, if you look at our Web site right now, if there's no promotion going on or certain promotions, we actually tell the consumer it's a guaranteed rate for life. So if you sign up with Mobilicity under that rate, it will not change; guaranteed rate for life. We do run certain promotions and we're clear to the consumer that's a professional plan and it's good for a certain duration. Usually it's one year. And so, for instance, we ran a 50 percent off promotion where the 25 dollar plan was 12.50. That 12.50 a month is good for one year, and then after a year it goes up to $25.

6473   COMMISSIONER DUNCAN: So if I was your customer and I wanted to take a chance on the one year, I could give up the lifelong guarantee and take the 12.50.

6474   MR. BOOTH: Sure, and that's a decision a customer would have to make to say, "Is it better for me to go with a promotional plan for a year or lock myself in for a rate, you know, for life?" Yeah.

6475   COMMISSIONER DUNCAN: Okay.

6476   So do you see that we'd have a separate document, for example, in your instances compared to Bell, TELUS and the others for the Code then? Because if we are going to give the customers the Code you suggest some sections that would apply? I see your Appendix A.

6477   MR. BOOTH: So Gary, do you want to...?

6478   MR. WONG: Yeah, so just to be clear on the question, so you're asking whether or not we would be in the position to provide a wireless Code to promote the wireless Code?

6479   Is that the question?

6480   COMMISSIONER DUNCAN: Well, I'm just wondering if we put a Code in effect and we want to benefit pre-paid wireless consumers, and it's not necessary to tell them all the stuff about the fixed contracts, are you willing to -- are you agreed that they should be two completely separate documents and you just use the one? Or would you think it's just going to be --

6481   MR. WONG: Yeah. I think -- you know, I think the pre -- our motto is always going to be a subset of the main Code.

6482   I can see benefit. I haven't really given it much thought and we obviously have not discussed this. But it's -- I can see benefit in both.

6483   On the one hand, you know, providing the full Code would actually inform the customer about everything. So if they do want to switch over to post-paid they also -- you know, they would also learn from -- you know, from the provisions in the Code.

6484   I think, you know, that's also helpful as well.

6485   COMMISSIONER DUNCAN: Okay. So as far as promoting the Code then, which was one of the items under consideration, because you're not giving a contract, you're just discussing it or they can go to the Web site afterwards -- in this instance would you hand them a copy of the Code?

6486   MR. BOOTH: Yeah, I think, you know, if you look at our business and how we've operated, we've always been advocates for the consumer and we're about transparency and we try to be as transparent as possible.

6487   We think it's in the best interests of our business model that people know everything they can. You know, we always encourage customers even through our TV campaign in Q4 which was about, hey, read the fine print and make sure you know what you're signing up for before you sign a contract.

6488   So I think it's advantageous to our type of consumer and consumers in general. So, yeah, absolutely we would.

6489   COMMISSIONER DUNCAN: Just one other point, on that section D4.3 about the limited and disclosing limited, so you do have a limited aspect to what you're offering through throttling.

6490   So I'm just wondering if the wording in that paragraph if you'd like to suggest some other wording. They say you can't use limited unless it truly is unlimited and if you're throttling, then I guess it's not unlimited.

6491   MR. LYONS: See the thing is we still believe it is unlimited for a couple of reasons.

6492   Number one, it doesn't end. You can still use more and more data.

6493   Number two, our initial bucket is so big that to compare it to what the incumbents do when they have one gig or two gig plans -- ours is six gigs. It's a basic plan. Our premium one is 20 gigs which is like a very large amount of data. So from our position, we believe that constitutes effectively unlimited. I mean, it's just that -- it's that different.

6494   Yeah, we can -- I don't know, Gary, if you want to talk to specific language.

6495   COMMISSIONER DUNCAN: So it's usage limit and then another limit, is what you're saying.

6496   MR. LYONS: Yeah.

6497   COMMISSIONER DUNCAN: So maybe there would be wording that you could provide that would --

6498   MR. LYONS: Because just, again, it's painting a room with the same brush, right?

6499   I mean I think the concern is and the incumbents typical position is you have use -- you know, you have a limit and then it costs more to go above the limit. And we don't charge more. It's just a matter of the speed.

6500   COMMISSIONER DUNCAN: I'm clear with that. Okay.

6501   MR. LYONS: Right.

6502   COMMISSIONER DUNCAN: So I think it might be worthwhile to have something for the benefit of consumers, if you could undertake to do that?

6503   MR. WONG: Yes, no problem.

Undertaking

6504   COMMISSIONER DUNCAN: Okay. For February 22nd then.

6505   MR. WONG: M'hmm.

6506   COMMISSIONER DUNCAN: Okay, thank you, that's it. Those are my questions. Thank you very much.

6507   Thank you, Mr. Chairman.

6508   THE CHAIRPERSON: Yes, Commissioner Molnar, please.

6509   COMMISSIONER MOLNAR: Thank you. Good afternoon.

6510   I just want to understand a little bit more about your roaming. And you charge the same roaming fee if I understand for text, voice and data, is that true when you were out of your --

6511   MR. LYONS: No, it's -- well, it's --

6512   COMMISSIONER MOLNAR: -- coverage area?

6513   MR. LYONS: -- first of all, it depends obviously, if you are Canadian or U.S. because our business model is really urban-focussed.

6514   So our coverage polygon that we actually have our own sites and our own network, is confined to urban areas. So for example, here in Ottawa it kind of goes south of the airport, kind of covers Gatineau here. But if you drive to somewhere else you actually start to roam on one of the incumbent networks.

6515   So that is pay-per-use and that does come with a charge. There is different data charges as there is a voice charge; 20 cents a minute for voice and then there is a data charge of --

6516   MR. BOOTH: 1.50.

6517   MR. LYONS: -- 1.50 is it, per meg? 1.50 per meg. And that's the same price as it is for the U.S. Our U.S. roaming is also 20 cents a minute voice and $1.50 a meg for data.

6518   MR. BOOTH: Yeah.

6519   COMMISSIONER MOLNAR: So people have to put money into their wallet in order to cover these charges and if they don't have enough money what happens?

6520   MR. LYONS: They get directed to the call centre and they have to put money in their wallet to the call centre through a credit card or other means to top up their wallet, or they can do it on their handset too.

6521   COMMISSIONER MOLNAR: Or otherwise?

6522   MR. LYONS: Otherwise they can't use the services.

6523   COMMISSIONER MOLNAR: Okay. So you --

6524   MR. LYONS: So there is no surprise, right? That's again -- this goes to the bill shock issue.

6525   COMMISSIONER MOLNAR: Right, right.

6526   MR. LYONS: If I have no money in my wallet and can't make a call then I know I have to put in 10 bucks and then I know I will use up the 10 bucks when I use that much talk time.

6527   COMMISSIONER MOLNAR: M'hmm.

6528   Is it your experience that most customers -- well, I guess it's a little tough here because some of the roaming -- kind of your urban roaming it's just, I think, probably your day to day work. So you're not going to choose to not have the capacity or capability of doing that.

6529   But I wondered if you could tell me --

6530   MR. LYONS: Yeah, there's no roaming inside our polygon. So you know, say like Vancouver, if you're in the Greater Vancouver Area where we have our actual network, you actually can't -- we'll actually prevent you from roaming to ensure that you don't accidentally eat up your wallet usage.

6531   So when you're in an area where we say we have coverage you're prevented from roaming. So you're on Mobilicity and if you go into a building and you don't have coverage then you're not going to roam on another network. You're just not going to have coverage just like any other network.

6532   But if you leave and you go to Victoria then you will start to roam.

6533   COMMISSIONER MOLNAR: Okay. We've heard some of the other wireless providers say that having caps of any sort is really not customer friendly. And so we should never, you know, put in any kind of a regulation here that would cause a customer to lose service.

6534   Is your experience that your customers always top up?

6535   MR. BOOTH: Yeah. You know, the good thing about or we make it very clear to our customers when they are in an unlimited and when they are roaming.

6536   So first of all, a customer is notified on their handset. It will tell them they're roaming. So the consumer knows right away if they're in coverage in the unlimited area or they are roaming.

6537   We actually rarely if ever hear from a customer who thinks it's a problem with the business model. More on the other side which we get accolades from consumers which helps them, you know, to prevent spending money on roaming when they don't know they're roaming.

6538   We think that's a big paying point amongst, you know, some of the post-paid incumbents where consumers don't know they're roaming and they incur roaming charges and they are unaware that they are no longer in their unlimited area or their home area or whatever you want to call it.

6539   So, you know, I think the model works perfectly for our consumers. We spend a lot of time educating the consumers at the point of sale where the unlimited area is, what happens when you go outside it.

6540   We also offer, you know -- in three of the four of our plans we do offer roaming minutes included in the plans. So if you're a consumer who goes, "Jeez, you know what? I do go outside of your unlimited area once or twice a month" you can select a plan that has roaming minutes in it so it's already included in your plan. And when those minutes run out you would have to go to a pay-per-use model to use roaming.

6541   But there is no mystery in our model to the consumers and there is no misconception about, "I was roaming and I had no idea and I didn't know I was doing that".

6542   COMMISSIONER MOLNAR: Even on the data side?

6543   MR. BOOTH: Yeah, the same thing. If you're roaming for voice or your handset says you're roaming then you're roaming for data and you're roaming for text. You're either roaming or you're not, right.

6544   MR. LYONS: We get a lot of calls to the call centre where someone says, "I'm not getting my emails or I'm not getting this" and you know the usual answer eight times out of 10 is, "You don't have money in your wallet".

6545   So that goes to show you that they immediately get a response and understand that, "Oh, okay, I have to do this to put money in my wallet" and that's where the pay-per-use money comes from.

6546   MR. BOOTH: Yeah.

6547   MR. LYONS: So they know when they're doing it and when they're not doing it.

6548   COMMISSIONER MOLNAR: And this wallet rolls over month to month, does it?

6549   MR. LYONS: No, just it stays there in perpetuity. There is no expiration on the wallet.

6550   COMMISSIONER MOLNAR: Okay. Thank you.

6551   THE CHAIRPERSON: Commissioner Simpson?

6552   COMMISSIONER SIMPSON: Hello, gentlemen.

6553   I'd be interested in your views with respect to whether a carrier has the right if it changes its coverage area to amend a contract, if you think that's a reason for doing so.

6554   MR. LYONS: That's a good question, one that we probably haven't contemplated. Although usually I would assume that coverage is amended to the good in terms of bigger coverage. So I guess you're suggesting maybe more.

6555   You know, I mean, I can only speak for ourselves. But I think from our perspective I don't think we would consider that an excuse for -- you know, our customers are pretty picky about their pricing as it is and we're in a fiercely competitive side of the business.

6556   So I don't think we'd be able to charge more for expanded coverage and we certainly wouldn't be able to charge less for reduced coverage.

6557   MR. BOOTH: Yeah, and we've gradually expanded coverage on some of our areas. So for instance, we didn't cover the south end of Edmonton. We covered that as of, you know, late last year. It's not like we saw that as a contractual change or charged customers more for it or anything. So 99 percent of the time with a company like ours it's going to be the benefit.

6558   I think the essence of your question was probably if I'm a consumer and, you know, in downtown Toronto and I'm on post-paid and now you've shrunk my unlimited area and you don't include Scarborough and you don't include Brampton and you don't include Oakville anymore, is that a breach of contract, right?

6559   My view would be, yes, it is. You materially changed what I've signed up for as a consumer and you arbitrarily chose to change the conditions that I've signed up for it.

6560   COMMISSIONER SIMPSON: And the opposite would be true. I'm looking at the map of Vancouver and I noticed that you've got two chunks of what would -- maybe because you're a city phone service by definition. You've got a big chunk of Delta and Pitt Meadows that are not serviced yet.

6561   But I'm just curious as to how you would define a city service to the extent that you wouldn't get yourself into a crossfire with the consumer. You know, do you define --

6562   MR. BOOTH: Yeah.

6563   COMMISSIONER SIMPSON: -- the outer reaches of what you already, you know, pre-defined as a city, so that if you haven't got total coverage within that city they could expect that as you grow to the edges of your defined area they --

6564   MR. BOOTH: Yeah. So, one of the first things we do with a customer is we show them very clearly, it's on a big eight-foot map in every of our stores, what our coverage is in that city.

6565   So, if you're in Ottawa and you go to any of our stores, the first thing you're going to see is exactly where our coverage is in Ottawa and what's in and what's out.

6566   And then if we -- you know, if we had plans to expand to a certain area, we would tell you that at that point, but we make sure it's very clear to that customer because, you know, a buyer's remorse, or a customer signing up on the service and joining and then leaving will cost us money, we lose money in that transaction because generally, even if we're, you know, not subsidizing the handset heavily, there's still costs associated with servicing that consumer.

6567   If the consumer leaves because they're unclear about coverage and they live outside of coverage or something happens, that's actually bad for us.

6568   So, we do everything we can to prevent that, and one of them is making sure that consumers are fully educated on where our coverage starts and stops.

6569   COMMISSIONER SIMPSON: Hmm... That's great. I appreciate that very much. Thank you.

6570   THE CHAIRPERSON: Just a few questions for me.

6571   In paragraph 18 of your submission today -- and you're one of the few, if not the only one, who's raised this -- I believe you raise it in the reply comments, it's this notion of putting a formula cap on the device subsidy.

6572   Could you explain to me exactly how that would work and why do you think that's important?

6573   MR. WONG: Yeah. So, the way this formula would work is the amount of subsidy would not be more than 20 percent and it's designed really just to manage the inflation of the cost of the phone, because when, say, for example, a new phone comes out and, say, for example, Canada is the first one to have this phone and for one reason or another the manufacturer had not announced the price or, you know, the carrier is free to set the price, then either -- then this is something that could -- potentially carriers could set this price to a, you know, relatively high threshold thereby increasing the amount of subsidy per month and thereby also increasing the early termination fees if, you know, the customer is to exit early.

6574   THE CHAIRPERSON: Could it not have the other consequence of actually requiring even longer contracts?

6575   So, let's say you have a five or a $600, you know, iPhone type device and if you're capping it at 20 percent the only way you get to, you know, amortize the full value is having an even longer contract.

6576   MR. LYONS: Yeah, I think what Gary's getting at, it's a blend between that concern and the fact that typically when you see the handset pricing for incumbents, when they go to the store they have the two-year contract price which they're going to ignore, because they have the there-year contract price, which everybody goes for, and then they have the no-contract price, but their no-contract price is well beyond the cost of the phone.

6577   You know, we're all in the same market, buying the same phones. I can tell you that our price for phones is probably higher than their costs and those prices that they advertise for that unsubsidized price are even higher than the price that we pay for the phones.

6578   So, we know that they're not -- the wholesale cost of the phone, that they're something above that.

6579   So, I think it's a mechanism, I think, to sort of try and balance out a super inflated retail cost to justify a higher ETF in return.

6580   So, in other words, they're saying, well, this phone is a $750 phone, when in reality it's only $600 wholesale, it's to kind of deal with that mushy middle of that $150 of extra retail.

6581   THE CHAIRPERSON: I'm still worried there may be an unintended consequence there.

6582   MR. LYONS: There could be. That's a fair comment.

6583   THE CHAIRPERSON: Here, I'm going to put a case to you and I'm dancing around a constitutional question when I'm putting it to you, the fact that you -- so, look to your lawyer -- it's this notion of the Ottawa-Gatineau situation, right.

6584   Assume the hypothesis, I'm an urbanite who lives in Gatineau -- like I believe you don't have points of sale in Gatineau, maybe you do, but they're in Ontario -- but I cross the river, but I'm a resident of Quebec but I go and get your and sign up to your -- I get your phone, I sign up to your offering, how do you deal with that?

6585   I take it you're not complying with the Quebec legislation in that case?

6586   MR. LYONS: It's a tough hypothetical question here, but I would posit that our assertion would be that we're an Ontario-focused business, we offer service for sale in Ontario. If you want to travel to Ontario and acquire our service, then that's -- you're more than welcome to, but we should be bound by Ontario legislation in that case as opposed to Quebec or any kind of extra-provincial because, you know, that's our place of business, that's where we're selling, that's where we're marketing, we're not marketing in Quebec except for maybe some bleeding and spill-over and such things.

6587   So, I suppose we would suggest -- and I don't know if Gary's going to hit me -- but I would suggest that we would say that, you know, if Ontario's the place we're doing business and marketing and offering for sale our services and doing those things, then we should be bound by the legislation of the province that we're effectively marketing in.

6588   THE CHAIRPERSON: Do you want to add anything?

6589   MR. LYONS: Am I wrong?

6590   MR. WONG: Yeah. So, to be honest, I really do not want to deal with the constitutional questions plainly because, you know, I don't think this is the right venue --

6591   THE CHAIRPERSON: It's not so much a constitutional question, I'm asking where the contract is formed.

6592   MR. WONG: Yeah. So, the contract is -- to our mind the contract is formed at the -- contract, or the sale is formed at the point of sale. So, therefore -- you know, therefore, the -- you know, if it's sold in Ontario, then it should, you know, really be Ontario law.

6593   THE CHAIRPERSON: And the only way I can get one of your phones and services is to be in the store; can I order it online or call you and get it delivered in Quebec?

6594   MR. LYONS: No, it's -- we -- it's in the store effectively, or in one of our retailers, we have, you know --

6595   THE CHAIRPERSON: You have other retailers?

6596   MR. LYONS: Right.

6597   THE CHAIRPERSON: So, it has to be --

6598   MR. LYONS: Right.

6599   THE CHAIRPERSON: -- physically...

6600   MR. LYONS: I mean, taken to an extreme example, I mean, it's the same as if some resident of the EU came to Canada and, you know, we're obviously an easy choice because you can pick up our stuff and, you know, very quickly and pay in advance and away you go.

6601   And then you went back to Europe and then said, you know, it's subject to some consumer protection legislation over there.

6602   That's an extreme example. But at the same time we would say that, you know, we market in Ontario or Alberta or B.C., those are the provinces we currently operate in and that's who we're focused on and if you want to come to those provinces and conduct business and acquire our services there, then we think it would only be fair to be, you know, bound by the jurisdiction of those provinces.

6603   THE CHAIRPERSON: So, this hypothetical person who goes into your Ottawa store and wants one of your phones and your services under your model, do you take any customer information, like address?

6604   MR. LYONS: We take minimal customer information which is -- it's part of the model. We take effectively name, address, phone number and email, but the reality, is because there's no credit check, we don't really have the means of verifying all those things.

6605   So, we have a lot of Mickey Mouses and that kind of thing in our database.

--- Laughter

6606   MR. BOOTH: But there's also no consumer rationale for us to gather extensive customer information. I'm buying the phone, I'm paying for the service in advance.

6607   If I'm the consumer, you know, why do I need to give you my home address and all these other things.

6608   MR. LYONS: Right. What's the advantage and I'm not obligated to.

6609   THE CHAIRPERSON: Imperfect recollection, but it seems to me that consumer contracts in Quebec are formed at the residence of the consumer and not at the place of business, I think that's the issue.

6610   Anyhow, we'll let you figure that one out.

6611   We had a lot of discussion on pre-paid cards and whether there's an expiry date on those, and I take it that, in your case, you said earlier that there's no limit, it's in perpetuity; is that correct?

6612   MR. LYONS: Well, we have no cards, so, you don't -- even for the top-up stuff we mentioned, you kind of just pay as you go for wallet and whatnot, but for the core services, there's no usage-based billing, so...

6613   THE CHAIRPERSON: But the folks were telling us with respect to pre-paid cards --

6614   MR. LYONS: Yeah.

6615   THE CHAIRPERSON: -- one of the reasons they can't -- you know, they have an expiry date is so that they can re-harvest the phone numbers.

6616   MR. LYONS: Right.

6617   THE CHAIRPERSON: So, what do you do in your case?

6618   MR. LYONS: We have a time period, I believe it's 90 days where we re-harvest the phone number. So, if someone disconnects, there's a period of time which they remain inactive where we try to solicit them to continue service. If they fall off, then we have 90 days of a sort of grace period and then we re-circulate the phone number at that point.

6619   THE CHAIRPERSON: And the only way, because you have Mickey Mouse addresses, that you try to get them back is through the device somehow?

6620   MR. LYONS: Or email. I mean, believe me it's in our interest to get the correct information as much as possible and that's always a big bone of contention for us, with our dealers and our salespeople to make sure, look, it's important to us, get their real name, get their real email, get their real address because these are all tools that we need to use to retain our customers.

6621   So, you know, often times we -- between the phone number, between -- if they poured it out, for example, or between the email address or whatever else, we have some form of way of communicating with the customer hopefully.

6622   THE CHAIRPERSON: Okay. Those are my questions. That's it.

6623   MR. LYONS: Thank you.

6624   THE CHAIRPERSON: Thank you very much.

6625   MR. BOOTH: Thank you very much.

6626   THE CHAIRPERSON: Let's take a 15-break until 3:15 for the next presentation.

6627   Thank you.

--- Upon recessing at 1458

--- Upon resuming at 1515

6628   LE PRÉSIDENT : À l'ordre, s'il vous plaît.

6629   So, we will now hear from the Consumers Council of Canada. So, welcome. Please identify yourself for the purpose of the transcript and make your presentation, please.

PRESENTATION

6630   MR. HOGARTH: I simply can't handle out during the introduction. For the record, my name is Dennis Hogarth and I am a Director of the Consumers Council of Canada. I am here today on behalf of Aubrey Leblanc, the Council's President, who had hoped to be here, but was unable to attend.

6631   And joining me here today are Ken Whitehurst to my left. He is the Council's Executive Director, and Monica Auer, our legal head counsel in this proceeding.

6632   In the next few minutes I will briefly describe the Council and its work, and our interest in this proceeding. I will then set out our views on the Wireless Code, concluding with specific recommendations.

6633   The Consumers Council of Canada is a non-partisan, not-for-profit organization focused on protecting and strengthening consumers' rights and responsibilities. We participate in many regulatory proceedings including financial services, energy utilities, and health care, among other issues.

6634   The Council uses research and education to support an efficient, equitable, safe and effective marketplace. In representing consumers, the diverse background of our members enables the Council to work with all levels of government, and with large and small businesses, from coast to coast to coast.

6635   In my own case, for example, after graduating from the Richard Ivey School of Business I joined KPMG, where I became a CA and Partner of the Canadian firm, serving in both client service and internal management roles.

6636   I have been certified as both an IT auditor and information security manager, and was elected in 1994 as a Fellow of the Ontario Institute of Chartered Accountants for my work surrounding the adoption of emerging information technologies in audit and accounting. I have also been certified as an Information Privacy Professional.

6637   This proceeding has been especially interesting for me because the issues it raises are so familiar. I established KMPMG's national Computer Audit practice in 1984, for example. In 1994 I formed and led KPMG's global Technology Group, which coordinated global IT networking and processing for over 100 KPMG-member firms around the world.

6638   From 1999 to 2011 I led KPMG's International Information Risk and Security Office. It focused on information governance, risk, security and privacy issues from a multinational perspective. My group not only developed, but implemented the policies, training and compliance programs associated with the extensive use of mobile technology being adopted by KMPMG's global network of over 130,000 partners and staff.

6639   Since retiring from KPMG in 2011, it has been interesting to see that the problems I deal with thirty years ago remain with us. I am still being consulted by clients about their data governance structures and related risk issues. Currently, for example, I am conducting a research study for the Consumer's Council that is supported by the Canadian Office of Consumer Affairs about emerging cyber threats and risks associated with the use of mobile devices by consumers.

6640   From the perspective of the Council as a whole, our interest in this proceeding is to ensure that Canadian consumers' rights and abilities to participate in the market are protected and preferably strengthened.

6641   As our written submissions mentioned, consumer rights are protected not just by Canadian, but also by international law. In 1985, the United Nations General Assembly adopted Guidelines for Consumer Protection.

6642   Among other things, these Guidelines set down the principle that consumer have a right to expect truth, choice and redress from the marketplace.

6643   We were therefore pleased with the CRTC's decision to hold this hearing. The problems it can address have been years in the making.Millions of consumers rely today on wireless telephones across Canada. Excessively complex contracts and unexpectedly high charges compelled to many customers to complain that their elected provincial representatives finally began to enact consumer protection legislation.

6644   While some decry such laws as a 'regulatory' responses, regulation can also be viewed as a marketplace response. Legislators and regulators stand in for consumers in the marketplace, especially when three competitors in that market take in more than 90 per cent of its revenues, as is now the case in the wireless sector.

6645   While we support and work with provincial consumer protection agencies, telecommunications falls under federal jurisdiction. The CRTC could and should play a key role in protecting consumers' interests.

6646   A Wireless Code that is properly designed, implemented and enforced could offer consistent protection of the rights of millions of wireless telephone consumers in every province and territory?. It could be a small step -- or a giant one -- for protecting consumers.

6647   In the next few minutes I will set out the Council's views on the Wireless Code. Although we believe there are even better alternatives to meeting consumers' needs, the Council supports much of the draft released by the CRTC at the end of last month.

6648   I will begin by briefly listing the positive aspects of the Code that must, in our view, be retained. I will then address other aspects that require improvement. Attached to the printed copy of our remarks, which we have given to the hearing secretary, is a copy of the draft and our comments at this time on its wording and options.

6649   The CRTC's draft Code offers a number of improvements over the status quo.

6650   In particular, the Council recommended and therefore welcomes the idea of a Personalized Information Summary. Millions of Canadians will benefit by having a clear and succinct statement of what they are being offered by wireless services providers. They should not have to buy anything to obtain or retain a copy of this document.

6651   The Council has been very critical about the extremely misleading and nearly systemic use of the word "unlimited". The very fact that we have to consider defining this word is proof that there is a serious problem with how it is being used. We therefore welcomed the introduction of a definition for the term, and the inclusion of information about limits in the personalized summary.

6652   The draft Code's requirement for push-based consumption warnings was also very welcome. We see it as an efficient and more effective way for consumers to be informed about their account.

6653   We also strongly support the idea that consumers should be given the option of applying caps to their wireless service expenditures.

6654   Next, we would like to address aspects of the draft that concern consumers.

6655   To start, the definitions set out in the draft Code do not capture all of its important terms, at times uses circular definitions, and at others uses terms that are at best misleading.

6656   For example, considering the important role of month-to-month contracts, why are they not defined? Conversely, why are early termination fees defined as early termination fees?

6657   Our next comment addresses contractual clarity. The Council agreed with the many consumers who wrote to you about their frustration with high wireless rates that are difficult to understand and to predict.

6658   This frustration is very real. It begins when monthly charges are higher than promised. It is compounded by the enormous time needed to correct even small problems.

6659   The Code can begin to address this frustration by mandating clarity in three areas:

6660   First, consumers constantly hear they are being "given" wireless devices through a subsidy or discount. The Draft Code also refers to subsidies.

6661   In our experience, a subsidy is a grant of money that does not have to be repaid. What consumers are actually being offered is a loan to buy a wireless device or devices on instalment.

6662   If the Code is to be a tool to enforce consumers' interests, it should not use marketing or misleading language. When consumers must pay for a handset over time they are not being "given" anything for free, they are really taking out a loan. This makes "early termination fees" the cost of prepaying or paying off a loan. The Code should explain this point to consumers to enable them to understand what is really being offered in wireless contracts and advertising.

6663   Second, the number and variety of plans for what should be a very simple service has grown far too complex. Today's system has not just created the illusion of choice: for the average consumer, it has created a monster.

6664   This is why the Council, like others, recommended a personalized summary that sets out key terms in a standardized format. This simple step will enable consumers to understand what they are actually buying. It will promote competition by enabling consumers to make decisions on an informed basis.

6665   Third, wireless business plans that are based on lending consumers money should be clearly identified. Describing loans as "subsidies" is misleading and ultimately distorts the marketplace.

6666   The Code can change this by dropping terms like "economic incentive" and "subsidy".

6667   It should also ensure that loan repayments are made over the actual length of contracts. This will begin to address the serious problem of complicated and excessive charges for depreciation.

6668   We therefore oppose Option 2 for clause D3.3 which uses 48 months to calculate the cost of ending a loan early, instead of the actual length of a contract. How is this reasonable for consumers?

6669   In our view, Canadian consumers are the best judge of how they should spend their money. They should know when they are borrowing money.

6670   Mandating clarity through personalized plans and accurate language will go a long way towards giving them back control over their telecommunications expenditures.

6671   Another area that can be improved involves roaming fees.

6672   The draft Code defines "roaming", but it does not require service providers to tell consumers the areas in and outside of Canada where using their phones will trigger excess fees or when these areas might change.

6673   Considering that mobile phones are designed to enable users to use their phones while travelling, this gap is difficult to understand.

6674   It is also out of step with 27 other advanced industrialized countries in the European Union. They have been regulating roaming fees for several years, precisely to eliminate bill-shock for mobile consumers.

6675   If Canada really wants to encourage mobility, the final Code should at least require providers to inform consumers where roaming charges apply and what they will be. Pre-notification and caps will also help.

6676   Finally, we would like to address promotion, enforcement and evaluation.

6677   We agree that wireless companies should promote the Code and the body that enforces it. It is not clear from the draft whether participating companies will promote the Code consistently across their promotional literature and all of their web pages. If not, they should.

6678   As for enforcement, we would like to make three points:

6679   First, the draft distinguishes between administration and enforcement. Section Cl says the CCTS will administer the Code and resolve consumer complaints. It also says the CRTC will enforce the Code. This is confusing.

6680   Perhaps Cl is referring to delegated responsibility. If so, perhaps different wording can and should be used to explain that consumers always retain the right to complain directly to the CRTC.

6681   Second, section El sets out a new penalty. It proposes that the CCTS can impose a fine of up to $5,000 on a company that has breached the Code.

6682   Penalties can do several things: They can make injured consumers whole; they can sanction those who broke the rules. Most importantly, they can encourage compliance by creating a meaningful deterrent.

6683   In this case, it is not clear how this fining power will work. For example, could the CCTS order a company to compensate all consumers it has injured in the same way, even if they have not complained?

6684   As for deterrence, will a $5,000 penalty deter large companies whose balance sheets are in the billions of dollars? Suppose a wireless company earned $3 billion in operating profits last year and broke the Code 600 times, even if the CCTS levied the maximum penalty the total penalty would amount to 1/10 of 1 percent of the company's operating profit. Can it honestly be said that this penalty is a credible deterrent?

6685   We also have questions about how this fining power will be conveyed to and used by the CCTS in a transparent way. This is because the CCTS bylaws -- which presumably provide a process for creating the fining power for the Commissioner -- are hard to find. They are not posted on its Web site and were not provided in response to three consecutive requests made through the Web site's "contact us" page beginning last November.

6686   How can Canadians know if there are any circumstances in which the Code that you approve is not what is approved or implemented by the CCTS?

6687   That brings us to evaluation. We fully support ongoing measures of the industry's success in complying with the new Code.

6688   Measuring "success: will obviously depend on the definition of its specific objectives. With respect, counting complaints and identifying trends is not enough to tell us whether the Code is working. The number of complaints received may then measure promotional expenditures.

6689   What should be measured is consumers' satisfaction with wireless telephone service in Canada. That can be done through impartial, professional surveys and other social science tools.

6690   Similarly, it should not be difficult to determine how long it takes consumers to have their complaints resolved, whether through telephone calls to customer service representatives or through the CCTS process.

6691   What should really matter, however, are the prices that consumers are paying for electronic communications service in Canada. This question may be complex, as the Wall reports show. In the end, this is what will matter most to determining the impact of this Code on consumers.

6692   To conclude, Mr. Chairman, Commissioners and Commission staff, the Consumers Council's view is that the Wireless Code will provide consumers with more information about their wireless telephone services. We believe it can be improved and our comments of the past few minutes and in the attached chart explain how.

6693   We are aware that many people say the CRTC and the Wireless Code do not go far enough to protect Canadian consumers. They wanted more direct action. They asked for rate regulation or reduced barriers to entry to new competitors.

6694   The Council and its members are also concerned about the rates Canadians pay for wireless services, but have properly restricted our comments to the objectives of this proceeding. We have emphasized clarity as a goal.

6695   We would be remiss, however, if we did not express our members' serious concerns about the state of wireless telephone rates in Canada. They favour rate regulation in their interests. From this perspective, the Draft Code is an incremental step towards a long overdue, more coherent and more rational approach to telecommunications regulations.

6696   What we really need is a giant step towards a pro-consumer environment, because wireless will soon be an essential part of everyday life for Canadians of every age and in every place.

6697   However, this is a good start.

6698   Thank you for your time and we welcome your questions.

6699   THE CHAIRPERSON; Thank you very much.

6700   You have the advantage of being a little later in the week and having the benefit of the comments and questions we have had and I see you have already adapted to that.

6701   So I will be asking a few questions and my colleagues then will be able to follow-up with their questions, if they have any.

6702   You certainly point out at the beginning that there are even better means -- I think at paragraph 10 -- sorry, not 10. Anyway, there is a place in here you talk about other means of getting the -- 16, yes. I can't read my writing. It is 16. Thank you -- there are other means.

6703   Do I take it, then, that the means you refer to are the ones at the end of your submission in paragraphs 60, 61 and 62?

6704   MR. HOGARTH: Yes.

6705   THE CHAIRPERSON: That is rate regulation and perhaps structural changes, ownership changes.

6706   MR. HOGARTH: Yes. There are those major issues, plus all the highlighting that we have made in the attached annotation to the Code, and competition.

6707   THE CHAIRPERSON: And competition, of course.

6708   MR. HOGARTH: Yes.

6709   THE CHAIRPERSON: That's good. So I just wanted to clarify what was at paragraph 16.

6710   Now, you have started to answer what success looks like, which is excellent, so I take it that for you it is not just number of complaints, it is the health and competitiveness of the wireless sector and prices.

6711   Is that what success looks like?

6712   MR. HOGARTH: I'm going to let Ken deal with that one.

6713   MR. WHITEHURST: Yes. Well, there are a variety of things. You know, for instance, I mean we made the point that the industry is structured now around tying installment ones to network services. So there is an opportunity to look at that structurally and say: Does it make sense anymore? What were the roots of it and should it continue that way? And based on the consumer electronic products that are being sold today and their prices, everything, you know, does that whole marketplace actually make sense? Do consumers really need it? What would secondary markets do to support lower income consumers who maybe need less expensive devices.

6714   That takes a good deal of examination beyond our means, but it's not beyond the means of the CRTC.

6715   THE CHAIRPERSON: Okay.

6716   Will you, in your final comments -- you have indicated that the performance measurements would be based on traditional, social science, quantitative and qualitative. Would you be able to help us guide our thinking as to exactly how one would structure that?

6717   MR. HOGARTH: I think we could, but that is sort of a standard approach that many consultants could advise on in the marketplace.

6718   But measuring success by less complaints isn't adequate or sufficient to deal with the entire issue.

6719   THE CHAIRPERSON: The amount of churn, as well, is that an indicia of success, in your view?

6720   MR. HOGARTH: I think that it could be. The problem is, the issue of churn is impacted pretty directly by the high cost of leaving some suppliers and the lower cost of leaving others.

6721   So you would have to adjust for those factors in that marketplace.

6722   Changing suppliers is certainly an indication of dissatisfaction, but if you are paying such a high cost to leave, you may be actually prohibited from leaving one supplier and moving to another, in spite of the fact that you really are totally dissatisfied with your current provider.

6723   MS AUER: And if I might just add, Mr. Chairman, of course, in evaluating the success of any CRTC policy, I am sure that one would look to section 7 of the Telecom Act or, alternatively, the Broadcasting Act in section 3, to look for the objectives that Parliament itself has laid out.

6724   I am thinking specifically here of affordability.

6725   THE CHAIRPERSON: Right, which is a section 7 objective.

6726   Others have suggested that we need some baseline data. We probably would have to start this even before the code is fully implemented.

6727   MR. HOGARTH: I think that is absolutely true. You need, to begin, to have some sort of baseline, a database of the issues that you are going to be trying to capture -- you know, the information against which to evaluate the success or failure.

6728   MR. WHITEHURST: You know, it's funny, from a consumer standpoint, we have kind of ended up with a game at which consumers and not companies compete.

6729   You go out and you make a game of figuring out which way you can spin the Rubrik's Cube so you can tell your neighbour that you got a better deal.

6730   That is a clever invention, but it's not competition.

6731   THE CHAIRPERSON: I will get back to that in a second.

6732   Now, there was a very useful suggestion of having these personalized summaries. I take it that you see them having two purposes. One, before the contract is actually formed, it is a way of getting an offer, I guess, that you can shop around and compare prices elsewhere.

6733   MR. HOGARTH: I think it's more a means of really understanding what your contract is all about.

6734   I have a specific example, sort of personally. One of my family members -- I entered into a family plan with a supplier and got a phone for one of the younger members of my family, and signed up for 2,500 text messages a month, not realizing that you pay for not only sending, but receiving as well, and one member of the family managed to blow through the 2,500 to get to 5,000 text messages in one month, which cost me $400.

6735   In that case, the cap would have been a very nice thing to have, to be able to have a voluntary cap which said: Listen, I want this to stop a two times my normal billing.

6736   But none of that was ever explained to me at the point of sale.

6737   I think that the point of sale is a pretty critical part of the transaction for the telcos, and the people who they have working in their dealerships are critical to the process of allowing people to understand what their contract is about, and, frankly, from some of the research that I have been doing, what the risks are for them if they don't set up passwords and do certain things to mitigate their risk -- you know, if they lose their phone.

6738   There is a lot that could be done at the point of sale to assist consumers in various areas in terms of understanding contracts, and helping to protect themselves.

6739   MS AUER: And, as you mentioned earlier, the entire point of having the summary is to understand what is being offered. Consumers find it difficult to go into a store, be handed a 25-page contract, and understand what it is they are really getting.

6740   It is not so much in terms of understanding how they can predict their rates, but whether they are getting the best possible use of their money, which is their goal, legitimately.

6741   THE CHAIRPERSON: Right, but I put it to you that the personalized summary could actually have two purposes. It could form part of the contract -- many companies have actually suggested, so far, that they would actually put it up front -- but before it becomes a contract, it could be used as a tool for customers to compare and contrast.

6742   MS AUER: And that seems to me to be an ideal way to promote competition in the marketplace, to ensure that people really understand what the differences are between the different providers.

6743   I think, in our original submission, we pointed out that -- or perhaps our reply -- we pointed out that even Bell's annual return at one point noted that its plethora of plans was so confusing, it had difficulty assessing what was happening sometimes.

6744   When the companies have difficulty knowing precisely what they are planning, I think it may be very, very difficult, if not impossible, for consumers to be able to evaluate the best plans for their purposes.

6745   Therefore, having an offer before you finalize the contract or accept the terms is ideal.

6746   THE CHAIRPERSON: So I take it that even though some may say that is very interventionist and very prescriptive, there would be an advantage to make those personalized summaries somewhat similar from provider to provider.

6747   MS AUER: I think the standardized form approach will assist consumers to be able to compare things that are being offered.

6748   We had specifically sought a way of measuring data usage. We said: Whatever other measure you use, you must use either megabyte or gigabyte, but use a common standard across all of the providers.

6749   Because it seemed to me, from our evaluation of the comments being filed in the proceeding, that many people misunderstood what a megabyte was and what it would cost, or what a gigabyte was and what it might cost.

6750   They don't understand these terms, and, frankly, as a lawyer, neither did I.

6751   Our second point, I think, is that, with respect to having the plans summarized before you, it can only help consumers know what they are doing.

6752   As we mentioned at the beginning of our remarks, or as Dennis mentioned at the beginning of our remarks, really, we see the Commission as standing in for consumers within the marketplace.

6753   You are not the enemy, you are part of the marketplace. And if you, as part of the marketplace, enable the marketplace to function better, I think that is a very positive step.

6754   THE CHAIRPERSON: Are you aware of similar personalized summary tools that have had success in other types of markets?

6755   MR. HOGARTH: I'm not, but --

6756   MS AUER: But we would be happy to undertake some research and file it on March 1st.

6757   THE CHAIRPERSON: I don't want to -- I mean, I think there is a consensus already, so I don't want you to spend time on that. I thought, maybe, as --

6758   MR. WHITEHURST: You might question the success, but the whole of financial services -- there are very detailed consumer documents required, depending on the sophistication of the products, and common points of comparison for performance, pricing, and what have you.

6759   They are always working to refine that, but there still is a lot of consistency.

6760   THE CHAIRPERSON: Right. There are only so many ways that you can slice the essence of these contracts, so that, one way or another, they look comparable.

6761   Could I bring you now to the subject of pre-notification and caps.

6762   In the course of the past couple of days, we have heard comments that there are, potentially, significant costs to implement some of these tools, and they may actually be the subject of annoyance on the part of consumers, who might receive -- I believe the term was an unprecedented number of these, and the point was being made that perhaps, if one distinguishes between voice, text, data and roaming, that the need was perhaps more on the data and roaming, and that is perhaps where we should put our greater efforts, and that it is somewhat more intuitive that voice and text -- one is less likely -- although you gave us an anecdote moments ago that you wish you had had a few more tools at your disposal on the texting side.

6763   MR. HOGARTH: Absolutely.

6764   MR. WHITEHURST: A review of the marketplace would suggest that that seems to be like the problem is being stretched a little bit.

6765   If you are on a Smartphone today and you are using at least one of the major carriers, you sign in through their application and they tell you your current usage. You can see it.

6766   What they are not giving people that they really need is something that converts into incremental costs, and that means they need to be able to apply rates to usage.

6767   But tracking your usage, I don't know what they would say they need to develop, since they seem to be delivering it to consumers, on the platforms, at least, that are well adapted to delivering that kind of information.

6768   THE CHAIRPERSON: I think the suggestion was that maybe because voice, for instance -- because we have been dealing with it intuitively for a number of decades, that voice -- there is a cost, and it is more intuitive that, when you talk on the phone, there is a cost to it, unless --

6769   MR. WHITEHURST: I know that when I look at my Smartphone usage summary, it tells me about my voice over and --

6770   THE CHAIRPERSON: But, depending on your plan, you may not know how much it costs.

6771   MR. WHITEHURST: That's right. It's telling me how many minutes I am over, and it gives me the usage calculation. What it is not doing is delivering what a consumer wants to know, which is: What is it costing me? What is it likely to cost me if I stay on the same trajectory?

6772   These are the things that consumers need to manage their budgets. So, if you want to look at the customer service dimension of it, it's not about caps, it's about giving consumers the tools they need to manage their budgets.

6773   THE CHAIRPERSON: Right, but I think what the providers -- and I am putting this to you to see your reaction. The providers are saying that maybe pull -- that somebody could go on a Web site, or elsewhere, and get information that they want to pull, let's say, on their voice and text, and that, in terms of push notifications, caps, maybe we should focus on data and roaming, where perhaps there's greater risks of bill shock because it's less intuitive. You know, downloading a few maps, how much does that cost, right?

6774   MR. WHITEHURST: I don't see, once they transfer the information, why push is so expensive. It's not bankrupting any of the major news organizations. They don't give any push notifications.

6775   MR. HOGARTH: Yeah. I would say that it's true. I think data and roaming is the -- you know, sort of the big area.

6776   You know, the other issue, remember too, is that, you know, organizations, large organizations are constantly upgrading their IT systems. And, you know, if they know in advance that, you know, this should be something that's factored in, you know, the costs should not be as astronomical as maybe is being presented in terms of -- you know, in terms of the reaction. You know, it can all be factored in over time.

6777   THE CHAIRPERSON: Fair enough, and we'll be getting some undertakings to, you know, explain to us what are the technological and operational barriers to implementation of the current working document.

6778   But beyond that there also seems to be a consequence, yes, systems get updated from time to time but these are complex platforms and I'm sure they want to protect the -- these platforms because apparently they'll be the basis of financial transactions perhaps in the future as virtual wallets. So I get the business requirement to make sure these platforms are efficient, but the consequence of that, of making sure that the systems work well and are updated correctly is that the implementation of the code may be delayed because you can't -- and we've talked about six, nine, perhaps even more months to implement. So there's sort of a cost-benefit analysis to be made in how much system adaptation do we require in terms of costs but also timeliness of getting the code out there.

6779   MR. HOGARTH: I would suggest that, you know, different parts of the code could have different implementation dates as well. You know, some can be implemented earlier than others. So, you know, there may be a grace period, for example, if -- you know, if a significant change in systems is required, you know, that's going to be very costly. But I think, you know, I can't see that you would have to have all aspects of the code have the same implementation date. I mean ...

6780   MR. WHITEHURST: You're going to have some devices that are effectively growing obsolete by the minute and they're going to disappear from the landscape and you're going to need one way to advise that consumer, and it may be a fairly simple technical solution and the options you may be able to offer to help them manage their budget may be less. But the devices are changing rapidly; the capability is changing rapidly, and the cost to deliver is dropping rapidly. You know, all you have to do is look at the applications, innovations of the smartphones, market and the size of some of the companies that are creating quite novel applications.

6781   So it is going to have to be a phased approach and it's going to have to be an evolving one. And so, why not start right there? So there are some options that you have that make sense. If you were on an old phone that only ever had basic SMS text messaging and what have you, you need to do something for those consumers, but that marketplace is contracting and the other marketplace with more sophisticated devices is growing and there you can already see usage. So the next question is applying prices to usage. So it's a different story depending on the device environment.

6782   THE CHAIRPERSON: I fully understand that we could do it in a phased approach. My concern, and maybe I'm being over-concerned about this, is in line with what you say in paragraph 12, it's the complexity of the contracts. I'd hate that we overlay complexity of a code and a very difficult implementation period. You know, we have customer service folks. People phone our offices to get information. It's already quite complex having to explain, well, this code -- part of the code is in, not in, maybe not now. And you understand the challenge that I'm --

6783   MR. WHITEHURST: Yeah, I think you're going to have -- you're going to need some principles and timelines for delivery of certain kinds of information, but the beauty is is that the more sophisticated applications that are coming available on smartphones are easier and less difficult to explain. They're more explanatory. There's greater opportunity for user interface design and to assist the consumer with the information they need. So I think you need to know first what it is you want delivered.

6784   And the other thing is is from a consumer perspective, since the consumer is trying to manage a budget, you may -- you may want to recommend some default states for informing consumers, but consumers should be able to elect and choose to some reasonable degree the information they get so that they can use it to budget.

6785   THE CHAIRPERSON: You make the point that we -- in your view we've misused the word "subsidy", that in fact there are -- it's a loan and there is an instalment and that -- would you go so far as if you could roll back the clock there should be two contracts here?

6786   MR. HOGARTH: Absolutely. You know, I think, you know, somehow it probably grew together in the days when, you know, cell phones were -- you know, were very expensive and it was, you know, kind of a package deal. But today the -- you know, the cell phone is -- you know, is a commodity and the -- and then the service, you know, accompanies the -- you know, sort of the commodity, but, you know, it would certainly help, I think, most consumers to understand that they're buying a six- or seven-hundred-dollar device, you know, and they're paying for it over time. And then they're buying the service separately, you know, to basically, you know, use the device. So, you know, it would -- I think it would greatly clarify and, you know, prevent many of the misunderstandings that are happening now when you -- you know, you do an early termination and you've only had the phone for a year and you get hit with, you know, a huge charge which is really, you know, pre-paying the loan.

6787   THE CHAIRPERSON: M'hmm.

6788   MR. WHITEHURST: We would urge you to take a look at secondary markets and look at how fast the devices depreciate and look at, you know, which you can often buy used technology, even smartphones, which you can buy them for on the open market after they're a year or a year and a half old. And I think that any fair estimation of that, if most consumers were out shopping for these wireless devices like they shop for their cars, they would be much more value conscious. So there is something about the system that's masking that ability to be value conscious.

6789   MR. HOGARTH: Yeah. I think some other important points were raised by others too about, you know, sort of value of the asset and the -- you know, that perhaps there are unrealistic, you know, sort of values being placed on -- you know, on the assets and then the depreciation factor is being, you know, taken from there. I think the quote was a 750 dollar -- or a phone that's being sold for $750, you know, by Atelco might only actually be worth, you know, $600 retail. So, you know, there's -- there are, you know, factors being built into, you know, the whole model that are -- you know, that are maybe -- that should be examined, you know, because the -- there's perhaps a significant inflation factor in there. You know, the whole calculation.

6790   MR. WHITEHURST: It's a restraint on the credit markets too. I mean, there are lots of ways to finance purchases and people should be able -- should be more aware of the options that they could examine for doing that.

6791   THE CHAIRPERSON: But you're not going so far -- if I ask the question in an ideal world, if we could travel back in time, perhaps we could, but you're not suggesting that we would require two separate contracts. What you're saying is it should be within the wireless working document that there actually should be clarity within the document that there's two important -- perhaps interrelated, but two important distinct transactions at work?

6792   MR. HOGARTH: Yes.

6793   MR. WHITEHURST: Yeah. But that also depends on their ability to buy the device and finance it with other options. So if they can buy the device and finance it with other options and they can make a fair comparison, then why would you ban the business? But today, you know, that option is diminished, right?

6794   THE CHAIRPERSON: Right. There's a lot of comments that we've received throughout this process and we continue to receive about banning three-year contracts. Do you have a view on this?

6795   MR. HOGARTH: I think, you know, if you're tying the -- you know, the sort of purchase of the phone into, you know, the end of the contract, three years these days is pretty much from -- considered to be a -- you know, too long a period from a technological standpoint. In fact, many people are saying that the average, you know, sort of smartphone or phone that's coming out these days is probably -- you know, has a maximum life of two years and that's both from an obsolescence standpoint and a, you know, usability factor because the things do wear out. You know, batteries. You know, batteries expire and all the rest of it. So three years is really, you know, probably too long given the average, you know, technological lifespan of the asset.

6796   MS AUER: Your question, of course, addressed the idea of the code banning the three-year contract outright and that was our dilemma because we looked at the code and we thought, okay, exactly how should we express this prohibition within the code. You shall not have contracts of X length. And it seemed to us that that would be unworkable. We would like to have something that dealt with long-term contracts.

6797   For this proceeding we perceived the best response would be ensuring that consumers really understand what it is they're getting into, that they sincere-- that they truly understand that they are borrowing money to buy an asset and that is the bulk of their fee. If they knew that, if they could see it clearly separated on the bill, they might then decide, hey, I'd like to check out some other options and see what other providers are out there. It's when they're unaware and they think that this is the only option, that this is the best deal and, my gosh, I mean, the store looked so nice and the phone is so cool, and you're standing there and you've got your winter coat -- it's difficult. We all know it's difficult. And they look and say, "Well, it's only $25 a month and you want me to read a 25-page contract. Well!"

6798   So faced with all of that and we can't rewrite history and we're not going to go back to 1985 or any other period, we're here where we are. So we do the best we can which is to ensure that consumers are fully aware of the consequences of the decisions that they are going to make before they sign the contract.

6799   THE CHAIRPERSON: So you think that being clearer on what the Code talks about a subsidy, which you believe it talked about loan and instalments in the nature of that arrangement, that if we are clear about that and that there is an informed consumer that knows that, we don't have to go down the road of limiting three-year arrangements?

6800   MS AUER: It's blinking green.

6801   THE CHAIRPERSON: Yeah, too many lights on. Okay, there you go.

6802   MS AUER: Not at this time. We think, frankly, that there may be still sufficient complaints within the next few years that at a certain point additional steps will have to be taken. That's why we described this as an interim, a very good incremental first step.

6803   THE CHAIRPERSON: Right.

6804   MS AUER: It is not the ideal. It is not where we would like to be but this is the proceeding we're dealing with.

6805   THE CHAIRPERSON: Right, but we could -- I mean, it could potentially be within the scope of this proceeding to deal with it. These are expensive and time-consuming and you saw as well some of the comments. It'll take some time to get this 100 percent into the marketplace, this Code.

6806   I don't want to start this every year.

6807   MS AUER: Gosh, I wouldn't want to start this every year but, you know, you're going to be around for a few more years. I mean, we hope.?-- Laughter / Rires

6808   THE CHAIRPERSON: You should see the others she's waiting for.

--- Laughter

6809   MS AUER: You have to watch out for the Ninjas hiding at the CRTC. They'll strike you down before you can act.

6810   MR. WHITEHURST: I think the other thing, you know, to that point in making change and everything, I mean we have tried to deal with the scope of the hearing but we did read with interest the Competition Bureau's submission. You pointed it out and we're aware of that point of things. They did raise this issue and that would suggest they have an issue.

6811   I don't think that you can just ignore that. I think you need to consider that as part of ultimately what needs to be done, right? So how you deal with that that wasn't really put on the table to us. That's a new development to see their opinion stated publicly.

6812   THE CHAIRPERSON: Right. Well, as I said earlier, it's a dynamic process. Now, you have it and the comment phase might allow you to say something.

6813   MR. HOGARTH: There is one other thing which is that, you know, when you buy a car you can finance it over two, three, four years. It'll cost you more to do it over two years than it does over four, obviously. But the person that leased then realizes what the length of the contract is going to be and, you know, how much they're going to pay over the period.

6814   So you know, if the contracts were separated in that way such that, you know, a person if you want to -- so if you think you can use that phone over four years or that's all you can afford or, you know, you're going to make it last that long, then that's your option. But don't try to tie it into, you know, a three-year contract that locks you into using you know the services of one telecommunications provider.

6815   So I think separating things on that basis, I don't think that the length of the contract in terms of the purchase should be linked to a three-year contract for delivery of services. You separate the two then I think you would be, you know, sort of provide the consumer with more information and they would be making a conscious decision to do what they want to do in that area.

6816   THE CHAIRPERSON: M'hmm. The dilemma which we face is that on the one hand we get a lot of comments asking us to intervene in the length of the contracts but, by the same token, it appears to be one of the most popular forms.

6817   Now, how did it come to be the most popular? One could ask the question.

6818   But it is possible that, you know, these are expensive devices and people see that there is a benefit. We even had an intervener yesterday, I believe -- this is Wednesday, is it not -- saying that they shopped around and they thought that that was the best option for them. They made an informed choice that a three-year way to get that loan for the device made sense to them.

6819   I mean, I'm torn. I mean, do we take that choice away from Canadians?

6820   MR. HOGARTH: Well, you know, I look at the U.S. market and I lived there for seven years. The standard contract term there is two years which seems to be tied into the useful life of, you know, the device. People down there are really happy.

6821   If you look at the consumer reports, you know, sort of evaluation of the U.S., you know, sort of market, telco marketplace versus Canadians, there is a huge difference in satisfaction. I think part of that is the standard contract down there is shorter. Two years seems to be probably more appropriate than the three given the life of the asset and all of those things.

6822   THE CHAIRPERSON: You mentioned --

6823   MS AUER: I'm waiting for the light -- oh, there.

6824   THE CHAIRPERSON: There we go.

6825   MS AUER: Yes.

6826   I want to make sure that we're responding to your questions and that we understand your questions.

6827   Our submission does not say ban three-year contracts. The reason it does not is not because we might not support that. It's because we couldn't really see how the Code could do it.

6828   We couldn't see what statement the Code would make to, say, "You may not offer three-year contracts". One alternative might be to require a variety of contracts to always be offered. Now, we're into multiple personalized information summaries.

6829   As we mentioned in our very first submission, one of our concerns with this proceeding is that we may be layering over what is already complex, something that looks even more complex to the consumer.

6830   Now, I don't think any of us want that. So, yes, on the one hand it would be ideal if consumers were not faced with very long tied contracts. They should have choice.

6831   The counterargument would be that they do have choice. The question then is, given the structure of the marketplace where you have three companies that appear to dominate in the marketplace is that choice real or are many people really unaware of the other choices?

6832   These are -- we don't envy you. You don't get paid enough. We understand that. What we are, I guess, are saying is that, yes, if you think you can find a way to ban long term contracts that bind consumers without their full knowledge, we would support that.

6833   MR. HOGARTH: I think there are also some other very interesting business models that have been presented here that kind of break the mould.

6834   And I think part of the problem with, you know, three-year contracts is that we're looking at life in terms of what we know as opposed to what the new business models might be. I think that's a very -- that that bears some research by the Commission.

6835   THE CHAIRPERSON: Right. I think our regulatory toolkit could perhaps allow us to do it. Some have suggested obviously even the Code as perhaps a section 24 condition on a forborne service.

6836   So there may be a way of doing it. And so I'm trying to distinguish mechanisms from the wisdom of doing it.

6837   MR. WHITEHURST: Yeah. Well, and I also think you were hearing earlier though -- you know, and this is something you've really got to think about is that all consumer electronics are going to be connecting to that, right?

6838   Like, audio cell phones are going to be history. Everything is data. People want to buy data. They want to use data.

6839   So all devices are going to want to be on the wireless network and what have you, right? How are you going to deal with that, you know, if that happens, I mean?

6840   So somehow you've got to parse this marketplace into your telecommunications responsibility and decide whether you're into regulating consumer electronics.

6841   MS AUER: And, of course, this won't be settled the day after the proceeding ends here and it won't be settled within the next several months after that.

6842   So it is conceivable you may decide there are staggered stages of implementation, at which point you may want to consider maybe we could have a paper proceeding to decide whether consumers are fully satisfied with the Code. If they still find that the long term contracts are a difficulty at that point, ask them.

6843   If it is a problem then it certainly gives you real authority to act, not that you don't have real authority now but maybe popular support, so to speak.

6844   THE CHAIRPERSON: The horror stories we had more than enough and everybody who comes has another one. So I'm not sure I want to make the pain continue. I would rather find solutions.

6845   MS AUER: I like my cell phone. I really do. It's a good story but I like --

6846   THE CHAIRPERSON: I think a lot of people do. That's why they feel so passionate about this issue.

6847   From the Competition Bureau now to talk about the length of contracts, they also expressed a view about the locked in and unlocking of devices. Do you have a view specifically on that?

6848   Do you agree with them? Do you think that it's something we should get involved in? Are you satisfied with what is provided in the Code?

6849   MR. HOGARTH: You know, frankly, sitting through the proceedings today I have been, you know, somewhat confused as I think Madam Poirier is about sort of exactly why cell phones are locked or unlocked. I mean I can see the financial or the motive behind sort of locking in a person as part of the sales cycle to recoup that cost.

6850   But, you know, I think there are other factors at play with respect to, you know, sort of the locking and unlocking that probably aren't a part of what the Commission is looking at right now. But I think certainly would bear some investigation, further investigation, to figure out you know what is really happening and who is driving the locking and the unlocking of the phones. Is it really the -- is it the Telco's? Is it the suppliers? You know, because it certainly isn't the marketplace.

6851   So I'm not sure at this point in time that I could give you an opinion. I think earlier this morning I would say, you know, we were all for unlocking phones but I think there is more to investigate there in terms of what the actual model is and how that works behind the scenes in terms of the marketplace.

6852   THE CHAIRPERSON: And that's what we're doing through this process and we'll have other providers.

6853   MR. WHITEHURST: You also have to consider there already is a market in unlocked phones. So unlocked phones are on the market and what's the implication of that?

6854   People who are totally on their phones and they are unlocked what should their entitlement be? You know, how should they be treated, right? Is market dominance a factor in how they were treated?

6855   So that's a whole new development, really, because there are a lot of unlocked phones, both the ones that have been legally sold as unlocked, right, to start with, and the phones that people are figuring out how to unlock by whatever means; different, even little phone companies may be recommending to customers.

6856   THE CHAIRPERSON: Right.

6857   My last, just, clarification before I turn it to my colleagues, I didn't have a chance to look at the presentation document going through it, but in your oral presentation you mentioned some lack of clarity in certain terms, some suggestion.

6858   Do I take it you have proposed wording to fix all that the attachment?

6859   MS AUER: For the most part. You will see that we -- there is one part where we suddenly discovered yesterday that we had a slight misunderstanding amongst ourselves, and so there is one section that is a little bit blank, but for the most part, you know, we have already proposed terms that we believe should be defined, we have certainly highlighted the areas for example where there are circular definitions throughout the remainder of the Code. For each of the provisions we have provided commentary. We have made suggestions for additions, suggestions for deletions, it's very clearly spelled out.

6860   THE CHAIRPERSON: Right.

6861   MS AUER: And we would be happy to e-mail the Secretary an electronic copy.

6862   THE CHAIRPERSON: For that one item that you -- have you clarified it among yourselves or could you do it before the 22nd of February?

6863   MS AUER: Yes, we could.

6864   THE CHAIRPERSON: Thank you.

6865   M AUER: Would you like us to file something by the 22nd?

6866   THE CHAIRPERSON: Yes, on that one item that you think -- it will just help the process because people will then know what they have to react to.

6867   MS AUER: We would be very happy to.

Undertaking

6868   THE CHAIRPERSON: Thanks.

6869   Commissioner Simpson...?

6870   COMMISSIONER SIMPSON: Fascinating, thank you. This has been great.

6871   One simple question, given your experience in the IT area, you are familiar with organizations like KRAFT and others who have adopted a program where employees can bring their phone to the enterprise and connect.

6872   So here is the valid question: Phones are often used for business, often used for personal and commingle. Should this Code apply to just the consumer side of use and is that possible or does it have to extend into the business use because it is a business phone in a great many instances?

6873   MR. HOGARTH: How complicated do you want this exercise to be?

6874   The whole area of bring your own device to work really adds complexity and large organizations and small organizations are really struggling with that whole issue in terms of privacy, you know, who owns the device, who owns the data on the device.

6875   It is perhaps an area that the CRTC might want to look at at some point in time. I'm not sure if it is something that you would build into this particular version of the Code, but it is -- you know, in my background as a privacy professional it is, you know -- and I worked in this area trying to figure out sort of how we would deal with it internally in my former life and it's very difficult.

6876   COMMISSIONER SIMPSON: Well, to simplify the question, think of the drywaller, the heating or plumbing guy that comes to your house who has thought that phone, perhaps through his business but he still thinks of himself as a consumer when he presents himself to a cellular company?

6877   MR. HOGARTH: Yes, that is true.

6878   I mean the new -- my understanding is the new BlackBerry actually segregates the two environment, which is a very interesting approach, so that you have your business environment and your personal environment but, you know, still figuring out who owns what and sort of how it should be regulated is very interesting.

6879   One of the biggest issues is, you know, when a person terminates does the phone go with them, what happens to the contract with the supplier? It becomes really complex.

6880   MR. WHITEHURST: And you are raising the issue of the sole proprietor as consumer, which is really of interest to us because we certainly do hear from people who are sole proprietors and they are really very much in the same position as individual consumers.

6881   I would just say anecdotally that they have an even greater concern about loss of time in dealing with the complexities of their agreements and their customer service issues, because if they are dealing with a telecommunications company over a problem and it's taking hours during the business day, it's costing them a lot of money and it's definitely a drain on their personal productivity.

6882   I think every individual would complain about that, but they are probably more likely taking out of their leisure time or maybe there is a productivity loss to their employers, but for people that are in small business and sole proprietors it would just be anecdotally our experience that they are very, very, very sensitive about the loss of time.

6883   COMMISSIONER SIMPSON: I'm sorry, I'm going to put one more question, Mr. Chair.

6884   I was fascinated with your notion that the device may need regulating at some point and. believe me, we are not hammers looking for nails, but I'm familiar with one instance where the device has morphed into something that does intrigue me because it does move into a regulated area, where individuals working up in the North are quite often coming from foreign countries, their families don't have bank accounts in a country like Brazil so they take their paycheque to a chartered bank, transfer the money via Western Union and the money goes directly into mom or dad's cell phone account and the cell phone account has become a bank account with a positive charge and then the phone is used as the transaction device to buy groceries.

6885   Have you looked at that and do you have an opinion on that?

6886   MR. HOGARTH: As part of the other research that I'm doing, you know, it is quite clear -- and I have spoken with a number of experts in the field who have identified that the whole marketplace is morphing so that the Smartphone, first of all, is estimated to have almost full penetration in Canada in three years time, which is remarkable, a much faster rate of penetration than the portable computer. You know, it is going to be used for all of these banking transactions. It is morphing into the personal device that your whole life is going to revolve around.

6887   You know, when I said that I think this version of the Code is likely not going to last for a long, long time, unfortunately, I wish it would, but it's going to have to take into account the bring your own device to work, you know, work issues; it's going to have to take into account the fact that these things are going to be used for banking collections, for notifications you get from when your alarm goes off -- you know, your home alarm goes off. It basically will become ubiquitous in terms of the device and the problems and the complexities are going to get greater, not less.

6888   MR. WHITEHURST: You know, we focused on the things that -- the issues to do with consumer rights and responsibilities that seemed to be most immediately pertinent to the Code, but the way the devices are evolving there is a basic needs component to looking at what the future will be and, in other contexts, we have been trying to encourage some major financial institutions and other parties to work with us on developing a national consumer perspective panel to look at the future of mobile payments and the impact.

6889   Now, whether we will get that uptake or not we don't know, but we think it would be a very constructive discussion to begin outside of regulatory processes because somehow we need to have as frictionless entry into these new areas as we can and if we are not getting to work on it then regulators will really be busy.

6890   LE PRÉSIDENT : Madame Poirier...?

6891   COMMISSIONER POIRIER: If you allow me, it's 4:20, I would love to ask my question in French, okay?

6892   MME AUER : Bien sûr.

6893   COMMISSIONER POIRIER: I reach a point, I don't know, there is a limit and this question is complex.

6894   J'ai, moi-même, toujours été surprise de voir le mot « subvention » pour l'achat d'un appareil, parce que, pour moi aussi, une subvention, c'est quelque chose de donnée, et je suis certaine que dans la conception de l'ensemble de la population, une subvention, c'est donné, et c'est pour ça que vous abordez le fait qu'on devrait, même dans notre Code, changer le vocabulaire pour éduquer les citoyens et faire en sorte que le mot « subvention » ne soit plus utilisé, mais plutôt qu'on dise que c'est un achat avec emprunt ou peu importe le terme à utiliser, qui reflète vraiment le type de transaction.

6895   Et je trouve ça aussi très surprenant que les fournisseurs de services sans fil, qui sont aussi ceux qui fournissent les services de câble la plupart du temps -- je ne dis pas qu'ils le font tous, mais la plupart le font, O.K. -- n'aient pas décidé de prendre un modèle semblable à la téléphonie cellulaire. Ce que je veux dire par là, c'est que oui, ils offrent un service de câble, qu'il soit terrestre ou satellitaire, mais ils ne vendent pas les téléviseurs. Certains l'ont déjà fait dans le passé, mais pour garantir que le client est relié à leur service de câble, ils ne vendent pas la télévision.

6896   Alors, je me demande si, pour le meilleur intérêt des consommateurs, les fournisseurs de services sans fil ont pris et le bon vocabulaire et la bonne direction dans leur façon de lier le consommateur à leurs services, et est-ce que ça ne devrait pas changer?

6897   C'est-à-dire que oui, le consommateur devrait pouvoir acheter son appareil n'importe où et pouvoir facilement changer, comme avec leur appareil de télévision, sans être obligé d'avoir nécessairement un contrat avec eux. Ils pourraient faire leur emprunt pour leur achat de téléphone comme ils le font pour leur téléviseur, chez Brault & Martineau ou chez Sears ou ils le veulent.

6898   Alors, c'est une question large, mais je la pose dans le meilleur intérêt du consommateur. Est-ce que ce modèle-là doit tenir la route?

6899   MS AUER: Before I ask Dennis and Ken to respond, I did want to say that of course there is a difference between the BDU broadcasting model and the model we are in now. The most elementary differences that it is true that there are competitors in cable and satellite, but really there aren't even as many as there are in the wireless world. And even if in the wireless world there are very -- it makes up still a tiny share of total revenues, that may explain to some extent the difference in the model.

6900   Secondly, I'm not sure whether in the late 1960s when cable was being introduced to the broadcasting system there was ever in anyone's mind the idea that cable companies could build a really good business model and extremely high profit margins by requiring consumers to take out a loan to buy their TV, and at that point of course we already had Sony, we already had RCA, we already had -- so putting that aside, the complexity of the question is very interesting and now I'm going to turn to Dennis and Ken, having given them a little bit of pause to consider the question.

6901   COMMISSIONER POIRIER: And you don't have to answer if it's too --

6902   MR. HOGARTH: Well, I think, you know, it -- and it goes back to what we said before -- splitting the contracts makes a lot of sense because, you know, for exactly that reason you didn't sell TV as part of a contract for cable. The two are different transactions.

6903   One of the things that I found in my research that I'm doing for the Office of Consumer Affairs through the Consumers Council, we held focus groups and the amazing part was -- you know, they were primarily in Montreal and Toronto -- 50 percent of the people in that room had had their smartphones lost or stolen in the last two years.

6904   And I think part of the problem that's faced by the telcos actually is when people come in and say, well, I've lost my phone, and they find out that they're subject to these penalties because they don't understand the contract that they've made.

6905   It would almost be much better if the two were separated, that the phone deal is done and it's financed either separately through the telcos, through the suppliers or through sort of a retailer so they clearly understand that like losing sort of an expensive coat or any asset that they're personally responsible for that asset and it's not tied up in contractual details that make it even more complex for them, and, frankly, for the telcos to sort out in the long term.

6906   CONSEILLÈRE POIRIER : Effectivement, si je me fais voler ma télévision, je vais continuer à la payer ensuite parce que j'ai fait un emprunt et non pas une "subsidy."

6907   MR. HOGARTH: It would also probably lead to a whole, you know, sort of different level of insurance where, you know, hey, you can insure your phone so that for a $10 deductible -- you know, yes, the cost might be a little bit more than $7 a month but you can insure your phone against loss.

6908   COMMISSIONER POIRIER: Yes.

6909   MS AUER: And if I could just very quickly add, Commissioner, unfortunately in English because I want to be quick and not think about my French.

6910   You know, when you're considering what the purpose of this proceeding is, I would -- from the Council's perspective we're looking at 7(b), 7(c) and 7(h) of the Act with respect to the affordability of rates, consumers' or users' needs, and as well of course competitiveness.

6911   So by ensuring that consumers are well informed through the summary, by ensuring they understand that there's a distinction between the loan they are being offered and the money they have to pay to get out of that loan early and the network service, you may over time encourage more competition, which is also a goal.

6912   In encouraging more competition, necessarily you should expect to see profit margins decline. That won't be a bad thing. Well, it would be a bad thing if I were relying on those profit margins but since I have the luxury of not relying on them, you know, the fact is competition will drive down profit margins.

6913   But that should not stop the Commission, I think, from acting with respect to 7(b), (h) and (c) of the Act. That's what guides you and I don't see profit margins mentioned in that section.

6914   CONSEILLÈRE POIRIER : Et ma deuxième et dernière question, Monsieur le Président, c'est que... Demain, je sais qu'on va entendre Vaxination, qui suggère... Vaxination suggère d'éliminer les contrats. Mobilicity a un plan d'affaires sans contrat à long terme.

6915   Alors, je me demandais, est-ce que ça ne devrait pas être la solution ou la direction vers laquelle on s'en va, pour, en fait, aller dans la direction d'avoir vraiment un emprunt pour l'achat de l'appareil et un coût pour les services et de séparer le tout facilement?

6916   MR. HOGARTH: Yes.

--- Laughter

6917   COMMISSIONER POIRIER: Thank you. You don't have to add. It's on the record. Merci, Monsieur.

6918   THE CHAIRPERSON: I think those are our questions. Thank you very much for your participation. It's been very useful and I suspect that you will be contributing in the next phases as well.

6919   On va prendre une courte pause de 10 minutes, on va dire, pour permettre aux gens de Bell de s'installer.

6920   Et ce que nous allons faire, c'est entendre la présentation de Bell et al. -- il y a plusieurs compagnies -- et ensuite, on prendra peut-être une ou deux questions, mais vraiment la grande partie des questions sera demain matin, et on va reprendre à 9 h demain matin.

6921   Donc, on lève la séance pour une dizaine de minutes jusqu'à 16 h 40.

6922   MS AUER: Thank you, Mr. Chairman.

6923   THE CHAIRPERSON: Thank you very much.

--- Upon recessing at 1630

--- Upon resuming at 1640

6924   LE PRÉSIDENT : À l'ordre, s'il vous plaît.

6925   Donc, je vais inviter les gens de Bell à faire leur présentation, s'il vous plaît.

6926   Please go ahead.

PRESENTATION

6927   MR. DANIELS: Good afternoon, Commissioners. My name is Jonathan Daniels and I am Vice-President of Regulatory Law at BCE. It is my pleasure to introduce our panel.

6928   To my left is Ruby Barber, Assistant General Counsel for Consumer Markets, and Paule Desautels, that's beside her, Senior Counsel. And to my right is Claire Gillies, VP Marketing for Bell Mobility.

6929   Just before we start our presentation, I just want to thank you, Mr. Chair, for the accommodation for allowing us, as you're aware that one of our witnesses will -- the President of Bell Mobility will be here tomorrow morning when we are scheduled to continue.

6930   So -- but nonetheless, we are here ready to present and answer any questions, so with that, I'm going to turn it over to Claire.

6931   MS GILLIES: It's clear from the Commission's consultation process that consumers want more clarity about their wireless contracts and more control over their wireless services. We've heard that message loud and clear and we support the creation of a national wireless Code to help achieve these objectives.

6932   If the national Code can better inform those who feel overwhelmed by the complexity of the competitive marketplace, set out a basic set of consumer rights and improve the clarity of wireless contractual arrangements, then it will have added value.

6933   But we can't lose sight of the fact that the Commission has not regulated the wireless industry since it was in its infancy, which had allowed for a vibrant, competitive, world-leading industry to emerge in Canada. Regulation of today's dynamic marketplace could stunt the sector's growth and mute its success.

6934   Obviously, none of us want such an outcome, so the challenge is to achieve the Code's objectives, while letting the competitive market operate.

6935   Canada's wireless industry is among the most competitive in the world. Service providers fight for consumers' loyalty on a daily basis and rely on innovative products, services and promotional programs to differentiate themselves from their competitors. You can see the evidence of this intense competition in the newspapers, on television, on the internet and in the malls.

6936   As the Commission concluded when it recently examined Canada's mobile wireless market conditions, and I quote:

"...competition in the mobile wireless market continues to be sufficient to protect the interests of users with respect to rates and choice of competitive service providers."

6937   In fact, Canadians enjoy the most advanced wireless networks, the most powerful wireless devices and the best services available in the world. It's a remarkable achievement considering Canada's small and scattered population.

6938   Bell constantly strives to provide our customers with all the information they need about our services and contracts, but we recognize there's room for improvement. Our challenge is to be transparent, thorough and sensitive to our legal obligations, without overwhelming consumers with detail and jargon. Our objective is to continuously improve the consumer experience in all respects, including our contracting practices.

6939   It's an ongoing challenge, but we're making progress. For example, at Bell Mobility and Virgin, we've developed a robust set of usage monitoring and management tools for our customers, including a mobile application called "m-Care".

6940   This innovative application allows consumers to view voice, data and text usage, as well as their account information and billing information right from their phones.

6941   We provide a variety of consumer notifications, such as a welcome message when consumers enter a roaming territory to indicate that usage charges will apply and what those charges will be, a notification on consumers' bills when their service agreement is set to expire in 60 to 90 days and notifications when consumers' data usage reaches certain thresholds, including 90 percent of a subscribed level, $30 above a subscribed level, and several points thereafter.

6942   We also employ leading edge measurement tools, including a quick survey sent by text message to every consumer who completes a transaction in one of our stores or through one of our call centres. This allows us to keep a constant pulse on customer satisfaction and adjust our approach accordingly.

6943   All of these initiatives directly benefit consumers and contribute to our competitiveness in the marketplace. And it's paying dividends. Calls to our customer support teams are down, business performance is strong and we continue to make large investments in networks and systems that will allow Canadians to enjoy world-class wireless services for years to come.

6944   To facilitate the Commission's deliberations, we've prepared a summary of our positions on each section of the draft Code and provided it with our Opening Statement. For your convenience, we've also provided two additional pieces of information in the attachment.

6945   First, where possible, we've estimated the time needed to implement each section in the draft Code. Specifically, we've categorized the implementation of each requirement into one of three time horizons: 30 days, six months and 12 months.

6946   Second, we've identified those sections in the draft Code that we feel apply to pre-paid services.

6947   We don't intend to provide a section-by-section review, but you can see from the attachment that we support the significant majority of the proposals. We believe it provides a good base for the development of a national Code.

6948   We also have suggestions about how the provisions in the draft Code can be refined to ensure they are practical and cost-effective without sacrificing the consumer benefit that underlies the measure. These are key principles that should guide this exercise. So in the spirit of the Commission's request that parties structure their presentations around the draft Code, we would like to spend the rest of our time today doing just that.

6949   Firstly, on preventing "Bill Shock".

6950   In our view, notifications of additional fees and tools to monitor and manage usage are related issues as they are designed to prevent "bill shock" that may occur when consumers' monthly invoices are higher than expected. For the purposes of the national Code, these issues should be considered together so that a coherent approach is adopted.

6951   At the outset, it is worth noting that usage monitoring tools are evolving rapidly. Their development is being stimulated by competitive rivalry, and enabled by fast-changing improvements in operating systems, handset capabilities and applications. Consumers have never had more ways to monitor or manage their wireless usage.

6952   Notifications.

6953   We recommend that the Code require that consumers receive a welcome notification whenever roaming rates apply to data, voice and text services. This is a simple but effective way to ensure that consumers know from the outset that charges may apply and what those charges will be.

6954   As proposed in the Draft Code, consumers should also receive notifications when they reach 50 percent, 80 percent and 100 percent of their data usage limit. As noted by Mr. Fullerton, a consumer who appeared before the Commission on Tuesday, megabytes and gigabytes are difficult to estimate, so usage notifications for data services should be the priority of service providers. That's why Bell Mobility and Virgin currently provide consumers with both domestic and international data usage notifications when they approach and surpass their plan's limits. We can provide these notifications within two hours of use.

6955   We don't propose any mandatory usage notifications for voice and text services for a couple of reasons. First, consumers find it easier to keep track of minutes or texts than data, so the need for notifications is not as acute. Second, the billing systems for voice and text services are more complex than those for data, meaning that any notification requirements will be more difficult, time-consuming and costly for service providers to implement.

6956   Some notifications are simply not possible or practical. For example, for international voice and text services, international standards set a timescale that ranges from 36 hours to 30 days for exchanging roaming billing data among carriers. This makes it impossible to provide relevant usage notifications.

6957   The Draft Code proposed that notifications also be sent to consumers who use a service for the first time. This is not possible for Bell. We simply do not have access to the required historical usage information to allow this.

6958   Usage Monitoring Tools.

6959   We agree with the proposal in the Draft Code that service providers should give consumers access to an online tool that allows them to monitor their voice, text and data usage. As mentioned earlier, Bell Mobility and Virgin offer both an online and mobile tool today.

6960   Billing Caps and Other Usage Restrictions.

6961   We do not recommend including any provisions related to billing caps or other methods of constraining a consumer's usage, such as restricting features or services on a default basis. This reduces the value a consumer receives from their wireless device and service, and prevents service trial and experimentation. Such measures also present the risk of suspending a customer's service abruptly or at a critical time. This would be highly disruptive to many consumers.

6962   For consumers who remain concerned about unexpectedly high bills, despite having access to online usage monitoring tools and receiving multiple notifications, there remains the ultimate bill shock prevention tool -- prepaid service. A variety of such services are available from all service providers and they completely eliminate the risk of bill shock.

6963   I will pass it to Paule.

6964   MME DESAUTELS : La question du déverrouillage des téléphones a reçu une attention considérable au cours de cette instance.

6965   À ce sujet, nous serions en faveur d'une disposition du Code exigeant qu'à la demande du consommateur, les fournisseurs de services aient l'obligation de déverrouiller tout appareil non subventionné ou dont la subvention a été entièrement remboursée.

6966   Dans le cas des appareils subventionnés, les fournisseurs de services auraient pour obligation, toujours à la demande du consommateur, de déverrouiller l'appareil, moyennant les frais prévus au contrat et dans un délai d'au plus 90 jours. Toutefois, cette obligation devrait prévoir la possibilité pour le fournisseur de services de demander un dépôt s'il soupçonne une fraude.

6967   Nous appuyons la proposition du Conseil sur les dépôts de garanties.

6968   En ce qui a trait aux débranchements, certains ont suggéré que le Code sur les politiques de débranchement et de dépôt des services de téléphonie filaires du CPRST devrait s'appliquer aux services sans fil. Nous avons des préoccupations à ce sujet. Toutefois, avant de suggérer des changements, nous croyons utile de fournir davantage d'informations quant aux difficultés auxquelles nous faisons face avec les clients qui comportent un plus haut risque de crédit et quant aux solutions que nous avons mises en place jusqu'à présent.

6969   Environ 15 pour cent des clients abonnés à des services post-payés ont une mauvaise cote de crédit. Pour ces clients, nous avons mis en place deux programmes leur permettant de s'abonner à des services post-payés malgré le risque plus élevé qu'ils soient en défaut.

6970   En vertu du programme « Limite de crédit », un consommateur peut s'abonner à un service post-payé mais sera assujetti à une limite de dépense de 200 dollars. Dès que cette limite est atteinte, les services sont immédiatement suspendus jusqu'à ce que le consommateur acquitte le montant dû. Ce programme est utile pour permettre à des consommateurs ayant une mauvaise cote de crédit de s'abonner aux services post-payés, tout en réduisant les risques que nous assumons.

6971   Le problème avec les dispositions du Code du CPRST est qu'il n'est pas clair qu'un client puisse être suspendu quand il atteint les limites de dépense, même si les montants ne sont pas encore dus ou que 60 jours se sont écoulés. Voilà pourquoi nous suggérons une exemption expresse dans la politique de débranchement pour les programmes tels notre programme « Limite de crédit. » Autrement, nous pourrions n'avoir d'autre choix que d'éliminer des programmes comme celui-ci, au détriment des consommateurs.

6972   Pour les autres clients dont la cote de crédit est trop basse pour leur permettre de profiter du programme « Limite de crédit » mais qui souhaitent obtenir des services post-payés, nous demandons souvent un dépôt. Le document de travail du Code prévoit que le montant du dépôt ne peut dépasser le montant de la subvention sur l'appareil, ainsi que l'équivalent de trois mois de services. Nous ne voyons aucune difficulté avec cette disposition. Le problème vient du fait que d'après le Code, nous ne pouvons suspendre les services d'un client que lorsque le plein montant du dépôt est épuisé.

6973   En réalité, il existe deux dépôts différents : un pour le service, avec un maximum qui correspond à trois mois de service, et un pour l'appareil, avec un maximum qui correspond à la subvention sur l'appareil.

6974   Bien que nous appuyions une règle qui nous interdirait de suspendre le service jusqu'à ce que le client ait épuisé la valeur du dépôt de garantie, une fois le montant du dépôt de garantie dépensé, nous devrions être en mesure de suspendre le service, malgré le dépôt de garantie donné pour l'appareil, puisque le client a toujours cet appareil en main. Nous avons donc suggéré des changements au texte pour répondre à cette préoccupation.

6975   Enfin, nous notons que le Code sur les politiques de débranchement et de dépôt du CPRST, tel que repris dans le document de travail du CRTC, n'inclut pas la possibilité de débrancher un client pour fraude ou utilisation abusive. Nous avons suggéré des changements afin de permettre ces types de débranchement.

6976   Jonathan.

6977   MR. DANIELS: In our view, the national Code should be clear that it supersedes all similar provincial codes. We think this is the right decision for Canadians and for the industry. However, we are aware of the challenges this creates for the Commission, which may be concerned about undermining existing provincial initiatives.

6978   This concern, we believe, led to the Commission's initial suggestion to exempt provinces from the national Code if they already have their own wireless regulations. In the Draft Code, the Commission suggested a second approach, which is to allow the provincial and national codes to coexist and apply whenever the provision is deemed more beneficial to the consumer. In our view, neither approach should be pursued.

6979   For consumers, a single Code is important to clearly understand their rights and their service providers' obligations. Having both a provincial Code and a national Code, which are written in different styles, with different rules and governed by different administrative bodies, makes this much more difficult.

6980   Applying some provisions from a provincial Code and others from the national Code is the least workable alternative. Consider the example of a Quebec consumer whose fixed-term contract expires and multiple consumer notices have been unanswered. Under Quebec law, an expired fixed-term contract automatically renews on a month-to-month basis. However, if Option 2 of section D3.4 of the Draft Code is adopted, the consumer's wireless service must be discontinued when the fixed-term contract expires unless the consumer explicitly renews.

6981   Perhaps the consumer would like their service to be discontinued so they don't incur additional charges, but perhaps the consumer relies on his wireless service to such an extent that any interruption would be intolerable. It is also possible that the consumer expects the contract to renew because that is the Quebec law. How will the service provider determine what to do?

6982   We sympathize with the difficult position that the Commission finds itself in. No matter which option is selected on the automatic contract renewal issue, the national Code will conflict with one or more provincial codes. For example, if your Code provides that contracts renew automatically at the end of a term contract, this will conflict with Nova Scotia's legislation. If your Code provides that contracts do not renew automatically at the end of a term contract, this will conflict with Quebec's legislation.

6983   With competing codes there would also be many uncertainties faced by the CCTS. Will the CCTS be expected to administer the existing provincial codes as well as any new ones that are to be enacted? If not, then will they redirect consumers to a provincial counterpart, if one exists, to deal with complaints specifically related to the provincial Code?

6984   The result of this multi-Code approach would be confusion for consumers, confusion for service providers and confusion for the CCTS. The consumers that the Code is designed to help would be worse off than they are today.

6985   We recommend that the CRTC's national Code supersede all others. We are not alone in this view. Consumer groups, service providers and other stakeholders stand together on this point. Notably, representatives from the Yukon, Alberta and Ontario governments have supported a single national Code as long as it meets their constituents' needs. We have no doubt that the outcome of this process will do just that. In fact, the Draft Code exceeds by a considerable margin the provisions in most provincial legislation.

6986   Our recommendation is strongly supported by a legal opinion that PIAC and Bell jointly commissioned from former Supreme Court Justice the Honourable Michel Bastarache of Heenan Blaikie. This opinion will be filed in the March 1st round of comments.

6987   In short, Bell submits that any attempt by the Commission to accommodate provincial regulation of wireless service contracts would result in legal uncertainty and be inconsistent with Parliament's clear intent that the Commission exercise regulatory authority over all aspects of the Canadian telecommunications system.

6988   Our proposed solution is straightforward. The Commission should clearly state that its Code will apply nationally and exclusively for all wireless customers and service providers.

6989   Our final issue relates to new and existing contracts. Section B2 of the Draft Code captured the full range of theoretical options for implementing the Code. However, Option 1 of that section, which suggests that the Code apply to existing contracts, is simply not viable.

6990   As a practical matter, it would be impossible to comply with some aspects of the Code retrospectively. For example, Bell does not have a historical record of the subsidy amount provided to each consumer in order to calculate early termination fees under the national Code's formula.

6991   From a legal perspective, we don't believe the Commission has the authority to change existing contracts. The rationale is straightforward. Without the express authority from Parliament to make retrospective orders, the CRTC could not legally apply the Code retrospectively. The Telecommunications Act contains no such authority. Therefore, if the Commission moved ahead with the proposal in Option 1 to apply the Code to pre-existing wireless contracts, it would do so without jurisdiction.

6992   Nonetheless, we note that some aspects of the Code will effectively be implemented by most carriers across their entire customer base because it is practical to do so. For example, we anticipate that when carriers launch data notifications, they will likely do so for all their customers across their entire base, but that is a different matter than having the Code apply retrospectively as a matter of law.

6993   A national wireless Code that adopts the refinements we've proposed would:

6994   - inform consumers of their rights in understandable language;

6995   - allow consumers to terminate a contract at any time for a clearly understood price;

6996   - allow consumers to terminate a contract at no charge if the service provider unilaterally changes the contract to the consumer's detriment; and

6997   - provide consumers with access to usage monitoring tools and usage notifications.

6998   With this information, and their basic rights clearly explained and available, consumers will be in a position to make well-informed purchasing decisions. And then the competitive marketplace should be permitted to operate to the fullest extent. This will allow service providers to continue to innovate, compete, differentiate and invest. That's how we define success.

6999   We would be happy to respond to any questions you have. Thank you.

7000   THE CHAIRPERSON: Thank you.

7001   As I said earlier, what we will do is do the principal questioning tomorrow. But just to be clear, you've attached the summary of your positions, so any change that you've made compared to your original filings is reflected in this document; is that correct?

7002   MR. DANIELS: That is correct.

7003   THE CHAIRPERSON: All right. So we will be able to, in fact, discuss your position based on this document because this is now your new document.

7004   MR. DANIELS: That's the intent.

7005   THE CHAIRPERSON: Okay, great. Thank you very much.

7006   We will adjourn now and gather back at 9 o'clock tomorrow morning, so a little later than normal. Thank you very much.

7007   Donc, on lève la session jusqu'à 9 h demain matin.

--- Whereupon the hearing adjourned at 1703, to resume on Thursday, February 14, 2013 at 0900

REPORTERS

Lynda Johansson

Monique Mahoney

Jean Desaulniers

Madeleine Matte

Date modified:

2013-02-13