Listen to this article
Estimated 4 minutes
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
Canada’s telecom regulator has launched a formal inquiry into wireless fees charged by Rogers Communications, Bell Canada and Telus Communications, claiming the charges appear to violate new consumer protection rules.
In a public notice posted Tuesday, the Canadian Radio-television and Telecommunications Commission (CRTC) ordered Canada’s three largest telecom companies to justify their contentious fees and explain why they shouldn’t face fines for apparent federal violations.
The dispute stems from new CRTC rules implemented last month that ban telecoms from charging extra fees to activate, change or cancel cellphone and internet plans. The now-outlawed charges include early cancellation fees and the once-ubiquitous activation fee for phone plans.
The regulations are meant to make it easier for Canadians to switch phone and internet plans to secure better deals. But the CRTC suggests Rogers, Bell and Telus are flouting the rules with newly introduced fees that resemble the outlawed charges.
Between May and mid-June, the CRTC sent stern letters to the telecoms, warning that Telus’s newly introduced $15 SIM card fee, Bell’s new $40 device handling charge and Rogers’ new $40 device setup charge each appear to violate the regulations.
However, the companies have refused to back down, maintaining their fees are fully compliant.
Matt Hatfield, executive director of the non-profit advocacy group OpenMedia, suggests the telecoms may be refusing to fold because even if they lose the battle, they will still have made money during the period they were able to charge the fees.
“Over that time, they will collect more revenue than what they expect they’ll be fined,” he said. “So it’s in their financial interest to do it.”
If found in violation, the CRTC says the companies could each face penalties of up to $10 million, with additional fines of up to $25,000 for individual company officers or directors.
However, Hatfield said he thinks the CRTC is citing those figures for leverage and that any fines issued would, in reality, be much lower.
New rules for cellphone providers came into effect on Friday, banning fees to activate, change or cancel cellphone plans. Canada’s telecom regulator sent letters to Bell and Telus, warning them that new fees introduced by the companies appear to violate those rules.
CRTC fired up over fees
The CRTC first took aim at Bell in May, shortly after the company introduced its $40 device handling charge for customers who purchase a device with their wireless plan.
The new regulations allow telecom companies to still charge fees for optional products and services, such as a visit to a customer’s home to set up their Wi-Fi. But the CRTC wrote in a letter to Bell that “it would not appear that the device handling charge falls under the exemption.”
The regulator targeted Rogers for a similar charge — its $40 device setup fee — introduced in mid-June.
Both Rogers and Bell have argued that these fees are exempt from the new regulations because purchasing a device with a plan is optional.
Telus faces CRTC scrutiny over a $15 fee for both physical and digital SIM cards.
OpenMedia’s Hatfield said the SIM fee is a clear violation of the new CRTC regulations because the microchips are required to connect a customer’s device to a mobile network.
“To my understanding, you can’t bring your own SIM to a network,” he said. “You need to receive either an eSIM or a physical SIM from [your provider]. So I’m not sure how they can argue that that’s an optional service.”
Telus said in an email that its SIM charge is exempt from the newly banned fees because it is not a new charge but instead “a physical or digital product for purchase, rather than an administrative fee.”
What’s next?
The CRTC says Rogers, Bell and Telus must provide justification for their new fees by July 30.
The regulator has invited the public to submit comments on the matter by July 30 and says the telecoms will have until Aug. 10 to respond.
Hatfield said if the CRTC wins this battle, he hopes it will make the telecoms return the money they made from charging the contested fees.
“I think the CRTC needs to make sure this is a bad experience for the telcos that they won’t repeat,” he said.
