Canadians Are Being Ripped Off with Cell Phones

[Hartley]

Cellphone class-action suit gets green light

A Saskatchewan court has certified a class-action lawsuit against Canada's cellphone companies for their "system access fee," which could ignite a struggle over billions of dollars consumers have paid to wireless providers for the monthly charge.

The suit, lodged by Regina lawyer Tony Merchant, alleges that Canadians have been misled by the carriers into thinking the access fee — typically between $6.95 and $8.95 a month — was a tax by the government or the Canadian Radio-television and Telecommunications Commission, when in fact it was simply extra revenue for cellphone companies.

Regina lawyer Tony Merchant has launched a class-action lawsuit on behalf of more than 14 million cellphone users.
(CBC) The suit has been filed on behalf of the more than 14 million monthly cellphone subscribers, or nearly half the country's population, and seeks the return of an estimated $12 billion plus interest in charges. After interest, that would result in nearly $20 billion, or about $600 to $700 per customer, Merchant said.

The fee did indeed start out as a government levy for using the airwaves that cellphones run on, which consumers paid directly to Industry Canada. In 1986, the government department transferred collection of the fee to cellphone providers, who were to incorporate the levy into their monthly charges. But the carriers instead opted to keep them separate.

No other cellphone providers in the world charge a separate system access fee, and Canadian carriers have used them as marketing tools, making their monthly fees appear lower than they actually are, Merchant said.

"That's how they got into this crack cocaine [habit] of money coming in that didn't cost anything. They originally had a right to collect it because it was a special and separate tax, but when that ended, they just continued with the pretense of collection," he said. "It's like saying our fee is $30, but we have to charge an extra $10 because we have to pay income tax. That's no justification."

Keeping the fee separate has also allowed Canadian carriers to fare better in international price comparisons, he said.

Marc Choma, spokesman for the Canadian Wireless Telecommunications Association, a lobby group supported by the carriers, said each company has its own reasons for charging the fee. The carriers collectively pay about $150 million a year to the government in licence fees for using the country's airwaves, he said.

A spokesman for Bell Canada Inc., the nation's second-largest wireless operator, said the lawsuit had no merit but would not comment further. Rogers Communications Inc. and Telus Corp., respectively the largest and third-largest carriers, did not respond to a request for comment.

The carriers have in the past said the access fee is collected in part to pay their licence fees on airwaves and to finance the expansion and maintenance of their networks.

Financial markets did not take the threat to the three major carriers, among Canada's largest companies, seriously on Wednesday. Shares of Bell and Telus rose slightly on the Toronto Stock Exchange, while Rogers shares fell about two per cent. Other smaller players are also named in the lawsuit, including SaskTel, MTS Allstream and Aliant.

Analysts said Saskatchewan's certification of the lawsuit did not necessarily add any merit to the case. Media reports also noted that Rogers, if not all three carriers, planned to appeal the decision.

"The issue has been around for nearly 10 years," said RBC Capital Markets analyst Jonathan Allen. "Being certified as a class-action is just an administrative change, it doesn't mean there's any change in the actual merits of the case."

Merchant disagreed and said certification means the judge felt there was enough merit to the lawsuit for it to go ahead. Court hearings for certification are under way in just about every province, and the Saskatchewan ruling should be carried over into the rest of Canada, he said.

"Generally, other provinces pay what is known as 'good faith and credit' to a decision in one court. It's not a big task to move into those other provinces."

The next step, outside of appeals, will see the carriers turn over billing documents to be examined for evidence of misleading business practices, Merchant said.

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Canada Worse than 3rd World Countries when it comes to Mobile Data Access
By Thomas Purves |


The motto of the CRTC, Canada’s telcom regulator is “Communications in the Public Interest”. Right.

If you live in Canada, write to your MP. The CRTC, as an institution, needs to be taken out and shot.*

This chart charts the best rates available from all carriers. And all levels of government say that “ICT” competitiveness is key factor in Canada’s future economic
prosperity. Ya. Right. I would like to say that Canada is a 3rd world country when it comes to Mobile ICT, except you can clearly see from this chart that even *Rwanda* has orders of magnitude better Mobile Data service than Canada.

As I’ve noted in the chart, 500MB is about 100 minutes of usage at a Canadian Carrier’s maximum (advertised) download speed of 700kB/s (your mileage will vary, International carriers are typically twice or four times faster). 500MB is not a lot of data in the grand scheme of things, a few GB could make a better example but in that case the red bars would be completely off the charts.

If you don’t live in Canada but you or your small business depends on mobile connectivity or net neutrality in general, don’t come here.

If see these numbers makes you mad, then Digg this article and spread the word on your site.

(and leave a comment, what is mobile service like where you live? why do you think mobile data is important?)

Here is the complete data table including data speed and Caps for each of the services listed. You’ll notice Canadian carriers lag substantially in every category.

see also on this blog: Bell to charge you $3600 per hour for Wireless Internet access. (the situation has not changed in a while)

supporting links:
For Computers - Mobile Data - Vodafone NZ
Cell Phone Plans: T-Mobile rate plans-cell phones, wireless plans, BlackBerry, Sidekick
powervision.sprint.com/mobilebroadband/plans/index.html
Terracom - EVDO Pricing
http://www.telstra.com.au/business/p...tanddata/mobi…
http://www.telusmobility.com/on/busi...connect_megab…
http://www.bell.ca/shop/en_CA_AB/Sme...nternet.Plans…
Options you can add
http://www.shoprogers.com/business/w...ervices/busin…

*not literally of course, we are Canadian after all. (the CRTC is the Canadian regulator for radio, television, and telecomumnications). Here’s the Canadian Telecommunications Act that governs the CRTC. I like parts 7 a, b and c.

UPDATE: whoa, this graphic has been posted to flickr only on a few hrs now and it’s already hit 9 favorites and is my top “most interesting“.

[Spraguer]

We just got our class action legislation here in New Brunswick, Hartley - though class recognition/creation is tough under the new law. Bringing the suit in Saskatchewan is wise.