The Canadian Radio-television and Telecommunications Commission may be ringing in 2013 with one of the most ridiculous plans yet.
Unfortunately, the vast majority of the complaints and recommendations that make up this code were submitted by Canadian consumers who may not even have the intelligence to dial a cell phone, let alone understand the services that they are buying.
Top of the list: Outlaw 3 Year Contracts
The main reason for even having a 3 year contract is due to the fact that the average Canadian can’t afford to pay the full price for a cell phone. Having a 3 year contract allows for the carrier to subsidize the cost of the hardware and pass that subsidization onto the consumer. If the CRTC reall does force carriers to remove the 3 year contract option, consumers are now going to be on the hook for shelling out more dough up front for their phone. Likely to the tune of $200 or more, depending on the type of phone they want to get.
What’s funny about the whole contract debacle is the fact that people don’t HAVE to get a 3 year contract right now. All carriers offer various contract lenghts, depending on how much you want to pay up front.
Right now, you can get a Windows HTC phone with no contract for $599 from Bell Canada. You can get a Samsung Galaxy S III from TELUS for $650.
A very smart tech chick (hat tip to @followsandi) suggested that if the consumer bought the hardware upfront, there should be a decrease on the monthly service fees, since you don’t need to subsidize the cost of the hardware. I’m all for that — and it makes good sense. The downside of that is that it REALLY exposes the carrier’s margin models, and unless one of the carriers sees this as a great way to improve transparency with its customers, it’s unlikely that this will happen. You never know.
I’d like to see a few more options for pre-payment of hardware —— if I want to put down 50% of the cost of the phone, I’d like to have a different contract length. I expect that I could walk into any wireless store and make this sort of arrangement, and it changes the outstanding commitments I have with that carrier, since commitment is linked to revenue spend. Maybe that’s the way to go —- have a minimum spend commitment with a carrier, and when you meet/exceed that commitment, your contract is over, and you’re free to change, upgrade or do the hokey-pokey.
Some of the recommendations are reasonable: alerts when you get close to your data limits, or your voice minutes. EASY ways to upgrade or downgrade services on the fly.
But really, those recommendations have little to do with consumer safeguards and more to do with service development of the carriers. I expect that some of these recommendations have a pretty heavy service development cost associated with them. The big carriers may be able to shoulder the capital costs of the system upgrades, but the new entrants are going to be challenged with providing additional service features on products that they’re already struggling with.
It’s not going to be pretty, and it’s not going to be the right thing, but silly consumers —- you’re going to get what you get.