TELUS’ latest submission to the CRTC wireless code proceeding

Today we filed our “Final Written Comments” in the CRTC’s ongoing wireless code proceeding. Below is an excerpt. The full document is available here.

In our December 18, 2012 Reply Comments, TELUS urged the Commission to:

  • create uniform rules for all service providers but maintain scope for competitive innovation and differentiation by avoiding rules that are overly comprehensive, prescriptive or inflexible;
  • recognize that different customers have different needs and promote choice instead of an unnecessary degree of standardization, and;
  • avoid prescribing rules that would result in unnecessary operational inefficiencies or costs.

These remained the focus of our submissions at the oral hearing and are the motivation for those relatively few major objections that we have put forward to the substantive elements of the draft code. We recognize the broad demand for standards that would govern many aspects of the relationship between wireless service providers and consumers, but are concerned that those standards not go so far as to reduce competition among service providers, disrupt service to customers, or impede service innovation. The core rules should be consistent, but the way they can be implemented should be flexible, to allow carriers to differentiate themselves in the marketplace. Just because one competitor does something one way should not mean that all competitors should have to do it the same way.

Similarly, we urge the Commission to take note of the many points on which there was unanimity among all service providers, big and small, new and old. In this submission, we note several occasions on which new entrants explained their concerns with elements of the proposed code in substantially the same terms as the established carriers. Proposals that would involve significant systems development work, often at great expense and over long periods, often elicited the same comments from all service providers. In many cases, there are other less expensive and more pragmatic ways of addressing the same consumer interest, and we are hopeful that the Commission will adopt those options where possible.

In our view, by the end of the hearing, certain key propositions had received support from most of those who appeared, including the following:

  • a single set of national rules is preferable to different rules in different provinces;
  • pre-paid services serve the needs of many consumers and their unique characteristics ought to be preserved;
  • if the consumer can get out of a term contract at any time with no penalty simply by paying the outstanding device subsidy, then it isn’t really a term contract anymore;
  • the main cause of “bill shock” is international data roaming, and;
  • notifications are a good thing, but too many of them aren’t.

Among those issues that TELUS has highlighted as particularly problematic, we note that there was a high degree of consistency in the submissions of both new entrants and established carriers, including on the following points:

  • Unredeemed pre-paid service credits typically do not expire, while redeemed but unused pre-paid credits do not automatically expire after a month, but rather are rolled over indefinitely and remain available for use so long as the customer keeps the account alive. Only when an account has been inactive for 90 days (an industry standard) is it closed. By that time, in TELUS’ experience, more than 90% of accounts have zero balances.
  • Voice and text notifications are often impossible to provide in real-time or even close to it (especially in the case of international roaming). Data roaming can typically be reported in near real-time because the traffic passes through the home carrier’s network. Even when the necessary records are available, building the systems necessary to provide near real-time voice and text notifications would be extremely expensive and yet provide relatively little value to consumers in light of the prevalence of unlimited voice and text packages and the fact that consumers generally have an intuitive and real sense of their voice and text usage. TELUS customers are nonetheless already provided with an online usage dashboard and can access the same information on their Apple, Android, or Blackberry device using the TELUS My Account app.
  • Across-the-board usage caps on services outside one’s monthly plan (such as long distance calls, roaming charges, and goods and services such as meter parking) would annoy most post-paid customers. Consumers who prefer a hard cap on their monthly spend already have the option of pre-paid services. So long as consumers have access to robust usage monitoring tools and receive adequate notifications of additional charges, there should be no need for usage caps on post-paid services.
  • Wireless devices are almost universally ordered, manufactured, and sold to consumers locked to the network on which they are initially intended to be used. There are several reasons for this, including a variety of fraud-related concerns. Controlling fraud means controlling costs and keeping inventory available for customers. Further, as Samsung and Blackberry have told the Commission, locking increases Canadian consumers’ access to the best devices on the global market. While service providers should certainly offer device unlocking on reasonable terms for those customers who desire it, mandating that all devices be sold unlocked or immediately unlockable would have several negative consequences for consumers and service providers alike.
  • Applying the rigid rules of the wireline local exchange service Deposit and Disconnection Code without the exceptions that TELUS proposes would eliminate innovative credit management practices and result in reduced access to post-paid service for many consumers, which is surely also not an intended result.

TELUS urges the Commission to take notice of the high degree of commonality of views across service providers of all sizes on these and other important points. As Mr. Béland candidly stated in Québecor Média’s opening remarks (translation):

  • “Note in this regard, again, that Videotron is a new entrant in the wireless industry, with many customers to take from its competitors. Any measure that allows all consumers to better understand what they are buying, better monitor and manage their spending and move more easily from one operator to another is, in general, to our advantage. Therefore, if we say that a given measure is too complex, too expensive or would take too long to be implemented, we respectfully submit that these warnings deserve your attention.”

What TELUS fears in this proceeding is not that strong, pro-consumer rules will be developed – we know they will – but rather that overly prescriptive or misguided rules could divert us from our strategy of putting customers first. Forcing service providers to invest in requirements that might sound consumer-friendly in the hearing room but don’t respond to prevailing consumer needs would ultimately harm consumer interests. The proposals for voice and text notifications, usage caps on post-paid plans, and the application of the wireline Deposit and Disconnection Code to wireless services are chief among those.

TELUS recently confirmed that we have the lowest level of churn in the industry, and CIPPIC/OpenMedia has confirmed (as CCTS has before) that TELUS is the subject of proportionately fewer complaints per customer than our competitors. In its undertaking response, OpenMedia indicates that among those consumers who responded to its “cellphonehorrorstory.ca” campaign and identified their service provider, TELUS’ brands were the subject of only 18.90% of complaints, while Bell brands were the subject of 31.74% and Rogers 47.88%. This is all the more remarkable given that a disproportionately large share of complainants hailed from British Columbia, the home of both OpenMedia and TELUS.

J.D. Power named Koodo number one in customer satisfaction among standalone wireless service providers in 2012. Among full-service providers, TELUS came a close second to SaskTel (and hence first among national brands). These and other indicators demonstrate that TELUS and Koodo customers are, by and large, more satisfied than those of our competitors. This tells us that our strategy of putting customers first is working. All we ask is that the code leave us the flexibility to continue doing so.

As Commissioner Molnar noted, it sometimes seems like there is a gap between what many Canadians said in the online consultation and what the service providers said at the hearing when it comes to wireless consumer irritants. TELUS believes that it many cases, that gap can be explained simply by time. Many of the “cell phone horror stories” on the record date from a time when data roaming notifications were not generally provided, when contract termination fees were high and unrelated to the remaining device balance, or when there were fewer choices in the market, to name just a few things that have changed across the wireless industry in recent years. Once the code comes into force and consumers can cancel a term contract any time they wish without arbitrary fees (and without having to pay for another 30 days, as some of our competitors require), complaints about three-year contracts can be added to that list.

TELUS considers that consensus is within grasp on all of the issues in the discussion draft, and looks forward to the establishment of a meaningful, pragmatic, and consumer-friendly code that will set the national standard for regulation in this field.