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Tuesday, June 03, 2008

Liberal bill would crack down on 'misleading' cellphone charges

OTTAWA - It's one of those industries many Canadians use every day, don't like to pay for, and love to hate.

Now Liberal MP David McGuinty wants to crack down on the cellphone industry, which he says has collected billions of dollars in "misleading" charges over the last 25 years. The Ottawa MP is proposing legislation to ban so-called system-access fees charged by cellphone providers.

McGuinty says 911, overage, data and roaming surcharges can double advertised monthly rates for an industry that's turning a $4-billion-a-year profit.

Cellphone companies double-bill, change contract terms on the fly, and obfuscate agreements with unnecessary words and vague clauses, the MP told a news conference Tuesday.

"Clearly, the problem needs more than a quick fix," he said. "We need to take a hard look at advertising, contracts and billing."

But the president of the Canadian Wireless Telecommunications Association said McGuinty's assertions are based on misconceptions and faulty comparisons.

"We never like to pay our bills," Peter Barnes said in an interview. "That's a normal human factor.

"If we make too many calls or send too many text messages, obviously the bills will be higher."

Price regulation is unnecessary and would be a mistake, he said.

The industry is competitive and wireless prices have dropped up to 45 per cent in five years, he said, adding all fees are cited in every contract customers sign.

"Unfortunately, some customers don't take the time to read their contracts," Barnes said.

"We're not misleading customers . . . There are no 'fictitious' surcharges. Everything is clear and spelled out at the outset."

Barnes said the Canadian Radio-television and Telecommunications Commission has reviewed the industry each year and consistently advised against regulating cellphone prices.

But McGuinty said Canadian cell users are paying an average of 33 per cent more than users of equivalent services in the United States, while high-end business users average 56 per cent more.

He suggested usage rates reflect a poor opinion of the service and costs associated with the devices in Canada.

Fifty-five per cent of Canadians have cellphones, compared with 75 per cent of Americans and 86 per cent of Germans.

The rate of cellphone use in Canada ranks 29th among the 30 countries of the Organization for Economic Co-operation and Development.

But Barnes said the OECD gave Canada's cellphone industry top marks, saying prices beat those in the United States.

"We're better than the middle of the pack in the OECD and when you compare our geography, our cost of providing service with that of very densely populated countries, we fare quite well."

Canada is second in the world, to the Americans, in cellphone minutes used per user - 400 per month compared to 800 in the U.S. and up to 175 in Europe.

Barnes said the relatively low percentage of Canadians who have cellphones is reflective of the broader range of phone choices available to them, not of the quality of service or expense.

The industry has been growing by 10-12 per cent a year for "some time," he added.

McGuinty said his private-member's bill, called the Get Connected Fairly Act, would end system access fees and impose more transparency and accountability on the cellphone industry.

It would also direct the CRTC to review and report on competition and consumer choice in telecommunications services, which the regulator already does.

It was not immediately clear how McGuinty's proposal would be received in the minority Parliament, where private-members' bills that may otherwise be longshots have achieved some success.

The NDP's industry critic, Peggy Nash, said the bill does nothing to lower high cellphone costs and price-gouging.

"McGuinty's bill simply asks cellphone companies to include these unfair charges as part of the subscriber's monthly fee or monthly plan rate. Nothing else."

The New Democrats are pressing the Conservative government to regulate charges and specific fees for activities beyond users' control, such as incoming calls and text messages.

© The Canadian Press, 2008



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