Ontario is hanging up on “price gouging” by mobile phone companies with legislation that would cap the costs of cancelling service, provide up-front pricing details and plain-language contracts.
The law from Consumer Minister Margarett Best incorporates two previous private member’s bills by Liberal MPP David Orazietti in an effort to ease “cell shock” when customers open their invoices.
But it does not address concerns about voice, data and texting costs because they are regulated federally, Orazietti (Sault Ste. Marie) told reporters Thursday, urging Ottawa to open the industry to more competition that could lower prices.
“Canadians are paying the highest cellphone prices out of 11 countries in a recent survey,” said Orazietti, whose two previous attempts to get his legislation approved had all-party support.
Best said beefs about cellphone bills are among the top 10 complaints received by her ministry.
“This is a pocketbook issue consumers want addressed,” said Orazietti. “Bill shock is a common problem.”
But costs of complying with the legislation “could see costs rise for consumers,” warned Marc Choma of the Canadian Wireless Telecommunications Association, a group representing major players in the cellphone industry dominated by Bell, Rogers and Telus.
The bill, however, was applauded by WIND Mobile as “what is needed to keep the traditional wireless carriers from abusing their market power,” said chief executive Anthony Lacavera.
“We need to remove the barriers that prevent consumers from taking advantage of increased choice and better value.”
If passed by the Legislature under the minority Liberal government — which is now casting for NDP support if its budget to avoid a late May election — the law would cap “exhorbitant” cancellation fees for fixed-term phone contracts at $50.
Some carriers have charged as much as $400 to $600 for cancellations.
Better consumer protection on cancellations is long overdue, said Michael Janigan, of the Public Interest Advocacy Centre.
“We want a thriving rivalry in the wireless market, not one where customers are locked into plans and contracts that no longer serve their needs.”
Contracts would also have to be written in plain language so consumers can understand them more easily and would have to spell out clearly which services are covered by the basic fee and which are extra.
The legislation would also require customers be notified when they are about to go above their voice, data and testing limits, incurring extra charges.
Choma said the bill — similar to legislation in Quebec and Manitoba — could put Ontario cellphone users at a disadvantage “through the addition of expensive government bureaucracy that could possibly interfere with the price, choice and level of services.”
Orazietti countered that the enforcement of the bill will come at minimal or no cost to the government.
The association said it would prefer the federal government set national standards “if further consumer protection measures are deemed necessary.”
But whether the legislation will be passed remains unclear.
Ministry officials said the bill will be introduced within two weeks, while the Legislature is tied up in debate on the budget with a final vote by April 25.
If the fiscal blueprint is defeated, forcing an election, the cellphone bill would die.
“It’s kind of passing strange, this timing,” said Progressive Conservative MPP Peter Shurman (Thornhill), adding the Tories “cautiously support” the legislation to help consumers but need to see details.
NDP Leader Andrea Horwath said her party is also eager to see the proposed legislation.
“Anything that helps with the affordability of everyday life we’re interested in looking at.”