Despite years of arguments that Bell Canada (BCE) could not sustain offering unlimited Internet access, the company suddenly managed an about-face Monday, announcing the launch of a $10 unlimited Internet add-on option for broadband customers who do not want to worry about their online usage.

Bell customers in Québec and Ontario who choose at least three Bell services (broadband, television, phone, satellite, or wireless service) can qualify for the add-on. Broadband-only customers and those with two qualifying Bell services can also buy unlimited access for an additional $30 a month.

Oosterman

“Canadians are the heaviest Internet users in the world and our time spent online is growing every day,” said Wade Oosterman, president of Bell Mobility and Residential Services. “Thanks to Bell’s massive network investments and the success of the new Fibe network, Bell is taking the lead in maximizing the online experience with affordable unlimited usage options.”

Another factor may be a forthcoming ruling regarding wholesale access to Bell’s network from Canada’s chief telecom regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), rumored to be beneficial to the growing number of independent providers that already offer unlimited access.

Canada’s largest cable and phone companies have imposed usage caps for at least five years, although a few in western Canada have not enforced them. Most providers offer allowances tied to Internet speeds, compelling customers to upgrade to avoid overlimit penalties if they exceed the limit.

Bell’s decision to offer an add-on may force Canadian cable operators, particularly Rogers, to follow suit.

(Thanks to Stop the Cap! reader Alex for the heads up.)

Mountain Cablevision was owned by Shaw Communications but has been purchased by Rogers.

Rogers Communications, already Canada’s largest mobile-phone company, will grow even larger with the acquisition of Shaw Communications’ unused wireless spectrum and a Shaw-owned cable company making inroads in Rogers’ backyard in southwestern Ontario.

Rogers has agreed to pay $300 million for the spectrum and $400 million for Hamilton, Ont.-based Mountain Cablevision, Ltd. In return, Shaw will acquire a one-third interest in Rogers’ TVtropolis network.

Shaw is getting a premium price for the wireless spectrum it acquired in 2008 for $190 million. Shaw, like many American cable companies, originally planned to launch competing mobile phone service but aborted the effort in 2011, deciding to invest in its broadband service and construct a Wi-Fi network in western Canada instead.

Rogers CEO Nadir Mohamed told Bloomberg News the spectrum is needed to meet growing demands from Canadian wireless broadband customers.

“The wireless business is defined by what I would describe as an explosion in terms of usage,” Mohamed said. The new spectrum “will help us meet that demand in terms of capacity and speed.”

Rogers is by no means finished acquiring spectrum. The company plans to borrow as much as $800 million to purchase more at the next Canadian spectrum auction later this year.

Rogers Communications customers have a New Year’s surprise arriving in their mailboxes as eastern Canada’s largest cable company announces it is boosting rates effective Jan 24.

Many Rogers broadband customers will be paying an additional $3 a month for usage-capped service. Some of the steepest rate increases are reserved for budget-minded customers who only want the basics.

Those subscribed to Phone Essentials, Cable Digital Plus and Internet Lite face a 6.7 percent rate hike, which translates into $8 a month or $96 a year. One thing not increasing is Rogers’ usage allowances.

Rogers Rates Up, Up, and Away

• Phone Essentials up 7.0%
• Phone Favorites up 5.2%
• Phone Deluxe up 4.6%

• Cable Basic up 2.9%
• Cable Digital Plus up 5.7%
• Cable VIP up 2.9%

• Internet Lite up 7.8%
• Internet Express up 6.1%
• Internet Extreme up 4.8%
• Internet Extreme Plus up 4.2%

Rogers Communications isn’t exactly hurting. Their profits have been accelerating every quarter over the last year:

• Q4 2011: $327 million profit
• Q1 2012: $356 million profit
• Q2 2012: $400 million profit
• Q3 2012: $466 million profit

Image courtesy: Rick

Rogers’ customer Sunfox, who lives in Markham, Ont., and provided the breakdown, is purely tongue-in-cheek about Rogers’ quest for more of their customers’ money.

“I mean clearly something had to be done,” he writes on Broadband Reports’ Rogers Forum. “Any reasonable person can see that $1.5 billion profit in 12 months isn’t anywhere near enough, so it was time to significantly increase rates for their customers.”

Customers who want out can follow these instructions provided by Rogers:

Affected customers who wish to respond to the rate increase notice may call us at 1 888 ROGERS 1 (764-3771).

Residents of New Brunswick who do not wish to accept any applicable rate increase may choose to cancel the service(s) affected by the rate increase(s). Any applicable early cancellation fee, device savings recovery fee or service deactivation fee will apply.

Residents of Newfoundland and Labrador and Québec who do not wish to accept any applicable rate increase may choose to cancel the service(s) affected by the rate increase(s) without any early cancellation fee by sending us a notice to that effect no later than 30 days after the rate increase(s) take effect, as indicated in the rate increase notice.

Residents of Ontario who do not wish to accept any applicable rate increase may choose to cancel the service(s) affected by the rate increase(s) without any early cancellation fee, device savings recovery fee or service deactivation fee, as applicable, by sending us a notice to that effect no later than 30 days after receiving the rate increase notice.

Think your wireless service contract ties you down?

More than 500 Canadians filed comments about their wireless service with the Canadian Radio-television and Telecommunications Commission as the telecom regulator wrestles with a proposed code of conduct for Canada’s wireless industry and the contracts they hand customers. Why? Because of language like this from a typical contract with Rogers Communications:

Device Savings Recovery Fee (applicable to term commitment customers only for any new term entered into on or after January 22, 2012): A Device Savings Recovery Fee (DSRF) applies if you have been granted an Economic Inducement (as defined below) upon entering your new term, and if, for any reason, your wireless service or your new term is terminated prior to the end of the term of your Service Agreement (Service Agreement Term). The DSRF is the amount of the economic inducement (which may take the form of a discount, rebate or other benefit granted on the price of your Equipment), as stated in your Service Agreement (Economic Inducement), less the amount obtained by multiplying such Economic Inducement by a fraction representing the number of months elapsed in your Service Agreement Term as compared to the total number of months of your Service Agreement Term (plus applicable taxes). In other words, DSRF = Economic Inducement [Economic Inducement × (# months elapsed in your Service Agreement Term ÷ Total # months in your Service Agreement Term)] + applicable taxes. An Additional Device Savings Recovery Fee (ADSRF) also applies if, for any reason, your wireless data service, or your data plans commitment term (Data Term), is terminated prior to the end of your Data Term. An Additional Device Savings Recovery Fee (ADSRF) also applies if, for any reason, your wireless data service, or your data plans commitment term (Data Term), is terminated prior to the end of your Data Term. The ADSRF is the additional Economic Inducement you received for subscribing to your wireless data service, less the amount obtained by multiplying such Economic Inducement by a fraction representing the number of months elapsed in your Data Term as compared to the total number of months of your Data Term (plus applicable taxes), and applies in addition to the DSRF for termination of your Service Agreement. If you subscribe to a plan combining both voice and data services, both the DSRF and the ADSRF apply, up to the total Economic Inducement.

Despite contract confusion being an issue in the eyes of the CRTC, the overwhelming majority of comments focused on something else that irks Canadians above all else: being held hostage by the industry’s traditional 36-month wireless contract, one year longer than consumers in the United States find common.

“Get rid of the 36 months contract,” wrote one Canadian, noting contract creep is all the rage. “It first started with 12 months, then 24 months, now the standard is 36 months, which is ridiculous!”

Most of the comments came from customers of the chief three providers: Bell, Rogers, and Telus. All three received scorn from customers for uncompetitive, expensive service.

The state of competition in Canada:

Roger offers new plans:
– $55 1000min local, unlimited text, 200MB
– $65 unlimited local/text, 1GB
– $75 unlimited local/text, 2GB
– $95 unlimited canada/text, 5GB

Then Bell offers their new competitive plans:
– $55 1000 min local, unlimited text, 200MB
– $65 unlimited local/text, 1GB
– $75 unlimited local/text, 2GB
– $95 unlimited canada/text, 5GB

Then Telus offers their competitive plans:
– $70 unlimited local/text, 1GB
– $80 unlimited local/text, 3GB
– $100 unlimited canada/text, 5GB

Where is the competition? These plans are all the same.

Also unfamiliar to Americans, the automatically-renewing contract that snags Canadians that forget to cancel with a brand new service commitment complete with a cancellation penalty. Perhaps the most consumer-friendly provinces in Canada are Quebec and Manitoba, which ban certain kinds of termination fees and auto-renewing contracts. Canadians want these bans extended nationwide. The European Union already bans 36 month contracts and made 24 months the maximum. One former resident of the United Kingdom noted the EU also compels providers to offer 12 month contracts for those who want them.

The CRTC may not provide much relief if it remains convinced the marketplace remains competitive.

The agency points out under the Telecommunications Act, the CRTC will only intervene in a market if there is insufficient competition to protect the interests of users.  In the 1990s the CRTC decided to allow market forces to guide the growth of the mobile wireless industry.

The CRTC seems to have already made up its mind on this issue when it announced its proceeding:

In the decision issued on 11 October 2012, the CRTC found that there was competition sufficient to protect the interests of consumers and it did not need to regulate rates.  Although many consumers indicated concerns about wireless rates and the competitiveness of the wireless market, a number of market indicators demonstrate that consumers have a choice of competitive service providers and a range of rates and payment options for mobile wireless services. According to the CRTC’s 2012 Communications Monitoring Report, new entrants in the mobile wireless market continue to increase their market share and coverage. Companies continue to invest in new infrastructure to bring new innovative services to more Canadians. Moreover, the average cost per month for mobile wireless services has remained relatively stable.

The CRTC concluded that competition in the mobile wireless market continues to be sufficient to protect the interests of users with respect to rates and choice of competitive service provider.

That makes it more likely than not the agency will limit itself to ordering wireless carriers to better explain their wireless policies, not force them to change them.

The only relief potentially available outside of canceling service is considering one of several new competitors which offer relaxed terms and better prices to attract customers. So far, only 4% of Canadians have switched to WIND, Mobilicity, Vidéotron, or Public Mobile. Some may be trapped in current contracts with larger companies or are discouraged having to buy new equipment to switch providers. Most providers in Canada, like in the United States, lock phones so they cannot be easily used on another company’s network.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CRTC Cell Phone Contracts 12-12.flv[/flv]

The CRTC used this video to invite consumers to share comments about confusing wireless service contracts. Instead, criticism of tricky term contracts that auto-renew and last three years arrived in buckets. (2 minutes)

In spring of this year, rural Canadian access to the Inukshuk Wireless system was terminated, forcing many to usage-capped wireless plans from companies like Rogers Communications that cost a lot more.

Kevin, a Stop the Cap! reader dropped us a line this week to remind Canadians they don’t have to pay Bell, Rogers or Telus big dollars for a small wireless usage allowance.

“After a bit of shopping, I signed up for WIND Wireless and it has been a positive experience,” Kevin writes. “Their customers service is leaps and bounds better than the big three and I get 10GB of usage for $35 a month.”

Once Kevin exhausts his usage allowance, he keeps right on browsing because Wind does not charge overlimit fees — they throttle speeds downwards, but not to the punishing dial-up-like speeds of most other providers.

“I’ve streamed music and video after I’ve hit 10GB,” Kevin writes, although he admits YouTube can be a bit problematic with buffering issues at the slower speeds.

Kevin says if he stuck with Rogers he would be paying them around $195 a month for the same usage he pays $35 for with WIND.

“Who cares about the speed of Rogers’ LTE network when you pay that much,” Kevin adds.

WIND Mobile is one of a handful of upstart independent cell phone providers challenging the dominance of incumbent telecommunications companies that have set the standards for high Canadian broadband pricing and low usage caps. Kevin wishes more Canadians would consider switching away from dominant providers to send them a message they have to compete with lower prices and better service.