'Internet Code Of Conduct' Aims To End Bill Shock, But Critics Have Their Doubts

Canada’s telecom regulator has unveiled a new set of rules for the country’s major internet providers, in an effort to reduce “bill shock” from unexpected overage fees and clamp down on misleading sales tactics.

But critics say the CRTC’s new rules could prove to be ineffective, because they lack strong-enough penalties for internet providers who violate the code.

Starting in January of next year, major internet service providers (ISPs) will have to abide by a code that requires them to provide “easy-to-understand” contracts, as well as a “critical information summary” that they must give potential customers when making an offer of internet service.

Watch: Canadians’ top complaints about telecoms. Story continues below.

The rules will apply only to the 10 largest ISPs in the country, who together control 87 per cent of the market. They are:

• Bell Canada
• Rogers Communications
• TELUS
• Cogeco
• SaskTel
• Videotron
• Eastlink
• Shaw Telecom
• Xplornet
• Northwestel

ISPs will also have to alert customers when their usage reaches 75 per cent, 90 per cent and 100 per cent of their monthly usage limit.

CRTC chair Ian Scott cast the new rules as accompaniment to earlier codes of conduct for wireless and TV providers. In public consultations, Scott said he heard from members of the public about “unclear agreements, unanticipated price increases and inconsistencies between offers and (customers’) bills. ... 

“With the new Internet Code, we are closing the gap and providing Canadians with protections for the Internet, wireless and TV services in their bundle.”

The rules come amid growing dissatisfaction among Canadians with internet services. The Commission for Complaints for Telecom-Television Services (CCTS), which handles complaints about internet service, recorded a 56-per-cent increase in complaints about internet services in the second half of 2018.

The most common complaints were “incorrect charge,” “non-disclosure of terms/misleading information about terms,” and “intermittent/inadequate quality of service.”

In a report issued in January, the CRTC found that “misleading or aggressive retail sales practices” are widespread in Canada’s internet services market. 

“They occur to an unacceptable degree; they are harming Canadian consumers, in particular vulnerable Canadians; and they are a serious concern for the CRTC,” the report stated.

But some consumer advocates are questioning whether the new rules have the strength to stand up to the industry’s aggressive tactics.

Consumer rights group OpenMedia described the rules as “progress” but said they don’t create sufficient penalties for internet providers to change their behaviour.

“The code fails to provide any meaningful penalties to providers for known systemic issues like misleading and aggressive sales tactics, and continues to put the burden of proof and complaint on individual customers, despite these being long-standing concerns throughout the industry,” the group said in a statement issued Wednesday.

A case-by-case basis

While the internet code doesn’t change the rules for penalizing misbehaving companies, regulators have tools under the Telecommunications Act to ensure the code is effective, a CRTC spokesperson told HuffPost Canada.

The CCTS is responsible for handling complaints against telecom providers, and has the power to order providers to change or refund a bill, and can penalize a telecom up to $5,000 per infraction. Complaints are and will continue to be handled on a case-by-case basis, the spokesperson said.

That’s not good enough for OpenMedia’s executive director, Laura Tribe.

“What we need are penalties strong enough to scare Big Telecom into behaving better,” she said. “And as it stands, the internet code does nothing but incentivize more of the status quo.”