Tuesday, September 1, 2009

Lobbyists win, cellphone users lose. Again.

Reportedly under pressure from by Canada's wireless companies, Federal Industry Minister Tony Clement has killed off an online calculator designed to help consumers make sense of the cellphone industry's insanely complicated pricing plans.

Which Cell Plan? A Calculator had been developed by Industry Canada's Office of Consumer Affairs to provide consumers with a detailed list of suitable plans from Canadian providers, based on their cellphone use. Focus group reaction had been quite positive, and consumer groups were supportive.

But, as Michael Geist notes, "Despite months of preparation, thousands of dollars in taxpayer expense, the creation of an effective tool and the obvious benefits for lower-income Canadians, Clement nevertheless killed the project."

The Bell/Rogers/Telus oligopoly is hugely lucrative. According to Merrill Lynch, Canadians pay an average of US10¢ per minute while Americans pay US5¢ per minute, so "profit margins for Canadian wireless providers were among the highest in the developed world."

Consumer frustration is high. There is even an online petition to scrap regulator CRTC, which has been seen as having failed to promote true competition in the industry.

My prediction: This situation will be alleviated by new, long-awaited, competitors entering the market with lower, and simpler, pricing. That should force needed change on the three amigos.

Update: Later today it was announced that Canada's wireless providers have now committed to
Customer Service Excellence with a new Code of Conduct. Now do you see the kind of power I have?

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