Home > News > Open Letter to Industry Canada, CRTC, Competition Bureau and Consumer Affairs

Open Letter to Industry Canada, CRTC, Competition Bureau and Consumer Affairs

Fair Wireless for Canada seeks your support to help prohibit or regulate the use of SIM locking (or other technological measures) of wireless telecommunication devices sold in Canada. We call on you to help put an end to Bell, Fido, Rogers and Telus practices that lock-out competition, impede consumer choice and stifle innovation by supporting these four simple recommendations:

  1. For wireless devices sold as part of a service agreement, mandatory SIM-unlocking of wireless devices at the end or termination of the service agreement.
  2. Prohibit the sale of SIM-locked wireless devices when not included as part of a service agreement (e.g., when the wireless device is purchased at full price without any discounts or subsidies).
  3. Full disclosure and transparency by wireless carriers. In addition to coverage and rate-plan information, carriers must fully disclose any limits placed on devices, limits on bandwidth usage, if devices are locked to a single network and information regarding discounts and subsidies applied to the purchase of devices that are part of a service agreement.
  4. Require wireless carriers to provide purchase options of wireless devices without service agreements.

In the February budget of 2005, the Government of Canada requested the CRTC move expeditiously to implement wireless number portability (WNP). Thanks to WNP, by September 17, 2007 Canadians could now keep their existing telephone number when moving from one service provider to the next.

The demand for smart phones like Apple’s iPhone has exploded since WNP was introduced. Contrary to Charles Dalen’s, former Chairman of the CRTC, vision that “consumers should be given the widest possible choice of service providers and should be able to switch telephone companies without unwarranted cost or inconvenience” Canadian wireless carriers have still found a way to use technological measures to lock-out competition, impede consumer choice and stifle innovation. The CRTC also provides the following caveat regarding WNP:

“While WNP will remove a significant barrier to changing wireless service providers, consumers should bear in mind that handsets may not function on different wireless carriers networks due to different network technologies; customers may have binding long term service contracts with early termination fees; long distance services may not be transferable from one carrier to another; and not all the services that a customer has with one service provider will be supported or provided by another service provider.”

The CRTC has failed to acknowledge or address that Canadian wireless carriers continue to impose arbitrary technological restrictions that lock wireless devices they sell (like the iPhone) to Canadians for use only on their network. This is referred to as subscriber identity module (SIM) locking. This has nothing to do with network compatibility or recovering subsidies and discounts applied during the sale of wireless devices and everything to do with using technological measures to lock-out competition, impede consumer choice and stifle innovation.

Wireless carriers claim they lock devices for use only on their networks to protect subsidies and discounts on handsets they sell to Canadians in exchange for signing long-term service agreements. We understand that that these agreements include expensive early cancelation fees as a result of the wireless carrier providing subsidies and discounts on the purchase of a wireless device. When Canadians pay full price (without any subsidies or discounts) for their wireless device these arbitrary restrictions and technological locks are still imposed by the wireless carrier preventing Canadians from reusing their wireless device with another service provider. Likewise, when Canadians reach the end of the service agreement the arbitrary restrictions and technological locks are still imposed by the wireless carrier preventing Canadians from reusing their device with another service provider. Even a consumer in good standing who continues to pay their monthly subscription fees cannot chose to use their “mobile” wireless device while traveling abroad on another compatible wireless carrier network to avoid exorbitant roaming fees. How does this provide the widest possible choice to Canadians?

As evidenced by the hugely successful 2008 spectrum auction and 2009 launch of new wireless networks from Bell and Telus, wireless carriers are moving towards nationally and globally interoperable networks. Wireless carriers regularly encourage and support the use of SIM unlocked devices on their networks. Rightfully so, why would they turn away business when there are no technological restrictions or incompatibilities with the network and wireless devices?

Bell, Fido, Rogers and Telus require Canadians to unnecessarily purchase new phones in order to switch service providers. As of November 4, 2009 there are over 100,000 third-party applications officially available for the iPhone. These mobile and wireless devices are integrated into to the lifestyles of many Canadians. Gone are the days that wireless carriers can hold phone numbers hostage to retain customers, however, our beloved iPhones are now being held hostage by wireless carriers to retain customers.

Not only is there time and effort to unnecessarily replace an iPhone there is the financial cost. For those on a contract, It can cost up to $1619 to switch providers ($820 in early termination fees and $799 for the cost of purchasing a new iPhone). This is a significant cost to Canadians that Bell, Fido, Rogers and Telus rely on and exploit to lock-out competition, impede consumer choice and stifle innovation. How do these arbitrary restrictions and technological locks benefit Canadians?

Let’s not forget about the environmentally irresponsible practice of prohibiting Canadians from re-using their existing wireless devices with other wireless carriers. The U.S. Environmental Protection Agency (EPA) estimates that more than 125 million cell phones are discarded each year. Please help put an end to this unnecessary waste by allowing Canadians to re-use their existing devices when switching wireless carriers.

All of these concerns relate back to technological locks imposed on wireless devices by Bell, Fido, Rogers and Telus to lock-out competition, impede consumer choice and stifle innovation. Groups like Fair Copyright for Canada fight proposed legislation like Bill C-61 that would make it illegal for Canadians to circumvent digital locks when they unlock their phones. Unlocking wireless devices like the iPhone is a cat and mouse game between Apple and software developers. Apple will continue to fix software or hardware bugs to prevent unlocking and software developers will look for new bugs to exploit. There is no guarantee that it will even be possible to unlock some wireless devices. Fair Wireless for Canada argues that digital locks should be prohibited on wireless devices sold in Canada in the first place to avoid anti-circumvention legislation in Bill C-61 entirely.

Other European and Asian countries have laws that regulate and, in some cases, even prohibit the SIM-locking of wireless devices. Fair Wireless for Canada calls on you to help prohibit or regulate the use of SIM locking (or other technological measures) of wireless telecommunication devices sold in Canada. Lets put an end to wireless carrier practices that lock-out competition, impede consumer choice and stifle innovation. Whatever happened to good old-fashioned customer service to retain customers?

Fair Wireless for Canada recommends the following:

  1. For wireless devices sold as part of a service agreement, mandatory SIM-unlocking of wireless devices at the end or termination of the service agreement.
  2. Prohibit the sale of SIM-locked wireless devices when not included as part of a service agreement (e.g. when the wireless device is purchased without any discounts or subsidies).
  3. Full disclosure and transparency by wireless carriers. In addition to coverage and rate-plan information, carriers must fully disclose any limits placed on devices, limits on bandwidth usage, if devices are locked to a single network and information regarding discounts and subsidies applied to the purchase of devices that are part of a service agreement.
  4. Require wireless carriers to provide purchase options of wireless devices without service agreements.

What do you plan to do to help put an end to Bell, Fido, Rogers and Telus practices of using SIM-locking or other technological measures that prevent Canadians from re-using their existing wireless devices when switching wireless providers?

We anxiously await your response to these important issues.

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