Scrapping system access fees brings 'little benefit' to Canadian cell phone users

While the three major cellular carriers -- Rogers, Telus and (most recently) Bell -- have all dropped the $6.95 monthly systems access charge, the actual benefit to users from this may be scant. That's because what the carriers are giving with one hand, they are taking back with another, as one observer notes.
11/24/2009 7:00:00 AM By: Nestor E. Arellano

The dropping of system access fees by the three big Canadian carriers has come much too late, industry observers say.

What's more, the actual benefit to customrs will be scant because of the way the carriers have gone about it, they add.

What the carriers are giving with one hand, they are taking back with the other, noted Tony Merchant, principal at the Calgary-based Merchant Law Group LLP that launched a class action lawsuit in 2004 against companies that charged the fee.

The big three celluar carriers -- Bell, Telus and Rogers -- have recently hiked the price of most of their monthly plans by as much as $5.

Merchant also questions why it took so long for the carriers to eliminate system access fees. While they may not admit it, he said, this move "amounts to an admission that the charges where not legit to start with.”

Bell Canada was last of the big three Canadian carriers to drop the controversial fee when it quietly eliminated the $6.95 monthly charge last Friday without officially announcing the move.

Julie Smithers, a spokesperson for Bell, told ITBusiness.ca that the move to drop the fees were part of a initiative "to make billing more easy to understand for our customers."

Late last year, rivals Rogers Wireless and Telus Mobility scrapped systems access fees to some of their cell phone brands.

With Bell following suit this week, no national cell phone carrier currently charges the fee.

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Fee fiasco

The carriers should now start paying consumers back, the money they wrongly collected, Merchant said. His class action lawsuit is seeking a return of some $20 billion in fees to consumers.

System access fees date to 1986 during the early years of cellular phone service in Canada.

At the time, the Canadian Radio-television Telecommunications Commission (CRTC), required telecom service providers to remit to the CRTC what amounted to an $80 or so levy per cellular customer, said David McGuinty, member of parliament for Ottawa South. Eventually, the carriers absorbed that fee and got it back by charging their users a monthly fee of $6.95.

“Some18 to 20 months later the CRTC told the providers there was no need to collect the fees," McGuinty recalled. "But guess what, the telecoms never stopped collecting.”

Last year McGuinty sponsored a private member's bill (Bill C-555) also known as the Get Connected Fairly Act which sought for greater transparency in cell phone and Internet connection contracts. The bill “died” on the order paper when Prime Minister Stephen Harper asked the governor general for the dissolution of the 39th Session of Parliament. McGuinty has since re-introduced bill C-555.

Canadian cell phone users, McGuinty said, are prey to a host of hidden extra charges that jack up the cost of their monthly bill far above those of their U.S. counterparts and other cell phone users around the world. “The average cell phone bill of a Canadian comes up to $40 or $50 a month, which is about 40 per cent more than what Americans pay.”

“We should blow this whole thing open. We're talking about 21 years and billions of dollars of misleading payments,” he said.

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