Bell, Telus under under fire for charging fees that 'appear' to violate new rules

Bell and Telus are facing scrutiny from Canada's telecom regulator for introducing wireless fees the regulator says appear to violate new federal rules.

On Friday, the Canadian Radio-television and Telecommunications Commission (CRTC) implemented new rules banning telecoms from charging extra fees to activate, change or cancel cellphone plans. The now-outlawed charges include early cancellation fees and the once-ubiquitous activation fee for phone plans. The regulations are meant to make it easier for Canadians to switch wireless and internet plans to secure better deals.

Shortly before the new rules took effect, the CRTC sent stern letters to Telus and Bell, warning that Telus' newly introduced $15 SIM card fee and Bell's new $40 device handling charge appeared to violate the regulations.

Matt Hatfield, executive director of the non-profit advocacy group OpenMedia, suggested both fees are an attempt by the telecom companies to circumvent the new rules and recoup lost revenue.

"This appears to me to be them continuing a practice that looks very much like activation fees under a different name," Hatfield said.

"It's not great corporate-citizen behaviour, is it? It's sort of a shady used-car dealer type thing to do."

The CRTC first contacted Bell in May, shortly after the company introduced its $40 device handling charge. According to Bell's website, the one-time fee covers "fulfillment costs" for customers who purchase a phone with their wireless plan.

The new regulations allow telecom companies to still charge fees for optional products and services, such as a visit to a customer's home to set up their Wi-Fi. But the CRTC wrote in its letter to Bell that "it would not appear that the device handling charge falls under the exemption."

Bell responded on June 10, arguing in a letter to the CRTC that the fee is exempt because customers don't have to buy a phone when they sign up for a new plan. "It is a physical product that customers 'may expressly agree to purchase,'" wrote the telecom.

That explanation failed to satisfy the CRTC. It sent a second letter to Bell on Friday, demanding the company confirm by June 17 whether it has stopped charging the contentious fee.

Bell spokesperson Elise von Scheel told CBC News on Monday that the company is reviewing the CRTC's latest letter. But Bell showed no sign of backing down; Von Scheel reiterated the company's position that because buying a phone is optional, the associated fee remains exempt from the new CRTC rules.

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The CRTC is locked in a similar dispute with Telus over its $15 fee, which the regulator says the telecom introduced on June 11 for both physical and digital SIM cards. Those microchips are required for phone plans because they connect a customer's device to a mobile network.

In its initial letter to Telus earlier this month, the CRTC told the telecom, as it did Bell, that "it would not appear" the SIM card fee qualifies for an exemption under the new rules.

On Friday, the CRTC issued a second letter ordering Telus to confirm whether it has scrapped the fee and, if not, to explain why by June 17.

That same day, Telus spokesperson Martin Nguyen told CBC News in an email that its SIM charge is exempt from the newly banned fees because it is not a new charge, but instead "a physical or digital product for purchase, rather than an administrative fee."

According to Bell's website, it provides a physical or digital SIM card for free with a monthly phone plan.

Rogers told CBC News it also doesn't charge for the cards.

In its second round of letters to both Bell and Telus, the CRTC threatened to pursue "regulatory action" if the matters remain unresolved.

Hatfield said the CRTC is trying to convince the telecom companies to drop the fees now to avoid what can be lengthy enforcement action in each case.

"I appreciate them trying to move more at the speed" that would benefit telecom customers, he said. "CRTC decisions take a very long time."

The CRTC told CBC News its review into each matter is ongoing.