Hyer on the Hill – Cell Phone Freedom

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One of the symbols of modern life is the cell phone, and for good reason. More and more people rely on them for business and to connect with family and friends. You don’t have to be a chatty teenager to understand that they have become an indispensible part of our economy and society, or to grasp how much freedom they can bestow. So why is it that we, in Canada, have allowed such unprecedented restrictions on our use of cell phones?

If you have a cell phone, chances are it’s locked to work only on the network of the company you bought it from. You’re not alone. Most consumers don’t know their cell phones are deliberately “network locked” in this way …and that they can’t easily move to a competitor if they’re unhappy with the service they’re getting or the price they’re paying. You’ve been locked out of consumer choice.

Network locks, also called “SIM locks,” cost consumers in other ways too. They stop you from switching SIM cards when you travel, forcing you to pay expensive international roaming fees if you want to use your phone abroad. And they make it harder to sell your used phone easily because it will only work on one network.

Just as bad, these locks limit competition in the Canadian wireless market. Less competition means higher prices, and worse service. To illustrate how bad it’s become, a 2009 report by the 31-nation Organization of Economic Co-operation and Development (OECD) found that Canada had amongst the highest prices for mobile phone calling amongst all OECD countries. Another industry report released last year found that Canadian cell phone use is second last in the OECD, and implicated high prices as the reason. And just this week, Canada’s cellphone companies were each handed an “F” in customer satisfaction by the Better Business Bureau.

Lack of competition and regulation has led to this situation. The ‘Big Three’ providers – Bell, Telus & Rogers – currently control close to 95% of the Canadian market. And as far as network locks are concerned, there are no regulations. So mobile phone companies routinely lock all the phones they sell. While it’s possible to have your phone unlocked at a grey aftermarket shop, it can be expensive, time-consuming and potentially damaging to unlock a mobile phone without knowing how to do it or where to go. But unlocking a phone is a trivial matter for mobile service providers – usually, they just have to give you an unlock code.

Comparing internationally, cell phone network locks have been virtually eradicated in many countries where there is sufficient competition. In others, they’ve been regulated to make sure consumers are adequately protected.

So why can’t we do better? When we buy or lease a car, we would never accept the dealer telling us we can only fill up at one gas station, so why do we let this slide when big wireless companies lock us in? Mobile phone customers should have the freedom to choose whether they’re locked in or not, like they do in most other countries.

This week I introduced legislation to give Canadians that freedom. Bill C-560, the “Cell Phone Freedom Act” takes an important step to promoting competition and more consumer choice in the domestic wireless market. It makes sure that:

• Consumers buying new cell phones in Canada will be informed of any network lock on their phones, before sale.

• Phone companies must unlock new phones upon request, without charge, when consumers buy new phones outright, or at the end of their service contract.

This will help level the playing field for Canadian cell phone customers… who need all the help they can get. In the coming months, I will be working to earn the support of other Members of Parliament for this important legislation.

People can find out more about the Cell Phone Freedom Act at www.DontLockMyFreedom.ca

Bruce Hyer, MP