O Canada! > Canadian > Canadian Broadband > The New Wireless Code Hearings. Live Stream @ 9-am

reply to hm

Re: The New Wireless Code Hearings. Live Stream @ 9-am

reply to MaynardKrebs

reply to MaynardKrebs
Well that was a power-packed Q&A period.

The only situation with them is how they interpret the law should a Quebec by their service in Ottawa. Or rather, how they stated they want to interpret the law.

But with their offerings and the way the offer it I can't see them having issues. The only issue I can see is a warranty one. But I could be wrong. Haven't thought it out...

Summary on contracts, Prov Consumer Protection laws versus Fed laws, and competition:

They are in favour of "the highest level of Consumer Protection available". That is, they support both the fed and prov codes/laws.

Paraphrased: This protection also serves smaller start-ups as well since people are not screwed to one of the big carriers for years.

Paraphrased: Not being lock or screwed to a bad contract = Beneficial for a competitive market place to thrive that serves the consumer.

reply to hm
Dennis Hogarth, arguably a sophisticated customer, got screwed by the lack of coherent & accurate information at the point-of-sale. And he sort of danced around the dismal quality of point-of-sale personnel.

A LOT of the problems can be database-driven by having customers answering a few questions at point-of-purchase, ie.
max # of texts/month
max. overage $ for texts
max. overage. minutes
max overage voice $
etc....

All this ties into the real-time control of the customer bill.

reply to hm

reply to MaynardKrebs
Up next: Consumers Council of Canada

JF mentioned something where he might be called to talk earlier than expected (this afternoon), so he took off to his jail cell to do final touches on his presentation.

reply to hm
Once the CRTC realizes that there are two deals happening when a consumer finances a phone & a plan, ie.

a) a phone financing
b) a plan

Customer can then choose the term to finance the phone and separately choose the term of service.

The problem with that is that the likes of Bell, Rogers and Telus inflate the phone cost.

If you look at their websites where you can outright buy the phone, they mark it up by about 200$ more if you don't take a contract.

In other words, they punish you monetarily if you don't buy their 3 year contract.

CRTC would have to enforce cost, otherwise Bell, Rogers and Telus will continue to collude in keeping handsets artificially high.

Mobilicity made some reference to this.

For example, Bell has a huge market and a very big advantage when it comes to market share and buying power. They may get handsets at 400$ while smaller mobilicity gets them at 600$.

Yet Bell will turn around and sell that handset for 800$ if you don't buy a contract.

Mobilicity clearly stated they are screwing people since they can control all prices.

How would you control that when they manipulate market costs like this?

This is just one problem with the big 3. They artificially increase prices and control the market.

While you would maybe prefer a contract, I wouldn't. I would buy it outright. But then I get screwed paying 200$ more.

Manufacturer sets SRP, and then any retailer can buy them to sell at any price they like - just like HP does with printers, Samsung does with TV's

reply to hm
Bell is doing Presentation today.Will answer questions tomorrow

Order dinner in....this will take until 8pm now

reply to MaynardKrebs
There apparently is no Manufacturer SRP for these.

The CRTC needs to get reps in from the likes of Motorola, Samsung and Apple (as an example) to get to the bottom of things and answer some questions.

Again this was hinted at with Mobilicity, but not directly stated.

If they have a round 2, they need to do this.

Manufacturer sets Suggested Retail Price of phones, and then any retailer can buy them to sell at any price they like - just like HP does with printers, Samsung does with TV's

BUT

the phone manufacturers must not be allowed to get away with 'price disipline' like Apple does with their dealers, ie. a Macbook Pro of identical specifications sold in an Apple store is the same price when sold at an independent dealer 99% of the time in Canada. There is less of this sort of pressure in the USA »appleinsider.com/mac_price_guide/

Retailers must be free to set their own prices without manufacturer interference, or pressure from carriers.
However, manufacturers can offer sales inducements/promo's to lower prices.

reply to hm
The Bell-shite is now being shoveled.

reply to hm
Daniels: Provincial laws & federal laws create confusion. The solution is easy - let Bell decide what's best. /sarcasm

Well that was fast. All over with.

They spent their time only stating that they won't know which provincial law will apply to a Quebec person. And that a Quebec person is too dumb to know which provincial law applies to them.

That was basically it.

What a bunch of arrogant asses.

reply to hm
iPhone 5 16GB MSRP: $699
iPhone 5 160GB Rogers off-contract pricing: $699

Other phones I looked up were similar. With the possible exception of the Nexus phones, where Google sells them to consumers at a discount to begin with, the carriers like Rogers are not overcharging for the full price of the phones.
--
Developer: Tomato/MLPPP, Linux/MLPPP, etc »fixppp.org

reply to hm
BYOD plan prices must be lower by an amount NOT LESS THAN the TOTAL value of the monthly phone subsidy embedded in those plans where the carrier is financing the purchase of the phone - including imputed interest costs, profit on the phone, and administrative overhead in managing phone subsidy/financing programmes.

In other words, lets say the all-in monetary value of a carrier financing a phone is $10/month (eg. $9.50 for the phone & profit on the phone, $0.25 for interest, $0.25 for administrative overhead), then the cost of the BYOD plan MUST be at least $10 cheaper/month than the subsidized plan.

Now we come to the issue of the value discrepancy between high cost phones (iPhone etc...) vs. a low-cost flip-phone with no fancy screen) and hence the actual amount of subsidy & interest cost. How does the CRTC figure that out.

Simple.

The CRTC requires an annual AUDITED/SWORN statement from each carrier stating maximum retail sale price for all phones offered for sale sold on all plans (subsidized or not) in the preceding year in each of three categories - smartphone, feature phone, & for lack of a better term 'value phones (flip featureless phones or similar). Swearing a false statement for this purpose results in a mandatory $50MM fine, and restitution to all affected customers.

The three most costly phones (the most costly model if offered in multiple configuratons) - as determined by the highest advertised outright sale price for each phone in any jurisdiction will serve as the 'ranking' proxies for each category of phone. This is done to account for any 'gaming of prices in any market the carrier operates. It does not matter how long a phone has been offered for sale - it just has to be offered for sale for it to be price 'ranked'.

So say the pricing of the 3 most costly phones in the smartphone category are as follows:
Samsung Galaxy III - $700
iPhone 5 - $900 (64GB)
Blackberry Z10 $800

Take the simple arithmetic average of the three prices (700+900+800)/3 = $2400/3 = $800

This number is to be used as the proxy for the finance amount of a handset in the smartphone category.

Now let's work out an example of how this all plays out.

Customer chooses a smartphone to finance (subsidy) on a 3-year term.
Upfront cost of the phone is $140, therefore the amount to be deemed financed is $800-140 = $660
Over 3 years that works out to $220/year on a straight line basis.
Simple interest @ 10% assumed for the life of the contract (to simplify matters) = $22 per year for a total of $242 per year.
Add $3 admin overhead each year to track the financing and handling of any early termination costs to the carrier $242 +3 = $245/year subsidy.

That works out to $245/12 = $20.42 per month of financing costs embedded in a plan

Any plan the carrier sells which they deem to be mandatory for a 'smartphone' must be offered for at least $20.42 less to any BYOD customer, and that 'discounted' price must be prominently displayed in-stores, web sites, and in all advertising.

Similar calculations are done for feature & basic phones, and plans for those are offered at their corresponding discounts for BYOD users.

See how complex this is to place BYOD users on a fair financial footing for the actual cellular service with customers who aren't BYOD?

The simple solution is to sell the phones completely separately from the cell/data service.
In this way consumers are free to seek out the lowest price for the device itself, competitive financing costs (ie. a small business could get a loan at prime +3% vs. a carrier's typical 20%+), and the monthly service fees for the plans should drop to more competitive levels.

On the downside, people who write-off $100+ plan/phone combo's now as service costs will be able to write off the service costs but have to capitalize the handset acquistion - unless the handset is leased.

reply to hm
Now that separating handset sales/financing from cellular voice/data services is on the table,

a) Phones should preferably be sold unlocked
b) If sold locked, the carrier MUST provide - for free - a working unlock code at any point in time if the handset if fully paid, ie. end of term or earlier if consumer opts to pay it down early
c) Carrier must warrant that the phone is unlockable and must make customer whole if it is not
d) All phones must not be loaded with carrier bloat/crapware. If the carrier wants customers to have something specific on the phone they must let the customer decide if they want it, and the customer must download/install it. It also must be uninstallable and must not include any spyware of any sort
e) All phones must be sold de-branded
f) All phones must obtain their operating system updates directly from the manufacturer, thus avoiding delays ranging from minor to forever in receiving security fixes & updates

reply to andyb