Consumer Groups Angered by CRTC Decision

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7:15 am on February 19, 2006 | Category: Telecom Services, Regulation

Consumer advocates have voiced their displeasure with the Canadian Radio and Telecommunications Commission’s decision not to refund hundreds of millions of dollars to people who have been over-billed by their telephone providers.

In 2002, the CRTC forced regulated phone companies like Bell and Telus to charge over-inflated rates, in order to draw more customers to alternatives like Sprint and Primus, thus increasing competition in the telecom industry.

Although this strategy was originally intended to save customers money, it ended up backfiring, and customers throughout Canada have since paid about $650 million in unnecessary bills.

Consumer groups around the country have been trying to make the CRTC pay the money back to customers, but were recently met with flat refusal from the regulatory agency. The money will instead be used to fund the expansion of services into more rural and remote communities.

“It doesn’t make good consumer sense at all,” said Consumers’ Association of Canada president, Bruce Cran, about the CRTC’s plan. Cran says that he has already received over 1,000 phone and email messages from customers who are angry about the extra charges.

“Certainly it may be in the public interest to have rural broadband subsidized in some fashion, but that really is a role for government to finance,” agreed Michael Janigan of the Public Interest Advocacy Center.

Telus, meanwhile, is very happy with the decision, saying that it will help them to expand service areas more quickly. But customers in cities are asking why they should be forced to subsidize broadband access in rural areas.

When it comes down to it, this appears to be a simple squabble over who should pay for what. And it likely isn’t over yet, with the Consumers’ Association of Canada evaluating their options for appeal.