Canada’s giant telecom providers face at $18 billion class action suit over system access fees that they charged Canadians a long time ago. This could now cost them dearly.
The Supreme Court of Canada refused Thursday an appeal by Rogers Communications Inc., BCE’s Bell Mobility and Telus Corp. and others, who were asking the top court to throw out a case over controversial “system access fees.” — Financial Post, July 4, 2012
The class action lawsuit was filed in a Saskatchewan court in 2004 and now proceeds to the next level with 30,000 already on the list. At the time the story broke, there were only 7,500 registered names for the class action suit.
The statement of claim lists “All residents of Canada who have purchased wireless services from any of the defendants since April 1, 1987” as being eligible to participate.
Canadian telecom incumbents defended the fee claiming the funds were used as “administration costs” to cover costs for network investments in Canada’s telecommunications infrastructure.
Last November, the Saskatchewan Court of Appeal struck down a motion from the carriers to have the suit dismissed, supporting in its decision previous rulings that said the “legitimacy” of the fees could be questioned. A three-member panel of justices also said the notion of “unjust enrichment” was strong enough to carry a class-action suit against the companies.
Sadly, it doesn’t appear that the PR machine for Canada’s incumbents is drowning out the consumer sentiment well-enough. Judging by the feedback from reader comments to the Financial Post article, it’s clear to many Canadians that they were unjustly charged and feel the reasons for the fee was not clearly outlined.
The Canadian telecom environment is a complex one. Consumer sentiment built around media reports and studies from OECD (challenged multiple times) indicated that Canada had one of the worst cellphone rates in the world. A Toronto Star study in 2004 concluded that Canadian telecom giants could collect $800 million annually based on the controversial fees. It was the Toronto Star report which sparked the class action lawsuit by the Merchant Law Group.
Ill-timed, the Canadian incumbents started to phase out the system access fees as new competitors like Wind Mobile, Mobilicity and Public Mobile prepared for market entry with service bundles built around flat-rate plans and no network access fee.
Unfortunately, the hate affair by Canadians with telecom incumbents grows with media reports of them appointing ex-Cabinet ministers to the board, as reported on Techdirt.
WHAT WOULD ALEX BOSIKA DO?
Back to basics, folks! Consumer mistrust for telecom providers is at an all time high. In the Canadian telecom environment, consumers are now coming at the end with their ETF (“early termination fee”) contracts with suitable wireless phone plan options available from new market entrants. The anger and mistrust is so high that it is affecting incumbent revenues like never before. Layoffs are now commonplace at leading brand operators like Rogers. There is only one way out of this. We all know the answer and there must be greater emphasis to rebuild this trust and to convince Canadians that there is true and open competition because social media communities don’t lie.
Ethics, corporate responsibility, and moral decision-making must become the new paradigm in business today because to many, it never existed.
To sign-up for the wireless system access access fee class action suit, the Merchant Law group directs affected consumers to this page.