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How Telco Lobbying Helped Quietly Kill Consumer Cell Phone Cost Calculator

By Michael Geist

Last week I discussed the well-known challenge faced by millions of Canadians as they sort through a myriad of cellphone pricing plans in a marketplace still lacking in robust competition.  The subject of this week's technology law column (Toronto Star version, homepage version) is that previously unreported, however, is Industry Canada officials identified much the same problem and worked for years to develop an online tool to address it.

After spending tens of thousands of dollars creating and testing an online calculator designed to help consumers select their ideal wireless plan, Industry Minister Tony Clement killed the project weeks before it was scheduled to launch. Government records suggest intense lobbying this spring by Canada's wireless companies, who feared the service would promote lower cost plans, played a key role in the decision.

The Office of Consumer Affairs (OCA), a branch within Industry Canada with a mandate to promote and protect consumer interests, was the original source for Which Cell Plan? A Calculator. The calculator asked consumers for detailed information about their current or anticipated cellphone use and then provided them with a detailed list of suitable plans from Canadian providers. In 2008, the OCA paid Decima Research almost $60,000 to conduct extensive usability testing. The company conducted 12 two-hour focus group sessions in Halifax, Vancouver, and Montreal that included cellphone users as well as 'cellphone intenders' – those expecting to purchase a cellphone within a year.

Decima Research's report noted 'participants felt being a consumer of cellphones is frustrating and difficult. The service plans of different providers are difficult to compare because they are all different…Secondary frustrations and challenges included the length and limitations of contracts, billing inaccuracies, and quality of service issues such as dropped calls and coverage.' The focus groups' response to the cellphone cost calculator was positive, with the vast majority of participants indicating they would use the tool and encourage friends and family to do the same.

Yet just as Industry Canada was set to launch the tool, the major wireless carriers began lobbying against it.  According to lobbyist registration records, the Canadian Wireless Telecommunications Association and Bell Canada met with officials from Clement's office on April 8th, with the association listing telecommunications regulation and consumer issues as the topics of discussion.  Two weeks later, Telus also met with the same officials to discuss consumer issues.

The carriers were apparently concerned that the tool only covered voice services and that it was geared toward lower-priced plans. Sensing that Clement was facing pressure to block the calculator, Canadian consumer groups wrote to the Minister, urging him to stick with it.

Despite months of preparation, thousands of dollars in taxpayer expense, the creation of an effective tool, and the obvious benefits for lower income Canadians, Clement nevertheless killed the project. Given the tool's potential to encourage more Canadians to adopt wireless services, the decision ironically came just as Clement was meeting with technology executives in an effort to kick-start a national digital agenda. According to an Industry Canada spokesperson, 'technical limitations' were to blame.

With public dollars having funded the mothballed project, the government should now consider releasing the calculator's source code and enable other groups to pick up where the OCA left off.  In the meantime, Industry Canada has posted a cellphone checklist that asks consumers many of the same questions, but does not provide any information on carrier plans or pricing.

Full post as published by Michael Geist on August 31, 2009 (boomark / email).