30-day cancellation ban may lead to price hikes

By: Ted Kritsonis

November 28, 2014

cancelledStarting January 23, 2015, Canadian consumers will no longer have to provide a 30-day notice to cancel wireless, cable or Internet service with their provider. This is certainly good news, but does it also provide an impetus for those providers to raise prices?

We’ve covered the 30-day cancellation policy before, and in that story, we noted why the policy exists and what Rogers and Bell had to say in explaining it. In an analog world, a month-long delay may have made sense for scheduling and performing the work needed to rewire things, but that’s not really the case anymore. With the flick of a switch at a call centre, service can be turned on or off on a dime.

That made the policy seem like more of a disincentive to leave, not to mention the optics of prying away an extra month of payment from an unwilling customer. If service could go live or be cut off that quickly, what justified waiting that long? We now have the answer to that with the CRTC ban on giving 30 days notice.

That’s not to say you shouldn’t plan ahead. If you are planning to cancel and go with a different provider, especially for TV and Internet, it would probably be better to call and set up an appointment in advance so that you’re not left without service for too long. This gets a little trickier with wireless service if you’re under contract. After Jan. 23, 2015, you can cancel right away, but you would either have to pay off the rest of your contract or find someone to take on the rest of the term.

The process doesn’t have to be long, and certainly not 30 days, but it does have to be thought out. As long as you know what you’re getting from your new provider, there should be no problem in making the switch from one cellular service to another in a single day.

The question that looms over all this is whether or not the various providers, especially Rogers, Bell and Telus, will find it reason enough to raise prices to recoup some of the inevitable churn. If the move to two-year contracts is any indication, all signs would point to yes.

The Competition Bureau of Canada had submitted a report rejecting the country’s largest carriers’ claims that the country’s wireless industry was competitive. It stated, to the contrary, that the incumbents used protectionist policies to shield themselves from new entrants who genuinely wanted to compete. The same old song and dance, in other words, but one that could apply here, too. CRTC-mandated changes, including those coming from the wireless code of conduct enacted in December 2013, have led to price increases thus far.

The fact the incumbents are reactionary should come as no surprise. For companies raking in billions in profits, they don’t seem to feel truly comfortable. The CRTC doesn’t have the authority to set prices or tell providers how to run their businesses, so it’s treading a line that reins them in on the one hand, but gives them plenty of leeway on the other. The most obvious examples are killing off three-year contracts and banning cancellation fees, yet being powerless to stop any price increases.

Take a closer look at the services your provider will offer beyond Jan. 23, including your existing one, and make note of any increase in pricing. Chances are, the reasons for doing that will have more to do with the 30-day cancellation ban than anything else.


Leave a Reply

Your email address will not be published. Required fields are marked *