Who will take on Canada’s telecom giants?

January 24 2011 by Ellen Roseman

The Internet is becoming more video-based. But you’ll have to pay more if you want to enjoy the rich resources online.

Canada’s telecom giants (Bell and Rogers) have imposed caps on Internet use, making clients liable for surcharges if they exceed their monthly limits. Shaw is doing the same on Feb. 1.

Meanwhile, it’s getting harder to find unlimited Internet plans at smaller competitors. Those using Bell’s network have to adopt the same usage-based billing, according to a ruling last fall by Canada’s broadcast regulator.

As a result, Primus is raising its Internet rates and adopting bandwidth limits, starting next month. I wrote about this trend in the Star and at my Moneyville blog.

When it comes to the Internet, I’m not a heavy user and I don’t want to subsidize heavy users through my rates. Usage-based billing has a place. But should it be the only choice in a rapidly growing marketplace?

Canada will start metering Internet use unless consumers make their voices heard. Luckily, there’s a group called Open Media, which is using social media tactics to organize opposition. It has a petition with 40,000 signatures and a Twitter campaign.

Steve Anderson of Open Media frames this as a battle to save a vital democratic tool.

For me, the efforts to close the open Internet (by metering or throttling) are in effect a war on sharing, a war on creativity, and ultimately a war on human potential.

Perhaps I’m a bit too much of a romantic for my own good, but I think the Internet can bring out the best of the human spirit; I think it has the capacity to reflect back at us, and encourage us to reach for, the potential for a more just and democratic society.

The Internet won’t itself solve the world’s problems, but it does help break down barriers between us, it does make it easier to collaborate and self organize. For me, saving the Internet is important because the Internet holds the possibility for a better world.

In wireless phones, as well, Canada has let the telecom giants run wild. There’s no regulation at the federal level. Instead, we have an industry lobby group writing a wireless code of conduct.

Not good enough. Not even close.

Since Ottawa has abdicated, Quebec passed a consumer protection law that restricts penalties charged on cellular contracts. Manitoba also plans to impose new rules, although perhaps moving too far into an area of federal responsibility. (See the Public Interest Advocacy’s Centre’s comments here.)

We’re at a turning point in Canada. The companies have too much power and consumers too little. The government is failing to ensure there’s a competitive market in telecommunications, a key area that affects all its citizens.

Consumers have to raise their voices and let Ottawa know they won’t stand for the status quo any longer.

Do prepaid Visa cards serve a useful purpose?

January 7 2011 by Ellen Roseman

That’s the question I’m asking readers after writing a column about the hefty fees on these prepaid cards.

The only benefit I can see is for Internet purchases, where you worry about a retailer applying unauthorized charges to your credit card. If there’s not enough value left on a prepaid card, the transaction will be declined.

They’re expensive to buy as gifts, since there’s an up-front charge of about 10 per cent. Then, the recipient has to worry about monthly fees that kick in if the card isn’t used quickly. Some cards even charge a fee for reloading.

There’s another problem — using the card’s full value when stores won’t accept it for partial payments on higher-value purchases.

I asked Jean-Marc Handfield of Vancity about the logistics of getting every penny from the card. Here’s his response.

A solution that will allow prepaid cardholders to use all of the balance on their cards is to request that the retailer do a ‘split transaction.’

A split transaction requires that the cardholder knows the balance on the card. This information can be obtained by contacting our cardholder reporting website or customer service telephone line.

As the cardholder, you can advise the merchant what your remaining balance is – for example, $6.25 – and tell the merchant to take $6.25 from this card and you’ll pay the remainder by another method.

Please note that not all merchants can accept two forms of payment for one purchase due to their systems limitation, but this split payment is common in large retailers such as grocery and drug stores.

Handfield said the information about how to make a purchase that is larger than the value of the card is included in the Frequently Asked Questions section of the card’s packaging.

I sent his response to all the readers who suspected a plot to recover a few cents extra on every prepaid Visa card. Many were still dissatisfied.

I’m posting a few opinions below and want to hear your thoughts. Should the federal government impose rules on the card issuers, instead of just warning buyers about possible problems, as the Financial Consumer Agency does here?