Whatever Happened to the Hunter in the Woods

Where's the bloody government when you need it?

Doesn't the government regulate the wireless industry? Isn't there supposed to be a consumer protection branch of the provincial government? Are consumers really all alone in these dark woods?

Government De-regulation

The wireless industry in Canada has been effectively deregulated since 1994. Many consumers assume that the Canadian Radio-Television and Telecommunications Commission (CRTC) has regulatory oversight over the Canadian wireless industry, as it does over land phones (which, if you recollect, used to be monopolized by one corporation).

However, the CRTC long ago backed away from regulating the wireless industry, supposedly in an effort to allow free market forces to meet the needs of consumers. The central guiding principle of the CRTC with respect to Canada's wireless industry is "to foster increased reliance on market forces for the provision of telecommunications services." Those sections of Canadian telecommunications policy that permit the federal government to oversee the economic and social requirements of cell phone users have virtually never been tapped as those needs are presumed to be met, also, by market forces - oppressed consumers can "vote with their feet" and walk on over to a competitor.

This model of deregulation and reliance on market forces to correct social and economic ills has also been followed for the American wireless industry. Public interest advocacy groups in the United States are growing more vociferous in their complaints about the sometimes impossibly vulnerable position in which this increasingly leaves consumers. And American advocacy groups are also beginning to observe that, despite government deregulation, the competition appears to be shrinking, not growing, with smaller providers being gobbled up by larger players.

The 2005 report "Locked in a Cell" by the United States Public Interest Research Group indicates how de-regulation has afflicted the wireless consumer in the United States. As the report notes:

By almost any measure, the cell phone industry is one of the real market-expansion success stories of the digital age. As of the end of 2004, there were 182 million wireless phones and related devices operating in the United States, up from 24 million in 1994.

Yet, at the same time, the number of giant companies controlling the industry has been shrinking. In mid 2004, six companies – AT&T, Nextel, Sprint, Cingular, Verizon and T-Mobile – controlled approximately 80% of the market. Since then, four of the six – Cingular and AT&T, and Sprint and Nextel– have merged. Now, just four firms will control 80% of the market.

Such a high level of concentration in a major industry can be accompanied by excessive market power, which in turn can reduce competition to the detriment of consumers.

Numerous studies have documented rising complaints about low service quality in the industry. For example, a recent MASSPIRG report, Can You Hear Us Now, surveyed 874 Massachusetts cell phone customers and found general dissatisfaction, with 42% of consumers having a billing problem with their provider and 68% reporting dropped calls and other quality problems.

This phenomenon of large wireless corporations consuming smaller ones, of course, is familiar to us here in Canada. Rogers recently wolfed down Fido.

You'd never know, from hearing Ted Rogers moan and whine and stamp his feet and wail about how the CRTC has to de-regulate telecommunications so that he can compete on a level playing field with Bell Canada that he's only referring to the de-regulation of the land phone industry, not the wireless industry, over whose de-regulated woods he has been able to maraud rampage at liberty for over a decade.

So that's one hunter in the woods out of commission. Aren't there any others?

The consumer protection branch of the government seems like it would be another likely place to turn for help. I don't know what the hell the provincial government in Ontario is otherwise doing, but it's pretty clear to me that it's not protecting the consumer. Here's how helpful the government was (WITH legislation in place to protect the consumer) in getting Rogers to ease up its chokehold on the Ontario consumer:

Gone Fishing

Correspondence between Susan Drummond and the Manager of Compliance and Consumer Services, Consumer Protection Branch, Ministry of Government Services.


February 21, 2006 Letter

Dear Mr. [Manager],

Now I am very curious about exactly how the Consumer Protection Branch is actually protecting ordinary consumers against abuses by large corporations:

As you know, Rogers now owns FIDO. FIDO consumers this month (in particular FIDO consumers across Ontario) just received a lengthy insert in their invoices. The insert is the new contract to which FIDO consumers supposedly have to commit (again, by doing nothing more overt than by passively paying their next invoice). While the FIDO contract appears to be have been minimal in the extreme, the new contract is effectively a complete reproduction of Rogers' wireless service agreement. INCLUDING THE BINDING ARBITRATION CLAUSE!!

Here is the new FIDO wireless service agreement that FIDO consumers have to accept by March 2:


Here is the old FIDO "contract":


How is it that the government is letting Rogers get away with this? There is no disclaimer that the binding arbtration clause is unenforceable in Ontario. Further, FIDO consumers are being pressured into "accepting" the new contractual clauses in a most oppressive manner:

FIDO consumers are being told in their February invoices that they have to accept the new contract or cancel services. They have until March 2 to commit. There are substantial losses to the FIDO consumer in just switching their service provider within the remaining seven days that Rogers/FIDO has given them to get up to speed on the new contract or bail out; including the loss of whatever service provision arrangement they had with FIDO.

Further, while it might have been argued that there was original consideration for Rogers consumers who signed the original Rogers contract for the provision that Rogers could unilaterally change the contract on-line, post hoc (they got wireless services for such an "exchange"), in the case of FIDO, there is NO consideration being offered for entering into this bargain (that Rogers can change the contract whenever they want), and NO consideration offered for giving up their right to sue FIDO/Rogers in a class action or other court proceeding. I don't believe the new FIDO contract is even valid.

Even though the binding arbitration clause is unenforceable, and even though this new "contract" is highly suspect with respect to its validity, as you know, Rogers will succeed in bamboozling the ordinary FIDO consumer into thinking that they no longer have any litigation rights. When Rogers/FIDO tell the vast majority of ordinary FIDO consumers who want to protect themselves in court or sue for damages that they have signed away their litigation rights and this "contract" is hauled out to affirm that claim, you must surely be aware that there are extraordinarily few among the ordinary consumers who will be capable of arguing otherwise.

And I have to say it appears to me that the government, which is supposed to be regulating the corporation under the Consumer Protection Branch, is colluding with a very oppressive corporate agenda.

At this point, if I had to characterize what Compliance and Consumer Services has done on this issue, I would have to suggest that the service be renamed the Corporation Protection Branch.

Where is the Ontario government?!?

Susan G. Drummond


February 23, 2006 Response from Consumer Protection

Thank you very much for this information especially that pertaining to the FIDO matter.

Might I assure you that the Ministry of Government Services and the Consumer Protection Branch are indeed fully committed to consumer protection and a marketplace highlighted by ethical dealings. 

We will review the latest issues you have raised against the provisions of the Consumer Protection Act, 2002 and those actions as are appropriate in the circumstances will be pursued.

Thank you once more.


Mr. [Manager]


February 23, 3006 letter from Susan Drummond to Consumer Protection

Regarding: Regarding Rogers Wireless/FIDO's disregard for compliance with ss 7 & 8 of the Ontario Consumer Protection Act.

I believe that it is long overdue that Market Place Standards and Services of the Ontario government intervene between Ontario consumers and Rogers Wireless (and now FIDO) to protect the consumer from the unfair trade practices of one of Canada's largest corporations. Below I suggest the actions that I believe are appropriate for the Ministry of Government Services and the Director of Market Place Standards and Services to take in the circumstances and under the Consumer Protection Act, and perhaps you can respond to me about why they are not being pursued by the government:

First some context:

The 2002 Kanitz case, which upheld Rogers arbitration clause (which forced  consumers to waive their rights to class action as well as other litigation rights) was widely regarded within the legal community to be wrongly decided; and the arbitration clause regarded to be an unconsionable, deeply cynical, if not indeed unethical, contractual swindle of the Ontario consumer on the part of Rogers. The Ontario legislature clearly agreed with this analysis. In remarkably swift order, an amendment was passed to the OCPA which rendered those clauses unenforceable in Ontario. It cannot be seriously doubted that Rogers has known full well, since 2002, that those arbitration clauses are unconsionable and that the explicit intention of the Ontario legislature was that they must not be unenforced. It is now 2006!

I now hear that FIDO consumers are being pressured in a most oppressive way to cancel their existing FIDO contracts if they do not want to accept, holus bolus, a contract that is not only a virtual reproduction of the Rogers Wireless Service Agreement, but which also includes this unconscionable and unenforceable clause. The conversations on internet blogs on the new FIDO contract make it abundantly clear that consumers are confused, uncertain, wary, feel pressured, and are unaware of their rights.

The entire context of the FIDO Wireless Service Agreement, conjoined with the cynical inclusion of the arbitration clause, suggests that Rogers/FIDO's behavior amounts at a minimum to the unfair trade practice of false, misleading or deceptive representation under s. 14 of the CPA. And indeed, it is NO stretch of the imagination to see that it also constitutes the unfair trade practice of unconsionable representation, at s. 15 of the Act. As per s.15, "the consumer is not reasonably able to protect his or her interests because of...[an] inability to understand the language of an agreement." I can assure you that virtually NO ordinary Ontario consumer would be able to read the new FIDO contract in the extraordinarily limited time that they have available and understand what the arbitration clause implies.

For Rogers to attempt to foist a fully unmodified arbitration clause upon unwitting FIDO consumers in Ontario indicates to me that Rogers has not felt the LEAST whit of pressure from the Ontario government to comply with the Ontario Consumer Protection Act.

                           WHAT THE GOVERNMENT IS EMPOWERED TO DO

Under the legislation, at section 112(1) the Director of Market Place Standards and Services can issue an order requiring immediate compliance with the OCPA.

Under s. 109(1) of the OCPA, if the Director believes that a person is making false, misleading, or deceptive representations in respect of any consumer transaction in an advertisement, circular, pamphlet or material published by any means, the Director may,

         (a)  order the person to cease making the representation; and

         (b)  order the person to retract the representation or publish a correction of 

               equal prominence to the original publication. 

And under s. 102(1) of the CPA, the Minister may disseminate information for the purpose of educating and advising consumers.

I believe these are the appropriate remedies in these circumstances. If the Minister and the Director of Marketplace Standards and Services are not in agreement, then I would like to know why not.

Yours sincerely,

Susan Drummond


February 23, 2006 Response from Consumer Protection

Incidentally, we have received no consumer complaints pertaining to the FIDO matter.  If you are in possession of precisely what FIDO has delivered to their customers, would you be so kind as to share same with us by fax:416-326-8665.

February 23, 2006 letter from Susan Drummond to Consumer Protection

I have received many emails from Rogers and FIDO consumers because of the story about my debacle with Rogers Wireless that appeared on the front page of the Globe and Mail on December 17 and 19, and on the inside pages on December 20 and February 11.

I have attached one of the many emails that I received regarding Rogers and FIDO so you have some sense of the anxiety and uncertainty that FIDO consumers face.

It's not great, I suppose, that my prominence as a consumer advocate is greater than that of the Consumer Protection branch when ordinary consumers flounder about trying to make sense of things.

One prominent blog that deals with FIDO's new wireless service agreement is called Howard Forum. It's immediately apparent from the blog that people don't know what to do or who to turn to. There's a lawyer giving people somewhat spurious advice (I believe) about what will happen to them if they just cancel with FIDO. He tells them emphatically they will still have to pay the early termination fee (ETF) of $200 if they don't accept the contractual changes in whole. Other consumers are finding that they can cancel with FIDO and not pay the ETF, while others are told by FIDO consumer service reps that they must accept the new contract in its enitrety or pay FIDO $200. There are also suggestions that people turn to the Better Business Bureau. Nobody seems to be aware that they can turn to Consumer Protection to get assistance.

I don't have a fax machine. But I am almost certain that the lengthy new FIDO Wireless Service Agreement (which goes on for several pages of an accordian pamphlet) reproduces what can be found at


There is more to the insert than that. I know of several FIDO consumers who are spending hours on the phone with FIDO's consumer reps trying to make sense of what they confronting on March 2. I'll try and get one of them to give me a copy of the insert and I'll find a way to pass it on to you.


Letter from Fido Consumer - forwarded to Consumer Protection

(The below Fido consumer, Mark Akrigg, gave me permission to forward this February 20, 2006 letter, originally addressed to me, to Consumer Protection)


Dear Professor Drummond,

Like many others, I read with great interest (and sympathy) the accounts in the Globe and Mail of your dealings with Rogers in the aftermath of the $12,000 bill you were presented with.

At the end of the Globe's Dec 19 article, there was a mention that you "will continue to pursue underlying issues, including a contentious  clause in the Rogers contract that forbids consumers from taking the company to court or joining a class-action lawsuit against it."

I and my partner are both customers of FIDO, which was taken over by Rogers just over a year ago, and we find that we are newly confronted by this clause.  On February 15th, we both received with our monthly FIDO bills a very lengthy insert: it is the new Service Agreement, which was represented as part of FIDO's integration into Rogers.  Buried on the very last page of the agreement is Section 34, which reads as follows:

"34. Any claim, dispute or controversy (whether in contract or tort, pursuant to statute or regulation, or otherwise, and whether pre-existing, present or future) arising out of or relating to: (a) this Agreement; (b) the Services or equipment provided to you by us; (c) oral or written statements, or advertisements or promotions relating to this Agreement, or to the Services or equipment; or (d) the relationships that result from this Agreement (collectively the "Claim") will be determined by arbitration to the exclusion of the courts, to the extent permitted by law.  You agree to waive any right you may have to commence or participate in any class action against us related to any Claim and, where applicable, you also agree to opt out of any class proceeding against us, the extent permitted by law...[They then give the Montreal address to which any claims should be sent]...Arbitration will be conducted by one arbitrator pursuant to the laws and rules relating to commercial arbitration in the province in which you reside that are in effect on the date of the notice."

Obviously we agree to nothing of the sort.  But Rogers says that if we do not cancel our service with them before March 2, we have accepted their new Service Agreement and have therefore voluntarily renounced our access to the courts.

We consider this kind of behaviour coercive.  It is simply not possible for us to cancel the FIDO service, find another carrier, get the new service going, and notify everyone of our new numbers in the space of two weeks. So not cancelling our service before March 2 most certainly does not mean that we accept the terms of the new agreement.

But the real question is whether Rogers, offering service under a licence granted by the Government of Canada, has any right to deny customers access to the Canadian court system.

I would very much appreciate it if you could let me know what the status is of this issue.

Again, congratulations on the public service that you have performed.  I agree with you that the real objective of all this is to make Rogers behave like decent corporate citizens.  They have a long way to go.

Sincerely yours,

(Dr) Mark Akrigg

P.S. I should say that during our years of service with FIDO, starting in 1999, we felt that we were always treated fairly.  We never had the feeling that they were trying to exploit or deceive their customers.  Dealing with Rogers has been a very different and consistently nasty experience.