Canadian small business owners say a lack of competition in the telecommunications sector means they’re getting sub-par service, according to research released Thursday by the Canadian Federation of Independent Business (CFIB).

The problem all comes down to poor customer service driven by a lack of options from providers, says Corinne Pohlmann, senior vice-president of national affairs for the CFIB.

"With only one provider available in some regions, small businesses have no choice but to contract with them, or do without these services completely. That's no way to run a business, especially if you want to stay competitive," Pohlmann said. “Frankly, you feel beholden. You have no choice. You don’t like the service, it’s too expensive – but they know they have you.”

“Those are some of the frustrations a lot of small business owners are feeling.”

The CFIB surveyed 5,311 business owners from across Canada, and their responses suggest that small business satisfaction with high speed internet, wired and wireless telephone service hasn’t improved since 2008, the agency says. Just over 47.1 per cent of small business owners the CFIB surveyed say they felt there was not enough competition in the wired internet services market, followed by 44.3 per cent for wired telephone service, and 40.9 per cent for wireless telephone service.

Many fees not disclosed: Hamilton small biz owner

Hamilton’s Peter Anderson, who owns the Global Village Market in Westdale Village says contract lengths for phone and internet at his business are his biggest gripe.

"Customers should have the ability to opt out of contracts when customer service issues are not met," Anderson said. "There are many fees charged that are not disclosed on a regular basis ... it takes too long to get a warm body to address your issue in customer service to make it worth arguing."

The CFIB is pushing for the Canadian Radio-television and Telecommunications Commission (CRTC) to allow access to wholesale services for smaller competitors in any given internet area, Pohlmann says. That would include forcing large providers like Bell and Rogers to rent usage to smaller companies on their lines at a wholesale cost.

“That was eliminated a couple of years ago because it was felt like there was enough competition, but we don’t think that’s the case,” Pohlmann said, adding that’s especially true in rural regions and industrial parks where there are only one or two telecom options.

“If you look at it country wide it doesn’t look too bad — it looks like we have ten companies that are competing in these areas. But when you really look at it by province, that’s when you see it’s a very different scenario,” she said. “It can be a limitation in the growth of your business. Suddenly your website goes down and you can’t be the most competitive option and your competitor is in a better position.”

CRTC's new code a move in the right direction

The CRTC’s wireless code that was introduced last year was a “great step in the right direction” for putting power back into the hands of consumers and pushing transparency and flexibility to the forefront, Pohlmann says.

That code of conduct forbids cellphone companies from charging customers fees to break their contracts after two years and makes it easier to unlock cellphones. It came into effect for contracts signed after Dec. 2, 2013.

That code allows consumers to:

  • Terminate their wireless contracts after two years without cancellation fees, even if they have signed on for a longer term.
  • Cap extra data charges at $50 a month and international data roaming charges at $100 a month to prevent bill shock.
  • Have their cellphones unlocked after 90 days, or immediately if they paid for the device in full.
  • Return their cellphones, within 15 days and specific usage limits, if they are unhappy with their service.
  • Accept or decline changes to the key terms of a fixed-term contract (i.e., two-year), and receive a contract that is easy to read and understand.

“Those are the sorts things we need to look at more,” Pohlmann said.