They're not going to take it

Politicians take note: Canadians are showing an unprecedented level of discontent with their telecommunications companies. With lawsuits and protests flying, the situation is building toward a 'perfect storm,' consumer groups say.

Politicians take note: Canadians are showing an unprecedented level of discontent with their telecommunications companies

Canadians are particularly upset over their cellphone rates. ((istockphoto))
Class-action lawsuits against telecommunications providers are flying like text messages from a teenager. Websites and Facebook groups protesting cellphone rates are popping up faster than spam in your inbox. People are even rallying on Parliament Hill to oppose the purposeful slowing down of internet connections.

There is a new disconnect happening — one that politicians in the upcoming election need to take note of. Normally placid Canadians are speaking up. Consumers have never been angrier with their telecommunications service providers and they are letting the companies know it. A selection of comments on CBC stories over the past few months tells the story:

"Crooks... When are we gonna stand up for ourselves and take down these criminals?" wrote spacholka.

"I can't believe how ridiculous cell phone service is getting in Canada. When I find myself watching an American channel on TV, all I see are ads trying to lure customers with cheap plans," said CrystalP. "While up here in Canada, all I keep hearing about is how prices are going up, and new charges are being added. It's time for change, we need to allow more competition into the cell phone market in Canada."

"Bell has been a blight on technological innovation for decades in Canada," wrote George Keith Young.

"Anyone who complains about American corporations and monopolies, etc., just think 'Rogers'. They top them all," said MatthewBaker.

Consumer rights groups, which have long fielded complaints from cable and phone customers, say they have never seen anything like what has unfolded over the past year.

"The forces are getting to be perfect-storm like," says John Lawford, counsel for the Public Interest Advocacy Centre. "There's a tipping point. People are fed up."

A plethora of lawsuits

The discontent has mainly manifested itself in a slew of lawsuits. Last August, Montreal resident Fernand Savoie — aided by Quebec's consumer watchdog, L'Union des consommateurs — filed a class-action against Vidéotron Ltée. for introducing download limits to his high-speed internet service. Vidéotron, the lawsuit said, had broken its contractual agreement by materially changing the unlimited download service for which Savoie had signed up.

In its defence, the company said it was it within its rights because it gave Savoie and other customers two months notice of the change.

Similarly, Montreal resident Myrna Raphael filed a class-action lawsuit against Bell Canada Inc. in June over the company's throttling of internet speeds, also with help from the Quebec consumer watchdog. Raphael is seeking the return of 80 per cent of her monthly subscription fee, which she says is about equal to the diminished speed, plus damages for false advertising. Bell had promised "always-on, constant high-speed," she said in her lawsuit, yet the company was purposely degrading the quality of her connection. The consumers union in July expanded the lawsuit to include Ontario residents.

Hundreds of customers who lined up for iPhones in July were disappointed by low stocks at Rogers stores. ((Peter Nowak/CBC))
A pair of class-action suits were also launched in July in Quebec against Bell and Telus Corp., who announced earlier in the month that they would begin charging cellphone customers for incoming messages unless they were signed up to a texting plan. Saint-Pierre Grenier Avocats Inc., the Montreal law firm behind both lawsuits, is using the same reasoning as the Vidéotron case — that Bell and Telus have illegally changed the terms of their contracts through introducing the new fees. Clauses in the contracts that allow the companies to change their fees with 30 days notice is "abusive," the lawyers say.

Another class-action against Bell in Ontario was given the green light by courts in February. Peter De Wolf, from Braeside, Ont., launched the suit in 2005 against the company for charging him a $19 administration fee after failing to pay his ExpressVu satellite television bill on time. Combined with interest, Bell was demanding more than 60 per cent interest on his bill, a rate he says is illegal under the Criminal Code.

The biggest class-action of them all, however, is Regina-based lawyer Tony Merchant's lawsuit over the system access fee paid by the large majority of cellphone users in Canada since 1986. Merchant started the lawsuit in 2004 and a Saskatchewan court gave it the go ahead last September. Merchant says Canada's cellphone companies have been misrepresenting their system access fees as government charges, and he is seeking a repayment of nearly $20 billion.

Merchant says he will soon be launching another new suit over the 911 emergency fee charged by cellphone carriers.

The respective companies have denied any wrongdoing in each case and all of the lawsuits are still before the courts.

Quebec a hotbed of discontent

A disproportionate number of the cases have originated in Quebec because the province, along with Manitoba and Saskatchewan, has stringent limits on the costs that can be recouped by a defendant if the class-action is defeated, or if it fails to get court certification. Plaintiffs are limited to paying costs similar to those found in small-claims courts if they are not successful, which means they are immune to hefty penalties for waging an unsuccessful case.

Quebec has additional incentive for class actions in that the first party that starts a lawsuit gets full rights to any damages awarded whereas other provinces allow additional claimants to join later in the process, which can result in law firms fighting over the spoils.

The rules have allowed Quebec residents to take the national lead in fighting back against telecommunications providers, says Anthony Hemond, telecommunications analyst for L'union des consommateurs.

A protester holds up his sign at the rally for net neutrality in Ottawa in May. ((Peter Nowak/CBC))
"They are measures designed to help people get justice," he says.

Besides lawsuits, consumer anger has also found prodigious expression in a medium that has become notorious for the venting of displeasure — the internet. Last December, tens of thousands of people poured into a group on Facebook, the social-networking site, to protest the imminent introduction of a restrictive copyright reform bill by the government. The backlash was enough to persuade Industry Minister Jim Prentice to hold off on the legislation for a few months.

The online protest's efficacy set a precedent and inspired tens of thousands of potential buyers to launch a similar offensive in July in response to Rogers Communications Inc.'s rate plans for Apple Inc.'s long-awaited iPhone.

With 60,000 petitioners drawing a good deal of negative media attention for Rogers, the company decided to temporarily drop its rates two days ahead of the iPhone's launch. Fans of the iPhone scored a big victory as a contrite Rogers backpedalled, but the damage had been done. proved to have a life beyond Apple's device, says Graham Fair, who became the spokesman for the site when its founder wished to remain anonymous. Even after Rogers lowered its rates and ameliorated many of the complaints, the site still served as a focal point for frustration with the company and the cellphone industry in general.

"People are generally questioning whether they're getting value for their money," he says.

(Online protests and their efficacy are looked at in depth in a Tuesday story as part of this special report.)

Throttling most emotional issue

The issue that has perhaps drawn the most intense vitriol, however, is the slowing down or "throttling" of connection speeds by internet service providers such as Bell and Rogers. The moves to throttle usage of peer-to-peer software such as BitTorrent, which the providers say is necessary to prevent congestion on their networks, have drawn howls of protest about ISP interference with the internet.

Slowing the speeds of a select online application is the thin edge of the wedge that will eventually expand into ISPs picking and choosing which internet services get priority, a violation of net neutrality principles, the angry customers say.

"When did Bell deign to say what's good and what's bad?" one angry customer told in May. "Who gave them that right?"

Bell and Rogers have over the past few months become a dartboard for net neutrality advocates. NDP and Liberal MPs Charlie Angus and David McGuinty, respectively, filed private member's bills over the summer looking for stricter rules governing the conduct of telecommunications providers. The Canadian Internet Policy and Public Interest Clinic filed two separate complaints with the Privacy Commissioner. The Canadian Association of Internet Providers (CAIP), a group of Bell's wholesale customers, filed a complaint with the Canadian Radio-television and Telecommunications Commission that attracted support from internet giants Google Inc. and Skype. The CRTC is expected to rule on the CAIP dispute in October.

Worst of all for the companies, their own customers descended on Parliament Hill for an anti-throttling rally in May. About 300 protesters showed up to say "Hands off our internet" to Bell and Rogers.