Colin Perkel had a two-year Internet service deal with Rogers Communications. When it was about to expire, he called to discuss renewal options.
A live chat agent at Rogers said his existing plan no longer existed. So, he agreed to a promotion that would cost a little more and boost his Internet speed.
Perkel, a journalist with The Canadian Press, turned to Twitter when he found his new rate was going up 16 per cent soon after he accepted it.
“How is it that you can negotiate a one-year term total price with Rogers that they unilaterally increase two months in?” he asked.
Rogers’ answer mystified him at first. Then, he checked his written agreement for the Ignite 150u unlimited Internet deal.
- The regular price was $89.99 a month.
- His savings would be $39.99 a month.
- His discounted rate would be $50 a month.
Only the $39.95 monthly savings was guaranteed for a year, Rogers told him, while the $89.99 regular monthly price was subject to rate increases.
“Rogers is arguing that the consumer didn’t contract for a fixed price, but for a fixed discount on a variable price,” Perkel tweeted, calling it an absurdity.
Rogers is not alone. Other telecom companies also advertise promotional savings for a specific period, while retaining the right to raise prices at any time.
Both Rogers and Bell Canada have boosted Internet fees this year. Rogers raised most plans by $8 a month on March 12. Bell’s increase was $5 a month for Ontario customers on April 1, plus a $1 per GB increase in overage charges.
Why are Internet prices rising? According to Rogers, demand for capacity is growing by more than 40 per cent a year as the number of connected devices in the home increases.
Doesn’t the Canadian Radio-television and Telecommunications Commission (CTRC) regulate prices charged by phone, Internet and television service providers? Can they increase prices as much as they want?
Such questions arise so frequently that the Commission for Complaints for Telecom-Television Services (CCTS) put out a factsheet to clarify the situation (which is hard to explain clearly).
“We often receive complaints from customers about price increases. They want to know whether this is allowed. The answer is almost always … it depends,” the CCTS says.
Generally speaking, most of the prices charged by phone, Internet and TV service providers are not regulated. The CRTC intervenes only in markets where there is little to no competition.
Service providers are free to set their own prices. And they can adjust these prices for a variety of reasons, constrained only by supply and demand in the market.
Phone, Internet and TV providers set their own rules (known as terms of service or terms and conditions), which are shown in your service contract.
“But just because at one time the provider offered you certain services at a certain price, and that price is set out in your service agreement,” the CCTS says, “that does not necessarily mean that the provider can never raise its prices.”
You have more rights with wireless service than Internet service and TV service. Credit goes to the CRTC’s wireless code of conduct, introduced in 2013 and revised in 2017.
Under the wireless code, if you receive postpaid service under a two-year contract, the price is considered to be a key term that cannot be changed during the contract period.
Many Internet service providers have switched to a month-to-month contract from a fixed-term contract,
“We have a variety of options and discounts that customers can choose from, and we work to make sure that they are on the plans that best meet their needs,” said Rogers spokesperson Samantha Grant.
Clear disclosure is important, but it’s not apparent at the Rogers website when you check out the Internet offers for Ontario customers.
Ignite 150u is advertised at $69.99 a month. “No term contract required,” Rogers says in bold print. What you need to know is in a type font you can barely see, “Regular $107.99 a month. Subject to change.”
Next to a box that says “$38 a month off regular price for 12 months,” Rogers adds a barely legible footnote much lower down, “Advertised regular price applies in month 13 or 25 as applicable, subject to any applicable rate increases.”
I asked Colin Perkel for the confirmation sent by email about the terms of his deal. Nowhere did Rogers explain that only the discount was guaranteed for the year, not the base rate to which it applied.
Since he’s a writer, I suggested he draft a message that Rogers could use for Internet customers on a month-to-month deal. He came up with this:
“We may raise the price of your Internet service at any time, for any reason, wholly at our discretion, with 30 days’ notice to you. If we do raise your rate, we will discount the higher rate by the amount we promised for the duration of the promotional period, but your total payment will still increase.”
What do you think? Tell me your stories about telecom providers’ price increases during a promotion and I’ll revisit the topic in a future column.
Torstar holds an investment in The Canadian Press as part of a joint agreement with a subsidiary of the Globe and Mail and the parent company of Montreal’s La Presse.