Telus claims new refund rules will cost firm ‘tens of millions’

Telus Corp. is unimpressed with new refund regulations it claims will cost the company tens of millions of dollars annually.

Canada’s third-largest telecommunications provider filed an application with the Canadian Radio-television and Telecommunications Commission over a May decision requiring wireless, voice and Internet service providers to pay prorated refunds to customers who cancel prepaid contracts.

Telus argues this “surprise” decision modified a long-standing practice not to pay refunds when a customer cancels in the middle of the month — most Canadians prepay monthly for service — and will require significant changes to billing systems to ensure customers get their money back whether they cancel with 27 or three unused days.

These amounts are “minuscule and insignificant” to a customer but are “significant, in the aggregate, to network providers who are attempting to invest in network expansion and continued innovation,” Telus senior vice-president of regulatory affairs Ted Woodhead wrote in the application. “As a direct result of the decision, Telus’ revenues will be reduced by tens of millions of dollars per annum.”

Telus asked the commission for guidance on how to apply the refunds in complicated scenarios and for an extension to implement the new rules. It argued the decision was made without proper consultation, so it deserves an extra six months from the time the CRTC rules on its application to account for hundreds of possible cancellation scenarios.

The decision stemmed from a dispute between Quebecor Inc. owned Vidéotron and Bell Canada, but the CRTC expanded it to include all service providers.

It ruled that providers must not charge for a service that isn’t provided.

“By removing unnecessary barriers to consumer choice, the prohibitions also contribute to a more dynamic marketplace,” the CRTC determined.

Telus rejected that logic, stating that switching is at “historic” levels due to the volume of promotions in the marketplace. It asserts that the CRTC quashed the real barriers to switching when it forced providers to let customers keep their phone numbers and let them unlock their handsets, eliminated the 30-day cancellation notice and shortened contract periods.

It also questioned how to deal with refunds for wireless contracts with subsidized handsets, usage-based contracts (a customer could technically use all their data on the first day of a month, cancel and get a refund for something they already used) or if a customer cancels a landline during a minimum contract period.

The public can comment on Telus’ application until Aug. 22.