Ottawa draws fire for axing cellphone rate calculator

Industry Minister Tony Clement is taking fire for scrapping a taxpayer-funded online tool that would have helped consumers pick a cellphone plan, allegedly after being lobbied by the wireless industry.

The cost calculator would have compared rate plans from across different cellphone providers and was scheduled for a June launch.

The service was shelved just weeks before rollout after Clement's officials met with representatives from Bell, Telus and the Canadian Wireless Telecommunications Association, according to University of Ottawa law professor Michael Geist. The cellphone industry was afraid the service would eat into their revenues, Geist said on his blog on Monday.

"Government records suggest intense lobbying this spring by Canada’s wireless companies, who feared the service would promote lower-cost plans, played a key role in the decision," he wrote. "Despite months of preparation, thousands of dollars in taxpayer expense, the creation of an effective tool and the obvious benefits for lower-income Canadians, Clement nevertheless killed the project."

Laryssa Waler, a spokesperson for the minister, denied the project was killed because of lobbying, but rather because of technical issues.

"Technical limitations prevented the officials from building a tool at this time that captures the full spectrum of offerings available to consumers in the cellphone marketplace," she said. "The proposed calculator design only considered voice communications and text messaging. As this is an industry with ever-evolving elements, such as bundles, data and seasonal offerings, it made it highly improbable to ensure that Canadians were being presented with current and relevant data."

But a study conducted by Decima Research in the spring found a positive response from focus groups — which consisted of cellphone owners and people who planned on getting a cellphone — that had tried the tool. Respondents had some gripes with layout and presentation but were otherwise looking forward to using the calculator.

"Despite the various criticisms made of the tool among both cellphone intenders and cellphone owners, the vast majority of participants would actually use the tool if it were available," the report said. "As well, many participants would likely mention it to friends and family if they were in the market for a cellphone plan."

Liberal consumer affairs critic Dan McTeague dismissed the technical issues as an excuse and called on the government to explain the decision.

"If there was a significant problem in the implementation, it would have been discovered much earlier in the process," McTeague said in a statement. "Why is the Harper government against transparency? A significant amount of taxpayer-funded government resources had already gone into this project. This calculator is especially important during these belt-tightening times."

The decision renewed calls among consumer groups for splitting off the role of Consumer Affairs Minister from that of Industry Minister. The two jobs have been joined since 1995.

"This is what you're going to get every time consumer issues come into conflict with industry issues. Industry wins every single time," said John Lawford, a lawyer for the Public Interest Advocacy Centre.

Mark Langton, a spokesman for Bell, said the company did not lobby Clement and let the CWTA handle the issue.

"There was no separate or unique Bell effort," he said. "Geist insinuates in his column that Bell had talked to Clement or his office about the subject. We did not."

A spokesman for Telus did not return a request for comment.

Bernard Lord, the head of the CWTA and former Conservative premier of New Brunswick, said he did meet with Industry Canada officials to discuss the calculator. The CWTA's position was that the calculator was flawed since it did not take into account data plans, bundle discounts and hardware subsidies offered by carriers.

"The minister made the right decision, to not continue to dump good taxpayer money into a tool that was ineffective," he said.

PIAC's Lawford, who used to work for a database company, said such extra charges could have easily been added on later, after a tool for calculating basic costs was set up. He estimated the calculator project has cost hundreds of thousands of dollars, possibly even reaching into the millions. The Decima user study cost $60,000 alone.

On his blog, Geist suggested the source code behind the calculator should be released to the public so that other groups can pick up where Industry Canada left off. Lawford said such a plan wouldn't work without the government requiring cellphone providers to continually supply data.