So the other day I was sitting at my desk at work and my cell phone rang. It showed up on the call display as a local number which I didn't recognize. After answering, there was a brief pause, followed by a greeting in a very thick accent. It was Fido, wanting to know how my cell phone service is. Fido is my mobile phone service provider. They used to be a cute little upstart with good usage plans and no guerrilla marketing tactics. Then they were bought by Rogers.
After determining that I was largely satisfied with my service, except that it costs too much, the rep went on to tell me he could give me a free phone and a great plan for the next 24 months.
"But I have to sign a contract?" I prompted.
"Oh, no, sir, Fido doesn't have contracts. You would have an agreement."
"Ah," I replied, "and that's different from a contract?"
"Okay, and if I decide I want to cancel my Fido service next month...?"
"Oh, then you have to pay a cancellation fee."
"Well then, I can see how that is different than a contract. How about this? You put in my account notes that if anyone ever offers me a contr- sorry, agreement, ever again, I will cancel my service."
Unperturbed, he pushed on. "But sir, if you sign up for an agreement, I can offer you-"
I cut him off and repeated that if I was ever offered a contract again, I would cancel my service. He told me to have a nice evening, although to be honest, he didn't sound all that sincere. I told him the same. I was definitely not sincere.
This leads me to the lesson. This has come up a few times in the last month. Everyone seems to have a lot of misinformation about how cell phones work. Disclaimer: this rant really only applies to Canada.
Firstly, the "system access fee" is a scam. There was, in fact, a class action suit in Saskatchewan about how cell phone providers have been collecting this fee for themselves even though it stopped being a government levy many years ago. I was told once by a Bell rep that they split the cost of the plans into usage cost and system access fee because people wanted to know how the plan was divvied up, but I seem to recall that the plan that cost $30 before the split, cost $30 + $6.95 after. You also probably pay a monthly 911 system access fee. Even though you can dial 911 from any payphone for free.
Another serious point of misinformation seems to be about the difference between plans and contracts; or agreements; or shackles; whatever you want to call them. The important thing is that your plan and your contract are completely disjoint. And for those of you who thing this is completely obvious, I talked to two reasonable and intelligent people with two different misconceptions about this just this month.
A contract is just a statement that if you cancel your phone before N months (where N is usually 36) you will pay the phone company some large chunk of money. This renders you basically helpless in the event that the phone company wants to, say, charge you a new random fee for no reason. Keep in mind that it is usually stated explicitly in the contract that they can change your plan without notice whenever they want. So you may think you've signed up for unlimited something something for 3 years, but really, all you've signed up for is 3 years of getting hosed.
Your monthly plan is the usage you pay for. You can get a plan without having a contract. I have been without a cell phone contract for about 3 years now. And since there is now a law stating that if I change cell phone carriers, I get to keep my cell phone number, I have no reason to stay with my provider if I don't feel like it. They want to increase my fees? Too bad. I'll go somewhere else and it won't cost me $200 to cancel, even if I leave tomorrow. And I don't even have to change my number. I recently used that fact to knock literally $20 a month of my cell phone bill.
Sure, they'll offer you lots of little goodies to sweeten the pot: $100 off your cell phone cost; a $2 a month discount for the first 3 months. But you can get that same plan without a contract if you forego the $6 in savings and buy your own cell phone. At the time I bought my phone, Fido was selling the LG Chocolate for $200, if you signed up for a 3 year agreement. I got mine for $200 on craigslist, almost brand new. No agreement. Plus mine is unlocked, which means I can take it to any GSM carrier. Which, of course, limits me to Rogers of Fido.
The main reason that I recommend all this is that they are trying to get new carriers in the game. My fear, of course, is that because everyone is tied up in contracts already, any new carrier will find it impossible to sign up new customers. This will stifle competition, which will encourage the players we have now to continue to screw us. However, if, in a year or two, we get a new carrier with more reasonable rates and enough of us are free to leave our current providers, we may start seeing our rates come down. And that, in my opinion, would be a welcome change.
So the next time your cell phone company offers you some random thing if you agree to extend your contract, tell them to get stuffed. Buy your own cell phone and rest assured that whatever plan you sign up for will stay the same, even without a contract. Because if they start changing your plan around, you can just leave.
Please, feel free to post a comment with your provider and how much you actually pay per month, ie. your plan plus extras plus system access fee plus 911 fee plus whatever other ridiculous fees plus taxes. Post anonymously if you're embarassed about it. I'm curious, in any case.