Rogers CEO Tony Staffieri testifies Dec. 2 before the federal committee on industry and technology to defend certain contracts that raised in price while locking customers in.Supplied
Members of Parliament grilled the top executive of Rogers Communications Inc. RCI-B-T for answers about a price increase to one of its products, expressing concerns about transparency in the company’s contracts.
Tony Staffieri, the company’s chief executive officer, defended his company before the industry and technology committee on Monday afternoon, saying the company is always transparent with customers about potential price increases.
“We are very clear and transparent with our contracts as to what’s included and what isn’t,” Mr. Staffieri told MPs. “Our term commitments are on base TV services and we make it clear: There are other items that are add-ons, and the customer has the discretion to include them or not.”
The committee was called to discuss the issue after Rogers customers criticized the company for increasing the monthly fee of renting every television box in a household but one by $7. CBC’s Go Public reported in October that customers said they felt misled by the price increase. The possibility of the price increase was included in the fine print of the contract.
Conservative MP Rick Perkins asked Mr. Staffieri why the company had “slipped” the additional $7 charge “under the door.” Liberal MP Ryan Turnbull asked how he justified increasing the price for a piece of equipment customers were already using.
Mr. Staffieri said that increased prices are the result of upgraded experiences and investments in the company’s products and network, and that customers can return set top boxes if they choose to do so, adding that the vast majority of Ignite TV customers are not affected as the first TV box is included.
After first being called to appear before the committee in October, Mr. Staffieri delayed his appearance and was set to appear last Thursday, but instead, the company’s president of residential operations, Bret Leech, appeared before the committee. Rogers said Mr. Staffieri had an unforeseen scheduling conflict.
This prompted the committee to pass a motion summoning Mr. Staffieri within seven days, or risk being brought before the House of Commons to be reprimanded.
Mark Graham, BCE Inc.’s senior vice-president, legal and regulatory, was also in attendance, after the committee invited representatives from Bell and Telus Corp. He told the committee that Bell had not increased the price of its set-top boxes in the last five years, and in the period before that, it had increased that price by $1.
In an Oct. 30 letter sent to telecom providers, Scott Hutton, the CRTC’s vice-president of consumer, analytics and strategy, said the prices that set out in a contract, such as equipment charges, should be clear to customers.
“It has come to my attention that customers have recently reported being surprised by increases in fees related to their services during their commitment periods and are frustrated at the situation,” he said. “Service providers should not be surprising their customers with price increases beyond the price they had originally agreed to.”
Since then, the CRTC has launched a public consultation that will review contracts that include clauses that allow companies to raise prices during a contract, as well as three other consultations aimed at improving service transparency and helping Canadians gain access to new competitively priced mobile service plans.
The MPs also touched on other areas.
Mr. Perkins asked Mr. Staffieri about Rogers’s recent $7-billion structured finance deal, the proceeds of which it says it will use to pay down debt.
On Oct. 24, Rogers announced it had struck a non-binding agreement to sell a portion of its wireless backhaul network, which connects cellphone towers to the company’s core network, to an unnamed investor. The Globe and Mail reported that New York-based Blackstone Inc. is the potential buyer.
“Why are you selling that critical telecommunications infrastructure, other than the fact that you ran up too much debt in your other businesses?” Mr. Perkins said. “Frankly, I can’t see that it is actually within the laws of Canada.”
Mr. Staffieri said that while the deal has not yet closed and the buyer has not yet been disclosed, the company was careful to work within the regulations set for Canadian telecoms.