Archived—Project Summaries 2008-2009 - Public Interest Advocacy Centre (PIAC)
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1. A Do Not Track List for Canada?
Recently, consumer groups in the United States have asked the FCC and FTC to consider a "Do Not Track List" which will provide consumers with control over their online and corporately held digital profiles. The goal of the list is of course akin to the "Do Not Call List" which is operational and highly subscribed in the U.S. and is presently being replicated in Canada. A Do Not Track List will allow consumers to set preferences across electronic commerce platforms to ensure they were not unduly inconvenienced or harassed by marketing messages delivered to their computers, cell phones and other digital devices. The Do Not Track List idea has arisen due to increasing abilities of marketers and data brokers to produce targeted behavioural marketing for individual consumers and to deliver targeted ads in real or near real-time to a variety of digital devices the consumer may access.
This research will study the desirability of, feasibility of and possible effect of such a Do Not Track List in Canada.
To the extent possible, PIAC will seek to attend conferences on the subject and to participate in online fora discussing the matter.
This project will study the issues associated with the application of the "trade and commerce" powers set out in sec. 91(2) of the Constitution Act 1867 to accomplish nationwide goals in terms of enhancement of competitive markets. This study will include the possible use of the powers of that section to allow movement of goods and services across provincial borders, as well as standards of consumer protection designed to ensure that success of efficient competitors through an informed and empowered consumer population.
The study will analyze the effect the Supreme Court of Canada Decision in General Motors of Canada Ltd. v. City National Leasing Ltd.  1 S.C.R. 641, and the follow up cases of Morguard Investments Ltd. v. De Savoye  3 S.C.R. 1077 and Hunt v. T&N plc,  S.C.J. No. 12. This analysis will deal with the overall ability of the federal government to intervene legislatively to assure results in conformance with principles of competition or efficient markets. The report will study the impact of the 1994 Agreement on Internal Trade and the more recent TIMLA agreement with a view to constructing a reasonable methodological framework for assessing the effects of currently identified harm to consumer interests in Canadian markets arising from trade barriers or gaps in consumer protection. Where the result is incongruous with the maintenance of competition sufficient to protect the consumer interest, the study will examine the merits of invoking the federal trade and commerce powers.
The study will not attempt to catalogue, in depth, the other considerations in play that are associated with the invocation of the trade and commerce powers of the federal government to establish a legislative and rule making basis that would have primacy over laws or regulations made by other levels of government. The concerns will be directed to considerations of efficiency, transparency, and protection of consumers principally through the provision of workable competitive markets.
The three principal tasks will include the research concerning the trade and commerce powers, the construction of a framework to assess and evaluate the consumer interest, and identification of important consumer market interests in efforts to enhance competition through removal of barriers or enhanced and harmonized consumer protection.
3. Credit Cards and Access to Credit in the Digital Marketplace: A Priceless Necessity for Consumers
The recent years have been marked by warnings on the levels of personal and consumer debt that Canadians carry forward and the potential risks of higher levels of indebtedness. However, little attention has been paid to the barriers that a substantial number of consumers face in their efforts to access the online marketplace and other important services such as online retail, car rentals, movie rentals, travel reservations and transportation in general, hospitality, government services, and most other services. In the current information economy, plastic credit has become, more than a financial convenience item, a sort of 'credential' or 'passport' that enables consumers to be validated to perform economic and commercial transactions in a more efficient and convenient manner, while offering retailers, suppliers and merchants in general the benefit of engaging the credit card user base, who constitute the mainstream of all adult consumers. For consumers and merchants, there is value in reducing the need of having to carry, stock and use cash for all transactions.
Not having access to a credit card, entails higher overall costs for those consumers who have no credit history and must resort to alternative sources of financing. These consumers are, in their vast majority young adults and newcomers who are in need to swiftly integrate and participate in the economy, while the economy stands to gain by integrating these consumers. Increased difficulties to access credit card use may create inefficiencies that are exploited by high interest lenders though mechanisms such a pay day loans and fringe lending, whose interest rates are adjusted to the risk posed by loans made to consumers with damaged credit.
Plastic credit also lies at the heart of the current necessity of building a credit history in order to be able to access credit and lower the cost of borrowing for consumers, making possible a more dynamic and efficient market, poised to continuous and sustainable economic growth and enhanced welfare.
This project will inquire into the daily life realities of Canadians who do not have access to credit cards and the impact of this situation in their lives
Over the air, analogue television broadcasting will cease in 2011. Some 4 million Canadians currently receive television signals over the air. They will require subscription to cable, satellite or other subscription service to obtain television signals as of that date.
In 2007-2008, the Public Interest Advocacy Centre was funded to represent the interests of ordinary and residential consumers in CRTC Broadcasting hearings concerning the regulatory framework for broadcast distribution undertakings — BDUs (cable and satellite). This hearing is now taking place under Broadcasting Hearing PN 2007-10.
A central issue has arisen in the course of this proceeding that stems, in part, from the planned demise of analogue over the air (OTA) broadcasting. OTA broadcasters are demanding that carriage of local programming take place on fee for service basis instead of the current arrangements that merely require such pickup by BDUs (2007-10-3). By way of PN 2007-10-4, the Commission expanded their consideration of carriage fees to distant signals providing programming that satisfies CRTC rules.
The Commission has decided to address whether fee for service is an appropriate going forward principle in the context of the BDU operations. It believes that if such fees should be paid, it will then likely consider, in a separate hearing how these fees should be paid in an ongoing basis and how much these fees should be.
The issue of regulation of financial planners has moved recently into the public arena in Canada, following revelations in Canada about questionable and potentially illegal activities in the financial services sector. The Ontario Securities Commission (OSC) filed charges in 2005 related to the collapse of a hedge fund company targeted to average investors that had attracted over 26,000 clients and more than $830 million in assets in the space of two years. Many of the investors in this hedge fund company will be unable to recover their money. The Supreme Court of Canada's decision in Canadian Western Bank v. Alberta, permits provinces to regulate the sale and promotion of insurance services by banks and may affect the ability of provinces also to regulate bank employee financial planners.
This project examines the regulation of financial planners in Canada. Financial planners are those individuals who provide professional financial advice to consumers. They represent a range of disciplines within the financial services sector including those who are licensed to distribute life and health insurance, mutual funds and other securities. Financial planners provide financial and product advice to consumers on matters that include: estate and retirement planning; wealth management; risk management; and tax planning. Financial planners are not currently subject to any direct federal regulation (such as for financial planners employed by banks, under the Bank Act or any other federal legislation) and provincially, the only two provinces with any regulation about who can call themselves financial planners are Quebec and British Columbia. However, the CSA (Canadian Securities Administrators), under the direction of the OSC, is attempting to implement a baseline of professional standards nationwide at the provincial level. In addition, the Financial Advisors Association of Canada, called Advocis, has proposed a national regulatory model for financial planners which includes a consumer dispute resolution mechanism. This project will examine and assess this proposed regulatory strategy and dispute resolution mechanism as a means to look at the larger question of what regulatory model would best serve consumers.
Net neutrality, or "who owns the Internet" is shaping up to be the most important consumer issue in the areas of electronic commerce, telephony and public participation to date. The result of this debate will determine whether the historically open forum of the Internet will follow a "toll road" or a "right of way" model. The debate over net neutrality centres on critical issues of access to the Internet and delivery of "content". Advocates of maintaining net neutrality have warned of the danger that broadband providers will utilise their control over the "last mile" to block applications they oppose, and also to discriminate between content providers (e.g. websites, services, protocols), particularly competitors. Neutrality proponents also claim that telecom companies seek to impose the tiered service model more for the purpose of profiting from their control of the pipeline rather than for any demand for their content or services.
The question of whether there should be a 'tiered Internet' (where established content or systems providers pay Internet service providers and other system maintainers to prioritize their website and other Internet traffic) or a direct end-to-end model, directly affects the interests and rights of consumers.
The effect upon consumer choice, control and access to information through such "network discrimination" must be examined to determine if consumers are better served by using this method to increase the "quality" of Internet content and growth of the network. Viewed another way, network discrimination could increase the "scarcity" of Internet content and result in double charging consumers to create these pay networks, once for access to the network and once for content.
This research project will seek to determine if such "network discrimination" is indeed likely to result in better content delivery services at a reduced price or simply will mean less Internet content, except for those consumers who can afford to pay for full access. The effect of network control by established media companies and telecommunications firms will be examined to determine if it also leads to loss of incentives for providers to innovate and the possibility of anti-competitive behaviour by any companies that are able to control Internet access and content. Other questions arise around degradation of service performance for products that are not prioritized by particular Internet service or telecom providers.
The research will complement the CRTC's planned report on the issue, expected in late Spring 2008 and would help inform Industry Canada's telecommunications directorate. It will also assist any policy-makers regarding the growth and sustainability of Canadian culture on the Internet and any others who are dealing with virtually any aspect of electronic commerce or online speech.
An increasing number of businesses and industry in North America are resorting to the subterfuge of isolating one element of the service or the operations that they provide to the consumer and assessing a separate fee. Sometimes the fee is associated with moving an element of basic service into an optional category for assessment. Other times, it is passing on an imaginary fee or charge that the service provider supposedly has to pay or is simply caused by the agreement with the customer.
Currently airlines have been criticized for separating out components of its travel service package such as checked baggage for the levying of extra fees. Of more considerable concern is the inexact and one-sided levying of amounts for such things as "fuel charges" which may or may not correspond with the carrier's costs.
Canadian telecommunication consumers have continued to be assessed additional charges by their provider pursuant to their contracts of service that describe such charges in terms such as "system access fees" or "network access". The use of official sounding names, sometimes with the assertion that these are CRTC approved charges appear to be simply another way to collect revenue for the service.
Long distance carriers charge "network access fees" and providers, large and small in U.S. and Canada employ similar mechanisms to extract customer revenue. These latter practices include "regulatory program fees" from U.S. T-Mobile , "Federal Programs Cost Recovery" for Nextel cell phone users, and "FUSF pass-through fee" on DSL provided by Verizon. Needless to say the characterization and amounts of the charges are inventions of the companies. Other instances of this disputed telecom practice include surcharges from intermediate providers such as hotels and connection fees associated with pre-paid calling cards.
Other consumer transactions that have given rise to consumer outcry include banking charges for account occurrences which bear no relation to the costs that might have been incurred by a bank.
The result of the work should be a study that first attempts to describe the nature, and prevalence of the extra charges problem and attempts to analyze the practices of certain businesses and industries in the context of the current Canadian regime of consumer protection and competition. The study will make recommendations where legislative, regulatory or changes to business and consumer culture may be required.
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