News

The 411 – Canadian Radio-Television and Telecommunications Commission and the “Wireless Code”

07 CRTC

Nora Kharouba (3L)

Hear ye, Hear-ye, cellular mobile users: the time has come! The Canadian Radio-Television and Telecommunications Commission (CRTC) will be unveiling a new Wireless Code (the Code) on December 2nd 2013. What is this code I speak of?

Wireless providers will be subject to new mandatory requirements soon. The Code was drafted after the CRTC sought the public’s input through online surveys about ways to improve wireless service. Overall the survey revealed that customers wanted two things: better prices and better customer service. Consumers also expressed their needs for more clarity when it came to cell-phone contracts.

The CRTC is exercising its constitutional powers to create a standardized set of norms that will benefit consumers by ensuring they have the same rights across Canada.  Some of the Code’s features include: caps on extra data charges at $50 per month and international data roaming charges at $100 per month.  This cap means that a customer’s data service will be automatically suspended once the customer has reached the associated cap, unless the customer expressly consents to override the default limit.  CRTC will also require providers that give customers locked phones to unlock the device, or give the customer the means to unlock the device, upon request, at the rate specified by the service provider, no later than 90 days after the contract starts. Most importantly, the Code requires companies to produce contracts that are easy to read and understand, the particulars of which can be found here: http://www.crtc.gc.ca/eng/info_sht/t14.htm.

Service providers will still be free to determine their service rates and the costs of cellular devices.  One may pose that the Code will not be effective since any fees providers lose as a result of the regulations can be compensated for through increases to service price. However, the Code will also have provisions making it easier for consumers to switch providers – for example, by providing caps on cancellation fees to allow consumers under a contract term the ability to end the term easily.  The hope is that market competition should discourage wireless providers from increasing their service fees.

The CRTC has said the Code should apply to all contracts, no matter when they were entered into, by no later than June 3, 2015. This means that the Code is to apply retroactively to contracts signed before the Code comes into effect.  What is the effect of this? For example, a three-year contract entered into in say, September 2013, before the Code is released and which would normally run until September 2016, could be terminated by a customer on June 2, 2015 without payment of cancellation penalties that would have otherwise applied. Not surprisingly, Canada’s major telecom companies (such as Rogers, Bell, Telus) decided to challenge the Code’s retroactive effect on three-year contracts. The telecom companies were given the green light to do so on September 24, 2013 by the Federal Court of Appeal. Stay tuned for the actual trial!