Editor’s note: Updated with comments from Rogers Communications at 2:37 PM ET.
After hearing from the public in an online consultation last year and a public hearing in February, the Canadian Radio-television Telecommunications Commission (CRTC) has issued its plans for a wireless code that governs contracts between wireless service providers and their customers.
The code takes effect beginning Dec. 2 for cell phones and other personal mobile devices sold in Canada. Perhaps the biggest change to the Canadian wireless landscape is a new two-year term limit for contracts. Right now, the norm is a three-year contract for most Canadian carriers – incenting subscribers to sign on for the long contracts with subsidies on expensive smartphones. But under the new code, consumers will be able to cancel their contracts after two years without a penalty – whether they have a subsidized smartphone or not.
The wireless code also will put these changes into effect:
- Put a cap on excess data charges at $50 per month for over-usage, and $100 per month for international data roaming charges.
- Have a cell phone unlocked to use with other carriers after 90 days, or immediately if the device is bought out-right.
- Return a cellphone within 15 days and certain usage limits if unhappy with service.
- Consumers may accept or decline changes to the key terms of a fixed-term contract.
- Consumers will receive a contract that is easy to read and understand.
Ken Engelhart, Rogers Communications’ senior vice-president of regulatory affairs, said the carrier’s biggest concern is will it have its IT systems changed it time to meet the CTRC’s required change limiting contracts for small businesses and consumers.
He also wondered if new entrants, who have praised the commission’s ruling, realize that the new rules will impact them. New entrants like Wind and Mobilicity allow their subscribers to run a tab of up to four years to pay off the remainder of the price of a handset (after a deposit has been paid). Starting in December that term will have to fall to two years, Engelhart said, just like other carriers have to stop offering three year plans.
Otherwise, he said, the CRTC policy is good for consumers and small businesses. “It will make them happier with their wireless service.” But, he noted, most carriers have already changed their contracts to comply with Quebec legislation allowing consumers to cancel a contract at any time, pay off the amortized portion of the cost of the handset and have it unlocked.
The CRTC says its consultation attracted more than 5,000 participants. The idea for the code was hatched after the CRTC observed wireless services were drawing more complaints than any other service via the Commissioner for Complaints for Telecommunications Services (CCTS).
Contract length was the most popular complaint of online submissions to the CRTC consultation. Many consumers expressed that 36 months was too long a period given the quick product cycle of new smartphone releases now, and that a 24 month term would be a better maximum limit as is done in other countries.
Contract disputes were also the bulk of disputes filed by small and mid-sized businesses with the CCTS for 2012, an exclusive ITBusiness.ca report shows.
With notes from Howard Solomon.
