CRTC Issues Wireless Consumer Protection Code

The CRTC released Telecom Regulatory Policy CRTC 2013-271today, its decision in aproceeding which set out to establish a new Code to protect consumers of wireless services. The Code represents a solid first step towards addressing myriad woes that have been plaguing Canadian wireless services. It adopts measures that should alleviate bill shock resulting from excessive charges for data usage by requiring service providers to gain express customer consent before charging them in excess of $50 in data usage charges ($100 for international data roaming). It also takes steps towards limiting the ability of service providers to impose changes onto customers during the course of their contract. The Code also obligates service providers to unlock customer phones -- an important step, which will make it easier for customers to switch providers or use foreign SIM cards when travelling abroad. These are all important steps, which will somewhat address concerns that have plagued customers of Canadian wireless services for years.

In addition, the Code limits amortization time-lines to two years, a measure that will effectively end the unique 3 year lock-in period that Canadians uniquely enjoy. In its submissions to TNC CRTC 2012-557, CIPPIC argued that the 3 year lock-in period is harmful to customers, in that it denies them access to a rapidly evolving marketplace and locks them into devices that are often not even supported for three years. Moreover, CIPPIC argued that Canadian incumbents are using 3 year contracts as a lock-in mechanism designed to prevent their existing historical customer base from reaching the small number of new market entrants, who started operations in late 2009/2010 after the AWS spectrum auction -- barely three years ago. Finally, CIPPIC conducted an international pricing comparison which demonstrated that Canada's unique 3 year amortization periods do not lead to lower prices for customers, but rather to higher overall costs when one considers the value of a 'free' handset in conjunction with the very high monthly service offerings Canadian customers must endure for three years at a time. Canada's OECD counterparts offer the same phones and services for less, and do so without three year lock-ins. The Code will apply in full to any mobile agreement entered into or amended after December 2, 2013. The 2 year contract term limit, however, applies to all service contracts as of today (June 3, 2012). For more information see: https://cippic.ca/Wireless_Code.