Carriers seek to overturn CRTC code

Wireless carriers want to overturn parts of a new consumer code for mobile phone service introduced last month by the Canadian Radio-television and Telecommunications Commission (CRTC).

In a motion filed with the Federal Court of Appeals, Rogers Communications, BCE Inc., Telus Communications and other wireless service providers including Manitoba Telecom Services, Northern Tel and Saskatchewan Telecommunications sought clarification of the code.
The carriers said the code was retroactive in that it would allow customers to terminate their three-year phone contracts even if they were signed even before the new rules come into force in December 2.

The CRTC, earlier this year, held public consultations in which it asked consumers to air their views about cellphone service in the country. User mentioned a lot of issues but mainly focused on high cost of services, fees and contract. In June, the CRTC announced new measures which included putting a cap on roaming charges and other fees charged by the carriers and allowing customers to switch from three-year wireless contract to shorter one without any penalties.

The new code would take effect December 2 and its provision will to all wireless contracts by June 3, 2015, the CRTC said.

In carriers filing, John Meldrum, vice-president of regulatory affairs for SaskTel, said the wording of the code was ambiguous. He said service providers that continue to offer three-year contracts with devices they subsidize for about $500 each and yet they do not know if customers will be entitled to cancel these contracts after two years without repaying the unpaid portion of the contract.

A “troublesome precedent” would be set if the CRTC is allowed to change contracts “retroactively,” according to Shawn Hall, spokesperson for Telus.

Michael Geist, University of Ottawa law professor and privacy and consumer advocate, noted that telecom providers appear to have “changed their tune” about the code.

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“Now the major telecom companies are preparing a lawsuit challenging the rules associated with the implementation of the code,” he wrote in his blog. “…Yet during the wireless hearings, some telcos assured the CRTC that customers would benefit from the code within two years.”

For example, he said, Sasktel told the commission its customers upgrade their devices roughly a year and a half after signing their initial contract. The company said it actually introduced a device upgrade program in October last year which allows customers to upgrade their device at any time since its records show that customers were upgrading after about 17.5 months.

Geist cited transcripts of CRTC proceedings where representatives from wireless companies admitting that many of their customers were opting out of their three-year contracts in order to upgrade to newer devices.

“The telcos provided confidential data to the CRTC that may have backtracked somewhat on this timeline, but what is clear is that many still want to lock-in as many Canadians as possible under three-year contracts,” said Geist.

He said that while the CRTC may have expected carriers to adopt the two-year contracts readily, many telcos are likely to stick with the longer contracts through the back-to-school and Christmas seasons as they continue to challenge the new code.

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