TORONTO – A group of Canadian telcos, including Rogers, Bell, and Telus, have filed a court motion seeking leave to appeal from certain sections of the CRTC’s wireless code they say are unclear about when the code actually comes into effect.
In a motion filed by the Big Three, along with MTS Inc., NorthernTel, SaskTel, Télébec, and Société en Commandite, the companies contend that the CRTC overstepped its jurisdiction by attempting to make the code “retrospectively applicable” to wireless contracts that were created before the code comes into effect on December 2, 2013.
The new code, released June 3, states that customers may cancel a contract before the end of the commitment period without any penalty other than an established, clear, early cancellation fee. For wireless contracts that include a subsidized smartphone, the early cancellation fee must not exceed the value of the device subsidy, and must be paid in full within two years. The code is supposed to apply to all wireless contracts by June 3, 2015.
What’s unclear, argue the providers, is whether or not the code also applies to contracts that are signed before December 2, 2013 and if the conditions within those contracts are enforceable if they expire after the June 3, 2015 deadline.
The confusion stems from the somewhat ambiguous wording of two paragraphs of the Wireless Code; which states that “all aspects of the Wireless Code will take effect on 2 December 2013” in one paragraph, and uses the word “should” in the next paragraph, stating: “…in order to ensure that all consumers are covered by the Wireless Code within a reasonable time frame, the Wireless Code should apply to all contracts, no matter when they were entered into, by no later than 3 June 2015.”
The providers are concerned they may be unable to recoup the entire costs of the device subsidy for contracts expiring after June 3, 2015. For providers that continue to provide three-year fixed-term contracts before December 2, the companies argue in their legal brief that, “This uncertainty has led and will lead to confusion in the marketplace, which is especially problematic given that the industry’s two busiest sales periods, the back-to-school period and the pre-holiday period, are only two and four months away.”
Staff at the Commission have further exacerbated the issue by issuing “inconsistent positions” on the matter. A June 6 posting on Twitter by CRTC staff stated: “CRTC provides clarifications about wireless code: it does not apply to contracts signed before Dec. 2, 2013.”
Then, a June 18 letter from the CRTC’s chief consumer officer Barbara Motzney to CWTA president Bernard Lord indicates the final June 3, 2015 implementation date is “mandatory” but doesn’t clearly indicate if that applied to contracts signed before December 2, 2013.
Motzney’s letter also states that the CRTC, through its deliberations, determined that approximately 80% of contracts would be covered by the code by June 3, 2015 – which the wireless providers argue means that potentially 20% of wireless customers – amounting to “millions of customers across Canada” – would have contracts signed pre-Dec.2 that would not have expired by June 3, 2015.
The providers want to put the matter before the Federal Court of Appeal to make the final decision as to “whether the Wireless Code will apply as of June 3, 2015 to contracts entered into before the Code comes into force.”
Advocacy group OpenMedia.ca says the providers’ court motion is merely an attempt to delay new rules from being implemented until for another four years.
“After vigilance by Canadians of all walks of life policy-makers are finally starting to fix our broken telecom market. The old giant telecom providers had a chance to listen but instead they’re taking Canadians to court with hopes to delay safeguards until nearly 2017,” said OpenMedia.ca executive director Steve Anderson in a statement.
The providers’ appeal, filed by Torys LLP law firm in Toronto, is asking the courts for an expedited process to help reduce marketplace “uncertainty” created by the code decision.
