Wireless providers to challenge aspects of the CRTC’s Wireless Code as they relate to retroactive contracts

Daniel Bader

July 3, 2013 10:03 am

crtciamge
Major wireless providers such as Rogers, Bell, TELUS, SaskTel and others are challenging the CRTC’s Wireless Code of Conduct as it relates to retroactive contracts signed between June 3rd and December 2nd, 2013. The latter date aligns with the beginning of the Wireless Code rules; the former is 24 months before approximately 80% of wireless contracts are expected to be under the authority of the Code.

The issue at hand is one largely of ambiguous language: the CRTC wants all carriers to begin implementing aspects of the Code before December 2nd, and be completely up to speed thereafter. But the period between now (or June 3rd) and December 2nd is one of flux, as after June 3rd, 2015 most customers should be able to cancel their wireless services without penalty. Wireless providers fear that if they sign a customer to a three-year term before December 2nd, and are forced to allow him or her to cancel without penalty before the term has ended they will be unable to successfully recuperate the device subsidy.

According to Telecom Trends’ Mark Goldberg, there is plenty of legal precedent in favour of the wireless carriers here, so the group is likely to win the appeal and, conversely, prevent the CRTC from retroactively applying the Code to contracts signed between June 3rd and December 2nd of this year.

The CWTA had asked for clarification about the Code’s language — the document itself, in paragraph 369, says enforcement “should” be in effect by June 3rd, 2015, not “must” or “shall” — and received a letter from the CRTC’s Chief Consumer Officer, Barbara Motzney, offering examples of how a provider would recuperate a device subsidy through early cancellation fees if a contract was signed in April 2013 or October 2013. Based on the opinion of Ms. Motzney, contracts signed after June 3rd of this year will  hit the 24 month mark on the day the Code claims all contracts must come under its influence, and “would be contrary to the spirit of the Code and the development of a more dynamic marketplace.”

The appeal is set to be submitted today, and due to the immediacy of its potential effects, the appellants are asking for an expedited process.

Source: Vaxination (PDF)
Via: Telecom Trends, The Globe & Mail

  • Squint

    Get the picture Telcoms… it’s their way of saying, “Start giving out max of 2 year contracts”, just like in the US.

  • AllanVS

    Today … is July 3rd, not June 3rd.
    1st Sentence makes it seem like you’re meaning June 3rd 2013 and December 2nd 2013. while later on, you mention June 3rd 2015.
    You should clean up the ambiguous language in the article, before posting.

    • Derrick P.

      Why don’t you give the article another read there!!!! June 3rd was when this judgment was passed and they are saying that effective June 3rd through to December 2nd any new contract signed would be considered a 2 year and as of June 3, 2015 (2 Years) they can cancel their contract without penalties. The big 3 are appealing this.

      Go ahead, read it again and read it slowly, maybe you will get it the second time.

  • Frank

    Oh no, poor Robellus & Company… how could they ever recoup all these losses? :'(

  • rgl168

    The full set of documents are here: goo[dot]gl[slash]QLDqM

  • Sweet

    In that case, don’t offer phone subsidies. Charge full price for the phones, offer financing plans for the phones, and offer service subsidies such as, give the first X months free or at a significantly reduced rate.

    Charging full price for the phones will allow independent retailers to enter the market and offer the phones to everyone (not just new customers) at market prices, as what has happened with laptops, desktops and TVs.

    Offering service subsidies puts the carriers in line with other service businesses like ISPs, who give you reduced service rates the longer you commit to their service.

    • kroms

      Agreed. People are better off PAYING Full price for the phones.

      Sadly Most people are just not bright enough.
      Contracts for mobile phones should be banned all together. People in Europe Laugh at us , and they should.

    • GONINSANE

      Problem is that not everyone has $500+ to immediately drop on a smartphone. I do agree that its cheaper in the long run, but its a lot to drop that kinda cash on a 5inch device.

    • Sweet

      Top-of-the-line smartphones are not the only smartphones on the market. A brand new smartphone can be had for $150. If that’s too expensive, then they can always buy refurbished ones or even used phones. Unfortunately, most people seem to think of the flagship phones as the only smartphones or the market. If they bothered shopping, they’d see there are options for all budgets.

    • hrmm

      Can someone explain to me why it’s cheaper to buy a phone out right vs a term?

    • Guest

      The Big 3 give you a 10% discount on your monthly bills if you use an unsubsidized phone. It doesn’t guarantee that it will be cheaper than buying a subsidized phone with a contract, though.

    • hrmm

      Ok so let’s use arguably the most popular smartphone on the market as an example iPhone 5. I’m a smart shopper so rather then pay the 699 for the phone out right at Rogers I find one online still in the box for $550. So comparing to signing up on a three year for $179 I spent an extra $371 for a 10% discount so over 36 months on my $65 plan I save $234. Unless I have a $103 plan this cost me money. How is this cheaper?

    • Sweet

      The Big 3 give you a 10% discount on your monthly bills if you use an unsubsidized phone. It doesn’t guarantee that it will be cheaper than buying a subsidized phone with a contract, though, since it depends on how much of a subsidy you get and how big your monthly bill is.

    • Josh Brown

      It guarantees that it won’t be cheaper. If your plan is $60 or $70 a mth than your savings are $6 or $7 a mth. A phone subsidy is $500 -$450 that works out to be $12-13.50 a mth. now if you happen to get a new phone after 24 months then it is $20 a mth discount, 3 times what the 10% discount is. Does not pay to take the discount. You will maybe save $250 over 36 months not even the cost of a nexus 4. So the 10% is better than a kick in the head but not much better. You are better to get a brand new phone for $0 unless you are not going to have a phone sometime in the future.

    • Guest

      Well hrmm, First of all, all phones are so overpriced.
      But the companies say “hey you can get this S3 for $50″ which is
      normally $650. So they take the $50 out
      of the $650 leaving you with a device balance of $600, then you divide that by
      the length of your contract ($600/36 = $16.68) and this is the amount that they
      “take” to pay off the device balance.
      Now if you want to cancel your plan most places will charge you the
      remainder of the device balance plus an early cancellation fee anywhere between
      $10-$50.

      Simply put:

      Buy the phone outright

      $650 Plus Taxes

      Cancel a subsidized phone:

      $650 + Cancelation Fees + Tax + Bill depending on where you
      are at with your billing cycle. They
      usually charge you an extra month.

      Telus in AB for example.

      $650 + $50 = $700 x 5% GST
      = $735 + (Plan Avg $65 + GST = 68.25) = $803

    • Josh Brown

      So in example A) you are saving 16.68 a month.
      in example B) You save nothing.
      I will choose to save $16 a month thank you.

      Plus if you can get them to upgrade at 24 months you save $20 a month.
      Rogers Cancellation fee is only $12.50

      Plus are you ever not going to have a cell phone?

    • Derrick P.

      Probably not haha. Its just my personal preference i guess, I don’t like to be locked into a lengthy contract by the big 3. I can buy a phone outright and leave at anytime. That’s better than having to figure out how to pay hundreds of dollars if i want to leave or switch.

    • hrmm

      But the point is you pay $500+ for a phone outright so you have the “option” to leave at anytime. Or you can sign a three year for x amount of months and still cancel anytime you want and you’ll actually save x*device subsidy minus the $12.50 cancelation fee which will soon be gone.

      There is no logic to your point except you like to waste money.

      its not that people don’t have $500 to pay up front it’s they dont want to waste money.

    • Derrick P.

      It’s 50 for telus. I can see your point, and it is valid and i agree that you can save money as long as you stay in the contract for a while. A person like myself that travels a lot would not benefit from signing a 3 year every time and then paying for the cancellation. It would be pointless. I would rather just cancel my MTM plan and then take my phone and get a sim from the carrier i would be using and go from there.

      The only good thing about what the CRTC did was when you buy a phone outright the carrier has to unlock it, or if your in a contract, after 90 days they have to unlock it. That is going to save people even more money.

    • hrmm

      Your right about that tho Roaming sucks and I agree with you there traveling is one thing we canadians have rough. And I work with a telco and I recommend exactly that to most people buy a international sim and go prepaid while you travel or use wifi only devices in hot spots.

      The point I’m trying to make is that people are all up in arms about 3 vs 2 year vs month to month when in the end it doesnt matter. What matters is the overall cost of the hardware, the cost of older hardware (original gnote still $600 wtf)

    • hrmm

      Right but if im paying Rogers for service what does it matter that only 16.68 is taken off my balance? In fact as long as I’m a customer for one month I save money even I i cancel later. And if i need to cancel for moving etc after a year and I pay that fee buy then I still come out ahead cause its 16.68*many months with Rogers.

      Simply put

      It’s people like this that dont fully understand how it works that spread misinformation

    • Derrick P.

      Well every one of the big 3 companies are different. This is what Telus told me when i was getting my phone and i have worked in cell phones for 5 years so i know a little hahahahah.

      I know that $16 comes of your balance which makes it smaller every month but when everything is said an done it is cheaper to just buy that phone outright. Or go online and get one from a second hand dealer.

      I have no sympathy for these big cell phone carriers. They have a lock down on the mobile industry in Canada and we don’t have many choices like people do in the USA or even Europe do. This is why I will not sign a lengthy contract. It’s different for every person as not everyone can just fork out 500+ for a phone.

    • hrmm

      “I know that $16 comes of your balance which makes it smaller every month but when everything is said an done it is cheaper to just buy that phone outright”

      Are you kidding me? If $16 comes off of your device subsidy every month meaning you save $16 a month rather then buying a phone outright. Then you turn around a say its cheaper to by a phone outright. WHAT no its cheaper on a contract cause you still haven’t paid $500 for a phone!

    • Dylan K

      If you wanted to cancel the subsidized phone as soon as you purchased it, sure. Nobody will, most people will have the contract for a bit before cancelling.

      Lets say you cancel a year in, $600/36*24 (24 months left in the term) =$400 + 12.50 + $60 (last months bill) = $472.50.

      Subsidize the phone if you plan on using it for ANY length of time, it’s cheaper overall.

    • Derrick P.

      That’s what i do. I pay full price so that I don’t have to deal with all this 1, 2, 3 year crap.

      People complain about the prices for phones now on a 3 year term and now that they will have to be 2 year terms prices are just going to go up. Just pay the extra 200 and don’t sign a contract.

    • hrmm

      But if your going to be with the provider for two years whats the point? I’m seriously trying to figure out why you think thats better? Do you save money? Get a phone with lasers what is it that makes people think buying a phone outright is better?

    • Deli

      Calculations would probably work out that buying on contract (especially when the 2-year contracts start) work out better with the Big 3. But if you’re on the budget-brands, calculations get a bit different. Another food for thought, network coverage/quality matter.

    • hrmm

      Your right outside the Big three I guess it does come out differently. And you right the difference is coverage/quality. But I don’t seem to get is why everyone (ok most) people seems to think three years terms are bad. With flex tabs you 90% of the time come out ahead. I agree cost of older phone need to come down over time to refect the changing tech but three years doesnt really mater.

    • Sweet

      The most popular reason I’ve heard as to why people hate 3-year contracts is that the phones don’t last 3 years (which I don’t believe, even though my Z10 just died after 2 months :-) or that the customer wants to change phones after 2 years, and in order to get a new phone they have to re-sign a new contract.

      IMO, the criticisms against 3-year contracts have been overblown, especially now that the carriers changed their terms so that a customer can bail out of a contract at any time, paying only the remaining subsidy and a small cancellation fee. It seems to me that the people who are most vocal against 3-year contracts are the same people who know the least about the carriers’ contract cancellation terms.

    • Guest

      I completely agree with you the problem is that the majority of people who dont understand are the ones complaining to the CTRC about it and contributing the this lawsuit have no idea how it works now or how things would change to 2 year contracts and its going to f**k things up even further. Don’t want to pay $179 on a three year for an iPhone have fun paying $329 on a two year!

      Drives me crazy.

    • hrmm

      I agree but these people who don’t understand how it works are the majority and they are the ones complaining to the CTRC about it or are contributing to this lawsuit about three year contracts. What? you don’t like paying $179 for an iPhone on a three year? Have fun paying $329 for a 2 year.

      Drives me crazy.

      To get on to the CTRC to registrar a complaint for complain to this lawsuit thing you should have to do a quiz or atleast calculate your device subsidy or flex tab.

    • Sweet

      LOL ! “In order to file a complaint, you must first answer this skill-testing question: …”. I love it ! You’re absolutely right.

    • Derrick P.

      Holy Simmer Down!!!!!!! I travel lots for work! Out of the country. Why the hell would i sign a 3 year term then cancel 3 months down the road, and then when i get back sign up again to get a new phone that is LOCKED!!!!!!!!!!!! It doesn’t make sense. Not everyone is going to agree on everything, i can see you are hard headed and that nothing will get though your thick skull so conversation is done.

      GUYS HRMM SAYS SIGN SIGN SIGN…..HE IS ALWAYS RIGHT SO BUY A CONTRACT ALL THE TIME!!!! REGARDLESS OF YOUR LIFESTYLE!

    • hrmm

      Look at my response above! And ya I am “hard headed” on this. I’m tired of people screaming three year contracts are horrible and not understanding the other issues above. And in your case depending on the frequency of your travel there are other options then the big 3 for people who travel but your right you fall into the 3% of users who need to get out of a contract but in most people cases they cancel and pay there flex tab as soon as they need to travel.

      So in the end my bad if my comments drove you to the caps lock.

      edit: actually in your case sign the three year save your 3 months of subsidy off the phone, cancel pay your flextab balance (save a little compared to buying outright). Come back sign a new 3 year take your new sealed phone and sell it for close to full value online, let subsidy pay off until you need to travel again, if you dont need to travel for awhile you end up making some money cause you still have the original phone you started with.

    • Derrick P.

      Haha

      Good idea hrmm i may try that. Thanks

    • Deli

      Your concerns/statements are legit. However, you have to think of how your lifestyle applies to the vast majority of Canadians who do not travel outside of Canada on a quarterly basis. That’s where CRTC will focus. And if I ran a business, I would base my needs on the vast majority of my potential customer base.

    • Derrick P.

      I couldn’t agree more Deli :)

    • Sweet

      If you’re going to stay with that provider anyways, then you’re better off getting a subsidized phone. It’s only fair that a customer who makes a 2-year commitment gets more benefits than one who commits to only one month at a time. That’s how most services that I know of (ISP, satellite, cable, Skype, etc) work: the longer your commitment, the lower your monthly rate. That’s fair IMO.

    • Sweet

      I’ve been off contract since 2004. I initially did it because the cancellation fees were super high and I wanted the option to switch carriers on a month’s notice. Also, there were reports that the carriers were limiting the functionality of the phones they sold. I was aware that it would be more expensive, but I figure it was a price I was willing to pay for the freedom.

      Nowadays, I’m still off contract mainly because I want the option to switch carriers at no cost, but also because my preferred carrier (Mobilicity) doesn’t sell subsidized phones, and switching to a carrier that does, would cause my monthly bill to skyrocket. I’m currently paying $30/month for unlimited everything and I get the coverage and speeds that I’m happy with.

    • hrmm

      Have you seen most of the phones they offer tho? The reason they can do this is unlike North America not everyone wants an iPhone or S4 most are happy with old Nokia’s and Razors. So they have to offer more month to month plans to minimize churn which happens so fast its unreal in Europe. If we used their model telcoms would be losing money example Mobilicty/Wind. Not that I care if they lose money but if they did do you think we would have 3G, HSPA+ now LTE if they were constantly losing money?

      Not to mention our model was created the way it was to ensure the telcoms recouped their investments because our infrastructure costs tons more to build. They might laugh at us but considering there using old Nokia’s in a country the size of New Brunswick they can go right ahead.

    • Liberal Phone Person

      Yes! Separate the phone financing from the service. Hell, I’d even be fine with a 3 year financing contract (as an open loan) if it meant the ability to switch service providers etc.

    • Sweet

      The draft version of the wireless code said exactly that: separate phone financing from the service. But somewhere along the line, the CRTC decided to drop it, unfortunately. :-(

    • Josh Brown

      That is what it is if you can pay off the price of the phone any time to get out of your contract that is the same. What we need is for the full price of the phones to get cheaper. So a 1 year old S3 is not $599 mth to mth if that went down to $399 on a 2 year contract then it would be much cheaper to buy out.

    • Sweet

      Alternatively, instead of offering a subsidy/discount that is specific to a phone, the carriers could offer a general discount of the same amount but which the user could choose to apply to the purchase of a phone or towards paying for their service plan.

  • Rich

    Don’t be surprised if your monthly rates go up to US levels.
    Alternatively, your phone expenses, on contract, could go up to WIND pricing.

    • Liberal Phone Person

      As of right now, our monthly plans are very close to American levels. Not scared.

    • Derrick P.

      I hope our plans are more like the US plans hahahaha. My friends plan with sprint is 68.00 and he gets (Unlimited North America calling and text. Unlimited Data, Call Display, V-Mail) Most plans for that up here in Canada you get 1GB of data on no call display or voicemail.

    • Deli

      Mind if you send us a link to which provider is doing that in the US that is NON-retention. Most customers that sign up to a new provider are not entitled to retention deals.
      Furthermore, many unlimited data deals in AT&T and Verizon are grandfathered and if you do an upgrade, you will be forced off those grandfathered plans.

  • Mike

    At the end of the day the wireless providers will be the ones laughing. Jacking up the cost of hardware in store, bringing back activation fees, charging for sim cards, unnecessary cell tower fees…HIGHER RATE PLANS! The wireless providers wont be the ones suffering from this, it will be the consumers and the ones to be thanked for this will be the CRTC

    • kroms

      They can laugh and jack up prices all they want. I purchased my Nexus 4 from Google. $349. Couldn’t be happier. Id rather see ROGERS trying to sell $1000 phones , then the BS they are pulling NOW making people BELIEVE they are getting a free phone when they sign up on a 3yr.

    • hrmm

      Ok.. so you pay $349 for a phone and someone gets a $0 phone and you laughing? I don’t get it fill me in on the punchline? Do you save more a month on your plan then this person? If so is it enough to make up the $349 you spent on a phone probably not. But please why are you laughing?

    • Marc W.

      Obviously because the $0 phone doesn’t actually cost that. Anyone who thinks that the cost if $0 is delusional…..

    • hrmm

      Really? Explain? Facts? Numbers? What does it cost then? Cause you can get a Bold 9900 on a three year for $0 now with no activation fee. So unless you want to show me the fine print were it costs you $400 I’m going to assume your full of it.

      Thanks for contributing to the discussion!

  • Mozes

    That’s all they’re challenging? That’s actually a relief. I expected something much more like a biblical-apocalypse type of response. They seem to be accepting most of the major provisions of the code.

    • Tomb

      Well, they did help write it, so why not.

  • kroms

    I seriously HOPE Roger and the Other Wireless Telco win this.

    Why ? Simply because All you people on these 3 YR contracts are the REASON we in Canada get continuously F%#ked OVER by them over and over all the time.
    ” And will continue to…. ”

    Hate me all you want but Anyone on ROBELLUS Multi year plans are the problem ! Instead of Signing those LONG 3 yr Terms ( of which you end up PAYING MORE not less for the phone ) get a credit card and purchase it and pay it off monthly. It is Amazing how people will agree to be CHAINED up for 3 yrs simply to get a NEW shiny toy.

    Get OFF the multi yr crap and get on a MONTHLY plan…. end of story.

    • its a trap

      The problem is that monthly plans are crap. They’re designed for penny-pinchers. I’m a power user, and I can’t live off of kraft dinner and P&J sandwiches. By the time I build a monthly plan that equals my data and talk requirements it costs more than a three contract. Do a detailed cashflow analysis, you’ll be surprised at the cost of your “freedom”.

    • Josh Brown

      I dont hate you I think you are mentally handy capped. Do you know how much it would cost you to put $699 on a credit card for 36 mths. It would end up costing you an extra $250 in 3 years.

    • Josh Brown

      If you put that on a Credit Card that $700 phone will end up costing you $1000 over 3 years. How do you end up paying more explain it to because you pay way less. $500 off the phone spread over 36 months means you are saving $13 a month if you hardware upgrade after 36 months. If it is 24 months like most people that means you are saving $20 a month. If you take the 10% off on a $70 dollar plan that is only $7 a month. Do the math. Even if you sell the phone on kijiji and pocket the $700 you are away better off.

    • hrmm

      Explain how you pay more for a phone on a three year term? Give me an example, show some numbers?

  • MXH070

    Simple do away with the subsidy and make people pay full price. If you can’t afford the latest phone then get a better job or get what you can afford.

    • Salinger

      Even simpler, do what most of the rest of the world does (aside from us and the U.S.) Have two separate monthly tariffs, one if you take a phone subsidy another (much lower) if you don’t. 10% off for BYOP simply doesn’t cut it.

  • rgl168

    Last night I received some emails with PDF documents attached from a law firm. When I opened them they are legal documents regarding this appeal. I don’t know why they were sent to me initially.

    • silver_arrow

      I also received this email. I think it is because we helped when they were asking for peoples opinions.

    • Sweet

      Are you talking about the CRTC solicitation for input on the wireless draft ? I submitted a couple of comments as well, and received a Thank You e-mail for them, but I have yet to receive any such e-mail about the appeal.

    • silver_arrow

      Yeah that’s what I was talking about and I don’t know that’s just what I thought it was from.

  • astroboy99

    i see nothing wrong with the 3 yr contract. It is not like i am going to be going and changing my cell provider every 2 weeks because.. oh look x has this on sale for 2 days only ohhhhh. I sign a 3 yr deal with Rogers and after 24 mth i can upgrade, works for us. Sure maybe i am in a different situation here in mb because we only have two providers…

    • Tomb

      I am month-to-month with an unlocked pentaband phone.

      Do you want to compare how much money you’ve wasted over 3 years with single company, to how much I have saved by being completely flexible to go where I please?

      ;-)

    • astroboy99

      I haven’t wasted any money. I am using a service regardless so signing a contract is a mute point to me. I don’t have the time or patients to drive to the city every week because someone’s plan is $5 cheaper this month

  • geordan

    Personally ive been disgusted with the length of terms as well as the high service costs.
    All i do is text and use the net.
    Dont even need a phone really, just convenience. So when this contract is done, so am i with all cell phones

  • sicsicpuppy

    CRTC = Blood money.Time to open market

  • Guest

    I got this document last evening via email as well my name was mentioned on the distribution list.

  • Sun Sun

    So, when CRTC made its ruling, it essentially said,

    “here’s a laundry list of changes that need to be made. You have until Dec 2nd to update your systems, contracts, marketing, etc. etc…. oh, btw, this one involving cancellation fee, the greatest pain point, please have it ready for yesterday”

    Ok.