Federal appeals court denies carriers’ Wireless Code challenge

Blais CRTC

A Federal Appeals Court this week found that the CRTC was within its right to retroactively apply the tenets of the Wireless Code of Conduct to all Canadian wireless customers as of June 3rd, even if those customers’ service providers would lose a portion of revenue. Rogers, Telus, Bell, MTS and SaskTel took the CRTC to court weeks after the Code was announced back in June, 2013.

When the Wireless Code of Conduct came into effect on December 3rd, 2013, it applied only to new contracts going forward, bifurcating the market between those protected under the Code and those who weren’t. In order to ensure that every Canadian was offered the same rights as quickly as possible, the CRTC said that by June 3rd, 2015, all customers would be subject to the Code’s benefits, regardless of when they signed a contract.

According to the legal decision, “The optimum time to make the Code applicable to all contracts is June 3, 2015, which balanced the need for speedy implementation and the costs imposed on the wireless service providers.”

The carriers argued that such a move would create loopholes in a system of clear contracts, where before the Wireless Code cancellation fees were not directly correlated with the cost of a smartphone, and after it was. The Wireless Code states that a cancellation fee must be zero by the 24-month mark, and that it must be reduced in equal parts every month based on the inducement cost of the smartphone.

The court said that it was reasonable for the CRTC to retrospectively apply the Code to all Canadians by June 3rd, as not doing so “could be considered undue discrimination.” The case takes into account the CRTC’s right to regulate the Canadian telecommunications industry in order to “enable consumers to make informed choices in the competitive market [that] will contribute to making that market even more competitive.”

In the run-up to the decision, carriers have been incentivizing customers to re-sign two-year contracts, or remain on existing ones, with offers of free data, long distance, and discounted phones.

OpenMedia, one of the organizations that contributed to the various hearings held by the CRTC in the run-up to the Wireless Code’s implementation, said in a statement, “This is a great victory for Canadians, and sets a strong precedent for the CRTC’s ability to stand up for great choice and affordability in Canada’s telecom market.”

Rogers, Telus and Bell have said that they will honour court’s decision.


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