Winnipeg Free Press - PRINT EDITION

Telecoms challenge part of new CRTC rules

Fear retroactive effect on millions of deals

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MONTREAL -- Canada's major telecom companies are challenging part of the CRTC's new wireless code of conduct, saying it would affect millions of three-year cellphone contracts retroactively.

Rogers, Bell, Telus, SaskTel, Manitoba Telecom Services and others say the code would retroactively apply to three-year contracts signed before it comes into effect on Dec. 2.

They say that would include this year's busy back-to-school and pre-holiday sales.

The telecom companies said Wednesday the result will be confusion for carriers and consumers and have turned to the Federal Court of Appeal to resolve the issue.

"Wireless service providers that continue to offer three-year fixed-term contracts with a heavily subsidized device do not know whether these customers will be entitled to cancel those contracts after two years starting June 3, 2015, without repaying the unpaid portion of their device subsidy," the telecom companies said in their legal brief seeking leave to appeal that part of the code.

The sticking point for the companies is the subsidy on a device, usually an expensive smartphone that can cost as much as $700, customers receive when they agree to a three-year contract.

"The application of the wireless code to those contracts that terminate after 3 June 2015 is uncertain," the companies said in their brief.

The CRTC has said the "wireless code should apply to all contracts, no matter when they were entered into, by no later than (June 3) 2015," the brief said.

The Canadian Radio-television and Telecommunications Commission said it had no comment on Wednesday since the matter is now before the courts.

Under the new rules the CRTC unveiled last month, cellphone customers will be able to walk away from their contracts after two years without any early-cancellation penalties.

The CRTC ruled early-cancellation fees must not exceed the value of a device subsidy and must be gradually eliminated over 24 months.

But the telecom companies note the CRTC through its staff members has taken "inconsistent positions" on whether the code applies on a mandatory basis to contracts signed before Dec. 2.

Telus spokesman Shawn Hall said changing contracts that have already been signed by consumers is a "troublesome precedent" and the company has been unable to get a firm answer from the CRTC on whether its decision is retroactive.

"So we are seeking clarity from the courts," Hall said.

"We support the code and are actively working to implement the code, but we're concerned about this one aspect of it."

Advocacy group OpenMedia.ca said the code should be applied retroactively and Canadians will be upset otherwise.

 

-- The Canadian Press

Republished from the Winnipeg Free Press print edition July 4, 2013 A14

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