On September 24, 2013, the Federal Court of Appeal granted a group of carriers leave to appeal a narrow aspect of the Canadian Radio-television and Telecommunications Commission’s (CRTC) Wireless Code Decision. The decision, which was issued by the CRTC on June 2, 2013, establishes a detailed code – called the Wireless Code – applicable to the provision of wireless services to consumer and small business customers by wireless service providers (WSPs). One key aspect of the Wireless Code is the establishment of caps on cancellation fees and the requirement that any such fees must be reduced in equal monthly installments over a period that cannot, in any circumstance, exceed 24 months.

The Wireless Code Decision specifies that the Wireless Code applies to all contracts for the provision of wireless services to consumers and small businesses that are entered into, amended, renewed or extended on or after December 2, 2013. In addition, the Wireless Code Decision states that the Wireless Code will apply to all contracts, regardless of when they were entered into, by no later than June 2, 2015. This means, for example, that a three-year contract entered into in May 2013, before the Wireless Code Decision was released and which would normally run until May 2016, could be terminated by a customer on June 2, 2015 without payment of a cancellation penalty. The appealing carriers sought and obtained leave to appeal this aspect of the decision, on the grounds that the CRTC has no authority to engage in retrospective regulation of contracts that predate the effective date of the Wireless Code.

Other key aspects of the Wireless Code include:

  • Plain language contracts: Contracts must be easy for consumers to read and must address the following key terms: covered services and any limits on their use that could trigger additional fees or overage charges; the minimum monthly charge; the commitment period (or term of the contract); if applicable, any early cancellation fee, the amount by which the early cancellation fee will decrease each month and the date when the cancellation fee becomes zero; if a subsidized device is provided as part of the contract, the retail price for the device, the amount the customer paid for the device, and the fee to unlock the device, if any;

  • Contract amendments: WSPs cannot change key terms of postpaid contracts during the commitment period without express consent from the customer unless the change benefits the customer by reducing the rate for a single service or increasing usage for a single service. Other terms can be amended on 30 days’ notice;

  • Data charges: WSPs must suspend national and international data roaming charges when they reach $100 in a single monthly billing cycle and data overage charges when they reach $50 in a single billing cycle unless, in either case, the customer explicitly agrees to pay the additional charges;

  • Device unlocking: If WSPs provide a locked device as part of a service contract, they must unlock the device or give the customer the means to unlock the device on request at the rate specified in the contract (i) no later than 90 days after the contract start date, if the purchase of the device was subsidized and (ii) immediately, if the purchase of the device was not subsidized;

  • Trial period: WSPs must provide customers with a minimum 15-day trial period for service contracts involving an early cancellation fee, during which the customer can cancel the contract without penalty if the customer has used less than the prescribed usage and the mobile device is returned in near-new condition with original packaging;

  • Top up of pre-paid cards: WSPs must hold a prepaid customer’s account open for a minimum of seven days following the expiry date of an activated card to allow the customer to top up the account and retain the remaining balance on the card.

Regardless of the outcome of the appeal, the Wireless Code contains significant new regulatory requirements that will govern all consumer and small business wireless service contracts entered into beginning December 2, 2013.