updated 07:20 pm EDT, Mon June 3, 2013
New consumer bill of rights cuts contracts from three to two years
The supervisory Canadian Radio-television and Telecommunications Commission (CRTC) unveiled a new code of conduct for wireless providers, which (among other things) allows customers to cancel wireless contracts after two years, similar to US contracts, without cancellation penalties. Other notable changes include caps on roaming charges with a corresponding cessation of service, and the ability of the consumer to request a subsidized phone's unlock after three months as a customer in good standing.
The bill of rights in full call for users to be able to cancel contracts at no cost after two years, a 15-day grace period for consumers after purchase to return the phone if dissatisfied with service, to have the phone unlocked after 90 days, to allow for suspension of service if a device is stolen, to be provided contract explanations in plain language, the aforementioned caps on roaming service, to pay no extra charges for "unlimited" service, and to prevent wholesale changes of contracts by the carrier including provided services.
Generally speaking, consumers' response has been positive. However, Ken Engelhart, head of regulatory affairs at Canadian wireless provider Rogers said of the code of conduct that "I wonder if they made a mistake getting rid of the three-year contract. There was a lot of evidence at the hearings that this might mean that people make bigger upfront payments because they get smaller subsidies. The CRTC doesn't seem to think that will happen, but time will tell. The Competition Bureau gets mad at me when I make price signals to reporters, but logic would dictate that when you have a smaller period to amortize that subsidy, you're not going to have such a big subsidy."
Englehart offered no explanation of how US carriers are able to amortize their subsidies in two years and reap enormous profits doing so. The three-year contract that was standard for Canadians was one of the longest such terms in the world.