Canadian COMPETITION LAW

January 28, 2013

Earlier today, the CRTC published its anticipated draft Wireless Code, which will be subject to public comments until February 15, 2013 (see: Help Develop a Wireless Code).  According to the CRTC, it has received 3,500 written comments and about 600 online comments, which were reviewed in preparing the new draft Code.  This second phase of public comments will also include a public hearing to be held from February 11^th to 15^th in Gatineau.

In making the announcement CRTC Chairman Jean-Pierre Blais said:

“I would like to thank Canadians for having shared their candid views on wireless services. … The draft code is still very much a work in progress and intended to encourage more discussion.  We are inviting Canadians to participate by telling us what they think of the working document.  Once finalized, the wireless code will enable them to make informed decisions in a competitive marketplace.”

The draft Code has arisen as a result of growing consumer frustration with wireless contracts, terms of service, fees and disclosure, as well as a desire by industry members to have a single federal code, rather than multiple provincial regimes.

The draft Code addresses major topics including enforcement, contracts, fees (clarity of advertised prices, additional fees, etc.), repairs, unlocking devices and loss/theft.  Some of the aspects of the new draft Code that caught my eye, which according to the CRTC is only “intended to stimulate debate and does not constitute a preliminary view” by the CRTC, include:

1.  Conflict provisions benefiting consumers (i.e., contemplating that the new Code will co-exist with existing provincial legislation with consumers having the benefit of the most consumer-favorable provisions).

2.  Cancellation rights for contracts agreed to by phone or online (allowing consumers to cancel agreements without penalties where they have not either received a copy of the contract or written terms conflict with phone/online sales terms).

3.  Penalties that may include explanations/apologies for consumers, undertakings to take steps (or stop conduct) and monetary penalties of up to $5,000.

4.  Requiring contracts to be written in plain language with mandatory terms (e.g., detailed monthly service costs, device costs, one-time costs, payment terms and cancellation/renewal terms).

5.  Contract cancellation rights, including the right to cancel service at any time with notice, with only specified early termination fees (with the draft Code setting out several options).

6.  Terms requiring increased clarity for wireless pricing, including total monthly fees (and whether taxes and government fees are included), a prohibition on charges for services not expressly purchased, and disclosure of any limitations on “unlimited” plans.

7.  Notification obligations on carriers to notify consumers of impending additional fees in some cases (for limited usage plans).

8.  Tools to allow consumers to cap monthly bills and restrict features on request at no additional charge.

9.  Options for consumers to unlock wireless devices (making a distinction between subsidized and non-subsidized plans).

For copies of the CRTC news release and draft code see: here and here.

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