Some wireless carriers are planning to challenge parts of the federal telecom regulator's new wireless code.
BCE Inc., Rogers Communications Inc., Telus Corp., SaskTel and MTS are among a group of carriers that is poised to file a motion with the Federal Court of Appeal, as early as Wednesday, seeking leave to appeal from certain facets of the CRTC's wireless code.
Specifically, the carriers appear to take issue with measures that give the code "retrospective application" to wireless contracts signed before the code is due to come into force, according to a notice of motion and other legal documents obtained by The Globe and Mail. The filings, which have not yet been submitted to the court, were prepared by the applicants' lawyers at Torys LLP.
On June 3, the Canadian Radio-television and Telecommunications Commission unveiled the final version of its consumer code for the $19-billion wireless industry. Its centrepiece was a new measure that will allow Canadians to cancel their cellphone contracts after two years without incurring cancellation fees – a move that effectively spells the death of the three-year contract.
Under the new rules, consumers who sign a contract would pay the full cost of their handset within two years. At the time, the CRTC said the code, which was not intended to be retroactive, would take effect on Dec. 2, 2013. It also noted the code's provisions would apply to all wireless contracts no later than June 3, 2015.
But the applicants say some three-year contracts, especially those signed before December of this year (such as in the upcoming back-to-school season), would only expire after June 3, 2015. And they argue the code should not "override significant terms of these pre-existing contracts," according to their motion.
Their main concern is the inability of carriers to recover the entire device subsidy from consumers whose contracts expire after June 3, 2015.
"The CRTC exceeded its jurisdiction and erred in law by purporting to render the Wireless Code retrospectively applicable to contracts entered into between wireless service providers and their customers before the Wireless Code comes into force on 2 December 2013," the applicants argue in the notice of motion.
That document names a slew of respondents, including new entrant carriers, consumer groups, the Competition Bureau of Canada and numerous individuals who participated in the CRTC's public hearings.
"The application of the Wireless Code to those contracts that terminate after 3 June 2015 is uncertain. This uncertainty has led and will lead to confusion in the marketplace, which will only be resolved once this motion is determined and, if leave to appeal is granted, the appeal is heard and a decision is rendered," the document adds.
The code's other measures, meanwhile, would force carriers to cap extra charges for data usage and international roaming and unlock smartphones after 90 days.
"It will make for a more dynamic marketplace," said CRTC chairman Jean-Pierre Blais in an interview following the code's release. "So, at least every two years, there is a rendezvous – an opportunity – for consumers to either re-sign with their existing carrier or look what is available across the street."
(BCE owns a 15-per-cent stake in The Globe and Mail.)