Canada's wireless providers are adjusting to a new reality under the national wireless code, where some customers are free to cancel their cellphone contracts with no financial penalty.
Consumer advocacy group OpenMedia.ca fought against a legal challenge to the wireless code, which applies to all contracts as of Wednesday, and declared the day "Cellphone Freedom Day."
The code, which the Canadian Radio-television and Telecommunications Commission (CRTC) first announced in 2013, contains many customer-protection measures such as the use of plain language and the provision of critical information in bills as well as caps on data overages. But this deadline has attracted a flurry of attention because it states that cancellation fees for ending a contract early must be reduced to zero after no more than 24 months, meaning customers still on three-year contracts can get out of those agreements earlier than expected.
Wireless providers had been preparing for this day for months, offering promotions to try to retain customers and encourage them to renew valuable postpaid contracts as the deadline approached. There are no firm numbers on how many customers this will affect, but an analyst estimate suggests that between 2.2 million and four million subscribers were still on three-year contracts at the end of 2014.
Many of those customers are eligible to take advantage of Wednesday's deadline and in recent weeks there have been reports of confusion about the new rules at the customer-service level at multiple wireless carriers.
"I think people are still not fully informed [about the change]," Kora Martin, a salesperson at a Rogers Communications Inc. retail store in downtown Montreal, said Wednesday. "They are not that aware of this."
Some customers are also weighing whether it makes sense to cancel early or not. Since the wireless code essentially limited contract terms to two years, the carriers have since increased monthly rates, saying they have less time over which to recoup the subsidy they provide upfront on smartphones or other mobile devices.
That means committing to a new two-year term could come with a new smartphone, but it could also come with a more expensive plan.
Hélène R., a researcher who declined to give her full last name, spoke with the Rogers staff in Montreal about her options. In the end, she decided not to upgrade her handset and sign a two-year plan because it would have cost her $70 a month instead of the $60 a month she currently pays.
Her contract, which includes one gigabyte of data a month, expires in November and she said she will hang on to it until then despite the fact that she would not incur a financial penalty to cancel now.
"What this means for those who still have three-year contracts is that, if they signed their contract before 3 June 2013, their cancellation fee will be zero, because the formula requires that it be spread out over a maximum of 24 months," Patricia Valladao, spokeswoman for the CRTC, said in an e-mail last week.
Ms. Valladao added that those who signed a contract between June 3, 2013, and Dec. 2, 2013, when the code first came into force, can still be charged an early cancellation fee. "But it will be calculated according to the wireless code and not their contract, and so it will likely be significantly smaller than it otherwise would have been (because it was likely that their fee would have been calculated over 36 months prior to the code coming into effect for them)," she said.
Several Canadian carriers launched a legal challenge over the code's final deadline, which the CRTC set as June 3, 2015, arguing the deadline would interfere with their previously existing contract rights.
The Federal Court of Appeal dismissed the challenge and the Big Three carriers Rogers, BCE Inc. and Telus Corp. said they do not plan to appeal further. (BCE owns 15 per cent of The Globe and Mail.)
Yet, the court ruling came just two weeks ago and this has left many in the industry scrambling to determine how to handle the deadline.
The Commissioner for Complaints for Telecommunications Services, which is responsible for enforcing the code, released a statement last week on how it would interpret the terms.
"It is another busy day in our call centres and retail outlets, but not unusually so," Telus spokesman Shawn Hall said on Wednesday. BCE and Rogers did not comment specifically on call volume or in-store traffic related to the deadline.
Here are some resources for customers who might be affected by the new rules: