Canada to finally escape telco three-year contract hell

Canada's telecommunication watchdog, the Canadian Radio-television and Telecommunications Commission (CRTC), has issued a new Wireless Code that will come into effect on December 2, 2013.

The code sets out a number of consumer rights that are standard fare in other OECD countries, but the big one for Canadians is the end to the standard three-year contract. The code states that any contracted customer, whether prepaid or post-paid, has the ability "to cancel your contract at no cost after a maximum of two years".

Another big win for Canadians is the ability to have a phone unlocked after 90 days if on contract, or immediately if the phone is purchased outright.

Other rights listed in the code are to have a service suspended at no cost if a handset is lost or stolen; a cool-down period of 15 days to cancel a contract and return a handset at no cost, within certain usage limits; to receive notification of costs for calls, texts, and data usage while internationally roaming; a limit to excess data charges to $50 per month, and international data use to $100 per month; and to pay nothing extra for a service that is described as "unlimited".

Customers will need to be offered a contract written in "plain language" that clearly describes the services received and contains information on when and why extra charges may be incurred. A summary of less than two pages must be available to anyone signing a contract. Any key changes to a contract after it is entered into, for instance a change to pricing and/or duration, are able to be refused by the customer.

Prepaid users also gain a minimum seven-day period of grace to recharge a prepaid balance without losing the account's balance.

However, the new Wireless Code is not retrospective, and will only affect contracts signed after December 2.

"The Wireless Code will contribute to a more dynamic marketplace by making it possible for Canadians to discuss their needs with service providers at least every two years," chairman of the CRTC, Jean-Pierre Blais, said in a statement. "The Wireless Code is a tool that will empower consumers and help them make informed choices about the service options that best meet their needs. To make the most of this tool, consumers also have a responsibility to educate themselves."

The industry association for Canada's telco companies, the Canadian Wireless Telecommunications Association (CWTA), said in a statement that the new code would cause "major technology development and costs associated with implementing and complying with the new code".

The CWTA said that the move to two-year contracts would limit consumer choice, and could make the upfront purchase of a handset more expensive.

The CBC is reporting that one of Canada's big telcos, Rogers, is claiming that the changes could take up to 18 months to implement, rather than the six months that the CRTC has given the telcos to comply in.