Cracking the code


Canada’s wireless policy, like our national digital strategy, has been characterized by inconsistency and uncertainty.

In the past, I have referred to it as Calvinball, from the Calvin and Hobbes comic strip. A game where no one really knows the continually changing rules.

This week’s carrier appeal of the CRTC’s retrospective application of the Wireless Code highlights more of the uncertainty facing the sector as it prepares for “back to school” sales beginning next month.

Consumers and the industry alike don’t really know what the CRTC intended for implementation timing because of imprecise language used in the Wireless Code decision, and the contradictory clarifications [here and here] that have been provided subsequent to the Decision.

A number of carriers have filed with the Federal Court of Appeal because the CRTC appears to be asserting a power to retrospectively apply the Code to contracts that existed before the Decision, contrary to an Opinion that was filed as part of the proceeding that led to the release of the Wireless Code.

Even if an expedited schedule is granted, there is no way for the Federal Court of Appeal to make a determination before the summer is out. Uncertainty is bad for consumers, it is bad for the carriers and it is bad for the economy. It is hardly a satisfactory introduction for the national Wireless Code.

As such, a colleague and I wondered if there may be a solution that could allow the court case to be dropped while achieving most of the consumer objectives.

As I wrote a couple weeks ago, the trouble has been caused by the timing set out by the CRTC in Paragraphs 368 and 369 of the Code:

368. In light of the above, the Commission determines that all aspects of the Wireless Code will take effect on 2 December 2013.

369. The Commission finds that where an obligation relates to a specific contractual relationship between a WSP and a customer, the Wireless Code should apply if the contract is entered into, amended, renewed, or extended on or after 2 December 2013. In addition, in order to ensure that all consumers are covered by the Wireless Code within a reasonable time frame, the Wireless Code should apply to all contracts, no matter when they were entered into, by no later than 3 June 2015.

We wondered what the impact would be of changing the final date in paragraph 369 to 3 June 2016. Superficially, some would say that this provides the wireless carriers with an extra year, but in reality, the change creates the right incentives for the carriers to quickly shift to shorter contracts.

Had the CRTC responded to my June 7 tweet with such an erratum, I wonder if the carriers would have launched their appeal? Contracts entered into after the release of the decision (during the period between 3 June 2013 and 2 December 2013) fall into a grey area that are not as clearly beyond the CRTC’s power to change. Carriers would want to move quickly to shorter schedules for their device subsidies in order to avoid the risk of consumers walking out prior to the device being amortized.

It is a simple change – a single digit – and what is really being lost? Carriers will have the incentive to quickly shift operations to remove 3-year deals well in advance of the 2 December 2013 deadline. Carriers and consumers have the certainty that old contracts stand: a deal is a deal. The government isn’t going to retrospectively apply new rules to old deals. Going forward, from 3 June 2013, deals are being done with the new rules having been published. If carriers don’t want the risk of being left with an unpaid balance, they need to move more quickly to offer shorter amortization schedules, or shorter deals.

Can changing a single digit crack the code? Would the carriers withdraw their motion and focus on introducing innovative new deals for the student market? Would the CRTC consider this a friendly amendment, maintaining the incentives to quickly transition from 3-year contracts?

Scroll to Top