Wireless code should apply to existing contracts: Mobilicity

The CRTC’s proposed wireless code of conduct should be applied “retroactively” to customers who are already under contract when the code comes into place, new entrant carrier DAVE Wireless Inc. said Wednesday. “The federal wireless code must apply retroactively to all new and existing contracts for post-paid wireless service contracts, and all new and existing contracts for prepaid wireless service to the extent applicable,” Anthony Booth, chief customer officer of DAVE’s wireless brand, Mobilicity, said during the third day of CRTC hearings to establish the code. “The issue of when the wireless code should apply to Canadian consumers is just as important as its content.” Incumbent carriers Telus Corp. and Rogers Communications Inc. both said Tuesday that the commission’s code, when implemented, should only apply on a “prospective” or “going-forward” basis, and should not be applicable to customers who are already under contract. Ted Woodhead, Telus’ senior vice-president of federal government and regulatory affairs, said a retroactive application of the code would cause the company legal and technical problems as many of its contracts with customers were entered into before the code was even conceived. “For older contracts we wouldn't be able to properly calculate what the device balance is because we wouldn't have that information,” he said in reference to a proposed condition that carriers clearly define how much of a customer’s monthly bill is applied to paying off a device subsidy. “We would have to go back and re-sign every single one of our customers who would fall into that category ... Those are two very large operational issues.” Dave Fuller, Telus’ chief marketing officer, said other provisions included in a draft code the commission issued last month would also cause carriers problems if applied retroactively, including one that would require them to “unlock” phones to enable them to operate on other companies’ networks. “We still have a significant number of CDMA phones in our base,” he said. "It's actually impossible to unlock a CDMA phone.” Ken Engelhart, Rogers’ senior vice-president of regulatory affairs, said that applying the code retroactively would cause “an IT nightmare.” BCE Inc., which appeared briefly Wednesday before the hearings broke for the evening, and which will be back before commissioners to answer questions Thursday, said the CRTC does not have the legal jurisdiction to impose regulations retroactively. “From a legal perspective, we don’t believe the commission has the authority to change existing contracts,” said Jonathan Daniels, vice-president of regulatory law. “The rationale is straightforward, without the express authority from Parliament to make retrospective orders, the CRTC could not legally apply the code retrospectively. The Telecommunications Act contains no such authority.” Daniels said carriers would automatically implement some aspects of the code across their entire subscriber base as soon as they are required to avail those protections or services to new customers. He said it would not make sense for carriers to offer certain services to only some of their subscribers, such as one proposed service that would require carriers to send customers text message notifications when they are about to incur roaming charges. “But that is a different matter than having the code apply retrospectively as a matter of law,” he said. Unlike the incumbents, Mobilicity does not sign its customers to long-term contracts. The company, which launched in 2010, currently has coverage in Vancouver, Edmonton, Calgary, Toronto and Ottawa. Gary Wong, the company’s director of legal affairs, said carriers would rush to sign customers to long-term contracts before the code’s release if it is not going to be applied on a retroactive basis. “If the code applies only to new contracts or renewed contracts up to the effective date of the code, there will be promotions to try to attract consumers to sign up to longer-term contracts to delay the application of the code.” He said the company would like to see each of the carriers submit to the commission the number of customers they had under contract as of October 2012. “In general, we support that when the code comes into effect, it really should have the most affect on the most consumers,” Wong said. “Quite frankly, consumers have waited long enough for this code and for consumer protection, and to have it come into effect and not affect a lot of already in-contract consumers is something that could be disappointing to some consumers.” —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Danika Grenier at dgrenier@thewirereport.ca

Wireless code should apply to existing contracts: Mobilicity

News | February 13, 2013

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