Bottom Line: Help is on its way for consumers who have difficulty with (read 'tear their hair out over') cell phone contracts. While some provinces had already started legislating in this area (each with its own approach), on October 8, 2012, the CRTC announced that it will hold a public hearing on January 28, 2013 to canvass what should be included in a national CRTC code for cell phone contracts. The discussion will no doubt cover what constraints, if any, there should be on penalties for cancelling wireless contracts, and what disclosures should be contained in ads and contracts, among other meaty issues. As for how provincial legislation and the CRTC code will co-exist, that will be a lovely issue for the lawyers.
A FLURRY OF PROVINCIAL LEGISLATION
To rewind a bit, the provinces were first onto this legislative scene, as several have been passing various pieces of consumer protection legislation setting out requirements and restrictions for cell phone contracts. Quebec led the charge back in 2010 with restrictions on automatic renewal of cell phone contracts, mandating written notice of when the contract will expire and requiring certain disclosures in ads.
Not to be outdone, both Manitoba and Newfoundland have passed similar legislation that came into effect September 2012. Among other things, Manitoba is requiring specific disclosures at the beginning of cell phone contracts, setting out cancellation fee caps, and mandating that notice be given of contract expiry or extension. Newfoundland similarly has prescribed disclosures for cell phone contracts and advertising and sets out cancellation fee rules.
Ontario is following suit with the Wireless Services Agreement Act, currently working its way through the Legislature. Unless the Committee makes amendments, the Ontario legislation will require specific disclosures, consumer cancellation rights, and parameters on the advertising of monthly fees.
SO WHO'S ON FIRST?
While the provinces have been busy crafting detailed, yet slightly divergent, consumer protection provisions, there may still be constitutional questions about whether and how they apply to cell phone companies, which fall under exclusive federal jurisdiction. When the CRTC forges ahead with a national code applicable to carriers operating in all provinces, these provincial consumer protection provisions may effectively become moot, to the extent that the CRTC-sanctioned Code mirrors provincial regulation, or be superseded altogether by contradictory federal rules. Great fodder for esoteric discussion, although the uncertainty has not been much fun for cell phone carriers, who have serious concerns about the outcome. We will be monitoring these developments with interest.
To rewind a bit, the provinces were first onto this legislative scene, as several have been passing various pieces of consumer protection legislation setting out requirements and restrictions for cell phone contracts.
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