Editor’s note: Updated with comments from Rogers Communications at 2:37 PM ET.

After hearing from the public in an online consultation last year and a public hearing in February, the Canadian Radio-television Telecommunications Commission (CRTC) has issued its plans for a wireless code that governs contracts between wireless service providers and their customers.

The code takes effect beginning Dec. 2 for cell phones and other personal mobile devices sold in Canada. Perhaps the biggest change to the Canadian wireless landscape is a new two-year term limit for contracts. Right now, the norm is a three-year contract for most Canadian carriers – incenting subscribers to sign on for the long contracts with subsidies on expensive smartphones. But under the new code, consumers will be able to cancel their contracts after two years without a penalty – whether they have a subsidized smartphone or not.

The wireless code also will put these changes into effect:

  • Put a cap on excess data charges at $50 per month for over-usage, and $100 per month for international data roaming charges.
  • Have a cell phone unlocked to use with other carriers after 90 days, or immediately if the device is bought out-right.
  • Return a cellphone within 15 days and certain usage limits if unhappy with service.
  • Consumers may accept or decline changes to the key terms of a fixed-term contract.
  • Consumers will receive a contract that is easy to read and understand.

Ken Engelhart, Rogers Communications’ senior vice-president of regulatory affairs, said the carrier’s biggest concern is will it have its IT systems changed it time to meet the CTRC’s required change limiting contracts for small businesses and consumers.

He also wondered if new entrants, who have praised the commission’s ruling, realize that the new rules will impact them. New entrants like Wind and Mobilicity allow their subscribers to run a tab of up to four years to pay off the remainder of the price of a handset (after a deposit has been paid). Starting in December that term will have to fall to two years, Engelhart said, just like other carriers have to stop offering three year plans.

Otherwise, he said, the CRTC policy is good for consumers and small businesses. “It will make them happier with their wireless service.” But, he noted, most carriers have already changed their contracts to comply with Quebec legislation allowing consumers to cancel a contract at any time, pay off the amortized portion of the cost of the handset and have it unlocked.

The CRTC says its consultation attracted more than 5,000 participants. The idea for the code was hatched after the CRTC observed wireless services were drawing more complaints than any other service via the Commissioner for Complaints for Telecommunications Services (CCTS).

Contract length was the most popular complaint of online submissions to the CRTC consultation. Many consumers expressed that 36 months was too long a period given the quick product cycle of new smartphone releases now, and that a 24 month term would be a better maximum limit as is done in other countries.

Contract disputes were also the bulk of disputes filed by small and mid-sized businesses with the CCTS for 2012, an exclusive ITBusiness.ca report shows.

With notes from Howard Solomon.

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  • Bill___A

    I am wondering why everyone refers to a “cap” on usage charged for data and roaming. It seems there is no restriction on the rate – merely that they are required to check with you once you have reached these levels and you have to approve before further data is charged.

    I have seen some UK providers cap usage charges when roaming. They don’t charge you more than a certain amount per day, regardless of usage. We do not have that – we merely have the carriers charging us a lot of money to roam and gaining approval before they continue.
    Although roaming rates have come down a lot, they are still unrealistically high and the true solution is to regulate the rates. If they say it is out of control, perhaps a start will be regulating the rates they charge other carriers so that the other carriers can do so in return.

  • BetaTesterNumber1

    It’s not clear whether cancellation fees includes subsidized smartphones. All it says is no cancellation fees for the service contract, but it doesn’t say anything the residual value of, say a 300$ phone over 3 years, would still leave a 100$ fee to pay for the rest of a borrowed phone.

  • gisabun

    Only big disappointments is that it takes affect in 6 months and dropping the contract to two years will mean higher cell phone costs. Gone are the days of a phone for $0 unless really old stock.
    @Bill___A : I think the ‘cap” will be inforced in a way such that as you reach the cap, you will need to contact your provider to go over [if i read right]. My ISP allows me the option to send me Emails when I get close to my Internet quota but I can still go over. As i get close to my contract’s month end, I’m always looking at my totals. I would prefer a maximum per month than per day. What if it is a busy day and you need to grab documents from the office. Half way through, you get a message that you reached the daily quota and are cut off.

  • vyengr

    IMHO if anyone thinks this will lower their phone bill they are probably either in a very tiny minority or just outright dreaming. This is a typical political move and the CRTC and the politicians will be so very proud of what has been done but it does almost nothing to end the gouging of cell phone users in Canada.

  • Brad

    Unfortunately the data charge rules come in a little late for me also, I used 326mb data roaming in the USA and Bell gave me a bill for $2100. I wasn’t aware that I was racking up such a huge expense just using Google maps. I phoned them 4 times and got the bill reduced to $1000 which is still too much. And they want it paid to them by the end of the month. Bell is not a moral company, they are all about the money.