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CRTC chairman tweets on wireless code launch

GATINEAU, Que. - The head of the CRTC held his first Twitter chat on Monday, answering questions from the public on the launch of new regulations governing cellphone contracts.

During a 90-minute session, chairman Jean-Pierre Blais tweeted replies to more than 20 questions, in both English and French, about the CRTC's wireless code that came into force Monday.

Among other regulations, the code restricts the telecom industry to offering two-year contracts, reduced from three years.

The CRTC developed the national standards after hearing numerous complaints from consumers angry about being trapped in three-year contracts and unable to switch providers without penalties.

But several Twitter users said the move to two-year contracts has pushed up the cost of monthly plans.

Twitter user AndrewA92 tweeted: "Telecos axe three-year plans and raise monthly fees to compensate for new rules equals consumers still paying more."

Blais replied that allowing consumers to renegotiate their contract at least every two years will have a "positive effect" on competition.

Wireless carriers have argued that since consumers are now paying off smartphones over two years instead of three, it means their monthly bill will go up.

Under the new rules, however, cellphone customers will be able to walk away from their contracts after two years without any early-cancellation penalties. The CRTC has said early cancellation fees must not exceed the value of a device subsidy and must be gradually eliminated over 24 months.

Blais also said that the Canadian Radio-television and Telecommunications Commission will review the wireless code in three years.

In addition, the new regulations put a cap on extra data charges at $50 per month and $100 monthly for international roaming charges to prevent bill shock.

Another Twitter user asked if his existing three-year contract would be immediately shortened to two years.

Blais tweeted that wouldn't be the case, saying the code applies to new contracts signed after Dec. 2 and to those renewed or extended after Dec. 2.

Canada's major telecom companies. including Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T), are legally challenging part of the CRTC's new wireless code of conduct involving three-contracts still in effect. They say they want clarity on existing three-year contracts when it comes to paying off the subsidy for the device.

Blais also tweeted that the wireless code doesn't regulate rates that wireless companies charge.

"It gives you the tools you need to choose the carrier and the plan that suits your needs," he said.

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