On Monday morning, the Canadian Radio-television and Telecommunications Commission issued its final Wireless Code, a set of rules all wireless service providers in Canada have to abide by. I was curious how this code compares to the rules the Quebec government put into place in 2009 that similarly protect consumers in cellphone (and other) service contracts.

The result is this story in The Gazette, which appears in Wednesday’s paper. It lists point by point the provisions of both. In general, they’re very similar in terms of how cancellation fees are calculated, how major elements of contracts can’t be changed unilaterally, and how renewals are done. Bill 60 also includes a prohibition on late-payment fees or additional fees for pay-as-you-go services. But most of the advantage for the consumer is in the CRTC’s code, which specifically deals with wireless service. It includes a de facto two-year maximum on contracts, a 15-day trial period, a right to unlock phones, notification of data roaming and caps on data overage and data roaming fees.

You can read the CRTC’s decision here setting the Wireless Code into place and explaining its reasoning. Quebec’s Bill 60 became law in 2009, and the text of it is here (PDF).

The Wireless Code comes into effect with contracts signed on or after Dec. 2, though providers can start applying the new rules to new contracts as soon as they’re drawn up. Since it’s not really in their interest for people to wait, I would expect the code’s provisions to be in new contracts by the major wireless companies before then.

If your main concern is contract length, by the way, you can go ahead and sign now. As of two years from now, all contracts must comply with the code, which means in two years you won’t have a cancellation fee, even if your contract right now says you will.

How will this be paid for?

The big question now is how these changes (particularly contract length) will be reflected in the marketplace. Having phones subsidized over two years instead of three will mean one of three things:

1. Higher prices for new handsets. I’m guessing this is the most likely option. Instead of getting, say, a $360 subsidy on a phone, which works out to $10 a month for 36 months, the subsidy might only be $240, which means the phone will be $120 more expensive. Expect fewer $0 smartphones.
2. Higher monthly rates. If subsidies are done over two years instead of three, then they have to be 50% higher on a monthly basis. So that $10 a month subsidy now has to be $15 a month if the total subsidy is the same. But in my experience there hasn’t been much flexibility in monthly pricing based on device subsidy, and monthly fees have much more competitive pressure than initial handset cost. Prices might inch up slowly, but only if all the major providers agree their profit margin at the lower price is unsustainable.
3. Lower profits. Yeah, go ahead and laugh. But wireless providers make decisions all the time that result in lower profits, hoping that they might result in higher profits down the road. Acquiring new customers has a large price to it (beyond just the phone subsidy), but if you can lock them in for three years or longer, you’ll make much of that money back. Reducing the contract to two years will mean less time to recoup this acquisition cost. We may see an effect on the bottom line here.

Because, in two years from now, all contracts will have to have zero-fee cancellation after two years, expect new handset costs to go up quickly. Which means even though it sounds like it might be a good idea to wait until December, now might actually be the best time to get a new phone.