ARCHIVED - Telecom Commission Letter Addressed to Barry Stone (Quadro Communications Co-operative Inc.)

Ottawa, 14 August 2014

Our references: 8665-C12-201212448

BY EMAIL

Mr. Barry Stone
Quadro Communications Co-operative Inc.
barry.stone@quadro.net

RE:  Wireless Code Implementation – Compliance Reports – Action Required

Dear Mr. Stone:

This letter is to inform you that it appears to the Canadian Radio-television and Telecommunications Commission (the Commission) that your company, Quadro Communications Co-operative Inc.(Quadro), has made most, but not all, of the necessary changes to its contracts, policies, and procedures to implement the Wireless Code (the Code). The Commission appreciates your company’s efforts to implement the Code on time. However, the Commission considers that there are one or more remaining issues that your company must resolve in order to fully and appropriately implement the Code. Quadro is required to respond to the Commission’s concerns, set out in more detail below, by 22 August 2014. In your letter you should explain whether you have taken the actions directed by the Commission in this letter in order to come into full compliance with the Code.

The Commission intends to publish a report for consumers in August 2014 that summarizes the results of the Wireless Code implementation process, including the information submitted by your company in your Wireless Code compliance reports and in response to follow-up correspondence, including this letter. If your company demonstrates in its response to this letter that it has made the necessary changes to fully implement the Code, the Commission’s upcoming report will reflect this.

The requirement to implement the Wireless Code

In The Wireless Code Policy^{Footnote 1}, the Commission established the Wireless Code, a new mandatory code of conduct for providers of retail mobile wireless voice and data services (wireless services). The Wireless Code applies to all wireless services provided to individual and small business consumers in all provinces and territories regardless of the status and business models of the wireless service provider (WSP).

As required by paragraph 377 of the Wireless Code Policy, WSPs filed reports with the Commission in January 2014 detailing how they have implemented the Wireless Code^{Footnote 2}.

Commission staff reviewed these reports and, on 22 May 2014 and 6 June 2014, issued letters to follow up with certain companies to seek clarification on specific issues in these reports. Quadro filed a response on 30 May 2014.

Specific issues to be resolved

Based on the above-mentioned reports and correspondence, it appears that your company needs to address the following issues to fully and appropriately implement the Code:

• Trial period – restocking fees

In section G. of the Wireless Code, Contract cancellation and extension, the Commission required wireless carriers, including Quadro, to provide a trial period to customers when they sign up for a new contract. Specifically:

“(i)   When a customer agrees to a contract through which they are subject to an early cancellation fee, a service provider must offer the customer a trial period lasting a minimum of 15 calendar days to enable the customer to determine whether the service meets their needs.

(ii)   The trial period must start on the date on which service begins.

(iii)  A service provider may establish reasonable limits on the use of voice, text, and data services for the trial period.

(iv) During the trial period, customers may cancel their contract without penalty or early cancellation fee if they have:

1. used less than the permitted usage; and
2. returned any device provided by the service provider, in near-new condition, including original packaging.

(v)   If a customer self-identifies as a person with a disability, the service provider must extend the trial period to at least 30 calendar days, and the permitted usage amounts must be at least double the service provider’s general usage amounts for the trial period.” [Emphasis added]

The contract sample you provided with your Wireless Code implementation report indicated that customers may have to pay a restocking fee if they avail themselves of the trial period.

In a letter dated 22 May 2014, Commission staff sought clarification on this point and asked Quadro to explain how it considered that its approach was consistent with the requirement set out in the Wireless Code.

In a letter dated 30 May 2014, Quadro submitted the following: “Quadro’s contract sample references a restocking fee to address potential circumstances in which Quadro may be subject to a restocking fee from our supplier should the customer avails themselves of the trial period and Quadro is left with a device, which is not normally carried as a part of the inventory selection. For the record, to date Quadro has not implemented this fee on a customer. If it is determined that a restocking fee is applicable to recover underlying costs associated with a device this would be executed in such a manner fully compliant within the Wireless Codes trial period requirements, including disclosing as such in plain language to the customer and documented as such on the Customer Information Summary, ensuring that any such fee is not observed as punitive or in any way representative of an early termination fee. We feel that this approach respects the intended purpose of the Wireless Code of Conduct yet allow us to provision for special order items of non-stocked device to support unique customer requests.”

The Commission hereby clarifies for Quadro that where the Wireless Code states “(iv) During the trial period, customers may cancel their contract without penalty or early cancellation fee if they have (a) used less than the permitted usage; and (b) returned any device provided by the service provider, in near-new condition, including original packaging” that “penalty” should be read to include a “restocking fee” or other similar fee. As a result, a customer could not be charged a penalty, including a restocking fee, if they have met conditions (a) and (b) referenced above.

Action Required

The Commission considers that you need to do the following in order to fully implement the Code:

• Remove the reference to “restocking fees” during the trial period from your contracts and submit a revised copy of your template contracts.

Pursuant to section 37(2) of the Telecommunications Act, the Commission hereby directs Quadro to file a response by 22 August 2014, demonstrating that it has changed its trial period policies as set out above.

If Quadro fails to take the action required by 22 August 2014, the Commission may take further steps to enforce its requirement.

Should you have any questions regarding the above matter, please contact Nanao Kachi at 819-997-4700.

Procedural information

This letter and all subsequent correspondence form part of a public record. As set out in Broadcasting and Telecom Information Bulletin 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, WSPs may designate certain information as confidential. WSPs must provide an abridged version of the document involved, accompanied by a detailed rationale to explain why the disclosure of the information is not in the public interest.

All submissions are to be made in accordance with the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure, SOR/2010-277.^{Footnote 3}

Sincerely,

ORIGINAL SIGNED BY

John Traversy
Secretary General

c.c.: nanao.kachi@crtc.gc.ca

Date modified:

2014-08-14