New limits on the length of phone contracts and the fees that companies can charge for international roaming and data are being welcomed as "a step in the right direction," by one Canadian consumer advocacy group.

On Monday the Canadian Radio-television Telecommunications Commission said its new code "will make it easier for Canadians to understand their contracts and sets out their basic rights."

Bruce Cran, president of the Consumers' Association of Canada, said Tuesday the CRTC's announcement represents a victory for consumers dealing with little competition in the wireless market and as a result, some of the highest prices in the world.

"We've been fighting for some of these things and losing in the past. This is our first big win and we're very happy with it," Cran told CTV's Canada AM. "I've now read it through four or five times and the more I read it the more I like it, which doesn't mean to say we're at our final destination but I think it's a great victory."

The new code:

  • Says consumers can cancel their wireless contract after two years without paying a cancellation fee, even if their contract is for a longer term.
  • Caps extra data charges at $50 per month and international data roaming charges at $100 per month within one billing cycle to prevent "bill shock."
  • Allows consumers to have their cellphones unlocked after 90 days, or immediately if the device is paid for in full.
  • Allows a cellphone to be returned within 15 days and specific usage limits if the customer is unhappy with the service.
  • Says consumers can accept or decline changes to certain elements of a fixed-term contract.

In a statement, CRTC chair Jean-Pierre Blais said: "Every day, Canadians rely on wireless devices while in their homes, at their jobs, at school or travelling abroad."

"The wireless code will contribute to a more dynamic marketplace by making it possible for Canadians to discuss their needs with service providers at least every two years."

The new code will only come into effect on Dec. 2, 2013 and will only apply to new contracts for cellphones and other mobile devices.

The code also requires that service providers "communicate with customers using plain language," and that contracts and other documents be "written in a way that is clear and easy for customers to read and understand." Key terms of a contract will also be summarized in two pages using large fonts.

Some have suggested that wireless providers will simply boost the purchase prices of their phones in order to compensate for revenue they could lose under the new rules.

Cran said the Consumers' Association of Canada will "worry about that when it happens," adding that Canadians already pay the highest rates in the world and cell phone companies should be able to adjust to the new code without raising their prices.

Bernard Lord, a former New Brunswick premier and current president of the Canadian Wireless Telecommunications Assocations said Monday: "Each carrier will make that determination," noting that wireless providers set their own prices.

According to major cellphone provides such as Rogers, Telus and Bell – which owns CTV – they already fulfill many of the new requirements set out by the new code.