to conditions on the maintenance of these licences. These licencing
conditions may be modified at any time by the regulators. The
regulators may decide not to renew a licence when it expires, and any
failure by us to comply with the conditions on the maintenance of a
licence could result in a revocation or forfeiture of any of our licences or
the imposition of fines.
The licences include conditions requiring us to comply with Canadian
ownership restrictions of the applicable legislation. We are currently in
compliance with all of these Canadian ownership and control
requirements. However, if these requirements are violated, we would
be subject to various penalties, possibly including, in the extreme case,
the loss of a licence.
The Wireless Code
The CRTC’s decision to implement its wireless consumer code of
conduct, among other things, effectively requires Canadian wireless
carriers to move away from offering three-year service contracts and
instead offer two-year contracts, and this could change our customer
acquisition and retention costs and subscriber churn. The Wireless Code
also sets billing caps on data roaming and domestic data overage
charges, creates a prohibition on requiring customers to provide 30-
days’ notice of cancellation, and requires the payment of interest on
security deposits, which could also reduce our results of operations.
Our wireless business could be materially adversely affected if laws,
regulation or customer behaviour makes it difficult for us to impose
term commitments or early cancellation fees on customers or receive
the service revenues we anticipate from the term commitments.
Spectrum
Radio spectrum is one of the fundamental assets required to carry on
the wireless business. Our ability to continue to offer and improve
current services and to offer new services depends on, among other
factors, continued access to and deployment of adequate spectrum,
including both the ability to renew current spectrum licenses and
acquire new spectrum licenses.
If we cannot acquire and retain needed spectrum, we may not be able
to continue to offer and improve our current services and deploy new
services on a timely basis including providing competitive data speeds
that customers want. As a result, our ability to attract and retain
customers could be materially adversely affected. In addition, an
inability to acquire and retain needed spectrum could affect network
quality and result in higher capital expenditures, as a consequence of
network densification and other related network upgrades.
Spectrum Fees
Changes to government spectrum fees could significantly increase our
payments and therefore materially reduce our operating profit.
Spectrum licences are an indefinite life intangible asset and we do not
amortize them, however, any potential increases in spectrum licence
fees may affect our current accounting policies.
2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 75