Canadian internet service providers (ISPs) routinely impose data caps and engage in traffic management practices (throttling) that can significantly degrade your service. While the CRTC's Internet Code sets baseline protections for contracts, many consumers are unaware that their 'unlimited' plan may still be subject to throttling during peak hours, or that exceeding a soft cap triggers automatic overage charges without warning. Understanding the actual terms of your internet service agreement — particularly around data limits, speed guarantees, and early termination — is essential before committing to a contract that may last 1-2 years.
What is a Data Caps and Throttling?
An internet service contract is an agreement between a consumer and an ISP for broadband internet access. These contracts specify the connection speed (download/upload), data allowance (capped or unlimited), monthly price, contract term, equipment rental fees, and early cancellation penalties. The CRTC's Internet Code (2019) governs these contracts, requiring clear disclosure of all terms, a 2-year maximum contract length, limits on early cancellation fees, and a 15-day trial period for new customers. ISPs must also comply with the CRTC's Internet Traffic Management Practices (ITMP) framework when engaging in throttling.
Red flags to watch for
Many 'unlimited' plans are not truly unlimited. After hitting a soft cap (e.g., 1TB), the ISP may throttle speeds significantly. The fair usage policy buried in the terms effectively creates a data cap.
Some ISPs charge $2-4 per additional GB with no maximum overage charge. A household streaming heavily could face hundreds of dollars in unexpected charges in a single billing cycle.
CRTC Internet Code requires ISPs to clearly disclose the regular rate alongside any promotional price. If the post-promotional rate is buried in fine print, the ISP may be violating the Code.
Under the CRTC Internet Code, early cancellation fees must decrease monthly over the contract term. A flat cancellation fee regardless of how much time remains is non-compliant.
Some ISPs require you to rent their modem/router at $10-15/month when you could purchase compatible equipment. Over a 2-year contract, this can cost $240-360 unnecessarily.
The CRTC requires ISPs to deliver speeds reasonably close to advertised rates. If the contract only promises 'up to' speeds with no minimum threshold, you have less recourse if speeds are consistently poor.
Your legal rights
The CRTC Internet Code (Telecom Regulatory Policy CRTC 2019-269) applies to all contracts with ISPs for fixed internet services. Key protections include: a maximum 2-year contract term; early cancellation fees that must decrease monthly over the contract period; a 15-day trial period for new customers (with the right to cancel without penalty if the service does not meet your needs); clear disclosure of pricing, data limits, and speed; and an obligation for ISPs to provide a Critical Information Summary before you commit. The CRTC's ITMP framework requires ISPs to be transparent about throttling practices. Complaints can be filed with the Commission for Complaints for Telecom-television Services (CCTS), which can order ISPs to provide remedies including billing adjustments and contract cancellation.
Questions to ask before you sign
- 1Is this plan truly unlimited, or is there a fair usage policy that reduces speeds after a certain amount of data?
- 2What happens if I exceed the data cap — are there automatic overage charges, and is there a cap on total overages?
- 3What is the regular monthly price after the promotional period ends?
- 4What is the early cancellation fee schedule — does it decrease each month of the contract?
- 5Can I use my own modem and router instead of renting yours?
- 6What minimum download speed can I expect, not just the 'up to' speed?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.