Yep, for me this all hinges on if they told him that his current service would work in Calgary, and what the contract says.
If they are doing the best they can to try to accomidate a customer who tries to change a term of the contract (ie- the service address) and are unable to; then they did their best.
Keep in mind what telecommunications contracts usually represent. It's subsidized hardware in exchange for you having service with them. You already saved money by not having to buy the original hardware up front. I'd pay the $400; especially seeing as it may be tax deductable as a moving expense.
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