Competition Bureau rules against Rogers

Finally, the federal government has slapped Rogers Communications with a fine for misleading advertising. They will have to fork over $10 million for comments they made through their new brand, Chatr Wireless about dropped calls. As the Toronto Star article reports (click here to read it) They claimed that they have fewer dropped calls then new entrants Wind Mobile, Mobilicity and others but Canada’s Competition Bureau did not find enough evidence to back up those claims. The real story here is not so much the specifics of this case, but the fact that the penalty came against Chatr Wireless.

Chatr Wireless is a division of Rogers Communications that was setup to specifically compete against the new entrants in the cell carrier industry in Canada. Obviously, Rogers, Bell and Telus cannot compete with these new competitors because they are too busy ripping off Canadians and have been doing so since they began offering cell phone service. The new competitors offer fairer rates, closer to those offered in almost every other country. Therefore, in order to compete and for the longer term, to bankrupt the new competitors, Rogers launched Chatr Wireless which offers similar rates to the new companies. However, they combine this with Rogers’ large network and coverage area and it instantly becomes a tough competitor in the market.

The main concern Canadians have about these new companies is that their network and coverage is not as large and stable as the big players’ because of their small size. Rogers was well aware of this concern and utilized it in their marketing campaign for Chatr Wireless. This brings us to their claims about dropped calls which led to the $10 million fine.

It is unfair that Rogers only offers good rates through Chatr Wireless now that there is some level of real competition in the market. However, as much as I would like to blame Rogers for their unfair practices, it is really the government’s fault. It was the federal government’s ban on non-Canadian companies in this industry that allowed the three big players to be as awful as they have been to Canadians. Hopefully this ruling is a sign that things will continue to change for the better.