Calgary-based Shaw Communications has fired a shot across the bow of rival high-speed Internet provider Telus over a marketing campaign that boasts TELUS’s digital subscriber service is faster than cable and “never shared.”
In a claim filed in Alberta Court of Queen’s Bench in Calgary and heard by a judge last week, Shaw sought a temporary injunction to stop the B.C.-based telecom from making the claims in an effort to woo potential or existing Shaw subscribers.
But on Friday, Justice Rosemary Nation declined the request, and now the two parties will be back in court on Dec. 20, when Shaw will seek a permanent injunction.
Nation said she saw nothing to indicate that Shaw’s customers are switching to Telus or that customers have changed loyalty due to the ads.
“We’re very pleased . . . the judge did not feel there was sufficient evidence to give them (Shaw) what they were asking for,” said Simon Vincent, vice-president of marketing for Telus Consumer Solutions.
Shaw Communications president Peter Bissonette said his company took issue with the Telus ads, which state their ADSL service “is never shared, unlike cable, so you always get the speed you expect.”
“Changing e-mail addresses is a hassle. But if you have to do it anyway, why not change to an ISP you can trust to be around for a long time?” ask the newspaper ads.
Bissonette said: “We’re alleging their advertising campaign . . . is false, deceptive and misleading, because they are a shared network also.”
Shaw says the ADSL service uses “virtually identical” Internet networks and sites as high-speed cable. And since the Internet itself is a shared network, all web users will occasionally experience slowdowns at peak times.
Shaw’s statement of claim noted that while it’s impossible to count the number of potential customers it has lost to Telus because of the campaign, it is seeking $1 million in damages.
Vincent said the lawsuit is a sign of how Internet service has become a hotly competitive battleground.
“It is a sign of the intensity of the industry,” he said Friday. “I’ve been through the long-distance toll wars in the past, and we’ve continued to go through some very extreme battles. This has all the earmarks of that.”
He added Telus has no plans to change its advertising. “We’re quite comfortable with the messages. We take this very seriously, and in terms of any messages we send to market, we stand behind them.”
Meanwhile, in the wake of the bankruptcy of the California-based @Home network, Bissonette says Shaw, which holds an estimated 82 per cent of the high-speed Internet market in Alberta, is on track to switch over the last of its 600,000-plus subscribers to the @Shaw.ca designation. “We’re averaging about 4,000 a night,” he said.
“It was going in dribs and drabs, and so we sent out another e-mail to customers . . . that spurred some more interest, as well as the media awareness of the tenuousness of the @Home service.
“We’re down to the customers who have alternative mail like hotmail, and have really no reliance on the @Home dot-com mail.”
He estimates there are about 10,000 subscribers are still hanging onto either the @Home service or relying on their hotmail accounts. “But the ultimate outcome is @Home is going to be gone,” he said.
“We continue to write to those who haven’t converted. Those who haven’t converted will still be at risk of losing that mail if @Home ultimately turns us off.”
Meanwhile, Rogers Cable Inc., one of @Home Corp.’s Canadian partners, reached a deal last week to keep their customers’ Internet service running for three months while they complete stand-alone networks. In the U.S., Cox Communications and Comcast Corp. agreed to pay $160 million each to keep @Home service running for three months.
Shaw moved quickly last spring to disentangle itself from @Home’s crumbling infrastructure and take control of its own distribution network by building its own $56-million Internet Data Centre in Calgary.
Bissonette says the centre is easily handling the subscribers who are switching over.
“People may still experience slowdowns, but it’s from the Internet, not from our data centre, or on our network,” he added.
The company has set a goal of one million subscribers, but Bissonette said while rivals Bell and Rogers have raised their rates for Internet access and email, Shaw’s objective is to grow its market share. “In order to do that, you leave the rates where they are,” he said. “We have a ‘march to million’ objective in our company. Price point is part of that strategy.”
On Friday at Shaw’s annual general meeting in Toronto, CEO Jim Shaw vowed to see his company double its size in five years and become the dominant provider of satellite and high-speed Internet service in Canada.
