By Ahmad Hathout
VANCOUVER – A British Columbia court has dismissed an injunction application filed by Telus over Shaw’s promotion of its new Fibre+ internet product launched earlier this year.
In a September 11 ruling made public this week, the B.C. Supreme Court said it is unconvinced by Telus’ argument that the average customer would care about the differences between Shaw’s hybrid fibre-coaxial cable network and Telus’ fibre to the home technology when deciding on a broadband provider.
Telus asked the court in June to force Shaw to stop using “Fibre+” for its highest internet speeds until a final determination is made on its claim, which will ultimately settle whether or not the court should enforce a permanent ban on promoting the new product as is. The court found Telus’ arguments not strong enough to warrant an interlocutory ban in the meantime.
While telcos like Bell and Telus now offer direct fibre connections to many homes, cable companies such as Cogeco and Shaw offer the same internet speeds through DOCSIS technology where the last mile to consumer homes still tends to be coaxial cables.
The court expressed concern that Telus did not complain about Cogeco, which competes with it in Quebec, and uses a similar HFC configuration as Shaw – and with the word “fibre” in its branding. The court also noted Telus failed to explain its past use of the word “fibre” for its fibre-to-the-node configuration, an issue Shaw raised in response to the legal action.
Telus, which is Shaw’s biggest rival in the west, filed an injunction application against Shaw in June claiming the marketing of its Fibre+ product, announced on May 27, harms Telus by depriving it of business, damages its reputation and causes confusion among, and misleads, customers.
“I find that Telus’ argument weak in demonstrating that the average consumer (1) understands the difference between HFC and FTTH infrastructure; (2) correlates the use of the term ‘fibre’ exclusively with FTTH infrastructure and not HFC and thus would be misled by the word ‘fibre’, and (3) would chose an internet service provider using FTTH over HFC—i.e. that this would be material to their decision,” the decision reads.
“I am more persuaded by Shaw’s submissions that the use of the addition symbol (+) conveys that there are additional features, beyond the use of fibre, offered by the Internet products (i.e. faster speeds),” the court added.
The court also said it was not convinced that the term “fibre” holds “exclusivity” for FTTH configurations.
Telus’ evidence to the court about alleged misrepresentations by Shaw was provided in the form of social media comments to Telus allegedly asking whether Shaw was installing fibre in homes; public polling claiming to find that 78% of respondents would be led to believe Fibre+ would deliver FTTH; and industry reaction.
About a week before filing the legal action on June 10, court documents say, Telus sent a letter to Shaw demanding it stop marketing the Fibre+ services, which offers speeds of 300 Mbps, 750 Mbps and gigabit download speeds. Shaw sent back a letter denying wrongdoing.
Shaw responded to the original complaint by suggesting the legal action was itself a media strategy: to convince Canadians its Fibre+ product isn’t real fibre and Shaw isn’t a reliable service provider, and that it is an attempt to gain a competitive advantage as Telus announced its 1.5 gigabit speeds just weeks after Shaw announced Fibre+.
The court noted some of these changes in the decision as mitigating parts of Telus’ complaint.
Shaw also noted in its documents that nowhere on its website does it promote its Fibre+ service as being wholly delivered by fibre cables; nowhere does it promote the network as FTTH; doesn’t promote its “PureFibre” trademarks; and doesn’t compare its network with Telus or other FTTH ISPs.
Shaw also argued Telus hasn’t shown proof that the average customer cares more about types of technologies used to deliver speeds versus the experience and value of its bundled products; and Telus allegedly hasn’t shown proof that Canadians factor types of cables into their purchasing decisions.
“Also diluting Telus’ case is the past conduct of Telus in describing its ISP network as “fibre” well before it had any meaningful scale or geographical reach as an FTTH network and remained predominantly a FTTN network with twisted-pair copper wire in its ‘last mile’,” reads the decision.
“Telus’ failure to adequately to explain why its own use of ‘fibre’ to describe it own FTTN network with legacy copper wire as legitimate but that Shaw should be prohibited from describing its HFC network using the word ‘fibre’. Telus’ clarification that it was only objecting to the inclusion of “fibre” in the branding of Shaw’s plan tiers in my view does not assist it,” reads the decision.
In a statement, Telus spokeswoman Jacinthe Beaulieu said, “We are pleased with the Court’s finding that there is a serious question to be tried on the issue of whether or not Shaw misrepresented its non-fibre to the home Internet service as ‘Fibre+’,”’ referencing one part of a test that an applicant must pass before the court considers whether or not to approve an injunction.
In other words, the court found that Telus’ case is not “frivolous or vexatious,” which judge David Masuhara said in the decision is a “low threshold and is often met.”
This story has been updated and clarified since its original publication.
