MISSISSAUGA, ON – Internet telephony provider Vonage Canada announced today it has appealed to the CRTC to investigate Shaw Communications’ "thinly veiled VOIP tax to determine if Shaw is unfairly driving up competitor’s prices and forcing Western Canadians to pay more for phone service," says the company release.
Shaw tells its high-speed Internet customers that they should pay an extra $10 charge per month if they use a Voice over Internet Protocol (VOIP) phone service provider such as Vonage Canada.
The big western MSO says the fee it meant to ensure that customers of Vonage, for example, using Shaw’s network, get a certain level of quality of service.
Shaw doesn’t recommend the fee to its own telephony customers.
"Shaw’s VOIP tax is an unfair attempt to drive up the price of competing VOIP services to protect its own high-priced service," said Joe Parent, vice president of marketing, Vonage Canada. "Shaw’s actions are also part of a bigger issue of network neutrality and who controls how Canadians use their Internet service. Vonage Canada wants to ensure that the monopoly telephone and cable Internet service providers don’t restrict what services, applications or content Canadians can access. Canadians demand and deserve freedom of choice."
In its submission to the CRTC, Vonage described the VOIP tax as a possible "red herring" because Shaw had refused to provide a technical explanation for how its enhancement works or why it is necessary.
"Shaw has built a world-class network which Vonage customers use everyday with confidence and satisfaction," said Parent. "Recommending that its customers pay extra if they don’t use Shaw’s Internet phone service is unfair. Vonage Canada had little choice but to request that the CRTC determine the validity and fairness of Shaw’s fee structure."
No other ISP in Canada has such a fee structure.
"Because Vonage competes directly with the telephone services of the network operators that also provide the high-speed Internet access, the incentives to discriminate against us are clear. This will result in less innovation, less choice and higher prices for Canadian consumers in the long run," says the Vonage submission.
"If the type of action represented by Shaw’s (enhancement) service is not seriously investigated and addressed by the Commission, there will be a heightened risk of a duopoly in local voice (phone) services," that will unduly favor the phone and cable companies who provide the Internet access.
"In the absence of credible, complete information, there is good reason to believe (Shaw’s) service offering is not an enhancement to Shaw’s high-speed Internet service but rather is an anti-competitive measure aimed at either increasing the perceived cost, or damaging the perceived reliability, of the services of independent Internet telephone service providers when compared to Shaw’s higher-priced phone service."
Among the questions Vonage Canada has requested the CRTC address:
* What does Shaw’s so-called ‘enhancement’ service consist of, from both a technological and service implementation perspective?
* What evidence does Shaw have to prove its ‘enhancement’ service actually delivers on the promise of enhancing a customer’s use of a non-Shaw phone service provider and to what extent?
* What is the justification for a recurring charge to the customer for a service that it appears may consist of a one-time configuration of the Shaw-approved cable modem used by Shaw’s high-speed Internet customers?
* What is the take-up rate – past, present and likely future – of Shaw’s enhancement service, and what is the likely effect of the service on competition in local VOIP services?
"Vonage believes the Internet could not exist without network neutrality," added Parent. "Canadians shouldn’t be asked to pay twice to use their Internet connection for whatever they want, including VOIP service. Imagine if the power company could dictate the brand of appliance you can plug into your wall? It’s the same principle with Internet service."
An e-mail and phone call to Shaw for comment have not yet been returned.
