MISSISSAUGA, ON, March 7, 2006 – Vonage Canada today stepped up its efforts to ensure fair and competitive telephone service for Canadians, by disclosing its request to the Canadian Radio-Television & Telecommunications Commission (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.
Shaw recommends to its high-speed Internet customers that they pay an additional $10 charge if they use a Voice over Internet Protocol (VoIP) phone service provider such as Vonage Canada. Shaw claims its “quality of service enhancement” fee, which it does not charge to its own Internet phone customers, is necessary to ensure independent VoIP service is not disrupted or degraded.
“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 business development, 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.”
In its CRTC submission, Vonage Canada said: “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.”
“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 favour 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: