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Bell accuses Rogers of stifling competition
July 30, 2003
Toronto Star

Competition over television broadcast signals is heating up.

Bell ExpressVu filed an application with the Canadian Radio-television and Telecommunications Commission yesterday, charging Rogers Cable Inc. engages in anti-competitive behaviour.

The filing claims Rogers has signed deals with building owners that effectively keep Bell ExpressVu out of multiple-dwelling units such as apartment buildings. "Consumers are not really going to have a choice of cable or video suppliers unless we can have fair access to those buildings," said Lawson Hunter, executive vice-president of Bell ExpressVu's parent company, BCE Inc.

Rogers often supplies the inside wiring for new condominiums when they are built. If the condo developer wants to let another company provide television service in the building, the developer has to buy the inside wiring from Rogers for $200 a suite, minus depreciation.

"Consider a five-year old, 300-suite building," the filing states. "The owner's up-front cost to allow a second service provider into the building would be $20,000. This clearly creates a disincentive to even consider an alternate service provider." Rogers will pay the developer 50 per cent of the depreciated cost of the wiring in return. (That buys Rogers the right to provide service to interested building residents in perpetuity.)

But Hunter said some building managers expect Bell ExpressVu to compensate them for the wiring purchase as well. That puts a high price tag on customer acquisition - several times greater than the 52 cents per month, per suite that the CRTC stated was fair and reasonable.

"For the vast majority of buildings in the country, Bell ExpressVu is allowed to get in there at 52 cents a month per applicant," said Ken Engelhart, vice-president of regulatory affairs for Rogers Communications.

In new buildings, however, he said the 52-cent rule isn't reasonable. Rogers could spend $200 a unit wiring a building up one day and then find out the next that it is renting the line to Bell ExpressVu for 52 cents a month.

Mark Quigley, research director for the Yankee Group in Canada, said that many of those agreements were probably in place before there was any competition.

Still, he said, it doesn't leave new condo residents a lot of options when it comes to television service providers.

"I'm sure if the price was brought down to a level that was more acceptable to building owners and Bell we probably wouldn't be having this discussion," he said. v Quigley also noted that the filing comes at an interesting time: one month after Rogers filed a claim against Bell ExpressVu for anti-competitive business practices.

That filing claimed Bell is stifling competition by bundling its other offerings with local telephone service.

"That gives them a bundle that no one has and no one else can have," said Engelhart.

He doesn't think the timing of Bell's filing is merely a coincidence."I think its just sort of a childish reaction to the fact that we filed an application against them so they decided to file an application against us," Engelhart said.

Hunter said Bell ExpressVu intends to file a complaint with the Competition Bureau as well.

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