When Rogers first disclosed plans for its new chatr wireless carrier brand, Mobilicity Chairman John Bitove was quick to express his position that such a brand could very well be in violation of the Competition Act. And now Mobilicity has begun its first move in a course of action against the brand.

According to a report on the Financial Post, Mobilicity has sent Rogers what can effectively be deemed a warning note, advising that the chatr pricing, plan, and coverage structure appears eerily similar to that of Mobilicity's. It appears Bitove is also prepared to follow through with his original promise of a lawsuit should the terms of the chatr brand not be changed.

The section of the Competition Act that Mobilicity cites is called Abuse of Dominant Position, and it states, in part, that if a "dominant company exploits its market power in a way that hurts competition in the marketplace, the Competition Act may come into play."

Mobilicity's argument is, of course, that Rogers launched the chatr brand for the sole purpose of knocking out new competitors; namely Mobilicity, but also companies like WIND Mobile and Public Mobile. Rogers, however, has stated that chatr was launched in response to customer demand, and a need to service the under-served portions of the market (coincidentally, the same argument all new carriers have been giving from the get-go.)

The chatr service offering is indeed virtually identical to that of the new carriers, with unlimited talk and text in specific urban areas for prices that hover around the $35-$45/mo. range. But chatr focuses its marketing efforts on one, notable advantage: a reliable network (i.e. Rogers' own network) with fewer dropped calls.

But the ripple effect of chatr with the other "big three" carriers, Bell and Telus, is already becoming evident. Shortly after Rogers launched chatr, Bell Mobility came out with unlimited talk and text plans with its Solo Mobile brand, targeting the same urban areas in which chatr, as well as the new carriers, operate.

Should Mobilicity proceed with legal action, the issue would be, of course, in proving that Rogers indeed launched chatr with the sole purpose of kicking out the competition. How does one prove that Rogers plans to shut the doors on chatr should the new companies find it impossible to compete? After all, if the argument has been a need for a wireless carrier to service this niche market of consumers, the new carriers can't argue with Rogers' arguments asserting the same. Still, with the means to have launched such a service years ago, why is Rogers only acting upon this now?

Industry Canada has certainly be on the side of the new carriers these past few years, working hard to foster competition, and do away with the monopolies, duopolies, and oligopolies that exist in the telecom and communications sectors. But does this mean the courts will be on the side of the new carriers as well? Stay tuned for further developments as they become available.

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