Does Rogers' chatr Service Go Against Competition Act?

Does Rogers' upcoming chatr wireless carrier brand violate the ‘Abuse of Dominant Position" section of the Canadian Competition Act?

According to the Competition Bureau of Canada's Website: "The size of a business, even one that dominates a particular market, is not, of itself, a cause for concern. Businesses may need to become large to achieve lower production costs or to compete against foreign and domestic competitors. However, when a dominant company exploits its market power in a way that hurts competition in the marketplace the Competition Act may come into play..."

The Globe & Mail, is reporting that Mobilicity Chairman John Bitove claims just that: Rogers is abusing its power, thus violating this section of the Competition Act. And he may just pursue this argument further.

The mandate behind the chatr service is indeed, in large part, to target the very customer segment that Mobilicity, along with other new carriers WIND Mobile and Public Mobile, are targeting: the budget customers who have not yet adopted cell phones, who have just moved to the country, or who may have bad credit or are otherwise unable to sign contracts and undergo credit checks. The offering will include basic talk and text services, sounding eerily just like the plans offered by all three aforementioned new carriers.

But let's play devil's advocate. While new carriers are claiming to delve into their own untapped customer segments by offering unlimited talk and text, aren't they also delving into the already-tapped, heavy data, tech-savvy user that sits right at the heart of the Big Three customer segments by offering things like unlimited data and full-featured smartphones as well?

What's more, if the motivation behind allowing the entrance of these new carriers (let's call them the Little Three for sake of finding a moniker that quickly describes the trio in one) was to lower pricing in the Canadian wireless market, isn't chatr proving that they've accomplished just that?

Then again, if the Big Three come out with such competitive plans now that that the Little Three have invested millions in starting to build out their networks, it could most certainly bring us right back to the stifled competition we know so well. Especially if Rogers decides to yank chatr later, or severely adjusts its plan pricing.

Rogers most certainly has the advantage with network coverage; if you had to choose between a new carrier that's still working out the kinks in its network, or an established one that's been doing just that for decades, which route would you take? Mind you, the Little Three have the advantage of having clean slates; and considering the levels of passion felt by many irate Canadians who have had issues with one or more of the Big Three in the past, that reputation-free proposition is sweeter than one might realize. What's more, if a customer really doesn't travel outside the boundaries of a Toronto-based or Montreal-based or Vancouver-based network, why would he need coverage in other areas anyway? Nevertheless, Rogers will undoubtedly boast not just more widespread coverage with chatr, but also allegedly more reliable coverage within the core areas.

At the Canadian Telecom Summit last month, Rogers' John Boynton stated that Canadian consumers would vote [for their carrier of choice] with their "wallets and their loyalties." Interestingly, this statement came before chatr had officially been revealed to the public.

It's easy to pick the "good cop" and the "bad cop" in this argument. Indeed, I've always been vocal on the need for new competition in the industry, and the fact that new brands from existing carriers alone simply don't cut it. Have the new guys proved themselves just yet? They haven't been around long enough to even scratch the surface of doing so, but some of the initial offerings have certainly been enticing enough to make Rogers see such an immediate need to develop chatr.

On the positive end, hopefully the Little Three will prevail in spite of the aggressive competition. There certainly won't be any reduction in the amount of, er, chatter, around this topic any time soon.