Novus Files Predatory Pricing Complaint Against Shaw Communications

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Novus Files Predatory Pricing Complaint Against Shaw Communications

4:52 pm on July 29, 2009 | Category: Business, Law, Regulation

Vancouver-based fiber-optic broadband provider, Novus Entertainment Inc., has filed a Competition Bureau complaint against Shaw Communications, alleging that the cable giant engages in predatory pricing.

Shaw has been offering broadband, television, and cable phone bundles with each service costing just $9.95 per month. The offer is available to a limited number of households in the Vancouver metropolitan area and Novus claims that it specifically targets their customers.

“Shaw is abusing its dominant position in the market by offering services — which it normally makes nearly 50 per cent margins on — at a sizable loss as a means to destroy a local competitor,” alleged Novus co-president, Donna Robertson. “The millions of existing Shaw customers paying full price should be outraged because they’re unwittingly subsidizing the costs that customers with a competitive alternate pay, which is unethical and unfair.”

Shaw, which has more than 2.1 million subscribers across Canada, admits that the special offer is available only to some users, but denies that it is specifically targeting Novus.

“The offers are aimed at any multi-dwelling unit in Vancouver. They’re not limited to Novus buildings,” said Shaw president, Peter Bissonnette, in an interview.

Bissonnette called the Vancouver market a “very competitive space,” noting that Shaw, Telus, Novus, and a number of other providers compete for broadband, TV, and phone customers, and offer a host of special offers in order to attract new business.

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So if Peter Bissonnette (Shaw’s president’s)quote is TRUTHFUL(from business in Vancouver article) we should all feel ripped off. Peter is quoted as saying “that Shaw’s pricing is not below-cost”. If this is the case then their mark up is astronomical. After doing the math on this offer, it works out to $24.87/month, after factoring in the 2 months free, for all 3 services from Shaw. Now after this promo is done and you pay their regular rates, you would now be paying around $240.00/month!!!!!! That works out to approximately a 1000% MARK-UP!!!!!!!!
This is what I call GOUGING your customers. I am appalled at this. No company should be allowed to have these kind of mark-ups. This is why they want Novus gone. No competition = 1000% mark-up.

Comment by outraged Shaw customer — August 6, 2009 #
Since “outraged Shaw customer” is posting the exact same message on numerous messageboards relating to this topic, they must either work for 6S Marketing or Novus themselves…Otherwise, who on earth would go through all that efforts?

So, let’s play cut and paste too. Here’s some posts from other sites about this topic!

What Novus failed to mention is that they offered everyone in their areas $9.95 internet/cable to switch to them, and as Peter Bisonette mentions has been very unwilling to allow others into the building they’ve run fiber to. That is LITERALLY a “barrier to entry” into the market for Telus, Shaw, etc, wouldn’t you say?

Costs to maintain the services to 50-200 units in a single building are drastically different than providing them to 50-200 houses, and pricing is different. MDUs (multi-dwelling-units) are a highly competitive space, and pricing is different accordingly.

While Shaw is clearly flexing its muscles here, it’s in response to Novus acting like a “big boy” itself, and duely being treated like one. What do you think Shaw, Telus, and Rogers do to each other every day of the week? Novus brought it upon itself.

And every customer in those buildings wins. Remember, those are real people saving real money. If you want the same deal, you can move into an MDU too!

Market at work, nothing more. Welcome to the big leagues Novus, you finally made it. =)

Comment by Repeater — August 8, 2009 #
Hey Repeater- I think it’s time to stop the inaccurate postings from you and the other Shaw employee’s posting here and on other message boards. I say this because ANYONE that agrees with what Shaw are doing have been either extremely MISINFORMED or are associated with Shaw in some regard. So I may do a little “cut and paste!” myself. As for your misguided notion that there is a “barrier to entry’ into the market for Telus, Shaw, etc” guess again. It was only SHAW that complained to the CRTC at which point their complaint was DENIED. So you think it’s unfair for Novus to have an advantage in 1% of the new buildings in Vancouver whereas Shaw has the advantage in the other 99%. I can see how this is VERY UNFAIR to Shaw and annoys you so. This is a moot point as Shaw gains access shortly after Concord turns the building over. Therefore there is no “barrier to entry”.

And yes you’re correct in that “every customer in those buildings wins”, but you fail to mention that this is a win for only 1 year. After that year they are back to Shaw’s 1000% mark-up as Shaw will have successfully eliminated the competition. And no, Telus is not a viable competitor at this time as both their TV and Internet services are inferior to both Novus and Shaw. I now give you a “cut and paste” from a posting I found elsewhere.

“WHEN ONE COMPANY (SHAW) with a subscriber base of more than 2 million, OFFERS and OFFERS and OFFERS EVERY SINGLE CUSTOMER of another MUCH SMALLER company’s (Novus) client base and ONLY THEM a promo of this magnitude it can only be construed in one way. It is called predatory pricing with the sole purpose of putting the other company out of business. THIS IS WHAT THE PROBLEM WAS ALL ABOUT.”

You will now accuse me of being either a Novus or 6s employee of which I am not. I am simply an INFORMED CONSUMER that would like to get the FACTS correct. If this doesn’t paint a nice picture of Shaw, then so be it. They are the ones that have created this.

And yes “the truth is out there” it’s just not coming from you!!

Comment by INFORMED CONSUMER — August 9, 2009 #
Who the F*** pays for cable anyway? Shaw has brutal pricing and Novus should be driven out of the market as they are sh*t as well.

I laugh at any and all of you people who are enslaved to paying upwards of 150-250 per month on television internet and cable. When do you find time to leave the house and enjoy life outside your TV or computer.???

PHUCK SHAW CABLE AND NOVUS!!!! And I work for one of them, so all you b*tches who pretend to not work for one of them, just spit it out that you do and voice your opinions accordingly, not try to defend a company that is full of greed and conspiracy.

Comment by JhewBaggs — February 18, 2010 #