The Telus headquarters in Vancouver. Telus and Bell are accusing one another of interfering with customers.DARRYL DYCK/The Canadian Press
Rival telecoms are accusing one another of selling an “illegal pirated TV service” and “poaching” customers in a lawsuit that reveals friction in the industry after regulatory effort to increase competition.
The dispute between Telus Corp. T-T and BCE Inc.-owned Bell Canada BCE-T over alleged interference with each other’s customers follows a continuing disagreement over wholesale internet policy set by the Canadian Radio-television and Telecommunications Commission.
The policy requires certain telecoms – including Bell and Telus – to allow rivals to access their fibre networks, in areas where those rivals don’t themselves own infrastructure. This framework permits Telus to expand into Bell’s territory by reselling internet over Bell’s fibre, and vice versa.
Bell was required to provide access to competitors in Ontario and Quebec last May, and Telus started offering service in Bell’s territory shortly thereafter. Bell said in a statement it is not currently using the framework to resell in Telus’s territory.
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In its original statement of claim, filed with the Ontario Superior Court of Justice on June 26, Bell alleged that Telus’s door-to-door sales representatives promoted, facilitated and assisted in the installation of an illegal pirated television service, inducing Bell customers to switch to Telus services and infringing on Bell’s copyright, according to the filings.
In these filings, Bell alleged that Telus had endorsed the promotion of these services, and that it had “intentionally interfered” with Bell’s customers by “luring customers to change providers.” In so doing, Bell alleges that Telus engaged in conduct that is “misleading, unlawful and unfair.”
The filings show Bell is seeking damages of $25-million, or restitution of the same amount, plus $10-million in additional punitive, exemplary or aggravated damages.
However, in its July 25 statement of defence and counterclaim, Telus denied these allegations, saying Bell’s legal action “advances false, baseless allegations” in an attempt to undermine the CRTC’s network sharing policy.
In filings, Telus said that in May, before Bell’s legal action, it received a customer complaint regarding a door-to-door representative promoting “rogue services.” Telus said it investigated and found “a small and isolated number of third-party representatives” had attempted to “market rogue services,” without Telus authorization and in breach of their obligations.
Telus said it worked with its vendor to discipline each rogue third-party agent involved, including through suspensions and terminations, and issued a policy warning vendors against marketing rogue services.
Telus denied that it authorized or trained its door-to-door sales representatives to offer these services, or that its sales representatives would feel pressure to do so, given that there are “no consequences to door-to-door sales representatives for not meeting sales targets,” it said in the court records.
In the same filings, Telus advanced a counterclaim, alleging that Bell had itself engaged in “anti-competitive acts calculated to induce Telus’s customers in Ontario and Quebec to switch to Bell,” and acting with the intention to cause economic harm by “poaching” Telus’s customers.
Bell has yet to file a statement of defence.
None of the allegations have been tested in court.
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In a statement, Telus spokesperson Kalene DeBaeremaeker said Bell’s lawsuit is “part of a broader strategy to undermine competition and preserve its market dominance in Ontario and Quebec.”
BCE spokesperson Luc Levasseur, in a statement, called Telus’s counterclaim “baseless” and said the company would “provide a statement of defence in due course.”
In court filings, Telus alleged that BCE acted in an anti-competitive manner by offering “predatory pricing,” employing “aggressive, misleading sales tactics,” and impeding customers from switching to Telus by “frustrating the installation process” by failing to complete or test some installations, resulting in delays.
Because Telus is offering service over Bell’s network, the company says that the involvement of a Bell technician “cannot be avoided.”
“5% of failed installations are the result of Bell technicians’ failure to show up at customers’ premises to complete the first step of the installation. At 5%, Bell’s ‘no-show’ rate is over five times higher than Telus ‘no-show’ rate of 1%,” Telus said in its filings.
As a result, some Telus customers have terminated their contracts, Telus alleged.