Update: Ontario Court sides with Rogers, says Chatr ‘fewer dropped calls’ ads were accurate

The new entrants launched their wireless service in various Canadian cities across and offered a similar structure with no contracts, unlimited calling, texts and data. Since Chatr was backed by Rogers they also hopped onto their wireless network and quickly launched an advertising campaign that highlighted “fewer dropped calls than new wireless carriers.”

This, at the time, struck a nerve with the new carriers. Mobilicity was first to voice its opinion and made an “abuse of dominance” complaint with the Fair Business Practices Branch of the Competition Bureau. WIND Mobile followed this up by a similar complaint to the Competition Bureau, but specifically targeted the fewer dropped calls claim. One of the issues was that WIND Mobile claimed that dropped calls were actually caused by Rogers’ failure to permit a “seamless handoff” when customers were going in and out of their calling zone, thus creating a false impression that their network was less reliable. 

The claim would potentially would see Rogers pay a penalty of $10 million. To fully understand the scope of the claims the courts engaged in several dropped call tests in various cities the carriers offered wireless service, including indoor walking tests and drive tests.

Today, the court made its decision. According to the documents, the Ontario Court of Justice has declared that “Because the applicant’s assertion that the fewer dropped calls claim is false is based to a significant degree upon switch generated data, I am not satisfied that the applicant has proven on a balance of probabilities that the respondents’ fewer dropped calls claim was false in Ottawa with respect to Wind Mobile from July 28, 2010, to November 30, 2010.”

As for the $10 million penalty, well Justice Marrocco stated “Accordingly, I am satisfied that the $10 million administrative monetary penalty provided for in s. 74.1(1)(c) does not engage s. 11 of the Charter.” Even though the judge declared he believes the penalty should not be enforced, a hearing still needs to take place between the courts, Rogers and the Competition Bureau for potential charges, namely for failing to conduct adequate testing in Calgary and Edmonton before making its advertising claim. However, our sources believe the charges will be likely minimal when compared to the proposed $10 million.

Rogers was quick to speak on the decision, stating that “we’re pleased that the court today confirmed that Chatr’s advertising of fewer dropped calls, in connection with its 2010 launch, was fair and accurate. The court also confirmed that the drive testing used by Rogers is the best method for comparing network performance and is universally accepted, both in Canada and internationally.

In addition, with this news Rogers proudly boasted that their network is better than its competition, saying “there is no doubt that Rogers’ network performed better than networks of new wireless carriers and we believed it was important that consumers had that information.”

These days Chatr Wireless has slipped away consumers minds. The selection of wireless devices has been slimmed down and rarely do they advertise. In addition, Rogers closed majority of its kiosks last year and opted to direct potential customers to sign up at a Fido location.

Update: John Pecman, Commissioner of Competition, has issued a statement on the Ontario Court of Justice decision and said the Competition Bureau is “disappointed that the Court did not agree that Rogers’ claims were misleading to consumers, and we are currently considering our next steps in this matter.” Not really sure what they can do expect settle for a nominal payment for the inadequate testing Rogers did before launching the ad campaign.

Pecman also noted that “Nevertheless, we are pleased that the Court has dismissed the constitutional challenges brought forth by Rogers, and has agreed with our position that Rogers did not conduct adequate and proper testing beforehand to support its claims about dropped calls in some Canadian cities.”

Source: Ontario Court (PDF)
Via: CNW, MarketWire