Saturday, April 7, 2012

Rogers … in a bit of hot water over the legality of their contracts?

It is well known that Canada has the highest costs for media, data and wireless services in the western world. We have a duopoly – Rogers and Bell – and a whole lot of smaller feeder fish who try to “compete” while being forced to buy their wholesale services from the duopoly, who own all the relevant infrastructure in most of the country.

I’ve railed against this horrific pricing situation more than once, even while deservedly praising Rogers for their technology, which really does get better all the time and which is sniffing the world-class level (our Internet speeds are still too slow as an average to really be world class – parts of Europe and Asia are far ahead.) Bell is only now getting into the game with serious technologies, as the result of (very slow) deployment of fiber to the end office and faster speeds on the twisted pair to your home.

So it came as no surprise to me that an expert in contract law at the University of Ottawa is questioning the legality of Rogers’ penchant to raise prices unilaterally and then to penalize people very steeply if they choose to go to another provider as a result.

This sort of behavior is akin to having your rent raised during a lease and to having to pay off your entire lease if you choose to go to another building. Seriously, that is what they do to people all the time.

Note that the ethics of long term contracts where you must pay out the whole thing to go to another provider is questionable even without the price raise or the legal questions. Who would countenance the practice of offering people a choice to pay back-breaking fees or to be held hostage to back-breaking penalties for a discount?

Exorbitant costs and cancellation fees are common to all the providers in Canada, but Rogers is the only one that enforces these penalties even after their own price hikes. This situation is so imbalanced as to be comical. At least in a casino, you know that the house has the advantage when you gamble.

Anyway … read all about it: