Rogers Communications Inc. will no longer be able to tout itself as offering Canada’s most reliable network, thanks to an injunction obtained by Telus Communications Co.
On November 24, 2009, the Supreme Court of British Columbia issued reasons for judgment in a case challenging Rogers’ legal right to advertise that it provides Canada’s fastest and most reliable network. Telus based its challenge on section 52 of the federal Competition Act, which prevents “knowingly or recklessly mak[ing] a representation to the public that is false or misleading in a material respect.”
As explained in the reasons issued by Mr. Justice Grauer, wireless service in Canada has historically been provided using two different network protocols, the “Global System for Mobile Communications” (GSM) and “Code Division Multiple Access” (CDMA). Telus and Bell historically operated on CDMA networks, while Rogers operated on a GSM network.
By 2006, Rogers was using a second generation “EDGE” network that provided peak data speeds of up to 384 Kbps, while Telus had developed a third generation “EVDO” network that increased peak data speeds to 2 Mbps.
Rogers launched its advanced third generation HSPA technology on top of its existing GSM/EDGE network in September 2007. In the 25 Canadian cities tapped for the HSPA upgrade, Rogers’ customers are provided with peak data speeds of up to 7.2 Mbps. Elsewhere, Rogers’ customers rely on the existing GSM/EDGE network.
Based on Rogers post-2007 upgrade, which provided an advantage for data transmission capability (enabling Rogers, in turn, to exclusively market the iPhone), Rogers advertised its network as both Canada’s fastest and most reliable. Since then, Rogers switched its focus to its reputation as “Canada’s Most Reliable Network”, including in a campaign launched November 2, 2009 and scheduled to run until December 28, 2009.
Meanwhile, Telus joined forced with Bell to construct a new national wireless network using the most advanced HSPA technology available. Telus essentially built the western half while Bell built the eastern half, both in parallel to their existing EVDO networks. The new national network launched on November 5, 2009. Telus argued that, in doing so, it completely nullified Rogers’ advantage, and has actually leap-frogged ahead of Rogers because Telus’ HSPA technology is newer and available more widely.
Thus, Telus argued, it was false or at least misleading for Rogers to continue to advertise that its network is Canada’s fastest and most reliable.
Telus’ claims under the Competition Act haven’t been decided yet. But the victory for Telus flows from the Court’s ruling that, for now, Rogers must back away from its advertising claims of having Canada’s most reliable network.
The timing of the injunction hasn’t been finalized yet, nor has its terms. The Court acknowledges that the busy Christmas shopping season is upon us. Both Rogers and Telus have been summoned back to Court on November 29th to determine the precise wording of the injunction order, including the amount of time Rogers will be granted to pull its offending advertising materials. One things seems certain, though: Rogers’ highly successful and uniquitous advertising slogan is headed for the dustbin.
An interesting point argued by Rogers was that, even if its advertising was misleading, Telus could easily launch its own competing advertising campaign to set the record straight. The Court dismissed this “marketplace of ideas” line of argument, however. Requiring this of Telus would be too much to ask, the Court stated. We imagine Telus will find a way of getting the word out regardless, probably with the help of those cute animals we’ve come to enjoy seeing in those “The World is Friendly” ads.