Guest blog by Barry Shell - How Big Telecom makes trouble when switching Internet providers in Canada

Here's a guest blog by OpenMedia.ca community member Barry Shell, who is writing to: "show everyone how Shaw and the other major Canadian Internet providers deliberately invent unnecessary obstacles to try to stop Canadians from getting lower-cost service from independent providers." Imagine having to pay nearly $200 whenever you want to buy gas from a different service station? Sadly, this is currently the situation when it comes to switching Internet providers in Canada. Last month I decided to switch our home Internet service from Shaw Cable, the only cable Internet provider in BC—a monopoly—to Teksavvy, a small independent Internet Service Provider (ISP). My reason was simple - the same 25 Mbps service costs $60 at Shaw and $40 with Teksavvy.

But the experience showed exactly how Shaw and other giant Internet providers (such as Rogers and Bell) set up artificial barriers to deter Canadians from getting lower cost service from smaller, independent providers. They do this by imposing arbitrary requirements for different cable modems and supposed “activation” fees.

Here is how the scam works. Because Teksavvy must use Shaw’s physical network, the only way Teksavvy can provide Internet service to its customers is by following Shaw's rules. According to Teksavvy, Shaw requires that Teksavvy use DIFFERENT modems from the ones that Shaw uses. There is no logical reason for this. I was forced to go out and buy an unnecessary modem, which cost me $40 on Craigslist. Then I had to give notice to Shaw and was forced to wait 30 days before my service could be transferred to Teksavvy. I also had to pay Teksavvy an $80 "activation fee" in advance, which they claim is a requirement of Shaw, not Teksavvy

On the day of activation a Shaw cable technician came to my house and essentially did nothing. The man did not add or remove any cables. Nor did he do anything physical to the cable coming to our house, nor did he climb the pole in the back lane and make any changes. All he did was put a green tag on the cable line indicating that service was no longer provided by Shaw.

Our Shaw Internet service continued to work, but the next day we had no Internet and no phone either, since our home phone works over the Internet connection. I discovered that my new modem was not compatible with the 25 Mbps service I had paid for at Teksavvy - Shaw requirements meant I needed a different type of modem for this. I then asked Teksavvy to switch me to a lower bit rate 10Mbps service, which allowed the use of the modem I bought off Craigslist. Even this simple switch meant up to a 4 day wait due to delays at Shaw’s end. This wait was not acceptable. My wife was starting to get a bit upset, wondering why I was doing this to save $20/mo. (It's the principle, I told her. Competition and all that.)

I then went to the nearest Shaw store to see if Shaw could provide me with the modem THAT THEY REQUIRE ME TO USE to get the Teksavvy service. They could not. All they could do was to offer to take me back as a customer.

Ultimately to get the telephone and Internet working in our house I was FORCED BY SHAW to reinstate their Internet service at $60/mo instead of $40/mo for the very same service from Teksavvy.

NOTE WELL: I was informed by the Shaw customer service rep at the store that if I was to try a second time to switch to Teksavvy I would again be forced to give 30 days notice, and pay another $80 activation fee.

This activation fee pays for nothing, since there is nothing Shaw needs to do except maybe a 5 second entry into a database to ensure that billing goes through Teksavvy rather than Shaw. There is essentially no difference in the technology or the service. I know this for a fact, because the Shaw sales rep “reconnected” our home Internet on the spot with a few mouse clicks on her screen.

To summarize:
1. I tried to pay less for Internet by switching to Teksavvy for $40/mo rather than $60/mo. This is a difference of 33%. Very significant. Think of it as $270/year (including tax).

2. I bought the wrong modem for the service that I signed up for. This was indeed my error, and I take responsibility. HOWEVER: that modem would have worked, if it were not for Shaw's restrictive policies. In fact, Shaw's existing modem in my house (the Motorola SB5100 which I had bought from Shaw for $100 years ago) would also have worked. Fundamentally, I did not need to buy anything. It is only due to Shaw's anti-competitive practices that this was foisted upon me (and all Canadians).

3. When trying to do the switch from Shaw to Teksavvy, this small error on my part caused the whole switch-over to fail, hence I had to reinstate Shaw service for another $60 + 12% tax.

4. The end result was a loss of $173 ($40 + 80 + 40 + tax) and no satisfaction. Note the old Motorola 5100 modem continued to work fine at 25MBPS.

Ironically, I had paid $40 for Teksavvy service and this was simultaneously being provided to our house over the same cable as Shaw Internet service, but how to tap into it? In the ensuing days and weeks, a long email dialog with Teksavvy service reps helped me realize that a second activation fee could be avoided if I just got the right modem. So I coughed up another $110 (after taxes), plugged it in, and it worked fine after a quick call to Teksavvy. Finally I had succeeded in switching to an independent provider.

I am posting this story here to hopefully show everyone how Shaw and the other major Canadian Internet providers deliberately invent unnecessary obstacles to try to stop Canadians from getting lower-cost service from independent providers.

The good news? I submitted a complaint to the CRTC and received a quick response. They are keenly aware of the problem and proceedings are well under way to come up with new policies to address the issue. You can read all about it on their website - and a decision is expected soon.

The Competition Bureau was also interested in my case and organized a telephone conference call with their staff in Ottawa. They explained that a second CRTC proceeding was recently started at the request of the Canadian Network Operators Consortium (CNOC) - a group of independent Canadian Internet service providers, including Teksavvy. You can still make a submission to these proceedings before November 29. Indeed, I submitted this story.

Let's hope that the CRTC and the government come up with new rules to stop Big Telecom’s anti-competitive practices aimed at preventing Canadians from getting cheaper Internet service. You can write to Stephen Harper ([email protected]) and the Industry Minister responsible, James Moore ([email protected]) if you want to support these changes.

Despite my frustrations with Shaw’s made-up fees and artificial barriers, I’m pleased that I’m finally with a cost-effective independent provider like Teksavvy. Consider: the cost to switch can be recovered in less than a year. After that, the savings are huge. Internet providers are available from coast to coast - why not consider making the switch today?