Rogers Telecom is denying accusations of discriminatory and anticompetitive conduct filed by Comwave Telecom, a Toronto-based VOIP start-up.
The Toronto-based media giant also said that Comwave will need to prove that it actually lost money due to Rogers' actions. Comwave is seeking CDN$3.7 million (AUD$4.3 million) in damages for alleged breach of contract in a case pending before the Ontario Superior Court.
In a complaint filed May 5 before the Canadian Radio-Television and Telecommunications Commission (CRTC), Comwave alleged it was losing business because Rogers was unjustly restricting provision of local number portability (LNP) service, which allows phone customers to keep their phone number when they switch carriers.
Comwave claims Rogers will only process 10 Comwave LNP requests per day. In addition, the company claims Rogers won't handle LNP service requests from Rogers phone subscribers who want to switch to Comwave.
The LNP service was provided to Comwave by Sprint Canada until Sprint was acquired by Rogers in 2005. Comwave contends that Rogers "unilaterally" imposed new restrictions on the agreement.
Comwave said Rogers' practices "warrant Commission intervention and remedial action on an urgent basis."
"We are disputing their claims," said Jan Innis, vice-president of communications at Rogers, who would not provide any further commentary.
In its statement of defense, Rogers contended it did not enter an "unconditional agreement for the provision of telecommunication services" to Comwave.
The document also claimed that LNP services were not included in a service quote it provided to Comwave and that LNP services were to be provided at Rogers' discretion until a Data Services Agreement is in effect.
"Rogers' actions set a dangerous precedent and Comwave urges the CRTC to act swiftly in the interest of the consumers," said Yuval Barzakay, president and chief executive officer (CEO) of Comwave, in a release.
Barzakay said the provision of LNP service "is a right of consumers mandated by CRTC and not a right Rogers has to provide as it sees fit."
Barzakay estimates that Comwave could have as many as 160 prospective clients daily and that Rogers' processing quota of 10 LNP transfers per day will "leave a huge backlog that can ruin business."
He said by restricting LNP processing services and denying LNP service to Rogers customers who want to switch to Comwave, Rogers is in violation of section 27 of the Telecommunications Act.
The section states: "No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage."
"I think this is more about publicity," said Ian Grant, managing director at the Seaboard Group, a MontrA©al-based telecom consultancy. "I think Comwave achieved more publicity in the last week with this than it did in the whole of last year."
But Stefan Dubowski, managing editor of Canadian telecom research at Ottawa-based Decima Reports, said Rogers would have to prove before the CRTC that it has a "valid reason why it cannot provide more than 10 LNP transactions a day."
He said under existing laws, Comwave will have to prove that it is a competing local exchange carrier (CELEC). "Rogers does not necessarily have to provide LNP to companies with non-CELEC status."
Dubowski believes the episode is a symptom of growing pains in the industry. "There are currently other similar cases being debated and perhaps this is a matter of the industry finding itself. With the rapid adoption of VOIP, the world is changing for the big telecom carriers and they are trying to figure out how to handle business in the new environment."