Shaw initiates predatory price war, targets select customers


    Novus urges Shaw to play fair and offer all customers $9.95 monthly deal

    VANCOUVER, July 28 /CNW/ - In a move that will anger and frustrate its
more than 2.1 million customers, Shaw Communications Inc. is currently
offering its entire TV line-up, including high-definition TV (HDTV), phone and
high-speed Internet services to current Novus customers for $9.95 per month,
each. The offer - not available to Shaw customers outside of the Novus service
area - is being challenged by Novus Entertainment Inc. (Novus) at the
Competition Bureau and in the BC Supreme Court.
    "Shaw is abusing its dominant position in the market by offering services
- which it normally makes nearly 50 per cent margins on - at a sizeable loss
as a means to destroy a local competitor," said Donna Robertson, Co-President
and Chief Legal Officer of Novus Entertainment Inc. "The millions of existing
Shaw customers paying full price should be outraged because they're
unwittingly subsidizing the costs that customers with a competitive alternate
pay, which is unethical and unfair. If they don't make the offer available to
everyone, current customers should call Shaw and demand the same deal."
    Shaw has been targeting potential customers residing in Vancouver
highrise condominiums that currently receive their dedicated broadband
Internet and cable service from Novus. Shaw has been on a buying spree, taking
over small cable companies, but has been unsuccessful in getting traction with
Novus.
    "Shaw enjoys increasing cable margins of nearly 50 per cent, which it
boasts to investors is 'best-in-class' compared to other North American cable
companies," said Robertson. "We believe that Shaw's targeted campaign is an
attempt to eliminate Novus from the competition, which would allow Shaw to
maintain its near monopoly status and raise prices for all customers whenever
it sees fit"
    Shaw's $9.95 monthly cable package includes two rent-free high-definition
set-top boxes with PVRs, more than 200 digital channels, more than 25
high-definition channels, a movie channel package and the first two months of
service for free. The $9.95 Internet and phone packages also boast the first
two months free and include several premium features.
    Novus provides the best Internet and most reliable cable service
available. This is because Novus has invested millions in building a fibre
optic network that extends directly to the highrise condominiums with
dedicated lines for cable and Internet. Other providers piggyback their
services on one network, which limits their bandwidth capacity. On cable modem
Internet networks, congestion slows service, particularly during peak periods.
With more than 9,000 cable and Internet customers, Novus is currently
operating in approximately 220 buildings in Downtown Vancouver and Burnaby and
is poised to expand into Richmond.
    "Based on Shaw's actions, we can only assume that they are trying to buy
our customers by gouging their own prices," said Robertson. "They're offering
these services at an enormous loss, while forcing the rest of their customers
to make up the difference. We aren't big enough to compete with Shaw's
predatory pricing, but we are faster and more reliable, and our service is
actually less expensive over the long term."
    Novus is pursuing a formal complaint to the Competition Bureau and asking
for a swift resolution to this matter in hopes that meaningful competition in
Metro Vancouver can continue. Novus has also commenced legal proceedings in
the Vancouver Registry of the Supreme Court of British Columbia.

    About Novus Entertainment Inc.

    Founded in 1996, Novus Entertainment Inc. is a privately owned and
operated company providing high-speed Internet, cable and digital TV, and
digital phone services to residents in Metro Vancouver. Novus continues to
expand its fibre optic network throughout Metro Vancouver to offer customers
the very best in entertainment and communications technology. The network
provides truly digital service and virtually unlimited bandwidth with the
capability to meet future demands, particularly for high-definition
programming. Novus is currently the only company in Western Canada to offer
residential Internet speeds up to 60 Mbps without the use of a modem. For more
information on Novus, go to www.novusnow.ca.

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