A small digital services provider has declared war against Shaw Communications.

Novus Entertainment is accusing the western cable and telephone giant of targeting its customers in high-rise condominiums with below-cost promotional deals – in order to eliminate Novus from the competitive multi-dwelling unit market in metro Vancouver. Novus has lodged a formal complaint at the Competition Bureau and commenced legal proceedings at the B.C. Supreme Court.

‘We plan to fight this every step of the way,’ says Donna Robertson, co-president and chief legal officer of the company, which provides Internet, TV and phone services to about 9,000 subscribers in 220 Vancouver buildings.

She says Shaw ‘is abusing its dominant position in the market by offering services – which it normally makes nearly 50% margins on – at a sizable loss as a means to destroy a local competitor.’

Predatory pricing is prohibited by the Federal Competition Act.

Robertson alleges that Novus’ condo customers are being offered promotional deals that are way below cost. Shaw has been offering broadband, television, and cable phone bundles, with each service priced at $9.95 per month ($29.95 for the package).

‘To the best of our knowledge this promotion is targeted only at our customers,’ says Robertson. ‘We had some of our people pose as Telus customers and they don’t get the same promotional deal [that Shaw is offering to Novus customers]. We have no problem with fair competition, but this is dirty pool.’

Shaw Communications president Peter Bissonnette denies that the company’s promotional campaign is directed at Novus customers, but rather is part of an overall corporate strategy to increase penetration of the multi-dwelling unit market.

‘Our promotional offer is not targeted at Novus, it’s targeted at multi-dwelling units throughout Vancouver because we are trying to get our digital cable terminals into these buildings before the 2010 analog cutoff,’ he explains.

Bissonnette adds that the Shaw special offer is no different than the promotional deals offered by the competition.

‘Telus, Bell ExpressVu and Novus are all competition in this market and they all have been known to do special promotions to keep subscribers such as giving away free cable for a year,’ he says. ‘Novus has done this themselves.’

In addition to the legal proceedings, Novus has launched a public campaign against Shaw in the Vancouver area. The company has created the website www.10buckstoo.com plus Twitter and Facebook pages where its suggests that Vancouver Shaw customers who are paying full price for phone, Internet and TV services should call the company and demand the $9.95 deal, too.