The opinions expressed in this editorial are those of the author and do not necessarily reflect those of Decima Reports.  There is something wrong with the supposedly highly competitive Internet service business when one of the country’s largest Internet providers can raise prices with little fear of competitive pressure from its rivals.  Nonetheless, Rogers Communications plans to hike its Internet service prices. The move was announced by VP of finance John Gossling at the Bear, Stearns & Co. 19th Annual Media Conference in Florida this week.  Companies shouldn’t be able to raise prices without fear of reprisal from rivals in a competitive market. Consumers should have the power, not the carriers. As Gossling noted in his presentation, Rogers does have some pricing power. "We don’t seem to have the competitive pressure to take these decent-margin products and move their prices down, so we’re seeing good lift there," he said. This statement should raise red flags with the country’s telecommunications regulator. The CRTC should ask itself, "What has happened to the Internet business such that one of the largest providers in the country can raise prices seemingly without fear of competitive response?" It shouldn’t be that easy for a large provider to raise prices, especially if it’s competing in the country’s most populous region, Ontario, where many other providers also operate. Gossling’s brash comment suggests that Rogers knows competitors are powerless to hurt its Internet business – it’s flaunting its pricing power with no regard for the impact on consumers.  Prices should be low in a competitive marketplace driven by consumers seeking the best deal for the least amount of money. Of course, service quality and features are an important factor in the Internet buying decision, but let’s be honest: Rogers’ offering is similar to what other ISPs provide, so business differentiators really don’t play a big part in Internet provision.  One significant factor is brand: either you like Rogers or you don’t. It goes the same for Bell Canada’s ISP brand, Sympatico. But brand has little to do with either firm’s competitive stance or competitive reactions to price-moves. Instead, Bell will refrain from reacting because the new motto of BCE is profitable growth – a strategy championed by George Cope. If anything, Bell will react by raising its prices, not dropping them. The thinking is, "Well if Rogers can raise prices, then so can Sympatico."  We may be jumping the gun on the competitive response from Sympatico, but it is unlikely the BCE Internet provider will get into a pricing war with its biggest rival when it is losing telephony market share to Rogers in Ontario.  The Internet service sector isn’t the only market experiencing this kind of level playing field. The mobile wireless industry is criticized for its lack of competitiveness and speculation has it the government is pushing for the creation of a fourth national wireless operator (see next issue of Report on Wireless for more).  Is there anything the regulator can do to rectify the Rogers Internet situation? Not likely. The commission doesn’t want to regulate the Internet business.  It will be up to the consumer – hundreds of thousands of consumers – to jump ship and switch ISPs. It’s the only way change will happen.