Far-reaching implications of Rogers outage shows need for competition: expert

A widespread Rogers Communications Inc. outage that caused trouble for 911 services, retailers and transit operators Friday had many warning the incident is a sign that monopolistic telecommunications companies need more competition.

The outage also affected government services.

Canada Border Services Agency tweeted that incoming travellers would need to show paper copies of their vaccination proof.

E-Comm 9-1-1 told its B.C. customers to use a landline or cellphone on another provider if they had an emergency.

The Canadian Anti-Monopoly Project (CAMP), a think tank that addresses issues caused by monopoly power in Canada, says that Friday’s outage showcases the need for policymakers to protect everyday services.

“I don’t want to be a pessimist but if this doesn’t get people to wake up about this, then we have a lot more work to do,” said CAMP co-founder, Keldon Bester.

Bester says that Canada has fallen down a path of consolidation for decades, which he says the primary culprit being the country’s merger laws. He says that telecommunication companies need to enact policy solutions to protect critical infrastructures like 911 services, some of which is already present in other countries.

“We should be able to move critical pieces of infrastructure such as our payments over to another even competing network,” said Bester.

“The outage is illuminating the general lack of competition in telecommunications in Canada,” said Vass Bednar, executive director of McMaster University’s master of public policy program.

The country’s telecom sector is dominated by three large carriers — Rogers, BCE Inc. and Telus Corp. — and their hold on the industry has long been a concern of academics, who have called for regulators to increase competition for mobile and internet services in Canada.

The Competition Bureau is currently fighting Rogers’ plans to purchase Shaw Communications Inc. for $26 billion despite the planned sale of its Freedom Mobile business to Quebecor Inc. because the regulator feels the deal would only bolster Rogers’ monopoly and not create a viable fourth carrier.

When the outage began Friday, Rogers, Shaw and the Competition Bureau had just wrapped a two-day mediation period that ended with no resolution.

The company offered no explanation for the outage or its expected duration, number of customers affected and location, but promised technical teams are “working hard to restore services as quickly as possible.”

When everything from 911 services to GO Transit is impacted by a Rogers outage, the reach of telecommunications companies is very obvious, Bednar said.

“But unless we’re going to see people switching their providers today or new publicly run options suddenly springing up, there’s not much more that we can do right now other than perhaps factor in people’s anger and frustration, as the pending Rogers-Shaw deal is considered.”

She added that people should be compensated for the disruption.

“It’s a huge expense to Rogers, but even a modest decrease on people’s bills would acknowledge some kind of deficit.”

BUSINESS IMPLICATIONS

Beanfield, an independent fibre network operator, called the outage “every telecom provider’s nightmare,” but said it was also an example of why it has long been concerned with the lack of rivals for Rogers, Telus and BCE.

“A lack of competition and choice can lead to a building with the population of a small town going completely dark- cut off from all communications,” the company said on Twitter.

“If you can’t even get help from a neighbour, where do you go? How do you call 911?”

The business implications are likewise tremendous, the company added.

“The consequences of such an outage for the financial sector, the lack of functioning ATMs, of working bank branches, can be catastrophic,” it said.

“Not to mention the independent businesses across the country with no way of processing payment.”

Across the country, businesses reliant on Interac for debit and E-transfer services also felt the impact. The company tells CHEK News that the outage affect online and in-person checkout.

“Interac e-Transfer services are unavailable at most financial institutions, impacting the ability to send and receive payments. We are waiting for updates from Rogers on their time to resolution.” said the company in an email.

Sam Jones, owner of 2% Jazz Coffee, says he was fortunate he didn’t have to turn away his customers before the outage was announced.

“Luckily, we know most of our customers really well and we’re able to give them a credit, pay us tomorrow or whatever. But I really feel for the millions of other businesses out there that didn’t have that option.” said Jones.

Jones was faced with a $1,200 grocery bill for his business early Friday morning when he learned about the service disruption.

“We couldn’t pay for it all of the sudden. So we had to run and go to the bank. With cash limit withdrawls as they are, we had to go to a couple of different banks and gather up just as much cash as we could,” said Jones.

The Victoria-based coffee chain owner says that changes should be made in order to protect Canadian commerce.

“The system should change so that one company isn’t solely responsible for the country’s economic output for the day,” said Jones.

With files from Tara Deschamps with The Canadian Press.

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