Rogers outage points to need for greater oversight of critical industry
Tighter regulations required for a sector 'foundational to the very operation of society,' expert says
The massive Rogers Communications outage last Friday that prevented many Canadians from accessing crucial services demonstrates the need to better regulate the country's telecommunications sector, experts say.
On Monday, Industry Minister François-Philippe Champagne called a meeting of telecom CEOs, including Rogers's Tony Staffieri, to talk about ways to prevent similar service disruptions in the future.
Champagne said he wants to see the companies create a plan within 60 days for mitigating the impact of future outages on consumers that includes providing emergency roaming.
But experts say the issues facing the industry go beyond a quick fix.
The outage halted basic communication and internet access, stopped financial payments and in some cases blocked people from making emergency calls, underscoring the essential role of internet providers.
"The fact that we can have one provider go down and knock off so much of our internet, really, I think raises significant questions about how we approach internet regulation, given it's more and more critical capacity in our everyday lives," said Fenwick McKelvey, an associate professor of communications at Concordia University in Montreal and an expert in telecommunications policy.
Concentrated ownership
Five companies — Rogers, along with Bell, Shaw, Telus and Videotron — account for 90 per cent of Canada's telecommunications market. (Rogers and Shaw are in the middle of a proposed $26-billion merger, but face questions from the Competition Bureau.)
Part of the challenge in Canada is that these companies own many of the steps along the supply chain, McKelvey said.
Rogers has control over both the infrastructure and the services provided that use that infrastructure, he said. "You have the same company in the same system accountable for many, many, many parts of the communications supply chain."
McKelvey suggests making the infrastructure a public utility, which has been done in Australia, and then opening up greater competition between companies for cellphone contracts and other services.
"We're talking about something which is so foundational to the very operation of society," McKelvey said. "I think what we lack now is an imagination about different ways of administering and running the internet."
Dwayne Winseck, a communications professor at Carleton University in Ottawa and the director of the Canadian Media Concentration Research Project, said increased competition among service providers could help bring down the cost for consumers.
But that alone wouldn't address the infrastructure problem that led to the outage, Winseck said. Given the high cost of setting up the cables and towers, additional competition likely wouldn't lead to more reliable networks.
"What you would have is competitors buying the most lucrative markets and shaving costs at the margins," he said. "In those margins would include accepting higher levels of risk for breakdowns and so on."
It's imperative, Winseck said, that the federal government and the Canadian Radio-television and Telecommunications Commission (CRTC) better regulate telecom companies.
"We've got a small number of players in what we can call a tight oligopolistic market — basically a market with very few players," he said.
Ottawa needs to be more aggressive, expert says
Rogers has yet to offer details on what caused the outage, blaming a network system failure following a maintenance update.
In a letter to Rogers that was made public Tuesday, the CRTC ordered the company to explain in detail what caused last week's network outage, how it affected emergency services and what the company plans to do to compensate customers.
Following Monday's meeting, Staffieri had said he welcomed Champagne's suggestions and added that Rogers would work with other companies to bring the plan into action.
"We are united in our commitment to ensuring strong, reliable wireless and internet connections that meet the high standards Canadians expect," Staffieri said in a statement.
WATCH | Inquiry into Rogers outage needed, says consumer group:
Michael Geist, a law professor at the University of Ottawa and an expert in internet regulation, said the first step should be to determine exactly what led to the outage.
The breadth of the impact — from downed Interac machines to blocked 911 calls — demonstrates that many sectors and the federal government were ill-prepared to deal with such a situation, Geist said.
The government needs to put in place standardized compensation and rights for consumers affected by such an outage, he said, as was done with airline travel in 2019.
Geist said the next CRTC chair appointed by the government should be focused on more rigorous oversight of the industry. The five-year term of the current chair, Ian Scott, is set to end later this year.
"There's been frustration with the government that it hasn't been inclined over the last number of years to adopt a particular combative approach to the telecom providers," Geist said.
"I think that Canadians are going to be looking to the government to take on a more aggressive, serious tone, recognizing the seriousness of a situation when you can literally lose connectivity for millions of Canadians."