Responding to the Rogers Outage: Time to Get Serious About Competition, Consumer Rights, and Communications Regulation

Like many Canadians, I spent most of the massive Rogers outage completely offline. With the benefit of hindsight, my family made a big mistake by relying on a single provider for everything: broadband, home phone, cable, and wireless services on a family plan. When everything went down, everything really went down. No dial tone, no channels, no connectivity. Work was challenging and contact with the kids shut off. It was disorienting and a reminder of our reliance on communications networks for virtually every aspect of our daily lives.

So what comes next? We cannot let this become nothing more than a “what did you do” memory alongside some nominal credit from Rogers for the inconvenience. Canada obviously has a competition problem when it comes to communications services resulting in some of the highest wireless and broadband pricing in the developed world. Purchasing more of those services as a backup – whether an extra broadband or cellphone connection – will be unaffordable to most and only exacerbate the problem. Even distributing the services among providers likely means that consumers take a financial hit as they walk away from the benefits from a market that has incentivized bundling discounts.  Consumers always pay the price in these circumstances, but there are policy solutions that could reduce the risk of catastrophic outages and our reliance on a single provider for so many essential services.

First, there is a need to better understand what happened and why. Rogers CEO says the problem lies with maintenance to the core network, which caused some routers to malfunction. But that’s just tech talk. Canadians deserve answers that explain not only how this happened, but how we find ourselves in a position where malfunctioning routers at one company cause a nationwide payment system to go down, government services to be taken offline, and emergency services to be rendered inaccessible. It is one thing for my household to make a mistake, but another for Interac to do so. That means conducting an open CRTC process into this outage alongside a Parliamentary hearing on the broader issues since this is a matter that requires both regulatory and political response. There is no need to wait: these hearings must happen this month with the goal of identifying the scope and source of the problem along with potential policies that might mitigate future harms.

Neither the CRTC nor the current government has shown much inclination to challenge the big telcos. CRTC Chair Ian Scott has reversed years of a consumer-focused Commission into one more comfortable supporting the big providers, while the government has been far more interested in sabre rattling or shaking down Internet companies than taking on big telecom. Yet as we were reminded on Friday, the linkage to the availability of essential services – payments, health care, government services – runs through the telcos, not the Internet companies.

Second, can we finally get serious about competition in communications in Canada? The Rogers-Shaw merger should have been a non-starter from the very outset. Indeed, the hubris of the respective companies stems largely from a government and Competition Bureau that gave Bell a pass on its MTS merger and had consistently avoided confrontational decisions. In light of Friday’s events, the last thing Canada needs is an even more concentrated market. But stopping that merger alone would only maintain the status quo. The CRTC under Scott has proven to be a barrier to service-based competition, yet a regulatory model that offers third-party providers with access to multiple facilities-based providers or spectrum could offer innovative services that work around outages.

Third, there needs to be far more transparency regarding operational downtime and regulatory penalties where services are unavailable for extended periods. At the moment, downtime is often guesswork on the part of the customers and remedies require persistence that is rarely worth anyone’s time. While the airline sector isn’t anyone’s idea of a model right now, the regulatory framework for flight delays with regulated payments for extended delays could be incorporated into the telecom sector. Such compensation should be automated with customers entitled to it due to the downtime without the need for a formal application. Instead, downtime and applicable compensation should simply appear as a line item on monthly invoices.

The Rogers outage must be a wake-up for a government that has been asleep on digital policy, content to cite dubious claims about meeting wireless pricing targets, introducing a policy direction that signalled more of the same, and handing over broader digital policy to a Canadian Heritage department largely captured by a few culture lobbyist groups that view the Internet primarily as a threat. Industry Minister François-Philippe Champagne may fashion himself as a great salesman for Canada, but even he can’t sell the state of Canadian communications competition. The blame for Friday’s outage may lie with Rogers, but the government and CRTC should be held accountable for a failure to respond.

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