Industry Minister François-Philippe Champagne is directing Canada’s telecoms to enter into a formal agreement aimed at enhancing network reliability after a widespread outage shut down Rogers Communications Inc.’s RCI-B-T wireless and internet services across the country on Friday.
During a conference call on Monday afternoon, Mr. Champagne demanded that the chief executive officers of Canada’s major telecoms implement a framework that would require the wireless carriers to assist each other during network outages. It would also include providing customers with emergency roaming on their networks and following a communications protocol to ensure consumers are not kept in the dark.
It would be similar to a framework mandated by the U.S. Federal Communications Commission on July 6. Mr. Champagne said in a news conference that he has asked that it be implemented within 60 days.
Top executives at Rogers, BCE Inc. BCE-T, Telus Corp. T-T, Shaw Communications Inc. SJR-A-X, Quebecor Inc.’s Videotron Ltd., SaskTel and Bragg Communications Inc.’s Eastlink took part in the call. Representatives of several participants, including Rogers, expressed support for the network resiliency initiatives.
However, three telecom industry sources said such a framework would not have prevented or resolved the massive network outage that left Rogers customers across the country without internet, wireless and home phone service, because the disruption was the result of a malfunction in Rogers’s core network. The Globe is not identifying the individuals because they are not authorized to discuss the matter publicly.
Mr. Champagne said that even though Friday’s outage went “beyond” the kind of help other telecoms could provide, the measures he has requested are “common sense” initial steps.
“Certainly the [telecoms] were willing to offer their assistance over the weekend to Rogers, but we want to have a much more formal process in place to make sure that whatever the nature of a possible future failure would be, that we would be better prepared,” he said.
“Let’s be clear – this was a failure by Rogers in their system,” he added, noting that he told the company’s CEO, Tony Staffieri, the outage was unacceptable.
He also noted that Canada’s telecom regulator will conduct a full inquiry into the outage. The service interruption knocked out the Canadian Radio-television and Telecommunications Commission’s phone lines.
Patricia Valladao, a spokesperson for the CRTC, said the regulator supports the minister’s announcement and will have more to say on the matter on Tuesday.
The network outage, which took down the Interac debit system and affected 911 service and hospitals, highlighted Rogers’s prevalence in Canada just as the Toronto-based telecom is attempting to persuade federal regulators its proposed $26-billion takeover of Shaw Communications Inc. won’t harm consumers by reducing competition. Mr. Champagne’s ministry is one of two regulatory bodies that has yet to approve the deal.
Asked whether the outage would affect his review of the proposed takeover, Mr. Champagne said he was focused on affordability and competition.
The Commissioner of Competition is attempting to block the merger of Canada’s two largest cable companies, saying it would result in higher prices and poorer service, particularly for wireless customers.
During an interview on BNN Bloomberg TV on Monday, Mr. Staffieri said Rogers remains committed to the Shaw takeover. “That transaction has always been about expanding our network capabilities and obtaining more redundancy and coverage across the nation,” Mr. Staffieri said. “That can only help in situations like this.”
He added that Rogers struck a deal to sell Shaw’s Freedom Mobile to Quebecor for $2.85-billion to address competition concerns.
Mr. Staffieri said a coding error as part of a maintenance upgrade to the company’s core network early Friday morning caused a data overload. That made the routers overload and the core gateway shut down.
“We know what the problem is and we’re focused now on ensuring that our network is operating with 100-per-cent stability,” Mr. Staffieri said, adding that the telecom still has “intermittent issues.” The company is implementing changes to prevent a recurrence, he added.
Bank of Montreal analyst Tim Casey called the network outage unprecedented in breadth and duration, and said it increases regulatory risk for the Shaw deal.
“The Competition Bureau’s opposition is based on unrelated issues, but the wide-ranging impact of the outage will add to concerns regarding industry concentration,” Mr. Casey said in a research note. He added that if the merger is approved, some investors may be concerned about the telecom and media giant’s ability to deliver the $1-billion in synergies it has forecasted.
“From a high-level industry perspective, the outage weighs against an otherwise constructive narrative with regulators coming out of the pandemic where Canada’s telecommunications infrastructure performed admirably during a period of rapid and systemic changes in broadband consumption,” Mr. Casey said.
Scotiabank analyst Maher Yaghi said Rogers plans to provide $65-million to $75-million in customer credits for the outage. The telecom is also likely to see a higher rate of customer turnover in its wireless and cable divisions as a result of “disgruntled customers.”
Although the telecom will likely work on initiatives to retain customers, an offer from Telus on Friday for $200 off on a business smartphone could attract some people, Mr. Yaghi said in a note to clients. He added that he still believes the Shaw takeover has an 80-per-cent chance of closing.
Montreal law firm LPC Avocat filed a class-action lawsuit authorization request on Monday, alleging that Rogers misled consumers by advertising that it is “Canada’s most reliable 5G network.” The firm is seeking to launch the class-action lawsuit on behalf of Rogers, Fido and Chatr customers as well as Quebec residents who were affected by the outage.
A spokesperson for Rogers declined to comment on the proposed class-action lawsuit.
Mr. Staffieri endorsed Mr. Champagne’s proposed changes, saying Rogers is “committed to solutions to protect Canadians from serious outages.”
Telus CEO Darren Entwistle said in a statement that his company “is ready and willing to work with the minister to ensure Canadians can always access the tools and services they need.”
BCE representative Ellen Murphy said earlier on Monday that the company’s CEO Mirko Bibic was “looking forward to meeting with Minister Champagne and other telecommunications leaders today for a collaborative discussion about last Friday’s outage and a productive path forward.”
SaskTel spokesperson Greg Jacobs said on Monday that although the outage did not have a significant impact on Saskatchewan, “we understand how critical communications networks and services are in the modern world and welcome the opportunity to discuss with our peers how such situations may be avoided in the future.”
With a report from Nicolas Van Praet
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