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Canada takes action after Rogers outage

The Canadian government has put the onus on telecoms operators to come up with a back-up plan in the event of a network outage like the one that affected Rogers customers last week.

That might seem like a fairly soft approach, but the operators have been given a relatively short time to present their collective solution before… well, we don’t actually known what will happen if they don’t meet Ottawa’s deadline. Meanwhile, the country’s telecom regulator will also investigate the outage, which suggests that sanctions could follow.

And to make matters worse for Rogers, Friday’s network failure looks set to be the final nail in the coffin for its bid to merge with Shaw. If that deal wasn’t already dead in the water, it probably is now.

Late last week saw such an extensive fixed and mobile network outage at Rogers that it made the news on both sides of the Atlantic. As well as affecting consumer and business services, it also prevented users from contacting the emergency services and making payments, and disrupted travel plans, amongst other things. Rogers ultimately traced the problem to a network system failure following a maintenance update in its core network, which caused some of its routers to malfunction. The telco disconnected the malfunctioning kit and redirected traffic, and by Saturday it was mostly back up and running. But despite profuse apologies to customers, a day of chaos was never going to be without consequence.

François-Philippe Champagne, Minister of Innovation, Science and Industry, this week shared some details on the outcome of meetings held with the chief executives of Rogers and other major Canadian telecoms operators in the wake of the network drop. The minister took to Twitter to outline what he expects to happen next.

The outage was “unacceptable,” Champagne said. “That’s why today I brought together the heads of the major telecom companies to demand they take immediate action to improve the resiliency and reliability of our networks by ensuring a formal arrangement is in place within 60 days.”

He told the telcos to hammer out agreements on emergency roaming, mutual assistance during outages, and a communication protocol to better inform the public and authorities during telecoms emergencies. The minister also confirmed that the Canadian Radio-television and Telecommunications Commission (CRTC) will investigate the outage.

With the big three – Bell, Rogers and Telus – having historically called the shots in the Canadian telecoms market, it’s tempting to assume that the repercussions of the outage will be limited, from a regulatory point of view, at least. We’ll have to wait and see on that one.

But Rogers will certainly feel its impact on its proposed merger with Shaw, which was first announced in March last year.

Realistically, the telco was already fighting an uphill battle to win over the authorities for the tie-up. But the outage served to further highlight that a reduction in network competition is probably not a great idea.

Canada’s Commissioner of Competition indicated that he would seek to block the deal a couple of months ago, and Champagne has also been vocal in his objections to the deal, something he reminded the industry in his comments on the outage.

“I’ve said very clearly and openly that I will not allow the wholesale transfer of licenses from Shaw to Rogers and I think this is well understood,” Reuters quoted him as saying, on Monday.

Rogers and Shaw have been scrabbling around for remedies designed to safeguard competition and appease the regulators. A few weeks ago they brokered a C$2.85 billion deal to sell Shaw’s Freedom Mobile business to telecoms and media company Quebecor, a move they hoped would help them get their tie-up over the line. “The parties strongly believe the agreement effectively addresses the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry regarding viable and sustainable wireless competition in Canada,” the companies said in a joint statement.

However, last week Rogers published a subdued announcement noting that two days of mediation with the Competition Commissioner had failed to sway the latter in his objections to the merger.

“Rogers and Shaw intend to continue to work constructively with the Commissioner to highlight the many benefits of the merger to all Canadians, including maintaining a strong and sustainable fourth wireless carrier across Canada through the proposed divestiture of Freedom Wireless to Quebecor Inc,” it said.

This time last week, Rogers still believed it had a chance of going ahead with the Shaw merger. Surely it has now seen which way the wind is blowing.

 

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