Rogers outage exposes tough choices for Ottawa

We should have known the Rogers breakdown was in the cards. It was intended.

After two years of bizarre grocery shortages, no bikes or kayaks on the shelves, airport congestion and passport pandemonism, we were of course going to lose the internet too.

We already know that our infrastructure is in bad shape, with bottlenecks in our ports and on the railways, and many labor disputes on the horizon.

It is now apparent that the digital infrastructure that has been the mainstay of socializing and conducting business during the pandemic is also fragile and needs more than just loving care.

When Industry Minister Francois-Philippe Champagne emerged from his meeting with Rogers and the other major telecommunications companies on Monday, he made sure the world knew he got it right. He was keen to be the boss – giving orders to companies, denouncing the breakdown as “unacceptable” and demanding a quick solution.

“I demanded that they take immediate initial steps to improve the resilience of our networks,” Champagne told media after meeting.

“What I have asked for and what I expect from telecommunications companies in Canada is to reach a formal agreement within 60 days of today, at the most.”

He might as well have hit his chest.

But in a post-pandemic economy, where resilience has sidelined efficiency as a top priority, the federal government has been slow to translate that vision into the digital world. And now Champagne faces the stark reality that if something deep in the inner workings of a telecommunications company goes wrong, millions of people lose connectivity, money and essential services to the point of putting lives. in danger.

It’s not at all clear that the plan Champagne is asking for within 60 days would have mitigated last week’s Rogers outage.

He wants — demands! — an industry-wide pact of mutual support during outages, as well as better communication with the public when services go wrong. But he also acknowledges that such a pact would only formalize an informal arrangement that pre-existed the Rogers outage, and that it is only the first step in forcing telecom operators to provide reliable networks.

Despite the harsh words, he’s behind on resilience because he’s focused elsewhere.

When it comes to Rogers, Bell, Telus and others, Champagne’s focus until this week has been squarely on competitiveness and affordability. In their 2019 election platform, the Liberals pledged to cut cellphone bills by 25%. They backed off a bit in the 2021 campaign, but maintained the rhetoric of encouraging competition to push major telecom operators to lower their prices.

Indeed, that mantra has persisted stronger than ever this week, even as Champagne has at times vaguely attempted to separate the discussion of competition and affordability from the discussion of reliable networks.

Many critics have argued that breaking the oligopoly that is our telecommunications industry and making the market more competitive by attracting new players into business would do wonders to get Rogers back in shape. The first step would be for Champagne to provide a significant and immediate boost to Rogers’ planned $26 billion takeover of Shaw.

The theory is that greater competition will incentivize incumbents to adopt higher standards and cut costs at the same time.

But this is by no means a given.

On the one hand, new mobile service providers must rely on the infrastructure owned by Rogers, Telus and Bell. And these companies also occasionally use other people’s infrastructure. Building redundancy into the backbone of the system would require a huge investment that probably wouldn’t directly drive down prices.

Indeed, the pandemic has shown us that efficiency and global competition have driven companies to cut corners on resilience, leaving some unable to scale up when demand becomes urgent and supplies are scarce. Think personal protective equipment, vaccines, shipping containers and computer chips.

So, in addition to talking tough, Champagne and the feds have to choose. Do they prioritize network reliability or competition and affordability? And how should they wield their powers over the telecommunications industry in a way that ensures our networks are always there when we want them, setting quality standards and requirements for backup systems in a way that won’t get in the way not the consumers?

The banking sector is a place of learning. Ottawa has long played an important role in regulating financial services, and there has always been a well-understood quid pro quo. The federal government protects Canadian banks from outright foreign competition and, in return, expects the banks to maintain a high level of capital reserves and provide services to all Canadians in all parts of the country.

Yes, Canadians pay for this consideration in the form of fees. Some will say they are way too high, but others will say it is the price to pay for stability and high standards.

If Champagne really wants to push telecom operators to create layoffs, he has the power to do so, through the telecom regulator and other avenues. But he will need more than harsh speeches. He will have to make difficult choices.

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