Canadians' anger over Rogers' interruption may complicate their hopes of integrating

Canadians’ anger over Rogers’ interruption may complicate their hopes of integrating

The Rogers Building, the green-topped campus of Canadian media company Rogers Communications, is seen in downtown Toronto, Ontario, Canada on July 9, 2022. REUTERS/Chris Hellgren

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TORONTO (Reuters) – Rogers Communications complicated its chances of securing antitrust approval for a C$20 billion telecom merger after a massive blackout on Friday highlighted the dangers of Canada’s powerful telecoms monopoly and sparked a backlash against its dominance of the industry.

Rogers’ network outage disrupted nearly every aspect of daily life, cutting off banking, transportation and government incomes for millions, and hit the nation’s cashless payments system and Air Canada’s call center (AC.TO).

Consumers and opposition politicians have called on the government to allow more competition and enact policy changes to reduce the influence of telecom companies. Rogers, BCE Inc (BCE.TO) and Telus Corp (T.TO) control 90% of the market share in Canada.

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Smaller Internet and wireless providers rely on their own network infrastructure to provide their own services.

“The reality in Canada is that there is a dangerous monopoly on our communications,” NDP leader Jagmeet Singh said in a TikTok video when he launched a petition to stop Rogers’ plans to merge and “break up these monopolies.”

“The effect of this interruption shows that this monopoly cannot continue,” he added.

Industry Minister François-Philippe Champagne, who has called the blackout “unacceptable,” said Sunday that he would meet with Rogers CEO Tony Staveri and other industry executives to discuss improving “the reliability of networks across Canada.” High cell phone bills were a hot issue in the recent Canadian elections.

Police across Canada said that interruptions to the Internet, cell phone and landline connections mean that some callers cannot reach emergency services via 911 calls.

Amit tweeted: “Due to the Rogers outage, millions of Canadians were unable to call 911 yesterday. Hospitals could not contact staff. There was no way to contact families so they could say goodbye to their loved ones at the end of their lives,” tweeted Amit Arya, Canadian Association’s itinerant director For palliative care physicians.

Rogers, who blamed a router failure after maintenance, said he was aware that some customers were still experiencing disruptions. He did not comment on whether the interruption could affect the merger proceedings.

Friday’s outage came two days after Rogers held talks with Canada’s antitrust regulator to discuss possible remedies to its prohibited C$20 billion ($15.34 billion) takeover of Shaw Communications (SJRb.TO).

The Canadian Competition Bureau blocked the deal earlier this year, saying it would hinder competition in a country where telecom prices are among the highest in the world. The merger is still waiting for the final verdict.

Consumer rights groups said the disruption could prompt the Competition Bureau, which generally evaluates mergers based on their impact on price, to look more closely at other considerations such as quality and service.

said John Lawford, chief executive of the Ottawa-based firm’s Defense of the Public Interest Center (PIAC), which opposed the merger in the competition office.

But Vas Bedner, executive director of the public policy program at McMaster University, said the outage was an issue separate from Rogers’ merger plan.

“I don’t think this issue will affect the merger because I’m not sure how the competition office can explain the greater outage risk,” Bedner said.

University of Ottawa professor Michael Guest, who focuses on internet law and e-commerce, said the blackout “should be a wake-up call for a government that has been sleeping on digital politics.”

“The blame for Friday’s power outage may lie with Rogers, but the government and (Telecom Regulatory Canada) should take responsibility for not responding,” he wrote on his blog.

The NetBlocks monitoring group said the outage, which began around 4:30 a.m. ET (0830 GMT) on Friday before service was fully restored on Saturday, halted a quarter of the internet connection observable in Canada.

The outage was Rogers’ second in 15 months with a third-party software upgrade that essentially disrupted service for consumer customers last year.

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Divya Rajagopal reports. Written by Imran Abukar. Edited by Chizu Nomiyama

Our Standards: Thomson Reuters Trust Principles.

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