IT HAS NOW BEEN over two weeks since the start of Rogers Communications’ nationwide network outage, which impacted the company’s phone, Internet and cable subscribers – some, for days.
Rogers’ president and CEO Tony Staffieri has issued an apology and attributed the outage to “a network system failure following a maintenance update in our core network”, the company submitted a detailed report to the CRTC about what happened, and a House of Commons standing committee spent the day yesterday hearing from witnesses about the outage – what went wrong, why and what needs to be done moving forward.
At the second of two back-to-back meetings of the standing committee, Liberal MP Han Dong spoke about a constituent who wanted to change service providers, but when she contacted a smaller provider was told her building was not serviceable. Dong said he suspects the building and others in the country have agreements with Rogers (or another one of Canada’s big three telecoms), and asked CRTC chair Ian Scott if he was aware of this phenomenon limiting consumer choice.
“The tenants can only access whoever is in the building,” Scott said, while also explaining “the Commission’s regulatory framework allows for any ISP… or local competitor to have access to a building and if they can’t get that access, then they would come to us with a complaint.”
According to Todd Hofley (above), Beanfield Metroconnect’s vice-president, policy and communications, the problem Dong described is widespread and the regulatory framework Scott mentioned does not prevent residents of multi-dwelling units from having access to only one provider.
Calling the nature of the situation in Toronto “ubiquitous”, Hofley told Cartt.ca during an interview the “vast majority of new developments” in the city are entering into bulk agreements with telecommunications service providers (TSPs).
Over the past five to six years in the residential sphere, developers have been increasingly turning to TSPs to ask them to enter into bulk agreements, Hofley said, explaining “there will be an upfront payment for this, and then they build into the declaration and into the condominium fees that the Internet service, for example, will be part of the common element fees.”
Beanfield is a Liberty Village-based TSP that offers service in a few cities in Ontario and Quebec. It has “the largest private, independently owned fibre optic network in Toronto and Montreal, and we’re growing pretty aggressively,” Hofley said.
Despite the company doing well and the regulatory framework Scott told the standing committee about, which essentially guarantees TSPs will be able to gain access to multi-dwelling units to provide service, doing so does not always make sense.
“The devil is always in the details,” Hofley said, explaining that while Beanfield may be able to gain access to buildings so they can provide service, if a building has a bulk agreement with another provider, there is no reason for Beanfield to invest in bringing service to it “because there’s no possibility of any return on that investment and building into these buildings is a significant monetary investment.”
It also does not make sense for residents to choose a different service provider than the one the building has an agreement with because doing so would mean paying for service twice – once through the building’s common element fee and once to the resident’s service provider of choice.
“So, while technically access is allowed, what a bulk deal does is it effectively shuts out any competition within buildings,” Hofley said. Furthermore, once a bulk agreement has come to its end and it is time to renew it, the incumbent provider typically has already become profitable, which makes it easier for it to beat any competing offer.
What the CRTC needs to do is “reiterate that true end user choice means at the individual and that means that there have to be a multitude of networks available in every building,” according to Hofley, who called the situation “a little bit of a ticking time bomb”.
When the Rogers outage happened Beanfield posted on Twitter to direct people to its free wifi hotspots throughout Toronto and to ask all its own customers to share their Internet. “We got a lot of internal notes back to us with people telling us that they did in fact do that,” Hofley said.
In buildings where all residents rely on Rogers, however, sharing Internet would not have been possible.
Beanfield saw this as an opportunity to start a discussion about consolidation in Canada’s telecommunications industry “and how the solution to all of this really is more competition, more networks, more diversity of networks,” said Hofley.
The outage showed us “how vulnerable Canada is by having such a large percentage of the population dependant on only a few telecommunication providers,” he said. To a certain extent, “this was a national security risk in that all of these telecommunication systems landing in the hands of the few creates a lot of uncertainty, and so if this isn’t enough to have a robust discussion and to really change the playing field, I don’t know what is quite frankly.”
Beanfield is not the only organization sounding the alarm about the lack of competition in Canadian telecom. After the outage, others including Iristel president, founder and CEO Samer Bishay and CANWISP (Canadian Association for Wireless Internet Service Providers) president Scott Holmes, also drew lines between what happened and the state of competition in the country.
Bishay posted a long note on Twitter on July 13, in which he criticized industry minister François-Philippe Champagne’s response to the outage, which included demanding the country’s major telecoms come to a formal agreement on mutual assistance. He argued that “while Champagne’s chest thumping is reactive, it is not proactively tackling the main problem: a lack of viable and healthy competition in Canada’s telecom industry.”
The lesson from the Rogers outage “is that Ottawa’s telecom policy protecting the Big Three incumbents and restricting competition may be good for Rogers, Bell, and Telus, but it’s bad for Canadians and sustainable, viable competition,” Bishay wrote.
“The ramifications from the Rogers incident will go beyond Champagne’s order for the big telcos to merely share their networks among themselves in times of emergency.
“Let’s hope it also leads to real competition, lower wireless rates, and improved Internet services,” he said.
Holmes, in a letter to Champagne on July 14, made a similar argument, stating that diversity is “an integral part of resilience.”
“A regulatory regime that fosters competitors, and competition, will support the resiliency of the telecommunications network in Canada,” the letter reads. Holmes argued the current regulatory environment in the country “puts non-incumbent service providers at a disadvantage.”
The CANWISP president indicates there are numerous challenges for competitors including “an outdated and uncompetitive wholesale market policy,” large amounts of government funding going to the incumbents to build their networks, and what he says are unaffordable spectrum auctions.
Holmes called on the federal government to address these issues immediately and argued the formal agreement Champagne is requiring “is not a solution to more diversity, and consequently more robustness, in Canadian telecoms infrastructure.”
However, “fostering more competition and more service providers – of all sizes and regions – will build a stronger and more resilient Canadian economy,” he said.
Photo supplied by Beanfield Metroconnect.
