Rogers CEO faces grilling as network woes cast shadow over deal

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(Bloomberg) – The CEO of Rogers Communications Inc. will face Canada’s Industry Minister over reporting on a nationwide network outage that left millions of homes and businesses without service wireless and internet.

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The office of Industry Minister Francois-Philippe Champagne said it will meet with Rogers CEO Tony Staffieri on Monday, as well as executives from other major telecommunications companies, « to discuss the importance of improve the reliability of networks across Canada ».

The Champagne department has the final say on approving Rogers’ proposed C$20 billion ($15.4 billion) acquisition of Shaw Communications Inc., a major Internet and wireless provider based in the western Canada. The country’s antitrust body, known as the Competition Bureau, opposed the deal and Friday’s outage could provide the regulator with more ammunition in its battle to stop the merger.

Champagne said the network outage was « unacceptable ». It began Friday morning, extended through Saturday, and affected access to emergency services for some customers as well as bank payment systems, including Interac. It even caused postponements of events like The Weeknd’s scheduled concert in Toronto.

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« These services are vitally important to Canadians in their daily lives and we expect our telecommunications industry to meet the highest standards that Canadians rightly deserve, » Champagne said in a statement sent by email from his office.

Faulty routers

“If I worked for the Competition Bureau, I would think of ways to quantify the damage resulting from an outage like this,” said Benjamin Klass, who studies Canadian telecommunications policy at Carleton University. Ottawa and presented arguments opposing the agreement. at hearings.

Klass said Rogers can use a so-called « efficiency defense » in Canadian merger law to argue that its takeover of Shaw creates a more efficient system with economic benefits for the country and should therefore be approved.

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Still, Friday’s network meltdown demonstrates that there are issues with « overreliance on these big companies, » Klass said. « In this particular case, smaller providers would have contained the impact of something like that. »

Staffieri apologized in a statement Saturday and said the Toronto-based company would compensate customers with credit, but did not quantify the extent of the financial impact on the company.

He also offered an explanation for what happened, attributing the issue to a maintenance update that caused his routers within his core network to fail. The disruption was so widespread that even Canada’s telecommunications regulator lost phone service on Friday.