Rogers Communications Inc. CEO Tony Staffieri attempted to soothe public anger over his company’s massive network outage earlier this month during a Monday appearance before a parliamentary committee — but still faced some pointed questions from MPs.
On the morning of July 8, the entire Rogers network — cable television, internet and wireless telephone services — went down and stayed down for much of the day while the company scrambled to figure out what happened.
The outage triggered a series of seemingly unrelated systems failures beyond the company itself, leaving debit payments, 911 services and government services unavailable to Rogers customers for much of the day.
“As Rogers’ CEO, I’m accountable for the outage,” Staffieri said told MPs on Monday. “On that day, we failed to deliver on our promise to be Canada’s most reliable network.”
The company said at the time that the outage was caused by a software update gone wrong, which then cascaded into a massive chain reaction that took down the entire system.
Rogers’ newly minted chief technology officer Ron McKenzie went into more details with MPs, saying the update caused an unexpected reaction from certain equipment that began to push high amounts of traffic toward the “core network.”
“The core of the network you can think of as the brain of the network that controls all access of flow of information and flow of connectivity for all services,” McKenzie said. When the core became “flooded” it shut down, he said.
WATCH | Here’s what regular Canadians told us about the outage on the day:
Staffieri repeated to MPs what the company said on Sunday when it released more details of what it plans to do in response to the outage.
Rogers says it wants to ensure that 911 calls switch automatically to other carriers during an outage, separate its wireless and cable systems so that an outage affecting one system doesn’t affect the other, and spend $10 billion to strengthen its networks.
Staffieri still had to field some tough questions from MPs. Liberal MP Nathaniel Erskine-Smith pushed the Rogers CEO on the lack of competition in the Canadian telecom market. Staffieri disputed that point, saying Canadians have “alternative and choice.”
“You’re saying that with a straight face?” Erskine-Smith shot back at Staffieri before moving to other questions.
Minister says he ‘demanded’ plan from industry
Minister of Innovation, Science and Industry François-Philippe Champagne took questions from MPs before Staffieri’s appearance.
Champagne insisted that, during a meeting earlier this month, he “demanded” that Rogers and other telecom companies come up with a plan for mitigating the impacts of future outages on consumers.
NDP MP Brian Masse pushed Champagne to do more, arguing that Canada’s current legislation includes little in the way of penalties for companies.
“What is the government doing to actually restore this as an essential service and put some legislative teeth behind this issue?” Masse asked the minister.
Champagne said that his request of the telecoms was just an “initial step.” He didn’t say if the government is pursuing new rules or regulations.
Outage may knock out Shaw merger, too
The hearings come against the backdrop of Rogers trying to finalize its $27-billion takeover of Calgary-based Shaw in a deal that would make Canada’s concentrated telecom industry even more top-heavy.
Rogers pitched the merger more than a year ago and the marriage already has proven to be harder to get to the altar than anticipated.
About a month after the merger plan was announced last year, Rogers’ wireless network went down across most of the country for about a day, irking customers and raising questions about whether it’s in Canadians’ best interest to allow Rogers to buy up Shaw, the owner of Freedom Mobile, which is a distant fourth in Canada’s wireless industry.
Last year, the CRTC signed off on allowing Rogers to buy Shaw’s broadcasting assets, but much of the focus has been on the wireless side of the business. Rogers apparently solved that problem when it announced a deal to sell the wireless business to Quebec-based Quebecor, but hurdles remain.
The company set a self-imposed deadline of July 15 to finalize the sale of Freedom to Quebecor, but that day came and went with no update from anyone involved. With regards to the entire Shaw deal, Rogers earlier this year set a revised date of July 31 to finalize the merger, and doubts are mounting as that day nears.
Investors certainly don’t seem to think it’s a done deal. Shaw shares were trading for about $35 a share on Friday — well below the more than $40 Rogers has pledged to pay for the company.
Securing the OK for the merger from Canada’s competition watchdog, the Competition Bureau, is proving to be the highest hurdle of all.
In May, the Competition Bureau filed an injunction seeking to stop the merger until it can decide whether it would be bad for consumers. Rogers and Shaw agreed to talks with the regulator, but even before the outage, they expressed concerns that those talks were going nowhere.