Why can’t Canadians have low cost, reliable internet?
This week a major internet service outage from Rogers wireless resulted in millions of individual Canadians losing cellular service. So did businesses and critical government services. Critical infrastructure ranging from banking to accessing 911 was affected.
It would be one thing if Canada had a competitive environment for cellular service. If that were the case consumers, businesses, and governments who rely on this type of service could easily move to a more reliable, lower cost service provider. But in Canada, a few major telecommunications companies have a stranglehold on the market because they put a lot of time, effort, and money into ensuring that government regulations don’t change the non-competitive landscape.
This most recent Rogers outage shows that the regulatory environment that allows big telecommunications companies to function like an oligopoly doesn’t just result in high wireless prices, as compared to other countries. The lack of diversity in the companies that own, operate, and sell wireless services also expose our entire nation to economic and security vulnerabilities.
In 2022, access to the internet is as critical to Canada as having access to roads and bridges. This outage could be described as the virtual equivalent of blockading the Ambassador Bridge, or shutting down the 401 in Toronto.
We rightfully don’t tolerate groups who blockade roads, pipelines, and bridges, so why should Canadians tolerate significant failures to access the internet in an environment where there isn’t a lot of market choice?
In 2017 the National Post published an article that inferred a simple answer to this question; that is, because the current system means that Canadians have to.1
In Canada, the telecommunications industry is owned and controlled by a handful of large companies who benefit from regulations that work in their favour. Because these companies depend on the federal government keeping the regulatory status quo, as well as making sure that any new regulations benefit them, they use every tool at their disposal to ensure nothing happens that would upset this balance.
So how do they keep the status quo?
First and foremost, they heavily lobby politicians and other senior government officials. These efforts could seek to influence decisions related to a whole host of issues, including spectrum auctions, the decision on whether or not to ban Huawei from Canada’s 5G infrastructure, and regulations around wholesale internet rates.
In early 2021, TekSavvy, an independent service provider, looked at reported lobbyist communications for Canada’s big telcos over the previous 12 months. In their analysis, they found 577 officially registered lobbying communications between the large telecommunications companies in Canada during that period of time.2
There are also specific examples of particularly…interesting lobbying.
In one instance the CRTC (the main regulator for telecommunications) Chairperson and CEO, Ian Scott, came under fire for having a one-on-one meeting at an Ottawa pub with Bell CEO Mirko Bibic.3 This report came on the heels of a surprising CRTC decision on wholesale internet rates that was seen as largely favorable to the large telecommunications companies.4
It is also noteworthy that the CRTC head is also a former lobbyist for Telus.5
Further, a not-insignificant number of senior backroom political influencers, former politicians and political staff - of all political stripes - also have affiliations with the big telcos or the firms that lobby for them. There are people who have worked for the big telcos now employed in critical areas of the public service. There’s nothing nefarious about any of this, but it is a fact that highlights just how much the telco’s agenda is presently woven into the fabric of public policy making in Canada.
In addition to their lobbying efforts, many major Canadian media outlets are also owned by these same big telecoms companies. Suffice to say, it wouldn’t benefit the telcos if wireless costs in Canada or wireless infrastructure security were frequently scrutinized. And, because these major telcos own many of the major Canadian news outlets, it may make some politicians think twice before critiquing the regulatory environment or the telcos themselves.
And last but not least, the telco’s growth and market share strategy has also often involved some form of acquisition of competition which further constrains consumer choice (that is why there are questions about Roger’s proposed acquisition of Shaw).
So how do the issues of Canadian wireless affordability and reliability get solved under these circumstances?
First, Canadians need to get really vocal about wireless prices, access, and reliability in order to force politicians to do something about it. Canadians also need to get vocal about the unacceptable nature of major outages. Last week’s outage was not the first time something like this happened with Rogers. In April 2021, Rogers had another significant incident that disrupted service. Yet, it happened again and severely impacted the country.
If these are not issues that Canadians continue to raise with politicians, given the lobbying efforts and ownership of media on the part of Canadian telcos, most politicians won’t want to do anything about it. A perfect example of this is Trudeau’s long forgotten election promise to lower cell phone bills by 25%.
Second, politicians need to have political will and foresight to be proactive on these issues. Our present and future economy depends on our country’s ability to provide readily available, affordable internet access in every part of our country. In late January 2020, just as news of COVID was starting to seep into the public consciousness, I put out a major policy piece outlining specific action to address many of these issues.6 I followed up a few months later with a similar piece outlining action the government should take to address the lack of access to the internet in rural Canada.7 Both of these policy documents were well received by many Canadian stakeholder groups.
Third, Parliament needs to take a more active role in scrutinizing if the activities of the telcos and the current regulatory environment are in the best interest of Canadians. This is too serious an issue to be left to occur behind the closed door of a cabinet Minister’s office. The House of Commons Standing Committee on Industry is the perfect venue for this. Last week, I wrote to members of that committee and asked them to hold an emergency meeting to review the cause of the most recent Rogers outage and determine what action is necessary to make sure it doesn’t happen again.8 The public has a right to know what happened and what steps are being taken to protect them from another system failure.
As the Internet of Things - that is, the interconnectedness of everyday devices - becomes more pervasive, and as faster and faster levels of data transfer enable things like autonomous vehicles and remote medicine, having vast swaths of our country without reliable and affordable internet is untenable. If anything, this most recent Rogers outage highlights how much of society is dependent on this infrastructure.
It cannot be allowed to fail.
It is the responsibility of politicians and the public service to realize that this is in fact their primary responsibility, as opposed to blindly following the agenda of Canada’s telecommunications oligopoly without pause for second thought.
Ibid.
Ibid.