Canada to probe Rogers outage as merger doubts grow

Canada’s government ordered an investigation of a major network outage suffered by Rogers Communications last week, at a time of rising concerns over a proposed CAD20 billion ($15.3 billion) deal to acquire rival Shaw Communications.

Francois-Philippe Champagne, Minister of Innovation, Science and Industry, tweeted the outage will be investigated by the Canadian Radio-television and Telecommunications Commission (CRTC). The minister also met the CEOs of Rogers Communications, Bell Canada Enterprises and Telus to discuss measures to prevent future outages.

The network outage was Rogers Communications’ second in 15 months. It lasted for around 19 hours on 8 July and affected all manner of services, from flights through to banking transactions and emergency calls.

It rounded out a rough week for Rogers Communications, coming a matter of days after it failed to make headway during mediation over the Shaw Communications deal with Canada’s Commissioner of Competition.

The incident has now prompted many to highlight the dangers of a telecoms industry being dominated by a few major players.

New Democratic Party leader Jagmeet Singh launched a petition to halt the deal, for example.

BMO Capital Markets analyst Tim Casey told Reuters the outage “is likely to introduce incremental regulatory risk” to the acquisition and would increase investor concerns over Rogers Communications’ ability to execute on deal synergies.

Despite the obstacles, Rogers Communications’ CEO and president Tony Staffieri (pictured) told BNN Bloomberg Television the company remained determined to seal the Shaw Communications deal, arguing it could offset potential outages by broadening its capabilities “redundancy and coverage”.

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