The Munk Debates Podcast - Rogers Blackout – Biden Trip

Episode Date: July 15, 2022

Munk Members Podcast provides listeners with a focused, half-hour masterclass on the big issues, events and trends driving the news and current events. The show features Janice Gross Stein, the founding director of the Munk School of Global Affairs and bestselling author, in conversation with Rudyard Griffiths, Chair and moderator of the Munk Debates.   This week’s Munk Member’s podcast focuses on two stories in the news this week. First, what did the nation-wide Rogers blackout tell us about the state of Canada’s digital infrastructure? Add in airport chaos, emergency room shutdown, and soaring inflation and are Canadians living through a summer of national discontent like few in recent history? Second, President Biden is in the Middle East with high profile visits to Israel and Saudi Arabia. What can this increasingly unpopular president expect from his Middle East sojourn as the midterm elections loom at home and prominent Democrats go on the record urging the party to consider a different leader to contest the 2024 election cycle?   This podcast is a project of the Munk Debates, a Canadian charitable organization dedicated to fostering civil and substantive public dialogue.   More information at www.munkdebates.com.Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

Hi, Monk podcast listeners. The following is a sample of the Monk members-only podcast. To access the full-length edition of this episode and all of our regular Monk members-only podcasts, go to our website, www.com, and register for membership. Membership is free, and it's available for you right now at www. Monk Debates.com. Hope you enjoy the program. Hello, Monk members. Rudyard Griffiths here, your host and moderator. Welcome to this. the monk members only podcast. This is our regular Friday program where we dig into the big issues and ideas and the news, hopefully leaving you with some new analysis and insights. Our guest, each and every week is Janice Gross Stein, the founding director of the Monk School of

Global Affairs, an internationally renowned author and scholar. Janice, great to be in dialogue with you after, wow, so much for the dog days of summer, a really weighty, week for us to dig into, I think, precisely what this show is all about, some of the big issues that have shaped all of our experiences of the last seven days. A busy, busy week for July. Maybe those dog days will come in August, Roger, but I'm not holding my breath right now. Well, here's what I want to do on the show today. In the first half, I want to go domestic with you on the back half international. And Janice, earlier this week, you and I had a conversation about the Rogers outage.

And it was really interesting to hear your perspective on that. I'd like you to share it with the monk membership because you think this is bigger, more significant, and more needed in terms of focus of government on what happened in its implications. This is more than just simply a technical problem by a major telecommunications provider that caused a lot of inconvenience, you think there's something that's been revealed by this severe disruption of our telecommunications networks in Canada. And that's right, Roger, this gives us into a window. It takes us right into what public

infrastructure is becoming as we move into a digital society. Rogers is a public company, but it is in the private sector. We would not normally think of this as public infrastructure, but it is. In our digital world, Rogers is the CNR and the CPR of 100 years ago. It is the critical infrastructure that connects all of us. And once we understand that telecoms, especially in Canada, where we have so few big players in the market are providing public infrastructure, government has to get involved in making sure that these public infrastructure providers

meet standards of reliability and resilience. It's not about pricing only, which is where the focus has been. We were in an unprecedented situation, 911 calls. did not go through. That is a public matter now. Yeah, during that period, I was coming back into Canada from overseas and I don't know if

it was directly associated to the blackout, but maybe it was more than just coincidence. The Arrivedcan app wasn't working. So people overseas, at least where I was at the airport, were unable to log on to the arrive can app at the same time as the disruption was going on. Could be coincidence, maybe not, but it goes right to your place. point, Janice, and it's a good way to think of it, we've kind of taken a Walmart approach to a lot of our public private services. You know, the lowest price is the law. And hey, on telecommunications, we've really lagged on that in this country. We have some of the highest costs in any advanced

economy in the world. So we're not succeeding there. And then it seems, Janice, like we're not succeeding in terms of resiliency, robustness, a regulatory environment that ensures that there is a public safety and a public security mission overlapping these companies and overlapping, frankly, the very valuable public airwaves. Because at the end of the day, Janice, what we all have to understand is these carriers broadcast over airwaves that are owned by you and me by all Canadians through the government on the basis of licenses. So I'm just surprised here, Janice, you know, can we put Humpty Dumpty back in the box again? Can we solve for lower prices and for resiliency and robustness?

Because right now it seems like we're failing on both fronts. No. And here's the critical tradeoff. And most of us in Canada don't want to hear what I'm going to say. And it's not only about our public infrastructure, it's bigger than that. It is the global financial problem that we're dealing with. It is really hard to have lower prices, maximum efficiency, just in time delivery, to solve for that at the same time as you care about resiliency, redundancy, backup systems.

Those cost money. So we actually have to pay more if we want the next time something like this happens to be able to back it up. Now, there's some really interesting ideas, Roger. Let me just fly this one by you because there's a lot of chatter about it. What about insurance schemes for our public infrastructure that when one provider goes down, you can flip a switch. The other telecom providers can flip switches that are pre-programmed in. The rest of us can log on to that.

The costs of doing that, we publicly ensure because it's public infrastructure. Yeah, I think the other thing, though, we really do have to take a look at, and it's throughout the Canadian economy, is this approach that we've taken towards privilegoplies, oligopolys, and in a sense, highly managed competition. We're doing that in banking, and it's had, I think, a profound effect on our economy over a generation in terms of loan origination, the extent to which these banks have to take any risks when they have no competition.

And now in telecom, we've purposely excluded foreign competition. We've allowed these large incumbents to kind of feast on Canadians through much higher rates than any other advanced economy in the world in terms of data and calling. And that would be fine if we were getting out the other end, a really great robust system that was delivering, you know, across the board. So again, I go back to this point that we seem to get the worst of both worlds. I just wonder if maybe it's not, heaven forbid, the time to think about a country, are we really truly served by these oligopolis, duopolis, and managed competition?

Is there a need here to unsettle these incumbents to force more competition to ensure that they just don't skim these massive profits off the top of businesses and plow them back to their investors as opposed to if they had more competition, investing in better services, investing in reliability. which is a big issue in other telecommunications, these are statistics that these companies compete over aggressively. I just feel like we're getting the worst of both worlds here, and there maybe should be a bigger debate here,

a debate that's more than just about insurance schemes and providing a role for government here to ensure security of service through the public pieces of the infrastructure like hospitals 911 calls. This is about the need for more robust competition in the Canadian economy, which also, by the way, would help with inflation. Well, you're right that we are getting the worst of both worlds. In this sector, in the telecom sector, highest prices. And let's look at this story.

This was not the first Rogers incident. The first major incident was 17 months ago, should all the red lights should have gone off, there should have been a robust root and branch examination of what went wrong and the resiliency of the system should have been reinforced. That didn't happen because if it had, we wouldn't have been where we all were last Friday. More to the point, the regulator didn't get involved after the first incident. It took Friday for the CRTC, which as you and I both know, is fixated on content. That's what it spends the majority of its time on

and did not get involved on a really basic issue. How resilient is this infrastructure to redundancy? So we are in the worst of both worlds. Now, would competition fix this, Roger? So I'm going to be a little more skeptical. I'm going to be a little more skeptical. Maybe it would help. Well, let me just be.

the status quo isn't enough. Let me be a little more skeptical than you because there's a tendency when you have highly competitive markets to compete on lowest price, to focus on services and lowering the price of services. That's not the problem when we have digital infrastructure that's not public. We actually need them to spend more money on hardening their infrastructure and making it more resilient. not sure that having seven players in the market would get us where we need to go.

Well, let's hope we could walk and chew gum at the same time. I mean, you look at the United States, Japan, South Korea, all these jurisdictions that have much more competition than we do, they haven't experienced these kinds of large systemic blackouts. So could that simply be a coincidence? I don't know. But doing the same thing over and over again and expecting a different result is Einstein. definition of insanity. But before we debate this any further, I just want to end this segment by having you reflect on what's kind of turning into, Janice, a kind of summer of our discontent.

I mean, think of what we've all experienced over the last 16 and 90 days. We have emergency rooms that are in crisis across this country. We have soaring inflation that is largely the result of a central bank that was unwilling or unable to. to take the threat of inflation seriously and is now, as we've seen this week, forward into super aggressive rate hikes that threaten a recession. We have airports in chaos. We have passport offices. One of the most basic and you'd think simple services of government,

unable to provide Canadians with the timely delivery of their passports. We have people sleeping for days outside passport offices on the sidewalk. Janice, you put this all together and you just have to feel like what's going on here? Like, why are we, why is this all coming together now? And does it speak to some, I don't know, I worry on my part about just again, forget the robustness of our digital infrastructure. The robustness of our infrastructure writ large seems to be somehow being shaken this summer in a way that is new and frankly disconcerting. I agree with you, Richard. I think we are seeing old, outdated, not fit for purpose, any longer infrastructure,

crashing into the 21st century. If you, the airport situation, we could explain away. All of us want to travel now after being locked up for two and a half years. And they simply can't hire back and train the staff. quickly enough. Passports, we could tell the same story. All of us want to travel now. And Passport Canada didn't gear up in time. And by the way, in very tight labor markets that came out of the pandemic, everybody is having trouble hiring and staffing up. So we could tell a story about each one of the things you're talking about. But frankly, it's not good enough. What we're

seeing out is outdated 20th century, mid-20th century ways of providing services and doing business by governments that are dealing with people who are living in the 21st. And so I would bookend that story you just told. On the one hand, an absolute failure of regulators on the telecom infrastructure, which is so important. And secondly, passports, where you have to go in person. We have secure ways of providing documents. We do this all over the world, but we are stuck in a system that has not updated, that frankly hasn't hired younger people who are digital citizens and who get it and are open to new ways at providing services much more quickly. Of course, there's an older group of citizens that are always going to want to come in

person, and that's fine you provide for them, but we have, we really, we are behind in helping our fellow citizens move into a digital economy, which is both digital services as well as goods. It's a much bigger problem than the, then if we stack up the failure, years we're talking about, sure, part of it is post-pandemic, but it's much bigger and much deeper. Yeah, I like the way you put that 21st century problems, meeting, you know, 21st, 20th century infrastructure and processes. I mean, I go one step further and also say that the Canadian public needs to kind of smell

the coffee, so speak, and get a little more perky here. Because, you know, we are very complacent on, I think, a variety. of fronts. We're assuming certain things about our healthcare system, about our economy, about government and how and could, should work. And you're right. It's not good enough. We need to have a tolerance and an ambition to be way more experimental, way more disruptive, and to understand that there's a choice here. We either, like, healthcare is a classic example. We either, we either do a transition now to a sensible two-tier system like any one of the Scandinavian countries or Israel. I'm not talking about the big battle of the United States. Or we don't. And if we don't,

then we're locking ourselves out into ever-diminishing public health outcomes, which are documented over and over again, how the Canadian health care system on a whole series of metrics now is falling behind all the health care systems in the world except the United States. Maybe that's good enough. again, like the OECD statistics that we debated earlier this year, Canada's growth projections set over the next few decades to be at the very bottom of the OECD. And I just don't know when as a country, Janice, we decided not only to settle for second bass, but to settle for 10th, 15th, 20th. It's not enough.

We need to wake up. The culture in this country needs to be shaken. And we need to be willing to be part of that cocktail of innovative. disruption, and change. You know, when you say the culture needs to be shaken, and that includes every one of us, including me being in that cocktail shaker and being disrupted, that's exactly right.

That's what I think has to happen, because we have legacy systems and we have inertia. And the frustration that Canadians are feeling and is boiling over this summer. the distrust in government, the unhappiness with political parties. All of that is a piece, Roger, to what you're describing. You know, we could debate the solutions about health care. I don't agree with one.

You just put on the table. But when I see one more time, that Premier's meeting and saying to the federal government, give me a massive infusion of cash. And the federal government is saying back, yeah, we'll give you the money, but we need to agree on the outcomes. I think how many times can Canadians go to the same drive-in movie and see the same movie over and over and over and not get that that's not the answer any longer?

So in a way, the frustration you're talking about, Roger, it's healthy. It's healthy because we're not going to get to. It's not good enough until that frustration wakes up the political leaders. and the political class in this country. Yeah. Okay, let's take a break. When we come back, we're going to shift the second half of the show onto the world stage. We're going to look at the week that the Biden administration had as it charts out a course in the Middle East with Israel, Saudi Arabia, some high-stakes issues that are involved. We're going to get into it next with Janice Gross Stein right after this break.

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