Industry committee will consider sovereignty and security in telecom review

The background paper released by Industry Canada when minister Allan Rock announced the review of foreign investment in telecommunications gives the members of the House of Commons Standing Committee on Industry, Science and Technology the questions they should consider. The 16 members have a baker’s dozen issues to look at. The government says it has traditionally considered domestic ownership of telecom infrastructure as essential to national sovereignty and security. But it admits that attracting foreign investment is essential for telcos. "Within the context of Canada’s Innovation Strategy, the commitment in the Speech from the Throne to Smart Regulation, and the recommendation of the National Broadband Task Force, the Government of Canada believes that this is an appropriate time to solicit views on our foreign investment restrictions," the document says at the beginning of its report. "Canadians need to decide whether the current approach remains the best means of achieving the objectives of strong investment and national economic strategy." Questions on the impact of foreign investment restrictions Do current Canadian foreign investment restrictions significantly affect the amount of capital available in Canada to invest in the telecommunications industry? Should Canada’s relative per-capita investment performance in this sector be a source of concern, or has there simply been ‘over-investment’ in the U.S.? To what extent, if any, can differences in investment levels be attributed to foreign investment restrictions? Are there foreign companies that would like to establish operations in Canada and, if so, would their entrance likely affect the provision of new or improved services to Canadians, and stimulate a more competitive Canadian market structure? Could altering Canada’s foreign investment restrictions materially affect the ability of new competitive providers to establish and maintain financial stability, and to what extent can one link any relaxation of foreign investment relations with the creation of a more competitive Canadian telecommunications industry? Would altering the foreign investment restrictions assist the deployment of broadband infrastructure in rural and remote communities? Should Canada adopt the approach of other countries by placing restrictions only on the existing traditional telecommunications service providers? If this approach were adopted in Canada, which companies would be required to continue to be Canadian owned and controlled? All incumbent providers? Just large incumbent providers? Should the current ownership and control limitations be maintained for these companies, or should the voting limitation be raised from the current 20 per cent limit for operating companies to some other level, while retaining the majority Canadian ownership and control? What would be an appropriate level? Should the U.S. approach of licensing be applied in Canada? Would all telecommunications carriers need to be licensed? The government could review all applications for licence transfers and ensure the continued Canadian ownership and control of ‘major’ companies in the context of merger and acquisition proposals. If this approach were taken, how should a ‘major’ company be defined? In cases in which mergers and acquisitions are approved, what conditions would be appropriate to ensure the achievement of other public policy objectives? Were the government to make any changes to these foreign investment restrictions, would it be appropriate to introduce some form of delay between when the changes would be announced and when they would take effect?

Industry committee will consider sovereignty and security in telecom review

News | 12/02/2002 5:00 am EST

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