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RoW Update

News | 02/10/2003 5:00 am EST

Focus of foreign ownership hearings shifts
Testimony to the Parliamentary committee studying the potential easing of foreign investment restrictions in the telecom sector has shifted from hard talk on access to capital to a discussion on removing red tape. Testimony last week also marked the first time that the House of Commons Standing Committee on Industry, Science and Technology has heard that broadcast distribution should be viewed as part of the telecommunications industry and ultimately part of the review.
Last week, CLECs and one ILEC told the committee that access to capital is not the highest priority for them and that recent CRTC decisions have had a far greater impact on the industry. Bill Linton, president and CEO of Call-Net Enterprises Inc., told the committee that removing foreign ownership limits is a distant fourth on his priority list of wishes. Competitive providers Call-Net and AT&T Canada Corp. argued that the costs associated with accessing incumbents’ loops are simply too high and that removing foreign ownership restrictions won’t make a difference to their competitive positions.
Jim Peters, Telus Corp.’s VP of corporate affairs and general counsel, agreed with CLEC rivals that eliminating foreign ownership restrictions won’t help the situation, but for vastly different reasons. He said the issue boils down to competitors operating under flawed business plans and that expanding the pool of capital upon which telecom companies can draw won’t help them to be more competitive.
Hudson Janisch, a noted telecom law professor, stated even if the Canadian market is opened to greater foreign investment, public interest policy goals can still be achieved through well-crafted regulation. "Indeed, foreign ownership restrictions are a particularly blunt and self-destructive way of seeking ends far more readily achieved by regulation," he told the committee during his presentation.
David Johnston, president of the University of Waterloo and chair of the National Broadband Task Force, and Michael McMillan, chair and CEO of Alliance Atlantis Communications Inc., are two notables appearing before the committee this week. The next full issue of Report on Wireless will provide a more in-depth look at the most recent testimony.

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