Industry committee winds down telecom foreign ownership restriction study

The House of Commons Standing Committee on Industry, Science and Technology has concluded its hearings into the topic of foreign ownership restrictions in the telecom sector. The committee will now have to weigh the diverse opinions expressed on the issue during several weeks of testimony as it drafts recommendations to the minister of Industry. When the MPs asked if limits should be liberalized, they were told "yes," "no" and "maybe." Appearing before the committee on the last day of hearings on February 27, Leonard Asper, president/CEO of CanWest Global Communications Corp., said telcos do not operate in a vacuum. Since most also offer cable and satellite television, they are considered broadcast distribution undertakings (BDUs), he noted. "Because of those competitive linkages, CanWest opposes liberalization of foreign investment rules for telecommunications companies or for BDUs unless broadcasters are also included," he stated. Asper added that opening up broadcasters to outside investment should not hinder the Canadian television industry from meeting Canadian content commitments or properly supporting the cultural sector. The Winnipeg-based broadcaster was contradicted by a witness from a neighbouring province. Donald Ching, president/CEO of SaskTel, offered a completely different interpretation of the existing foreign ownership regime when he appeared before the committee on February 25. "We believe that the current foreign ownership regulations are fair and reasonable, and that the public interest is best served when Canadians own and control one of this country’s primary infrastructures, telecommunications," the head of the only provincially-owned ILEC maintained. "Canada has gotten it right. The current balanced approach to regulation of foreign ownership of the telecommunications sector remains the best means of achieving the objectives of strong investment and national economic strategy." The commissioner of competition for the Competition Bureau, Konrad von Finckenstein, presented his agency’s views on February 24. The bureau is in favour of easing the restrictions and applying the same rules to telcos and BDUs. (For more on von Finckenstein’s remarks, see the Newsmakers column.) Another public servant was harder to pin down. CRTC chair Charles Dalfen appeared on the same day as the Competition commissioner but was less forthcoming. The CRTC does not create the investment regulations, it merely enforces them, he repeatedly stated. "What I can say is that we don’t want to give advice in that area. We live with the rules that the government creates," Dalfen said in response to questioning from Bloc Québécois MP Paul Crête about the commission’s recommendations in the foreign ownership debate.Liberal MP Brent St. Denis queried the CRTC chair about the reasons local residential competition hasn’t evolved as originally hoped. Local competition was introduced with the landmark CRTC ruling Telecom Decision 92-12. "I’ve been at the CRTC for just over a year and I’m still looking for that list," Dalfen responded. The dot com bust and the general economic downturn didn’t help matters, he said, nor did the "build it and they will come attitude" the telcos had during the late 1990s and early into 2000. But one can’t forget the bad business decisions the competitors made during this time as well, he added. Ching echoed those sentiments. SaskTel faces little competition in its serving area. "At $22 per month, there is little, if any margin in the price that we charge for basic residential service," he explained. "It is therefore not surprising that companies such as Call-Net and AT&T cannot develop a viable business case. Greater access to foreign capital will not enhance these failing business plans."

Industry committee winds down telecom foreign ownership restriction study

News | 03/11/2003 5:00 am EST

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