All sides in the debate on foreign ownership limits in the telecom sector hope the government has the political will to follow through on the recommendations of a Parliamentary committee. The wide-ranging suggestions could result in a massive overhaul of the current investment and regulatory regimes in telecommunications. But the road will not be without bumps. The House of Commons Standing Committee on Industry, Science and Technology advocates lifting all restrictions on foreign ownership of telcos, cablecos and satellite carriers. Committee chair Walt Lastewka (L-St. Catharines), speaking on his own behalf, suggested broadcasters should also be allowed to have greater outside ownership, although Canadian content regulations would still apply for them. Industry Canada minister Allan Rock, to whom the committee reports, is seen as being generally favourable to the spirit of the advice. But cable, satellite and broadcasting falls under the jurisdiction of Canadian Heritage minister Sheila Copps, who is a cultural nationalist. She opposes any changes to the investment system.The Standing Committee on Canadian Heritage is concluding a similar study into the Broadcasting Act and is expected to make vastly different recommendations. That report is due within a month or so. When Rock first directed the Industry committee to study the issue, it was suspected he was doing so as part of his putative campaign for the leadership of the Liberal party. He has since withdrawn from the race, but Copps has thrown her hat into the ring. The likely winner, former Finance minister Paul Martin, is seen as supportive of liberalizing investment rules. “The question for is now you’ve got a mandate from the committee, what are you going to do with this mandate?” vice-chair James Rajotte (CA-Edmonton Southwest) told reporters after the report was issued. “There will be a battle with Sheila Copps and with Heritage, there will be a battle with the Heritage committee, there will probably be a leadership issue between Paul Martin and Sheila Copps.” Lastewka echoes those sentiments. “Oh, I’m sure it will become a leadership debate. It shouldn’t, it really shouldn’t,” the Liberal MP, a Martin supporter, offered. Phase in changes Some industry observers want the Cabinet to move on what sections it can. They believe other changes could be phased in.“We have to see if minister Rock can engage his department on moving forward on at least the telecom elements of the recommendations,” Jean Brazeau, senior VP regulatory and strategic partnerships at Call-Net Enterprises Inc., tells Network Letter. “I know it would be difficult for him to bring around the minister of Heritage on the broadcasting side but I think you can have separate tracks for the two sectors.” Lawson Hunter, executive VP of BCE Inc., urges caution in proceeding with the recommendations. He notes there are pockets of resistance to changes. “We shouldn’t be rushing into this. I also think the committee recognized that they have their perspective, they represent a particular constituency, but there were other views and that the government was going to have to find a way forward that took all of that into account,” he explains to NL. “I think that’s part of the reason they recommended this special committee of Parliament. One major hurdle the government will have to overcome before proceeding with an overhaul of the regime is public opinion. A poll commissioned by Decima Publishing Inc. in December 2002 and frequently quoted by witnesses at the committee hearings found that Canadians overwhelmingly oppose foreign control of major communications sectors (NL, Jan. 13/03). Lastewka knows he and his colleagues will have to do a selling job on the general population. “We’ll have to do the overall summary of the report and the witnesses and all the people that were involved. And we need to have the facts out there completely,” he states. The two major labour groups in telecom – the Communications, Energy and Paperworkers Union of Canada and the Telecommunications Workers Union – appeared before the committee as part of the National Alliance of Communications Unions. They oppose changes to the foreign investment rules. Several labour leaders were meeting last weekend to decide on their next course of action to continue the fight against liberalization. The telcos will be just as vehement in talking up the changes. Chris Peirce, senior VP of regulatory and government affairs at AT&T Canada Corp., is willing to be patient, up to a point. “The government certainly deserves some time to think about the report and to respond. If that takes a few months, that’s completely understandable,” he tells NL. “But I really think from an industry perspective, from our perspective, we’ll certainly be doing everything we can to try and persuade government that they should be introducing legislative changes this year. And if they don’t, I think that’s worth comment. Why not? You’ve got no one who really is dissenting from the view that is an important issue now, at a policy level. So why would the government not act is the question to my mind.” Minister suggests caution Rajotte asked Rock in the House of Commons why the government didn’t act quickly on the committee’s report. The industry is united, the MP said, unlike the Cabinet. The minister countered that the advice given was broader than one portfolio. “The member is overlooking the fact that apart from dealing with foreign ownership, the committee also recommended a wholesale review of the mandate of the Department of Industry and the CRTC,” Rock told the House. “If he does not think we should take some time to consider its recommendations, I do not think he is being fair to the committee and its very important report.” Some wonder if the government will have time to consider the report. Cabinet is faced with immediate problems of SARS in Toronto, the cod fishery in Newfoundland and Canadian participation in the rebuilding of Iraq. The Parliamentary docket is filled with bills like the First Nations Governance Initiative, campaign financing reform, and the establishment of an ethics commissioner for federal politicians. In addition, Prime Minister Jean Chrétien has mused about decriminalizing the possession of small amounts of marijuana. Peirce concedes that the report might get lost in the shuffle. “Could it? Absolutely. Should it? No,” he asserts. “You think about their throne speech and this is something that is right in the sweet spot of that throne speech. It talked about smart regulation, it talked about innovation, it talked about investment. Well, here it all is and here’s a substantive report from a committee of the House showing that committees can absolutely look at current issues and make relevant recommendations in a timely way.” He notes as well that the House has been on extended breaks. While there are still broad issues affecting the public, the actual Parliamentary agenda is not crowded. Lastewka is also hopeful that Cabinet will act on the study. He admits that Cabinet’s timing may not be the same as the committee’s.“I think once they go through the report and the recommendations and what we want done, that it’ll move. It might move a bit too slow but let’s hope that it’s taken at the face value and all the work that we put into the report.” Rock is expected to reply by September. Any substantive changes may have to wait until Chrétien retires next February.