Globalive decision draws focus on key objectives of Telecom Act

The Conservative government’s announcement Friday that Globalive Wireless Management Corp. can enter the Canadian wireless market drew marked attention to the key objectives outlined in section 7 of the Telecommunications Act. “Oh yes, definitely,” says Michael Janigan, executive director of the Public Interest Advocacy Centre, when asked whether the decision will influence future CRTC decisions on the question of foreign control. Janigan says if the CRTC faces a similar review of the foreign ownership and control rules, “they’re going to have to take into consideration the wording of this decision, particularly in relation to the application of the objectives contained in section 7 of the Act.” Section 7 of the Telecommunications Act outlines nine objectives of Canadian telecommunications policy, from the development of a telecom system that serves to “enrich and strengthen the social and economic fabric of Canada” to stimulating research and development. Another key objective is “to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications.” On Friday the Conservative government issued an order-in-council that overturned CRTC telecom decision 2009-678, which had said that Globalive did not meet the Canadian ownership and control requirements of the Act. Cairo-based wireless carrier Orascom Telecom Holding SAE owns a majority of the non-voting shares in Globalive. Anthony Lacavera, a Canadian, controls the remainder. Following the government’s order-in-council—announced early Friday morning before trading opened—Globalive celebrated the decision at a news conference in Toronto, saying it was good for wireless competition in Canada and that the company hoped to launch its national Wind cellphone network as soon as possible. Reports said the network could launch in Calgary and Toronto as early as Monday. “The objective is to have quite a few Wind mobiles under Christmas trees,” said company CEO Ken Campbell. Michael Geist, a law professor at the University of Ottawa and a Canada Research Chair in Internet and e-commerce, posted on his blog Friday that the decision “seems to suggest that the door is open to greater foreign involvement in the Canadian wireless marketplace.” Geist went on to say that key paragraphs of the order-in-council “focus on the need to interpret the Canadian control requirements with enhanced competition in mind and on the absence of foreign investment restrictions under the law.” The order-in-council decision makes it clear that the objectives set out in the Act, which include competition, should be included in Canadian ownership and control decisions. “Whereas the Governor in Council considers that, when possible, the Canadian ownership and control requirements should be applied in support of the Canadian telecommunications policy objectives set out in the Act, including enhancing competition in the telecommunications market,” the order-in-council says. However a government release said that as a result of the decision, the government is not “removing, reducing, bending or creating an exception to Canadian ownership and control requirements in the telecommunications and broadcasting industries,” and that the decision was “based on the application of these requirements to the facts in this case.” Hank Intven, a law partner at McCarthy Tétrault who represented Globalive, said in an interview that he does not believe the decision will change future interpretations of the Act. “Every time you see one of these cases go before either the CRTC or to the government on appeal, which happens from time to time, people will look at the nine objectives set out in section 7, and they’ll pick the ones that they think the commission or the government should follow,” Intven said. “I think all the government was doing here was saying, ‘Look, you don’t have to focus solely on promoting Canadian control. You also look at the other objectives, and in this case, enhancing competition.’”

Globalive decision draws focus on key objectives of Telecom Act

News | December 11, 2009

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