CRTC launches foreign ownership review of OMERS-backed Public Mobile

Just one week after the federal government gave Globalive Wireless the green light to launch in Canada, the CRTC has said it will review the ownership structure of another wireless startup. It’s doubtful, however, the CRTC will find as much fault with Public Mobile Inc., which is getting the majority of its financing from one of Canada’s largest pension funds. In a Dec. 18 letter to Public Mobile VP, legal and regulatory affairs, Bob Boron, CRTC secretary general Robert Morin says the commission will conduct an internal review to determine if the Toronto company complies with Canada’s foreign ownership restrictions for telecom carriers. The review will be less onerous than that required for Globalive, which was subjected to a type 4 ownership and review process, the most public and open in its newly created arsenal. In comparison, Public Mobile will be subject to a type 2 private review with no public interventions or hearing. There are four categories of reviews: confidential, bilateral review (type 1); written, bilateral review, resulting in the release of a public record and decision (type 2); written, public, multi-party proceeding (type 3); and oral, public, multi-party proceeding (type 4). The CRTC said that “based on a preliminary review of the documentation filed to date, the ownership structure of Public Mobile appears to comply with the legal control requirements of the (Telecommunications) Act,” and its corporate governance provisions largely follow the guidelines laid out in the BCE Inc. and Globalive decisions. Rather, the review will primarily focus on the issue of control in fact, and whether the company’s large number of foreign investors and vendor financers could have any influence over corporate decisions. “At this time, and based on the information available, the Commission considers that the ownership structure of Public Mobile is of a complex nature and could hold precedential value for the industry and the general public,” Morin writes. He goes on to note that: “When reviewing the ownership and control of Public Mobile, the Commission will apply the existing jurisprudence relating to determinations of control in fact, cognizant of the fact that in varying Telecom Decision CRTC 2009-678, the Government stated that the “decision to vary is specific to the facts of this case”.” The OMERS pension plan has committed $50 million to Public Mobile, making it the company’s biggest investor. The startup is also backed by U.S. funds Columbia Capital and M/C Venture Partners. Other investors include Charles River Ventures, Rho Ventures, Ignition Partners and Kensington Capital Partners.

CRTC launches foreign ownership review of OMERS-backed Public Mobile

News | December 21, 2009

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