Public Mobile says it was unnecessarily denied access to foreign capital

Public Mobile CEO Alek Krstajic is calling for changes to the law if it will permit access to foreign capital that he says his company was unfairly denied. Krstajic is on the warpath after the government's decision to hand wireless rival Globalive Wireless Management Corp. access to the Canadian market in December, overturning a CRTC decision on Canadian foreign ownership. Krstajic accuses the government of favouritism, and his company has filed an application with the Federal Court, challenging the government’s decision. “We diluted ourselves by bringing on more investors that were Canadian, and what we could have done is bring on more U.S. money at probably better rates,” Krstajic tells Tech Media Reports. The court application asks the federal court to overturn the government’s decision on the basis that the government “erred in law in holding that section 16(3) of the Act should be interpreted to encourage access to foreign capital, technology and experience for the purpose of promoting competition.” The application goes on to say that “Section 12 of the Telecommunications Act does not confer power on the Governor in Council to vary or rescind the CRTC's findings of fact,” and that the government therefore reached its conclusion in a “perverse and capricious manner.” Krstajic now sees his company's pursuit of Canadian capital as an unnecessary obligation given the government's decision, he says. “The fact that we're now being told that this order in council doesn't apply to anyone else essentially says that I've got to still keep going after Canadian capital,” Krstajic says. “Either change the laws so that we can bring in foreign capital, or make the rules fair and equitable for everybody.” A call was placed to Industry Minister Tony Clement’s office, but no one was immediately available for comment. Clement previously said the government’s decision on Globalive was made on the facts specific to the case. “The government’s decision is specific to the facts of this case and is based on a rigorous application of the COC (Canadian ownership and control) requirements to these facts,” said a government release on Dec. 11. “In varying the CRTC decision, the Government is not removing, reducing, bending or creating an exception to COC requirements in the telecommunication and broadcasting industries.” Krstajic says he sees Public Mobile as “the little guy's wireless company” that will provide “flat rate, unlimited service to the working class.” But one expert says he doesn't believe Public Mobile is acting with the best interests of consumers in mind. Telecommunications strategist Eamon Hoey of Hoey Associates suggests the company is attempting to stop Globalive from “grabbing the market.” “I think (Public Mobile) are more concerned about the outcome and their own welfare than they are about reaching a settlement in court,” Hoey says. “This has got to be stupidity to challenge that (decision) ... They're using the courts as a competitive tool.” Hoey says Public Mobile would be better positioned to lobby the government than to challenge it in court. Krstajic disagrees. “Would you go and lobby the very people that in fact are clearly overturning a point of law? No, the most efficient way to do this is to actually go to people who, by definition, make decisions on the basis of law,” he says. Public Mobile spokeswoman Lisa Papas says Section 12 of the Act allows the government to vary a CRTC decision, but it “does not give the Cabinet the authority to amend the Act itself, which it is effectively doing in this case.” Papas adds that the government's decision is “entirely unprecedented” and that “no one has come up with a single case of Section 12 being used to overrule an independent tribunal on an issue of fact or law.” When asked about his expectations about the case, Krstajic suggests that “we're not trying to get Globalive to stop operating. We don’t think that’s ever going to happen.” But he says he is adamant that his company stands for consumers. “We think that we're doing what our customers would want us to do, and that is when a government oversteps its bounds, call them on it.”

Public Mobile says it was unnecessarily denied access to foreign capital

News | January 14, 2010

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