Clement prepared to go to Supreme Court over Globalive decision

OTTAWA—The federal government will appeal the Federal Court of Canada's ruling that said the federal cabinet erred when it allowed Globalive Wireless Management Corp. to enter the telecom market, Industry Minister Tony Clement said Tuesday. “The Harper government will be appealing the court's ruling. We believe that our decision was the right one for Canadian consumers and we will defend it vigorously,” Clement told reporters on Parliament Hill. “We are convinced that Globalive is a Canadian company and meets the Canadian ownership and control requirements under the Telecommunications Act.” On Feb. 4 the Federal Court struck down a decision by the Conservative government, allowing Globalive to operate as a wireless carrier in Canada. The government's decision, in late 2009, overturned a previous CRTC ruling that said the company was controlled “in fact” by non-Canadians through its debt with Egyptian-based Orascom Communications. The Conservative government's ruling allowed Globalive to launch wireless services in Canada under the Wind Mobile brand. But the government's ruling was challenged in court by fellow new wireless entrant Public Mobile Inc., and in a February decision, the court said the government acted outside of its jurisdiction and based its decision on errors of law. The court stayed its decision for 45 days to give Globalive time to consider its options. Clement said Tuesday the government will appeal the decision to ensure Globalive can continue its operations. The company has an estimated customer base of 250,000. “New entrants mean more competition, lower prices and better quality services for Canadians. That is our guiding star on this matter and we continue to defend consumer choice and competition in Canada,” Clement said. Clement said the government will defend its position in court, arguing that, under its interpretation, Globalive is a Canadian company under the act. “I've made a rigourous review of Globalive's structure ... and I came to the conclusion, and cabinet agreed with me, that it is Canadian under the act,” he said. “We believe that we are within the law.” Clement added that the Conservative government is prepared to defend its position in any court, including the Supreme Court of Canada. The government's announcement comes after industry speculation that the ruling will push the government to amend the Telecom Act to allow foreign ownership, but Clement said no amendment is necessary right now because Globalive already qualifies as a Canadian carrier. Clement added that the government is considering amendments to the act but is doing so in conjunction with its ongoing consultation on the upcoming 700 and 2500 MHz auctions. “This issue is a matter of consideration by our government ... We have not rejected that idea, but we have to move in lock-step with public policy decisions that will be made when it comes to the auction,” he said. Clement also addressed concerns from critics who say that the government is undermining the CRTC's powers, pointing to Clement’s recent call for a review of the commission's usage-based billing policy. But Clement said that, out of the 2,200 CRTC telecom rulings since 2006, the government has reviewed 13 and overturned just three of those commission rulings. “For any of those that are arguing that we as a government are meddling with the CRTC, an independent body—that's bunk quite frankly,” he said. “I believe we are being entirely consistent.” Clement said the government has an obligation to enter into conversations with the commission to defend consumer interests. Globalive said in a release Tuesday that it supports the government's appeal. “From the beginning, Industry Canada and then Cabinet maintained, with a full knowledge and understanding of the facts of our structure, that we are fully compliant with the Telecom Act rules, and we are pleased that the Government is vigorously defending its decision,” Wind Mobile chairman Anthony Lacavera said in a release. Lacavera said the company is still considering its options. Analysts told The Wire Report last week that if the courts continue to rule against Globalive, the company may be forced to merge with another carrier to increase its Canadian capital and continue operations in Canada. NDP MP and industry critic Brian Masse held a press conference following Clement's statement Tuesday, where he described the current situation for telecommunications carriers as “muddled up” and one that may lead to an anti-competitive environment. news@thewirereport.ca

Clement prepared to go to Supreme Court over Globalive decision

News | February 15, 2011

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