Globalive says Public Mobile Supreme Court appeal is ‘regulatory gaming’

Two competing new wireless entrants are now arguing before the Supreme Court over whether the federal Conservative cabinet erred when it permitted Globalive Wireless Management Corp. to operate in Canada as a Canadian-controlled telecom carrier. Globalive, which operates in Canada under the Wind Mobile brand, filed a submission to the Supreme Court Friday in response to an appeal launched by another new entrant, Public Mobile Inc. The request to bring the issue before Canada's highest court follows a series of decisions from regulators and courts that have seesawed on whether Globalive can operate in Canada as Canadian-controlled. In 2009, the CRTC determined that Globalive was controlled “in fact” by non-Canadians due to its debt with Egyptian telco Orascom Telecom Holding SAE. Later that year, the Conservative cabinet overturned the CRTC decision, permitting Globalive to operate in Canada. Public Mobile subsequently requested a judicial review with the Federal Court, which in February 2011 struck down the cabinet decision. Globalive and the governor-in-council (the cabinet) then appealed that decision to the Federal Court of Appeal, which in a unanimous decision in June, struck down the Federal Court ruling and upheld the federal cabinet order that said the company is Canadian-owned. Although incumbent Telus Communications Co. joined Public Mobile in its legal battle against Globalive at the Federal Court of Appeal, Public Mobile is now working on its own—against Globalive and the cabinet—in its request to have the Supreme Court weigh in. “It's disappointing that Public is continuing to pursue this regulatory gaming. This appeal has nothing to do with them so it is clearly an attempt to hurt a competitor,” Anthony Lacavera, chairman of Wind, told The Wire Report in an email statement Friday. Public Mobile, in a submission filed with the court in August, says it supports lower court conclusions that the governor-in-council acted outside the scope of the Telecommunications Act when it issued a ruling that took into consideration access to foreign capital, technology and expertise. This was a political consideration reflecting policy that is not stated in the act and should not be used in interpreting it, Public Mobile says. Public Mobile has asked the Supreme Court—which has not yet said whether it will hear the case—to review the decision to determine whether the control-in-fact test under the Telecom Act was “in whole or in part a policy decision” or “factual in nature.” The company has also asked the court to determine the standard for governor-in-council orders to vary the decisions of administrative tribunals, “in particular when the Governor in Council interprets a statute.” “It is one thing to see the requirement of ‘control in fact’ as reflecting a policy choice made by Parliament to insist on Canadian ownership and control of telecommunications common carriers. It is another thing to see its application as entailing further policy determinations, especially when those determinations water down the requirement itself," Public Mobile wrote. In a submission filed with the court Friday, Globalive argues the Supreme Court should quash Public Mobile's bid for a hearing because the issues raised are not of national importance. Globalive says the Federal Court of Appeal ruled that the cabinet did not apply policy considerations in its decision and that Public Mobile has drawn that mistaken impression from a judge’s passing remarks. Justice J. Edgar Sexton wrote in the Federal Court of Appeal decision in June that the governor-in-council applied policy considerations to its decision to vary the CRTC ruling but not in its decision that Globalive was Canadian-controlled. “There was no reference to policy objectives ... nor was there any other indication that policy played a role in this part of the Governor in Council’s decision,” Justice Sexton wrote. In the same decision, the justice added that references to the policy objectives laid out in section 7 of the Telecom Act “could be relevant to deciding whether a company was in fact Canadian-controlled.” Public Mobile argues that this creates confusion and should face Supreme Court review. “Any revision of the ‘control in fact’ requirement to reflect other policies is a matter for Parliament, not the Governor in Council,” Public Mobile wrote. Globalive wrote that the comment was made in passing. “In obiter dicta, that Court did say that it was of the view that it would not have constituted reviewable error for the Governor in Council to have taken policy considerations into account in deciding to review a CRTC decision relating to control,” the company wrote. “Public Mobile seeks to latch onto that obiter dicta for the purposes of this application.” Public Mobile also argued in its submission that the governor-in-council does not have a “home statute” and is not a legislative power. Cabinet ministers are not chosen for their expertise in subject matters or statutory interpretation, the submission said, and governor-in-council decisions depend largely on the nature of the advice that cabinet receives. Allowing cabinet “to interpret statutes based on a reasonableness standard would be inconsistent with the proper relationship between Parliament and Cabinet,” Public Mobile wrote. Globalive said in its submission that the CRTC and the cabinet examined the same facts and applied the same legal tests to determine whether Globalive was Canadian-owned, but that they came to different conclusions. “wo courts below have already found, after extensive argument, that the CRTC and Governor in Council examined the same facts, and arrived at different decisions because they drew different inferences or conclusions from those facts,” Globalive wrote. “In light of these concurrent findings by the courts below, there is no basis for Public Mobile to ask this Court to re-instate or validate the CRTC’s decision, and invalidate the decision of the Governor in Council.” Globalive added that there is no need for further review or a ruling on the standard to review a cabinet decision. “While standards of review are much discussed by courts and lawyers, it trivializes the concept of public importance for an applicant to assert that, while the court below held that it was not necessary to resolve the standard of review issue and while the standard is of no practical importance in the case, that standard should be reviewed by this Court,” the company wrote. Telus spokesman Jim Johannsson said Telus did not join in the Supreme Court appeal because it wants to rely on market forces. “There are a number of players in the market, and it’s time to let the market work,” Johannsson told The Wire Report. Public Mobile legal director John Pazzano said the company would continue its legal challenge, even if it does so alone. “Public Mobile is seeking clarity on the standard of review applicable to Cabinet when reviewing the decisions of administrative bodies (CRTC),” he said in an email statement Friday. “Cabinet increasingly continues to invoke its power to review and overturn administrative decisions with no clear set of rules as to the standard of review that should be applied when exercising this power. Telus deciding not to pursue the appeal has no bearing on the matter. Public Mobile will continue to seek clarity.” Lacavera said in his statement that he does not believe the court will hear the appeal. "Public's application is not strong and it's overreaching and are confident this will not move forward,” he wrote. “The Supreme Court only hears matters of significant national importance and this does not meet that criteria. At this point, we just want to put this behind us and focus building competition for consumers.” news@thewirereport.ca

Globalive says Public Mobile Supreme Court appeal is ‘regulatory gaming’

News | September 30, 2011

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