OTTAWA – Add law professor Michael Geist to the list of stakeholders who support relaxing foreign ownership restrictions in the Canadian telecom market.
In his appearance Tuesday before the Senate Committee on Transport and Communications as part of its pre-study on the changes to the Telecommunications Act contained in Bill C-38, Geist, who is also Canada Research Chair in Internet law and e-commerce, called Canadian rules on telecom foreign ownership “the most restrictive in the developed economy world”.
Citing a recent OECD study that ranked Canada the second most restrictive market for both communications and mobile telecom behind only China, Geist said that the changes in Bill C-38 will help address this issue, but still do not fully open the market. As Cartt.ca has reported, the current foreign investment restrictions will be lifted for wireless companies with less than 10% market share (effectively anyone other than incumbents Bell, Rogers, and Telus).
“The new entrants into the Canadian marketplace have had a positive impact, but it is only a start and more is needed to bring Canada up to world standards for competitiveness, choice, and costs”, he said.
Noting “broad support for change” from Canadians and the majority of the country’s telecom companies themselves, Geist dismissed concerns put forth by some in the telecom and broadcast sectors.
“I would argue that concerns regarding security risks or employment impact due to foreign investment changes are overstated”, he said. “Canadian carriers regularly outsource some of their customer service jobs out of the country. Meanwhile, other parts of the organization – retail and business sales as well as network building – involve jobs that will remain in Canada regardless of a company's country-of-origin. While some head office jobs may be at risk, new companies operating in Canada could potentially create more jobs, not fewer.”
While supportive of the changes in Bill C-38, Geist said that he would support "an even bolder vision". "The government could have shaken up the Canadian market by removing telecom foreign ownership restrictions altogether and considered dropping foreign ownership limits on broadcasters as well", he added.
– Lesley Hunter
