OTTAWA – We choked a little on our coffee when we read the co-signers, but a letter to Industry Minister Tony Clement – to be printed Monday in an ad in the Hill Times newspaper – urges him to respect the Telecom Act as he reviews the CRTC’s decision on Globalive’s lack of Canadian ownership.
Signed by western competitors Telus and Shaw Communications, along with the Canadian Film and Television Producers Association (which often doesn’t see eye-to-eye with carriers) and wireless newbie Public Mobile, the letter reinforces to the Minister that the CRTC was and is right to tell Globalive it can’t operate here because it’s not a Canadian company.
“Under the law, the CRTC had no choice but to find Globalive non-compliant. The evidence as presented in an open hearing is irrefutable. Globalive’s majority owner, Egyptian carrier Orascom, controls 82% of Globalive’s capital structure. That is way offside of the law,” reads the letter.
“For the CRTC to have interpreted the law in any other fashion would have rendered meaningless Canada’s foreign ownership laws, not just as they apply in this case, but as they apply to all Canadian wireless, telecommunications, cable and broadcast companies currently operating in our country.”
As we previously reported, the CRTC decided that Globalive, despite the fact it had been given the go-ahead by Industry Canada on its ownership structure, was not Canadian controlled and could not operate as a telecom company here. Our Telecom Act says all Canadian firms must be Canadian-controlled. Globalive is now examining its options.
To attempt to overturn the decision would disadvantage new wireless entrants like Public Mobile (which has made overtures to perhaps acquire Globalive) and Shaw, hurt incumbents like Telus, which has to abide by the Telecom Act when raising funds and threaten the various Canadian culture quotas as it would cause broadcasters to seek relief from the same ownership rules.
“In addition, there is no way to overturn the CRTC without setting precedents for foreign takeovers. As signatories to international trade agreements like, NAFTA and the GATS, if we now decide that up to 82% foreign ownership and control of the capital structure of a company is the new threshold to determine what is “Canadian,” then we are obliged to offer equivalent treatment to any other foreign carriers that wish to enter our market,” continues the letter.
“Allowing foreign interests to control our telecommunications and broadcasting sectors through the back door is not in the public interest. These sectors are the backbone of Canada’s burgeoning digital economy and cultural sovereignty. We do not believe that Canadians today are prepared to pre-emptively alter our existing laws without an open and transparent debate by Parliament.”
The Minister, as we reported last week, is gathering information from the industry until Wednesday and will make a decision one way or another, soon.
“Minister, this is not an issue that the Government has to solve,” the letter concludes. “It is up to Globalive to adhere to Canadian law.”
