TORONTO – It’s all in the wording, or perhaps the lack of it. According to Globalive, parent company of wireless upstart Wind Mobile, the real problem with Canada’s telecommunications foreign ownership rules is that their lack of clarity leaves them open to interpretation.
“The (Telecommunications) Act, as it is written, is very confusing if you’re not living it and breathing it every day”, said Globalive and Wind chairman Anthony Lacavera, in an interview with Cartt.ca. “The Act is unfortunately worded with a double negative – ‘a company cannot be controlled by non-Canadians’. That needs to be clarified.”
Lacavera was responding to a recent Cartt.ca report about the Federal Court hearing which heard a petition to overturn a decision by Cabinet approving Globalive’s ownership structure (Egypt-based wireless company Orascom Telecom owns two thirds of Globalive’s equity and almost all of its debt). Filed by fellow new wireless provider Public Mobile, the petition seeks to quash the Governor in Council’s decision in December 2009 that reverses a CRTC ruling that found that Globalive failed to comply with the Telecom Act’s foreign ownership rules. This could mean that Globalive would once again go through an ownership review before the CRTC.
“In our opinion, (the Act) has been twisted around considerably by some of our large competitors to seem like a foreigner’s in control here, but as a matter of legal fact, that’s just not true”, Lacavera continued. “Many broadcasters and telecom structures have been approved where there is board of 11 people – four Canadians, four internal representatives, and three independents – which is the exact structure that we have at Globalive. The point is that neither side is in control and the independents are the swing vote. This is the same structure that we got approval on from the government.”
Lacavera insists that the company did its homework on foreign ownership, and that the CRTC and the government agreed that Globalive is legally compliant. Where they differed, Lacavera says, is that the government felt that it was acceptable to have the company’s debt owned by Orascom while the CRTC did not.
“But there’s no rule on how much debt can come from a foreign shareholder”, he insisted. “That’s the whole issue around the Public Mobile suit. What they’re really asking the government for is clarity on what are the limits on foreign investor debt and equity with respect to a telecom company’s capital structure. There’s no law saying that the maximum is X, it’s just open on that question therefore open to interpretation.”
The company “will cross that bridge” should Globalive’s structure be found once again to be not Canadian enough, Lacavera said. In the meantime, it’s business as usual for Wind Mobile which recently signed its 250,000 subscriber.
Lacavera said that he is “looking forward” to the upcoming 700 MHz auction in the hopes of securing some additional spectrum, particularly in Quebec. The company also plans to roll out a Wind bundle this fall which will include a video offering (Globalive also owns Yak Communications which provides home phone, long distance and high speed Internet services).
“On the TV side, we know that we need that to compete long term, but I’m really looking at creating a different kind of experience because, obviously, there’s already a lot of choices in the market in Canada”, he added. “I want to come to the market with a unique bundling offer that truly differentiates us and shows Canadians value for their money. Similar to wireless, we know that many Canadians feel ripped off by their cable or satellite bundle.”
