Canadian Opposition Seeks Clarity of Telecom Rules

by Jordan Richardson on March 1, 2010

Prime Minister Stephen Harper will finally be getting back to work next week and Canada’s opposition parties will be set to discuss the foreign ownership laws regarding the telecommunications industry when Parliament reconvenes.

Members of Canada’s Liberal, New Democrat and Bloc Québécois parties will be pressing the Prime Minister regarding the cabinet’s decision to permit Globalive to operate in Canada despite a rather diverse set of rules in the country’s Telecommunications Act that prohibit foreign investment.

As I mentioned in my last article, recent reports have emerged suggesting that Canada’s Telecommunications Act effectively closes the door of opportunity for company’s to get at a rather large pool of foreign capital. By forbidding access to foreign investors and forcing companies to rely on national capital as a substitute, many upstart companies have trouble getting out of the starting blocks.

Globalive, despite going through some hoops at the outset, has managed to launch even with a considerable amount of foreign backing. In October, a court ruling decided that the company was controlled by Orascom Telecom Holding SAE, an Egyptian company. In December, a cabinet review led to the overturning of that ruling by Industry Canada.

Harper’s opposition wants his Conservatives to illuminate the basis for the overturning of the decision.

Public Mobile, another Canadian telecom upstart, has protested the overturning of the decision and has claimed that it is being treated unjustly by not having access to the same branch of foreign capital that has gotten Globalive off the ground. For Harper’s Conservatives, the intricacy of this issue could present some real problems.

None of the opposition parties appear to be arguing against the Globalive decision in and of itself. Instead the argument is, appropriately, that unswerving application of the current Telecommunications Act must be put into place in order to ensure a real sense of competition among potential providers.

The Conservatives have stood by the decision, saying that Canadians should have more competition in the marketplace. But if this competition requires a bending or ignoring of the current law, it is lavishly clear that something sticky is going on.

The consensus among the opposition is that some companies in Canada are following the law and are being punished for it, while Globalive has been permitted to circumvent key regulations regarding foreign ownership to get into the business of selling telecommunications services to Canadians.

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