Big Three Call for Fair Treatment from Parliament

by Gaurav Kheterpal on April 16, 2010

It’s not often that the Big Three Canadian Wireless Carriers join hands for a cause. However, they presented a unified front yesterday during parliamentary hearings related to the ongoing debate over foreign control and ownership of telecom companies. The big Three have clarified their stand and demanded that all carriers must be included because networks today typically carry an array of traffic including phone calls, TV programs and data.

Bell, Rogers and TELUS highlighted that any liberalized investment regulations that favor startups over incumbents or only apply to one type of carrier would be unfair and discriminatory. The Canadian Parliament is currently holding a series of hearings to contemplate a change in limits on foreign ownership of domestic telecom companies.

The controversy related to foreign ownership and control started last year when the federal cabinet overturned a ruling by CRTC and it allowed Globalive to offer wireless phones services under the ‘WIND Mobile’ brand. CRTC claimed that Globalive wasn’t “Sufficiently Canadian” to be allowed as a wireless carrier in Canada. As mentioned in yesterday’s post, the CRTC Chief believes that a conservative and cautious approach to foreign ownership is the best way forward. The Big Three have alleged that CRTC is being partial and the same treatment should be handed out to telecom, cable and broadcasting companies in Canada. It is turning out to be an interesting debate between the federal government, CRTC and the Big Three Wireless Carriers.

Ken Engelhart, Rogers’s senior vice president of regulatory affairs, told a Canadian parliamentary hearing today in Ottawa

“If you artificially change the ownership rules for telecom but not for cable television, then you make it impossible for integrated carriers to pursue the advantages of foreign liberalization.”

His statement was backed by Michael Hennessy, senior vice-president of regulatory and government affairs at TELUS, who mentioned

“Fairness requires equal treatment for all Canadian carriers. Parliament must recognize that communications today is an integrated business and you cannot effect change without changing the Telecommunications Act and parts of the Broadcasting Act at the same time.”

Anthony Lacavera, chairman of Globalive Wireless Management Corp is next in line to testify before the Canadian Parliament. The foreign ownership controversy came into limelight when Globalive Wireless Management Corp. partnered with Egyptian carrier Orascom, to enter Canada’s cellphone market last year. Will it add another twist to this controversial tale? Let’s wait and watch.

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Jordan Richardson April 16, 2010 at 4:54 am

These companies have been working together pretty consistently when it comes to grabbing market share and arranging government regulations to ensure maximum profitability at the expense of the Canadian consumer, so this is hardly surprising. Whether it’s Rogers and Bell working together as Inukshuk Wireless or Telus and Bell combining forces to do several things, Canada’s Big Three are almost inseparable. They certainly aren’t traditional competitors, that’s for sure.

So it stands to reason that they’d be back in Ottawa trying to manipulate the law in their favour to box out foreign ownership. While there is some justification to at least limiting foreign ownership in some sectors, Bell, Telus and Rogers are quite simply looking after their own backyards and want to maintain the status quo at all costs. After all, once you get over 95% of the market in Canada, you don’t give up without a fight.

It’s going to take a lot for the “competition” to break the stranglehold and some foreign cash might be the ticket, but I actually agree with the Big Three partially in that the rules need to be outlined so that all companies have a chance to compete fairly. Right now, it seems that the Harper government is making things up as they go.

Gaurav Kheterpal April 19, 2010 at 3:27 am

@Jordan: I couldn’t agree more that Bell, TELUS and Rogers are trying to manipulate the foreign ownership laws in their favor. However, I fail to understand the CRTC’s concern over foreign ownership affecting ‘Canada’s social and cultural values’.

If the entry of foreign players helps improve the state of wireless networks in Canada (which I bet will), why this stiff resistance to cling on to a closed and protected world. I hope that the Harper government gets this right. IMO, both CRTC and Big Three have taken extreme views and whatever the verdict may be, it would be impossible to please both the parties as well as preserve the interests of Canadian subscriber.

Jordan Richardson April 19, 2010 at 5:42 am

Well, the concern with foreign ownership is that a foreign media conglomerate could conceivably snap up Canadian businesses and transfer their particular viewpoints to the Canadian companies. I think there’s a legitimate fear out there that the same sort of bias and corporate slants that occur in the United States (ie. FOX “News”) could occur up here should there be too much relaxing of foreign ownership laws in telecommunications. Because the Telecommunications Act is such a thorny bit of work, there are some fears from some individuals and groups that foreign ownership could mean foreign perspective.

Of course, to solve this problem and even to curb the appearance of this problem, the CRTC could just alter legislation and the Telecommunications Act to reflect the new challenges. In other words, the regulations need to be able to relax the rules for foreign capital but still must address the convergence between telecommunications, broadcasting and the internet. I think it’s the broadcasting and internet sectors that most people are concerned with here, as foreign influence could completely change the way Canadian content is handled. An example of this would be downloading a video from the internet on to your wireless phone. How could foreign ownership rules impact the content of the material?

When Rogers and Bell Canada also own broadcasting media in Canada, you can start to see why the intersections of media types could be considered a problem and why some might be considered about cultural and social issues with respect to relaxed regulation.

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