Canadian Enough? WIND Mobile Continues Court Battle

by Jordan Richardson on May 19, 2011

WIND Mobile found itself in a court room on Wednesday, once again fighting for its proverbial life. The legal case began with its intention to establish whether or not federal cabinet overstepped its boundaries when it overruled the CRTC and allowed the mobile carrier to operate in Canada.

The federal regulator had decided that WIND Mobile, which is 65 percent owned by Egyptian telecom giant Orascom, wasn’t Canadian enough to operate in the country. Industry Canada accepted the ownership structure of WIND, however, and overthrew the CRTC decision pertaining to the provider’s “ownership and control requirements.”

The case, now before the Federal Court of Appeal, has been rolling since a lower court decided that cabinet did indeed overstep in overruling the CRTC.

A lawyer for the federal government began arguing on Wednesday that there are no limits to the amount of foreign debt financing that a Canadian telecom operator can raise. Robert MacKinnon, a lawyer for the Attorney General, argued that there are no restrictions on foreign debt financing because the telecommunications industry is “a very capital-intensive industry.”

The CRTC, on the other hand, has argued that ownership of debt gives “undue control” of WIND Mobile to the holder of said debt. In this case, that’s the Egyptian telecommunications giant. Orascom, for its part, does not own any voting control in WIND Mobile or Globalive. It also only holds a minority of seats on the company’s board along with its 65 percent equity stake.

The problem now is that there are no winners. Industry Canada’s move undermines the CRTC’s regulatory authority, again, and actually puts it at odds with the legalities of the case. While the federal government has been continually discussing the notion of cracking open the doors of foreign ownership in Canada’s troubled sector, officials haven’t actually done anything about it. What the industry is left with, then, is a patchwork of outdated laws that don’t benefit anyone.

So while the intent was to introduce competition to the wireless and telecommunications sector, Industry Canada’s move has only ensured that WIND Mobile and other similar providers can look forward to spending countless hours fighting for their lives in a courtroom.

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