[Veee]

OTTAWA (Dow Jones)--Canadian Industry Minister Tony Clement said Friday that the Canadian government has overturned the Canadian Radio-television and Telecommunications Commission's decision against Globalive Communications Corp., allowing Globalive to enter the Canadian market without delay.

As reported, in October the CRTC had ruled that Globalive didn't meet the Canadian ownership requirements needed to operate in Canada, even though Industry Canada said it did. The federal cabinet had the right to overrule the regulator's decision.

Clement said Friday that the government has determined that Globalive meets Canadian ownership requirements.

Globalive is aiming to launch competitive wireless phone and data services in Canada, a move that would challenge incumbent carriers BCE Inc. (BCE), Telus Corp. (TU) and Rogers Communications Inc. (RCI).

Many investors believe Globalive would be a strong new entrant into the market because of the financial heft of its backer, Egyptian telecom company Orascom.

Let the price wars begin!

 

[jpaik]

Wow. "Robellus" must be going out of "its" mind! I'm wondering how long it will take Wind to build out an infrastructure. It's one thing to be the new entrant, it's another to offer coast-to-coast service right away.

 

[hugh]

Clement said Friday that the government has determined that Globalive meets Canadian ownership requirements.

So what part of the government determined this - Industry Canada, the CRTC or ????

Although I was highly critical of the CRTC's decision after Industry Canada had previously approved Globalive's corporate structure, today's decision clearly shows that the Federal Government is corrupt (and I use that word in its truest sense meaning the government is not working properly not in the sense that bribes are taking place)

The capriciousness of this decision terrifies because it shows our politicians and bureaucrats are NOT operating under the rule of law which, history tells us, leads to more corruption and more unsound decisions.

I want Wind in Canada, however, I want Wind to be in Canada because it followed the rules and NOT because a bunch of politicians got together in a backroom and overturned the rules of the land

 

[17671]

wind already has an infastructure, ie: 302-490 if you have a phone with the IMT 2100 band you can "SEE" wind, but not connect to it, you need a phone with the AWS 2100 band to "connect and register" to wind, and you would need a wind card or a carrier with roaming agreements with wind which no one seems to have yet.

i hope they have good competitive price plans that will compete with Bellus and Rogido

 

[mr weather]

So what part of the government determined this - Industry Canada, the CRTC or ????

My guess is the cabinet since they have the power to overturn CRTC rulings.

I wonder if this decision can be appealed to the Federal Court?

 

[outinthornhill]

So what part of the government determined this - Industry Canada, the CRTC or ????

Although I was highly critical of the CRTC's decision after Industry Canada had previously approved Globalive's corporate structure, today's decision clearly shows that the Federal Government is corrupt (and I use that word in its truest sense meaning the government is not working properly not in the sense that bribes are taking place)

The capriciousness of this decision terrifies because it shows our politicians and bureaucrats are NOT operating under the rule of law which, history tells us, leads to more corruption and more unsound decisions.

I want Wind in Canada, however, I want Wind to be in Canada because it followed the rules and NOT because a bunch of politicians got together in a backroom and overturned the rules of the land

Very well said, Hugh. It's notable the cowardly Clement made the announcement as Parliament adjourns for the holidays so he will not have to answer for it in the House of Commons (at least until February).

If Canada was some banana republic, this would be reported as a "politicians over-ride legal system" story. Well guess what - we are looking more and more like a banana republic, with due apologies to bananas. The CRTC is charged with enforcing the laws passed by Parliament and tried to do so. The politicians, looking for some candy to toss the masses at Christmas, decided the law doesn't matter; let's buy some votes. That is corruption.

Amidst the hoopla, let's not forget it was Clement and a gang of his personal cronies who allowed SARS to rage out-of-control in Ontario when they couldn't set aside their political maneuvering to manage the health system professionally.

 

[rgto]

Here's Clement's reasoning:

Mr. Clement said 80 per cent of Globalive's voting shares are controlled by Canadians, and just four its board members are those nominated by foreign interests.

“I think it sends a signal to the world that we are place where the rule of law triumphs, where you can have two branches of government that can reasonably differ on an interpretation of the facts of a particular case but that there can be a resolution of this and that the government has the ability to resolve this issue,” Mr. Clement said.

He stressed there is no change to Canadian ownership rules.

“All we have done, is we believe, interpreted the law in the appropriate and proper, correct, way, that Globalive, when you look at the facts on the ground, Globalive meets those Canadian ownership and control requirements,” he said.

http://www.theglobeandmail.com/report-on-business/globalive-to-enter-wireless-market/article1396853/

 

[hugh]

What Clement fails to note (and what the CRTC and Telus argued) is that a majority of shares in the company are held by foreign interests.

Once again, I am not arguing that Wind should not operate in Canada, however, I am horrified at the capricious back room nature of this whole ordeal.

I said this in October when the CRTC ruled the other way that this whole Wind Mobile business smells real bad with way too much political interference and what appears to be a complete disregard for the rules of the land.

 

[randdon]

Really ... what does it matter if it is forgien owened? Its a pay for use service, it will employ Canadians not otherwise employed, they have to abide by the rules of Canada in every way to operate, pay taxes etc, ... So a little profit trickles off shore? Since this will be a discounted service, it should make the others tow the line a bit! It in case of hostilities or what ever, Canada can take over the spectrum if it requires, not like our oil being pumped out of the ground and shipped offshore!!! For next to no royalties to add!!

 

[hugh]

Really ... what does it matter if it is forgien owened?

may I suggest spell checking.

But seriously, I agree about the foreign ownership issue but that's not what the laws of Canada require. I believe all company's and politicians should abide by the law. Telus and the CRTC decision would suggest that Mr. Clement and his political peers have made a decision that contravenes the laws of Canada.

My belief is that, if the laws are wrong, then change them so everyone operates on a level playing field but don't make arbitrary backroom political decisions that essentially tell the country that "whoever gets the ear of the minister gets the winning decision."

 

[thesmith7]

Is this possibly the start to dismantle the CRTC?

 

[jpaik]

Paolo, given the spectrum that was auctioned, do you know which of the latest smartphones which operate in the AWS 2100 band? I know the current iteration of the iPhone will not connect to WIND.

 

[Dr.Dave]

If anyone wants to watch the press conference, here it is (about 15 minutes including questions):
http://watch.bnn.ca/#clip245136

A couple of points from the interview:

• Industry Canada ruled that Globalive met the legal and factual control requirements.
• The CRTC ruled that Globalive met the legal requirements but that Globalive was foreign-controlled.
• The cabinet decided Globalive met the legal requirements and although the foreign partners have influence on the company, it did not amount to control.
• Two branches of government can legimately come to different conclusions on a subjective decision.

@Hugh, from The Globe:

Mr. Clement said 80 per cent of Globalive's voting shares are controlled by Canadians, and just four its board members are those nominated by foreign interests.

 

[Veee]

Wind (Global Live) will operate in the 1700 3G spectrum

http://www.gsmworld.com/roaming/gsminfo/cou_ca.shtml

 

[jpaik]

Thanks, V. Now I'll take a look at which phones operate in this band.

 

[vjose78]

Hugh, found this on broadcastmagazine.com:

The Government and the CRTC agree that Globalive meets the requirements. In particular, Canadians own at least 80 percent of the voting shares of Globalive and 66 2/3 percent of the voting shares of Globalive's holding company. Also, at least 80 percent of Globalive's board of directors are Canadians.


Personally I don't care who owns it, we need more competition because all these fees and the prices we pay are ridiculous and something needs to be done about it. If bringing in competetion, no matter where it's from will help, then i'm all for it, all I want to know is when can I sign up with Wind?!

 

[hugh]

I fully understand the implications but as I noted the feds need to change the laws to show that Canadians need to only own a "majority of voting shares" and not a "majority of shares" - that's a HUGE difference.

If what Clement says is true, then it means that foreign interests should be able to own 100% of Rogers, Cogeco and many other major companies NON voting shares so long as the voting shares are majority voting shares are held by Canadians.

Many would argue (ie. the CRTC) that ceding complete control of non-voting shares to a foreign company is essentially ceding control of the major decisions.

Clements has overruled many long standing precedents and opened a can of worms by essentially saying non-voting shares are meaningless.

If I was a Telco cableco, or bank right now, I would quickly set up two sets of shares (if they haven't already) Voting and Non Voting and start selling non-voting shares to major U.S. investors. They could make a fortune.

 

[Arthur Dent]

With the infinitely complicated financial structure of current corporations, it is very difficult to figure out if it is in compliance with the outdated and anti-competitive Canadian law about foreign ownership. In the end it all came down to the call of the judges - in this case Industry Canada ruled in favour of the competition and consumers, and the CRTC - 100% owned by the incumbent telecommunication monoploies - did what it is paid for - tried to keep the monopoly of their owners intact.
The two things that the government needs to do to avoid being accused of corruption in the future is to change the law and dismantle the CRTC, and either move its functions to Industry Canada or create a new body with strictly technological mandate. This institution is painfully out of date and out of line with the current state of communications in Canada and the world.

 

[timlocke]

I suspect that if one read the words of the Acts setting up the CRTC and the Broadcasting Act references to the CRTC one would find that the Cabinet has the legal power to override CRTC decisions given them by the statute.

Whether they SHOULD use those powers in this case is a different matter. I do agree Hugh, that the Act should be changed to put Bell etc. on the same footing as GlobalLive and with a bit of luck the gov will do this.

I'd like to see a serious player like Orange, France Telecom or Tmobile take a go at our market maybe by taking over Telus.

 

[Deckster]

Let the price wars begin!

There will be price wars in Calgary and Toronto only. While Wind has been given national roaming rights on the incumbent carriers, they will only be offering local service in those two cities. The incumbents will simply offer regional packages similar to what was done when MTS offered an amazing package for Winnipeg.

Wind won't make a difference to many Canadians for a very long time.