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Christian Paradis, Minister of Industry and Minister of State (Agriculture), responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on Tuesday, September 20, 2011. (Sean Kilpatrick/THE CANADIAN PRESS)
Christian Paradis, Minister of Industry and Minister of State (Agriculture), responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on Tuesday, September 20, 2011. (Sean Kilpatrick/THE CANADIAN PRESS)

Don't ease telecom foreign investment rules, NDP warns Add to ...

“We want to make sure that new entrants are at the table,” said Charlie Angus, the NDP’s digital affairs critic. “The question is, there [are]various elements of the spectrum and on what parts of the spectrum do we set aside?” Another chief consideration, the NDP says, is determining which blocks of spectrum are best suited for rural network expansion by the incumbents, while also ensuring that some wireless licences are also reserved for use by first responders including police, fire and emergency medical services.

“In terms of the spectrum auction, we have a number of issues that we think needs to be looked at,” said Mr. Angus, adding ensuring competition, rural connectivity and public safety need not be viewed as conflicting priorities.

Globalive, Mobilicity and Public Mobile have all argued that a set-aside is the best option for the coming auction for the 700 MHz frequency.

“I’m glad to see the NDP understand our industry well enough to know that without 700 (MHz) set-aside, competition is dead,” said Globalive chairman Anthony Lacavera in an interview on Thursday. “I’m shocked that they could understand that but then somehow miss the reality that foreign capital has been a major contributor to the improvement in customer service and pricing and choices that consumers enjoy currently in the wireless market.”

Mr. Lacavera, who is also chief executive officer of Wind Mobile, said one just needs to take a stroll in a local mall to see how competition is flourishing at the various mobile kiosks and stores thanks to the presence of foreign capital in telecom.

The problem, he said, is that leaving the existing foreign investment restrictions in place, especially given Globalive’s recent history, would create an insurmountable hurdle to raising the enormous capital needed to create and sustain that competition.

“The NDP supporting the set-aside and opposing removing these antiquated foreign ownership restrictions is like setting up a great buffet at a party, and then locking the door so no one can come in and enjoy it,” said Simon Lockie, Globalive’s chief regulatory officer.

Foreign financiers, meanwhile, have been left guessing about their rights as investors under the current system. For example, Wind’s lawyers have spent a lot of time in court since its launch to defend against accusations that its foreign backers exerted too much control.

The federal government, meanwhile, has been accused of rewriting foreign investment rules on the fly to favour Globalive. In 2009, Cabinet overruled a decision by the Canadian Radio-television and Telecommunications Commission, which had deemed Globalive insufficiently Canadian-owned and controlled.

While the Federal Court of Appeal sided with the government in June, 2011, Public Mobile is seeking leave to appeal to the Supreme Court of Canada, arguing the industry remains confused about the rules. The Supreme Court has yet to decide whether it will hear the case.

At the same time, consumers are becoming increasingly curious about the future of wireless competition. A set-aside of wireless licences for new entrants is a position that is also being championed by OpenMedia.ca.

The activist group’s petition, entitled “Stop The Cell Phone Squeeze,” has garnered about 42,702 signatures since being launched just over a week ago. It argues that a set-aside is necessary to ensure the big three do not dominate the auction and use their relatively vast financial resources to squeeze out smaller players during the bidding.

This week, the NDP’s Mr. Angus tweeted his support for the OpenMedia.ca petition, urging Canadians to join the campaign.

“This has been one long drawn-out process without much clarity from the government, which is why having OpenMedia get out there and start beating the drum is raising awareness,” said Mr. Angus.

Rogers, BCE and Telus, meanwhile, are urging Ottawa to hold an open auction, arguing that smaller players no longer require special treatment, given current levels of competition. Telus, though, has also stated that it would also support caps that limit how much spectrum each company can purchase in the auction.

Last week, the Liberals' industry critic, Geoff Regan, posted an open letter on his website arguing the federal government should set aside a “reasonable amount” of spectrum for small and new entrants in the next auction. When asked on Wednesday whether he is endorsing the OpenMedia.ca petition, he replied: “I think our letter speaks for itself, and it is certainly very supportive of where they are coming from.”

The key concern, he said, is ensuring that Canada is on par or ahead of other countries on wireless costs, rural coverage and the roll-out of high-speed networks.

The Liberals, though, have yet to decide whether they support more relaxed rules for foreign investment, said Mr. Regan.

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