A parliamentary committee will force executives from Telefon AB LM Ericsson and Research In Motion Ltd. RIM-T into a public airing of their dispute over the sale of Nortel's wireless assets to a foreign buyer.
Four opposition MPs triggered the hearings, which could raise political pressure for the Conservative government to block the sale of Nortel Networks Corp.'s NT-T wireless assets to Sweden's Ericsson.
Opposition MPs are planning to question company and government officials Friday on issues similar to those that fuelled last year's rejection of the foreign takeover of MacDonald Dettwiler and Associates Ltd.'s (MDA) space assets – namely, the loss of key technology, public money invested in the company, and possible national security implications.
The MPs will also be able to quiz Ericsson Canada president Mark Henderson about which Nortel operations will remain in Canada and, for the first time, ask RIM co-chief executive officer Mike Lazaridis to explain his company's assertion that its efforts to bid for Nortel were blocked, as well as its complaint that a foreign sale could damage Canada's technology sector and compromise national security.
“Each will have an opportunity to say their piece,” said Conservative MP Mike Lake, parliamentary secretary to Industry Minister Tony Clement.
Ericsson's $1.13-billion bid for a package of Nortel's wireless assets won a court-approved auction on July 28.
But Waterloo, Ont.-based RIM complained that its efforts to mount a rival bid had been blocked. RIM did not submit a formal bid in the court-run auction because the company said it wanted Nortel patents for long-term evolution (LTE), a next-generation wireless technology, to be included in the sale of wireless networks and LTE licences.
Political pressure has mounted for the Conservatives to stop the Ericsson takeover. But Prime Minister Stephen Harper's government is loath to overturn the results of bidding organized by a bankruptcy court and reject a foreign sale at a time when Ottawa is trying to attract foreign investment.
But the Conservatives also fear a backlash if the public believes Nortel is being sold to foreign interests over a Canadian bidder, so Conservative MPs will press Mr. Lazaridis to explain why RIM did not submit a formal bid, a Conservative official said.
Executives from Nortel, which is now in bankruptcy protection, and senior civil servants from Industry Canada are also slated to testify.
Liberal MP Marc Garneau noted that details of the Nortel breakup remain murky. “[The hearings are] an opportunity for the government to decide on whether it's in the best interests of Canada. We want to make sure that all the information is there,” Mr. Garneau said.
Last year, the same committee's hearings into the proposed sale of MDA's space assets to Minnesota-based Alliant Techsystems raised opposition that pushed the Harper government to issue the first rejection of a foreign takeover in decades.
MPs raised concerns that MDA's technology is key to Canadian industry, that it was developed with public money, and that the sale of its Radarsat-2 satellite surveillance technology to foreign owners could compromise national security.
Mr. Garneau said he wants the Nortel hearings to reveal how much public money went into the company and to examine the impact of the sale on Canada's tech sector.
He and New Democrat Brian Masse said they also intend to explore RIM's concern that the foreign sale of Nortel's wireless assets could affect Canada's national security.
That concern is based on the possibility that a foreign sale of LTE encryption technology would make it harder for Canadian police and spy agencies to intercept and protect wireless calls and messages, technology analyst Carmi Levy said.
With files from reporter Heather Scoffield in Ottawa
