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The Globalive Decision: Time To Pick Competition Over Canadian Ownership

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Thursday October 29, 2009
The CRTC this afternoon issued its decision on whether Globalive, a new wireless competitor about to operate as Wind Mobile, complies with the foreign ownership restrictions currently found in the Telecommunications Act.  While Industry Canada previously concluded that Globalive met the Canadian control requirements for the purposes of the Radiocommunications Act in its bidding for spectrum, the CRTC has concluded that its ownership and control structure do not meet the Telecommunications Act requirements.  The Commission has indicated a number of changes that will be needed to comply with the law.  Globalive says it evaluating its options.

It is tempting to blame the CRTC or the incumbent telecom providers (who filed the complaint over the Globalive structure) for this mess, but the real culprit lies with outdated legislation that prioritizes Canadian ownership over a competitive Canadian marketplace. It is the wrong choice.  Canadians are desperate for a more competitive wireless marketplace.  The issue now falls to Industry Minister Tony Clement, who needs to change the law to facilitate foreign ownership of common carriers - both to facilitate immediate competition and to pave the way for more foreign bidders in the next round of spectrum auctions.  The government rightly said it did not matter that a foreign company took control of a former Canadian tech star like Nortel.  It should similarly not matter who controls a telecommunications company, particularly in a marketplace starving for competition.  The government should amend the law to remove the foreign ownership restrictions now.
Comments (31)add comment

Mike said:

Why don't you call it what it is - blatant price fixing - instead of saying the industry is "starving for competition"?
October 29, 2009

Dave Johnshon said:

Industry Minister Tony Clement
Dr. Geist, what are the best options for us as Canadians to impress this point on Tony Clement? I'm personally pretty steamed that our country has so many areas just dying for real competition and when someone is willing to invest billions to get into the game (like Globalive) we just cast them aside due to some out dated legislation that really has no place in a modern economy. I'd like to do what I can to make my voice heard, but I have no idea what avenues would not be a total waste of effort.
October 29, 2009

Laurel L. Russwurm said:

I know >I< am tempted

Globalive was Canadian enough for Canada to take their cash in the spectrum auction. In the eyes of the world, at best this this will look like a shell game.

If this wrongheaded CRTC ruling is allowed to stand, at the very LEAST Globalive needs to get their money back... with INTEREST.

If not, Canada will instantly gain an untrustworthy reputation internationally, which certainly wouldn't bode well for future investment. I have a hard time grasping how the CRTC could possibly have made a ruling like this during a recession.


(getting close!)
October 29, 2009

Bertalan said:

Michael makes no sense
Telus/Bell/Rogers would all love to have foreign ownership rules removed. That Verizon, At&T and whoever else could come in and snap them up. It seem only fair they don't want Wind to be the only foreign backed carrier.
October 29, 2009

Christian Vandendorpe said:

Time to change the law AND the CRTC
It is not a small irony that an organism established in order to protect the citizen does quite the opposite and keeps Canadians in the grip of an oligopoly of telecoms.
October 29, 2009

Name said:

Dissolve the Canadian Parliament AND the CRTC!

There is too much private corporate interference in both.
October 29, 2009

N/A said:

A good day for Canada...
Thank you CRTC for keeping jobs inside canada. Bell/Rogers/Telus employ canadians and invest in our communities. All the Egyptians would do is kill our jobs, abandon our communities and suck money out of our economy. No thanks. I'm glad the CRTC doesn't give much credence to whiners would throw away our some of our best employers to save $5 on their wireless bill.
October 29, 2009

Lighter said:

To the guy above me!
Are you kidding???? Keeping jobs in Canada? Thats what you think the CRTC did? Buddy these jobs have been outsourced for years now!! Wake up buddy!! CRTC isn't keeping jobs in Canada they are Killing Jobs in Canada!!! Read and understand beacuse you make stupid remarks like this one!!!

"Thank you CRTC for keeping jobs inside canada. Bell/Rogers/Telus employ canadians and invest in our communities. All the Egyptians would do is kill our jobs, abandon our communities and suck money out of our economy. No thanks. I'm glad the CRTC doesn't give much credence to whiners would throw away our some of our best employers to save $5 on their wireless bill."
October 29, 2009

Jim said:

A Good Day For Canada?
The guy who said a good day for canada must be stupid. Just so you know, Bell has operations in India to save money, and Telus has operations in the philippines to save money. They may be canadian companies but they have no trouble sending jobs overseas to protect their bottom line. I hate rogers but that's one thing I respect about them, they've kept their operations in canada if i'm not mistaken.

This ruling by the CRTC shows that no matter how modern a face canada wants to show the world we're primitive in our own backyard. It's a very sad day for our wonderful country.
October 29, 2009

McCoy said:

RE: A good day for Canada...
@N/A: Alright, so Glovalive has 800 employees ready to go, and both Bell and Telus outsource thousands of employees for call centre jobs.
As well, the CRTC has allowed foreign investments in the past, with AT&T previously having a stake in Rogers and T-mobile previously having a stake in Fido before Fido was swallowed by Rogers.
October 29, 2009

Darkroom1978 said:

I've officially reached the boiling point with the CRTC. their blatant disregard for the interests of canadians is a slap in the face. i'm just SO fucking pissed off!
October 29, 2009

Maxxp said:

We are decades behind most countries in our legislation policies and behavior of our governing bodies.
Problem is... after seeing this crap come down the pipe for over a decade now, I dont see it changing. I am beginning to lose hope.
October 29, 2009

Realist said:

Rules are rules, and people forget there are 2 other operators that are Canadian own that is ready to launch. Public Mobile and DAVE wireless. Some may disagree with the rules, but the CRTC would need to change them for everyone, in which case foreign money can come in for everyone, which may destroy jobs.
October 29, 2009

Vishal Malik said:

@ Dave Johnshon
You can write to Industry Minister, Tony Clement, at:

Email: minister.industry@ic.gc.ca


Industry Canada
C.D. Howe Building
235 Queen Street
Ottawa, Ontario K1A 0H5
October 29, 2009

Not happy said:

>which case foreign money can come in for everyone, which may destroy jobs.

Canadian companies like Bell, Rogers have already destroyed Canadian jobs by outsourcing.

I think it is time for the government to change the Telecom Act to allow for foreign ownership.

If we want jobs to stay in Canada, we should modify the act to require Telecom companies to have the operations stay in Canada and require Canadians working at all levels of the company and not just at the executive level. Review all of the companies periodically under the Telecom Act and see who is not being a good Corporate citizen and revoke their licenses.
October 29, 2009

Kalin Harvey said:

The current situation is the one destroying jobs
You know $5 a month on a bill is a lot when you add it all up. Put together a few heavy business users and you're quickly looking at thousands a month on mobile phone expenses. This is a marginal expense that if removed could free up money for thousands of companies to invest in equipment, lower prices for constomers, and yes even jobs.

How many innovative new companies didn't start in Canada because we're typically so behind on wireless technology and accessibility? How many talented mobile Internet developers have moved to the US where they may actually have a market to develop for (I can think of several by name)?

Europeans don't suffer from having choice amongst several carriers, in many cases none of which have head offices in thier home countries. America isn't hurt by the presence of T-mobile. Mobile telephony is basic infrastructure for a modern economy and we can no longer afford to get a second-rate version of it in exchange for protecting the positions of a few hundred or thousand head office employees.

October 29, 2009

frustrated said:

Hello N/A have you ever checked where Telus and Bell support people are located? The jobs are already being shipped offshore to reduce labour costs.
October 29, 2009

Josephk said:

How many thousands of jobs have been lost because Bell & Telus outsourced these jobs off-shore?

Globalive was ready to come in with a minimum of 800 jobs AND offer competition - something absolutely scandalous for Bell & Telus. Hell, they would have to drop their artificially overpriced, government-sanctioned prices and their obscene bonuses!

Please take 30 seconds to sit down & think about it: the government/CRTC APPROVES of Bell & Telus to throw Canadians out of work, and places SANCTIONS AGAINST Globalive to CREATE NEW JOBS in Canada to EMPLOY CANADIANS. There is something HORRIBLY wrong, here.

In the 4 letter-writing spells I have done, my Con MP and the CRTC have replied with the typical form-letter mealy-mouthed BS, autoreplies from Iggy, and NOTHING from George W. Harper's office, Clement's office.

Wake up, people. We've been HAD - - - AGAIN!
October 29, 2009

Darryl said:

It's not just Bell and Telus outsourcing jobs that make them bad for the economy. Their over charging us for substandard services means that money other people/business might be able to use to create jobs is instead being diverted to make more profits for the big three.

The substandard service we have means that we also miss out on other business opportunities as well.

What the telecommunications act is trying to accomplish with it's foreign ownership rules would be better accomplished with stronger competition laws. But then of course that would bring in the Competition Bureau, and that is a whole other kettle of fish working against Canadians.
October 30, 2009

MarcR said:

Foreign Ownership
Sorry Micheal but if telecom is to play a larger role in our economy (digital), we should be very careful regarding investment/ownership.

It's on thing being gouged by BCE and quite another when it's AT&T.

Rather than weaken Foreign Ownership provisions - maybe we look at setting reasonable Network Neutrality and Open Access regulations...

A policy change encouraging true open market conditions will attract domestic investment. At the moment, a lot of money is staying away.
October 30, 2009

mliving said:

CTRC's Actions To Obvious To Ignore
Oh come on...

Canada's telecommunications industry is the MOST sorry excuse for legislated oligopolies in the free world.

In Canada we can sell our technology companies to foreign companies like Nokia, Hitachi, etc. We sell our mining companies to Brazilians and other foreign nationals. BUT! We can not have a FOURTH "foreign owned" telco player. What a crock of shit!

The CRTC has clearly out lived it's usefulness and needs to be replaced with a more modern and practical agency that doesn't pin EVERY SINGLE DECISION on Canadian content or ownership. It's an out-dated and tired excuse to kill REAL competition.
October 30, 2009

Anon-K said:

Agreed with MarcR
to a point. There is a lot more involved that simply dealing with the monetary issues. A Canadian company is bound by Canadian laws. For a foreign owned company, they are also bound by the laws of the home country of the corporation. Let's say that we allow AT&T to enter the market in Canada. How sure can you be that they wouldn't hand over all of your calling records in accordance with a PATRIOT act request?

We can huff and puff all that we want with respect to a contract. Frankly, in some ways a contract isn't worth the paper it is printed on, in particular when it comes to conflicting laws internationally.

Let's say that AT&T were to succeed in taking over 90% of the Canadian telecom market, then they decided that they weren't making enough money here and decided to close up shop.

Telecommunications, if it isn't already, is close to being a critical piece of infrastructure. Do we want it to be at the mercy of a foreign corp and/or government?
October 30, 2009

Rod said:

Josephk: I've tried writing letters too, and received nothing but boilerplate responses. I was really hoping Harper would dismantle the CRTC, but I guess it's not going to happen.

To all those whiners about telecom jobs: You don't want them. These jobs are the ass-end of high tech, which is why they're going to the cheapest labour which can talk to Canadians. Why Nortel jobs are sacrificed to the free market and crappy telco jobs are protected is bizarre. Nortel is admittedly a poor example; they screwed up and deserve to die. Here's a crazy idea: Withdraw some spectrum from the incumbents (on the grounds of not serving the national interest), sell it off in a "foreigners only" auction, and then use the proceeds to provide venture funding for the high tech/clean tech industry. Roger/Belus get a well-deserved haircut, Canadians might get some real competition, and even if we don't we might get the next RIM.
October 30, 2009

Jean Naimard said:

Oh yeah, it’s gonna be great when Telus, Bell, Rogers and whatnot are swallowed-up…
… by Verizon or AT&T and whatnot. They'll bring their expertise in abysmal customer service to Canada…

What a joke.

Basic telecom infrastructure should be confiscated by the government, and made equally available to every operator in a cost+1% basis. This is the only way there’ll be *TRUE* competition in telecommunications.
October 30, 2009

Dr.M said:

this is a dark day for mobile in canada
So if you read the commissions decision - Industry Canada was fine with the ownership structure to make the sale of spectrum, then the BIG EXPENSIVE, COMPETITION KILLING 3 used their influence on the weak and ineffective (and so obviously so) CRTC to decide that even after changes to the ownership structure it was not enough. give the Canadian public a break. this is so bad that it blows my mind that we accept this kick in the head and wallet. when will it end. does any Canadian corp. in this economy have a billion to spare to invest. come on Canada!
October 30, 2009

Name said:

Bell destroyed jobs, so this is BS
If they were caring about jobs, the law would restrict not ownership, but how many employees must be Canadian.

But the government won't force corporations to repatriate jobs to Canada.
October 30, 2009

Jerry said:

I have mixed feelings about this. On the one hand I'm tired of seeing businesses in this country gobbled up by foreign owners who take their R&D investments and profits elsewhere. It's not just jobs that are protected by foreign ownership rules - it's sovereignty over our intellectual capital and the foundation for economic diversification that suffer when ownership shifts abroad. On the other hand I truly want to see more competition in the telecom market. That we allow monopolistic behemoths like Telus, Rogers, and Bell to control the availability of products and services is the real crime, something that could be prevented with adequate antitrust regulation (banks and media are other good examples). We shouldn't have to go to foreign owners to introduce competition, but the forces that work against investment and economic diversification in Canada have brought us to that.
October 30, 2009

jayson said:

the Current Ownership laws has not done a damn bit of good over the years. Canadains are not being better served by protectionism. It is becoming bluntly obvious protectionism in industry was put in place to protect the wallets of the rich by raping the wallets of the poor. 10,000% mark up on some wireless services in canada. Thats completely insane and needs to be stopped.
October 31, 2009

Dev said:

Bertalan you misjudge Telus, Bell and Rogers
They have no interest in competition, that is why just recently Telus has purchased Blacks and Bell has purchased the Source. LIkely to saturate the market and make it that more difficult for competition to try and secure a foot hold.
November 02, 2009

telco junkie said:

Like Jerry
Like Jerry - I also believe there are things we can do within our own economic means that do not require foreign ownership. That said, with 30M people in a territory as diverse and large as Canada, it takes a fair bit of capex to sustain infrastructure that is world-class. And believe me, we are still world-class (HSPA+). To have this controlled by foreign interests does impose risks to our sovereignty on an essential service.

In terms of the decision, it is a contradiction (allowing Globalive to bid and then not allowing them to launch). However, leaving something as landmark to legacy legislation is not the answer. Bringing it to Cabinet to make the final call is the basis for the types of things that Government should be involved in. Just wouldn't want to be in Tony Clemente's shoes.
November 20, 2009

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December 23, 2009

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