Post Tagged with: "foreign ownership"

Why the Canadian Plan to Encourage Wireless Competition Is Consistent with Many Developed Countries

As the lobby onslaught from Bell, Telus, and Rogers bears some fruit – editorials from the Globe and Toronto Star calling for the government to reverse its position on a set-aside as well as support from the Canadian Council of Chief Executives and from a leading telecom union – it is worth considering whether the Canadian policy differs significantly from other developed economies. The Canadian policy boils down to the two issues: opening the door to telecom foreign investment after years of restrictions and creating a spectrum set-aside to ensure that new entrants (whether domestic or foreign) have a reasonable shot at winning sufficient spectrum to offer competitive wireless services in Canada.

While the big three argue for a “level playing field”, the reality is that Bell, Telus, and Rogers already enjoy enormous marketplace advantages. As I’ve previously discussed, these include restrictions on foreign ownership for broadcast distribution, extensive broadcast assets that Verizon could not touch, millions of subscribers locked into long term contracts, far more spectrum than Verizon would own, and shared networks that saves the companies millions of dollars. In the absence of a set-aside, the incentives for the big three would be to pay far above market price for the spectrum in order to keep competitors out of the market. In other words, Bell, Telus and Rogers will massively over-pay for the spectrum to keep out Verizon unless the government establishes a policy that precludes them from doing so.

The incumbent talking points might lead some to believe that the Canadian policy is dramatically different from other countries (Bell has been talking about how the U.S. would never grant equivalent access, while the Globe speculates  that perhaps the policy is “the result of a drafting error”). Yet a review of recent spectrum auctions in other OECD countries indicates that the twin policy of encouraging foreign investment plus establishing set-asides to facilitate competition is very common. The biggest difference between Canada and many other developed economies is that Canada is late to opening its telecom market and is therefore doing both at roughly the same time. In other countries, foreign investment restrictions in the telecom market were removed years ago.

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July 30, 2013 11 comments News

Public Safety Links Telecom Foreign Investment with Lawful Access

Last week, I posted on the Public Safety Canada seeming attempt to circumvent the government’s spectrum consultation by submitting dual letters – a public letter expressing mild concern with foreign ownership and a secret letter warning of “considerable risks”. While that approach raises serious concerns that undermine public confidence in the consultation process, Public Safety’s detailed response (which is available on the Industry Canada site) anticipates the fight over Bill C-30 by specifically claiming that opening the Canadian telecom sector to foreign competition increases the necessity of lawful access legislation:

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April 23, 2012 1 comment News

Public Safety Claims Telecom Ownership Liberalization a National Security Threat

Fresh off Bill C-30, the Internet surveillance legislation, Public Safety Canada now says that opening the Canadian telecom market to foreign ownership “would pose a considerable risk to public safety and national security.”

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April 19, 2012 2 comments News

Ottawa Weighs Loosening Ownership Rules in Telecom Sector

The Globe reports that the government is considering changes to the foreign ownership restrictions in the telecom sector by removing restrictions for companies with less than 10 percent market share.

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November 23, 2011 2 comments News

Do We Still Need Foreign Ownership Restrictions in Canadian Broadcasting?

In recent weeks, a political consensus has begun to emerge on the benefits of removing restrictions on foreign ownership in the telecommunications sector. My weekly technology law column (Toronto Star version, homepage version) notes that implementing such reforms faces at least one major political stumbling block that is only tangentially related – the spillover effect onto the broadcasting sector.

As Canadian telecom operators, broadcasters, and broadcast distributors become single entities – Rogers combined with City-TV, Quebecor’s ownership of Videotron, Sun Media, and Groupe TVA, Shaw having purchased Canwest Global, as well as Bell in the process of merging with CTVglobemedia – the biggest hurdle may well be fears about the cultural impact of opening up telecom companies to foreign buyers.

While the link between broadcasting and Canadian culture is obvious, the connection between Canadian broadcasting ownership and Canadian culture is tenuous at best.

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March 10, 2011 59 comments Columns