Foreign Ownership Rules Threaten Vibrant Canadian Wireless Competition And Innovation

The Canadian wireless marketplace is dominated by three players — Bell Mobility, Rogers Wireless, and TELUS — that together control more than 95% of wireless revenues and a similar portion of wireless service subscriptions. In March 2009, new entrant Globalive, which had paid C$500 million for radio spectrum auctioned by Industry Canada (IC) in 2008, successfully passed IC's foreign ownership review. But in October, the Canadian Radio-television and Telecommunications Commission (CRTC) refused it an operating license, ruling that it is effectively controlled by a foreign company, Orascom Telecom. The ruling was overturned on appeal in December, and Globalive has launched service in two cities. A second license auction winner, Public Mobile, is also under review by the CRTC. While it considers itself compliant with the legislation, it is challenging case-by-case reviews in court, with the aim of forcing a statutory amendment to remove or substantially reduce limits on foreign ownership for all vendors — stimulating competition and innovation by reducing the cost of raising capital needed to build out next-generation networks and launch new offerings.