What’s next for Globalive?

The CRTC issued its decision in the review of Globalive’s ownership. Reading some of the re-tweets and comments on various news sites and blogs, I see the distain for our regulator that might be expected from those who don’t have an understanding of Canada’s structural framework.

As Michael Geist wrote:

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telecom providers (who filed the complaint over the Globalive structure) for this mess, but the real culprit lies with outdated legislation that prioritizes Canadian ownership over a competitive Canadian marketplace.

I agree with that assessment. Last month, I wrote about the Telecom Policy Review Panel’s views on liberalization of foreign ownership.

One of the Globalive lawyers, Hank Intven, was a member of that panel that delivered its report three and a half years ago. Shortly thereafter, Hank was commissioned to develop a book detailing the specific legislative changes required to implement the recommendations of the report.

The Panel was created by the last Liberal Government and its response was delivered to a the new Conservative Minister of Industry. I remember asking a local Liberal MP if the bipartisan origins of the TPRP would permit a more constructive legislative approach to speed discussion and passage of the package of reforms.

Silly me.

So here we are. Where do we go from here? To those who wonder how Industry Canada could approve the ownership and then watch the CRTC deny approval, there are a number of reasons that we can discuss.

The CRTC set out the remedies required to gain approval in its decision. The fastest and most certain course would be for Globalive to bring its structure into conformance and receive authorization from the Commission.

Alternatively, Globalive can appeal to Cabinet, but with such a process, the Telecom Act has prescribed timetables to allow consultations with the provinces and the public. This would not be fast and I’ll ask lawyers to consult on whether Cabinet has the legal authority to simply ignore the foreign ownership restrictions entirely. It is possible that the path of least resistance would be for Globalive to ask Cabinet to order the CRTC to delete paragraph 118 of the Decision – the one dealing with Orascom holding the debt – perhaps using a justification of the exceptional circumstances of the current economic situation.

Alternatively, Globalive could sit on the spectrum asset, waiting for legislation to remove the foreign ownership restrictions. I’m not holding my breath.

One way or another, there will be new players in the Canadian mobile space. Public Mobile, DAVE Wireless and Videotron are also building networks.

At the end of the day, Globalive entered the spectrum auction fully aware of the ownership regulations and precedents for previously approved corporate structures. It acquired new entrant spectrum that had been set aside to enable smaller start-ups to offer increased wireless choices to Canadians and it outbid the others perhaps hoping that it could push the envelop a little further.

All along, Globalive has been in control of the timetable for approval. The next move is up them as well.

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