How Canadian does Globalive have to be?

In some ways, it was fitting that Tim Horton’s HQ was repatriated to Canada yesterday. It was painful for many of us to think of such an icon being headquartered south of the border.

Yesterday also marked the opening of the oral phase of the CRTC’s review of Globalive’s ownership.

How could Globalive’s foreign ownership be in question by the CRTC when it has already passed the standard set by Industry Canada? How much maple syrup needs to run through the veins of its board?

The CRTC’s hearings into the compliance with Canadian ownership and control requirements for Globalive opened with introductory remarks by Chairman Konrad von Finckenstein, setting out the reasons why the review was required.

With an infrastructure that connects virtually every household across the country, telecommunications play a vital role in Canada’s social and economic development. For this reason, the Telecommunications Act states that the control of telecommunications companies must rest in Canadian hands. It further sets out the acceptable level of foreign ownership and control.

In the minds of many observers, one of the key questions is how Industry Canada could have approved the ownership structure for the purpose of licensing, and yet the CRTC has already indicated that, at a minimum, it will require a number of changes to ownership agreements in order to meet its standards.

The opening remarks by the chair addresses this question in part: Industry Canada made its determination under the Radiocommunication Act at an earlier point in time and in the context of awarding a licence pursuant to the advanced wireless services auction process. On the other hand, the CRTC is looking at the issue now under the Telecommunications Act in the context of establishing and operating a telecommunications carrier network. In the chairman’s words, the two agencies may be applying the same test but in a different context and with a different focus.

The other major difference is that the CRTC process is completely transparent, with most of the evidence open to public scrutiny and comment, absent the potential for political intervention – although subject to the possibility of its determination being appealed to cabinet.

Based on the exchanges in yesterday’s hearings, there are some clear concerns about the ownership structure that was presented to the CRTC, but not all of the Commissioners share the view that these can’t be remedied. Today, the CRTC will be examining issues with Globalive in-camera, with redacted transcripts to be produced for parties to review.

The schedule has been modified to enable final arguments to follow the filing of new agreements and allow the transcripts to be produced. I will update when the public hearings are to resume.

In the meantime, can I suggest that eveyone practice: “R-R-Roll up the r-r-rim to win.”