Review of foreign investment in telecom industry to take longer than expected

The House of Commons Standing Committee on Industry, Science and Technology won’t meet the February 2003 deadline for reviewing foreign investment limits in telecommunications service providers imposed by Industry minister Allan Rock. The chair of the Parliamentary committee promises to take a thorough and methodical look at all of the complex issues surrounding changes to foreign ownership rules, which requires that the process take longer than previously anticipated. "We will not rush the study," Walt Lastewka tells Report on Wireless. "Although the minister has requested that it be done by a certain date, we will be running back to him and telling him that in order for us to do a proper study, we’re going to take a little longer." Before the telecom foreign investment hearings can begin, the committee must first clear other items from its docket. The committee is currently hearing from witnesses as part of proposed amendments to the Lobbyist Registration Act (Bill C-15) and the Competition Act (Bill C-249). It is also being briefed on the potential economic impact on Canadian industry of implementing the Kyoto Accord. Lastewka expects foreign investment hearings to start at the end of January 2003 when the House of Commons resumes sitting after the holiday break. He anticipates finishing hearings in late March or early April, with recommendations to the minister to follow. In addition to having to clear other agenda items first, the committee is expecting a long line of participants who want to make their case either for or against changes to the current foreign ownership regime. Lastewka says that he has already been contacted by many parties seeking to present their arguments before the committee. "I’ve already tried to make up a list," the St. Catharines Liberal MP says, holding a four-page document. "We’re going to have, of course, people from the incumbents, representatives of the wireless telephone companies, and the associations. We’ll have other companies, smaller telecommunication companies. I understand some cable companies have already requested that they would like to present their half of the story. And there’ll probably be a number of individuals that will want to come forward." The committee will soon launch a web site letting interested parties request an appearance. While the committee has said it wants to have as many sectors represented at the hearings as possible, including cable interests, it’s now clear that examining foreign ownership rules for cable companies will not be part of the official review. In previous interviews with Report on Wireless, representatives from the cable industry have indicated that cable should be part of the review because Rock referred to infrastructure in his speech and the term is mentioned in the consultation document. Wireless companies want the scope limited to telecom (RoW, Nov. 25/02). Lastewka has indicated that, while cable companies are welcome to participate, they aren’t part of the official review. His committee will only deal with sectors that fall under the purview of Industry Canada. The government hasn’t explored foreign ownership rules for several years and Lastewka concedes that a review is probably overdue. But that doesn’t mean the hearings are going to be laborious. The chair hopes to streamline the process by cutting off testimony if it becomes repetitious. To ensure each party’s arguments are fully understood, he wants witnesses to present detailed information on elements such as the term "sovereignty protection" bandied about by some opponents of a liberalized investment regime. Lastewka needs a precise definition of what those words mean to the person or company using them. The chair plans to meet with other committee members to set out a minimum number of issues that should be examined, which should make the process proceed more smoothly, Lastewka says. Having too many aspects of the debate under the microscope at the same time will just confuse the issue, he adds. Consultation document a good start for committee In its consultation paper, Industry Canada posed 13 questions that it believes to be of primary importance in the debate. Lastewka indicates that the background paper is a good starting point, especially for MPs who are new to the file, but committee researchers will be gathering their own data for the members. Lastewka says that a significant part of the review process will try to compare the Canadian experience with international rules and regulations, noting that this will give the committee a broader perspective of the whole debate. The committee will also be aware of Canada’s international commitments under agreements like NAFTA and the World Trade Organization (WTO). Canada was to have opened up its telecommunications market to more foreign investment as a result of the 1996 WTO talks. "Normally when we have situations like this, we always try to touch base with Australia, New Zealand, the United States, the U.K., France, sometimes even the Scandinavian countries," Lastewka explains. "We like to look, to broaden our outlook. What are other countries doing and why?

Review of foreign investment in telecom industry to take longer than expected

News | December 9, 2002

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