Federal Court overturns government’s approval of Globalive

A Federal Court of Canada ruling that said the government erred in approving Globalive Wireless Management Corp. as a telecommunications carrier will not affect the company’s operations, Globalive chairman Anthony Lacavera said Friday. “We won’t let this be a set-back for wireless competition in Canada and are consulting with our advisors to determine our next steps,” Lacavera said in a release. On Friday, the Federal Court struck down a decision by the Conservative government to allow Globalive to enter the telecommunications market in late 2009. “The Governor in Council acted outside the legal parameters of the Act in stating that its decision impacts only on Globalive,” Justice Roger T. Hughes wrote in the decision. “The Governor in Council cannot restrict its interpretation to one individual and not to others who may find themselves in a similar circumstance.” In 2009, the CRTC said Globalive was not eligible to operate as a telecommunications carrier in Canada. The commission had determined Globalive was operated in fact by a non-Canadian. But in December 2009, the Conservative government varied the commission’s decision, allowing Globalive to launch wireless phone services in Canada under the Wind Mobile brand. Fellow wireless entrant Public Mobile Inc. opposed the government’s decision, and filed a judicial review of the decision with the Federal Court. Public Mobile told the court last month that 99 per cent of Globalive’s debt was controlled by Egyptian-based Orascom Communications. The Telecommunications Act limits foreign investment to 20 per cent direct investment in the carrier and 33 per cent indirect investment in the holding company. Although Globalive met both of these criteria, the CRTC determined Globalive was controlled in fact by a non-Canadian because of its debt. Public Mobile also argued all carriers should have access to the same levels of foreign capital, and said that the government’s ruling created an exception for Globalive. But Globalive argued before the court that the difference in opinion between the government and the CRTC boiled down to semantics. Lawyers said Globalive rested on the fine line of not being controlled by either Canadians or non-Canadians, and therefore met the act’s requirements. Globalive also said Public Mobile was using the court system in an attempt to gain access to foreign capital. The court ruling Friday said that the federal government could not reverse a CRTC decision focusing on one individual company. The court quashed the government's decision, arguing it was based on errors of law. Justice Hughes wrote that the judgment will not go into effect for 45 days to allow Globalive or any other party to appeal the ruling. Globalive said in its release following the decision that it was “disappointed” with the ruling. “We are very disappointed with this decision. From the beginning, we have maintained that we are fully compliant with the rules. Industry Canada saw this clearly. Cabinet saw this clearly,” Anthony Lacavera, chairman of WIND Mobile, said. “This Court decision does not suggest that Cabinet got it wrong, only that Cabinet made two errors in explaining their rationale and characterizing the decision.” Lacavera added that Globalive is examining its options and that the company doesn't “intend to back down.” Lacavera said Globalive is “proudly Canadian” and since its launch in 2009 has attracted over 250,000 subscribers. In an interview with BNN Friday afternoon, Lacavera said the ruling would not impact the company's operations. “There is no impact to our operations in this decision whatsoever. What the court is saying is we’re not happy with how the government got to its decision to vary the CRTC’s decision,” he said. “I don’t think it brings any uncertainty to our operations at all.” Lacavera said the ruling points to the high-level of confusion attached to the government’s foreign ownership rules, adding that he hopes the ruling will lead to clarification. Industry Minister Tony Clement said via Twitter that the government is studying the ruling and its options going forward. "Our stands with consumers who want more competition," he wrote. The Communications, Energy and Paperworkers Union of Canada (CEP), the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) and the Friends of Canadian Broadcasting also issued a joint release in reaction to the ruling. “Overturning the Cabinet decision is a victory for Canadian ownership rules and a victory for Canadian culture,” Stephen Waddell, ACTRA’s national executive director, said in a release. “Globalive was potentially the beginning of the end of our foreign ownership laws, we’re ecstatic that the courts have stopped the train in its tracks.” The groups participated as interveners in the case, arguing that telecommunications companies have a responsibility to strengthen and safeguard Canadian cultural sovereignty. news@thewirereport.ca

Federal Court overturns government’s approval of Globalive

News | February 4, 2011

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Federal Court overturns government’s approval of Globalive

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