Wind Mobile will fight a court decision that re-opens the question of whether the new wireless carrier should be allowed to operate in Canada and challenges the federal cabinet’s power to overrule the telecom regulator.
The CRTC had decided Wind Mobile’s parent wasn’t sufficiently Canadian controlled, as required by law, but the federal cabinet intervened.
The Federal Court ruling quashes Industry Minister Tony Clement‘s decision in 2009 to overrule the federal telecom regulator. Clement’s move allowed Wind to become the first major wireless player to enter the market in years, taking on established heavyweights like Bell, Rogers and Telus. Wind’s aggressive marketing efforts earned it a spot on Marketing‘s list of top 10 Marketers of the year in 2010.
The judgment said the law makes it clear that telecommunications have an “essential role” in Canada’s identity and sovereignty.
“There is no policy objective in the act that encourages foreign investment,” wrote Justice Roger Hughes. “That decision was based on errors of law and must be quashed.”
Anthony Lacavera, chairman of parent company Globalive, says the Federal Court ruling proves Canada’s telecom laws are outdated and need to be overhauled.
“We, of course, will fight this decision vigorously,” Lacavera said from Toronto.
“There is no impact whatsoever to the Wind Mobile or the Globalive broader operations. No one is trying to shut Wind Mobile down,” he said, noting it now has more than 250,000 cellphone subscribers.
The Federal Court of Canada ruling gives a 45-day stay of judgement, which allows Wind Mobile to keep operating and figure out its next move.
Lacavera said he’s assessing whether he needs to go back to the Canadian Radio-television and Telecommunications Commission to restate the company’s ownership structure.
Rival wireless company Public Mobile, which has been up and running since last spring, took the issue to the courts.
The Conservatives have signalled for years that they favour changing restrictions on ownership of Canadian communications carriers but they haven’t put forward legislation to do so.
Clement has said the Conservative government wasn’t yet ready to outline its plans on relaxing or lifting foreign ownership limits for the industry.
He announced consultations on foreign ownership in May, outlining three options–removing all restrictions; increasing the limit of foreign investment from the current 20 to 49%, and/or lift restrictions for carriers with less than 10% market share.
In the March budget, the government said it was “committed to ensuring that Canadians can benefit from increased competition and investment in the telecommunications sector.”
The Conservative government also has recently indicated this week that it will overturn a CRTC decision on usage based billing on the internet.
