OTTAWA, December 11, 2009 — The Government of Canada has varied a Canadian Radio-television and Telecommunications Commission (CRTC) decision regarding Globalive Wireless Management Corp., a Canadian-owned and controlled company.
The variance is effective immediately so that Globalive can enter the wireless telecommunications market without delay.
“Globalive is a Canadian company, and meets Canadian ownership and control requirements under the Telecommunications Act,” said the Honourable Tony Clement, Minister of Industry. “We take this decision very seriously. It is based on the application of these requirements to the facts in this case.”
In varying the CRTC decision, the Government is not removing, reducing, bending or creating an exception to Canadian ownership and control requirements in the telecommunications and broadcasting industries. The Government’s decision to vary is specific to the facts of this case.
“Our goal has always been greater competition in the telecommunications industry, which leads to lower prices, better service and more choice for consumers and business,” said Minister Clement.
Backgrounder and Order-in-Council attached.
For further information (media only), please contact:
Lynn Meahan
Press Secretary
Office of the Honourable Tony Clement
Minister of Industry
613-995-9001
Media Relations
Industry Canada
613-943-2502
Variance of the CRTC decision on Globalive
The Government of Canada has concluded that Globalive Wireless Management Corp. (Globalive) is a Canadian company that meets the Canadian ownership and control requirements (COC) under the Telecommunications Act.
The government has decided to vary Telecom Decision CRTC 2009-678, in which the Canadian Radio-television and Telecommunications Commission (CRTC) found that Globalive did not meet these COC requirements, so that Globalive can begin operating in Canada without delay.
Section 12 of the Telecommunications Act gives the Government the power to vary a CRTC decision on its own motion. The variance affirms that Globalive meets the COC requirements of the Telecommunications Act and is immediately eligible to operate as wireless telecommunications carrier in Canada. This determination is based on an assessment of the facts before the CRTC during the course of its public hearing into Globalive’s compliance.
The test for Canadian ownership and control under the Telecommunications Act is comprised of both legal requirements and a factual requirement.
The Government and the CRTC agree that Globalive meets the requirements. In particular, Canadians own at least 80 percent of the voting shares of Globalive and 66 2/3 percent of the voting shares of Globalive's holding company. Also, at least 80 percent of Globalive's board of directors are Canadians.
The factual requirement involves assessing whether a foreign entity controls "in fact" the company. Control in fact is the ongoing ability to determine the strategic decision-making or to manage the day-to-day operations of a company.
The variance issued today further affirms that no additional changes are required to the company’s structure and shareholder arrangements, including to its debt and equity financing arrangements and to the composition of its board of directors.
Before making its decision, the Government consulted with provincial and territorial governments, as well as with the companies that participated in the oral phase of the COC proceeding conducted by the CRTC. Their input has been taken into consideration.
The government’s decision is specific to the facts of this case and is based on a rigorous application of the COC requirements to these facts. In varying the CRTC decision, the Government is not removing, reducing, bending or creating an exception to COC requirements in the telecommunication and broadcasting industries.
The Canadian Wireless Market
The Canadian wireless market is comprised primarily of three companies, controlling 95 per cent of the market. In 2007, to encourage greater competition and choice for Canadians and businesses, then Minister of Industry announced the terms of the Advanced Wireless Services (AWS) auction, which set aside spectrum exclusively for new entrants.
Globalive, a new entrant, participated in the AWS auction held in 2008 and was the provisional winner of thirty licences at a cost of $442 million. Industry Canada conducted a COC review of Globalive under the Radiocommunication Regulations and concluded that it met the requirements. Consequently, Industry Canada issued the spectrum licences to the company in March of 2009.
