Paradis named new Industry Minister by PM

The information and telecommunications sectors will have to get used to a new Industry Minister after Quebec MP Christian Paradis was appointed to take over the department in the new Conservative government.

Tony Clement was rewarded for two and a half years of overseeing Industry by being named president of the Treasury Board, meaning he’ll be responsible for chopping government spending.

Paradis, pictured, who has represented the riding of Megantic-L’Erable since 2006, had been minister of natural resources in the last government, and public works minister before that.

He takes over at a when the Industry department is juggling a number of tricky files:

—Creating a digital economy strategy. Clement was ready to make a statement on May 2, but the election got in the way;

–Reform of foreign telecom investment rules. Promised a year ago, this has become tied to the department’s upcoming wireless spectrum auctions, which the wireless industry would like to hold sooner rather than later. It has been thought that either a 700 Mhz or a 2100 Mhz auction, or both, will be held next year;

–Setting the rules for upcoming spectrum auctions. Will there be set-asides for new entrants, as there was in the 2008 AWS auction? If so, what’s the definition of a new entrant? It is thought that the government will want to offer some protection to the new carriers such as Wind Mobile, Mobilicity and Public Mobile. The new entrants are lobbying for exclusivity on the next auction, arguing incumbent carriers are sitting on lots of unused spectrum. For their part the incumbents say the next auction should have no restrictions.
–Usage-based billing. Clement was firm, some might say rude, in public comments after the CRTC allowed BCE Inc.’s Bell Canada to go ahead with imposing its UBB rates on ISPs who buy wholesale Internet access. After the uproar the commission decided to hold new hearings this summer. But what will Paradis do if the commission sticks to its guns?
–Paradis also has to keep an eye on the ongoing court battle over the legality of Wind Mobile’s licences. Today a two-day hearing in the Federal Court of Appeal begins in Ottawa over a 2009 cabinet decision that allowed Wind to start operating.

The Canadian Radio-television and Telecommunications Commission (CRTC)  ruled that Wind’s parent company wasn’t Canadian-controlled under the regulations of the Telecommunications Act, a decision over-ruled by cabinet. Public Mobile appealed that decision, saying the cabinet made an exception for Wind that should be available to all telecom carriers. Earlier this year a Federal Court judge agreed. Should the appeal court or the Supreme Court of Canada back that decision up, Paradis will have to find a solution.

As part of his responsibilities Paradis also oversees the CRTC and the Competition Act.

He’s a lawyer who practiced corporate law after getting law degrees from the Universite de Sherbrooke and Universite Laval.
Telecommunications consultant Mark Goldberg said the appointment of a new minister likely means a delay of months in the release of the government’s promised digital economy strategy. On the other hand, he noted that the Heritage and Human Resources ministers stayed in place. Both those departments are involved in the crafting of the digital strategy.
Goldberg also believes Clement wasn’t going to announce anything detailed on May 2, because the federal budget introduced just before the government fell had no money allocated to support a digital strategy.
Still, he suspects it won’t see the light of day soon. “It’s not likely to be out until the fall, would be my guess, in order to allow the new minister an opportunity to be briefed and put his mark on it.”
The fact that the Conservatives now have a majority may give the government more leeway in crafting telecommunications-related strategies, he added, such as the long-called for merger of the Telecommunications and Broadcasting Acts. Again that could delay the release of a digitial strategy.
Goldberg did find it not surprising that an experienced cabinet minister and not a rookie is in the department. “Industry is not a portfolio for the meek and faint heart,” he said, noting the minister will oversee both new and traditional industries, foreign ownership of all sectors, the Competition Bureau.
One Ottawa industry hand who has met Paradis several times before his appointment is Bernard Lord, CEO of the Canadian Wireless Telecommunications Association (CTWA), which represents carriers and equipment makers. “He’s very smart, loves to work with others,” said Lord. “He listens and makes up his own mind.”
Lord hopes having a new minister won’t delay government moves on major issues, including the timing of the next spectrum auction. While Paradis is new to Industry, the government hasn’t changed, he said. What he does want Paradis to understand is how the wireless industry can help the government achieve its digital economy goals by connecting mobile users to high speed broadband.
More importantly, he said, the CWTA would like to see the government put out a 10-year plan for selling wireless spectrum rather than go auction to auction.
Dvai Ghose, a telecom financial analyst at Canaccord Genuity, also doubts appointing a new minister will mean a lengthy delay in dealing with major issues. The government knows it has to be proactive on telecom foreign ownership, he said, particularly with the Wind Mobile case in the courts, and on getting more spectrum into the hands of wireless carriers.
He also doubts Paradis will shift government policy, which is encourage wireless competition and liberalize foreign telecom ownership rules. Ghose noted that it was Clement’s predecessor Jim Prentice, who set the 2008 auction rules with protection for new entrants. On UBB, not only was Clement not behind the CRTC, neither was the prime minister. “I think you’re going to see continuity as opposed to major changes,” Ghose aid.
Amit Kaminer, a telecommunications analyst at the SeaBoard Group, noted Paradis will have his plate full of issues to deal with. “With a majority,” he added, “comes confidence and flexibility. The government can now push stronger on initiatives.”
One group that says it will miss Clement is the Canadian Network Operators’ Consortium (CNOC), which represents 26 independent Internet service providers. ISPs were cheered with Clement’s stand on UBB. “We were often very happy with his work,” said association chair William Sandiford. “We’re disappointed to see him go. We would have preferred to continue working with him.” Clement’s staff, he added, were “extremely well-educated” on issues.
He hopes Paradis will take the same positions on telecom issues that Clement and the previous government did.

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