Telus stalling CRTC hearing, Globalive says

Globalive Wireless Management Corp. is lashing out at Telus Corp. for what it calls stall tactics before the Canadian Radio-television Telecommunications Commission.

The new Toronto-based wireless company, which spent $442 million to obtain an Industry Canada approved wireless operating licence, is the subject of a CRTC review on Sept. 23 and 24. The hearing will determine the validity of its licence and whether Globalive is truly Canadian controlled, after it received a four-year, US$700 million investment from Egypt-based Orascom Telecom Holdings SAE.

After originally pushing the CRTC to investigate its parent company, Globalive Holdings, Telus has filed another application to Canada’s telecom watchdog in an effort to broaden the scope of its involvement in the control and ownership review hearing.

“It would be one thing if there was no precedent body of knowledge and decisions on this question, but there’s an overwhelming body of decisions here, so what could Telus really add to the equation?” said Globalive CEO Anthony Lacavera. “I’m a big proponent of the control and ownership rules and they’ve helped a lot in preserving Canadian culture.”

“Orascom came in knowing there was going to be this control and ownership review. It was no secret and all the rules are well-documented and on the public record,” he added.

In its submission, Telus’ argues that it is clear the CRTC envisages “third parties playing a significant role in completing and testing the evidentiary record,” adding that it is “essential that third parties be accorded meaningful participatory rights.”

Telus’ attempt to add itself as a “third-party” to the proceedings, Lacavera said, is an attempt to delay the CRTC hearing schedule and could even give Telus access to Globalive’s business plans.

“The hearings are public, so everything’s going to be out on the public record,” he said. “They have filed ‘directions on proceedings,’ in which they are requesting very broad, deep disclosure of Globalive’s propriety information such as our business plans. But that’s got nothing to do with our control and ownership.”

But according to Telus, Globalive is blowing its latest submission out of proportion.

“We didn’t actually file a new application to the CRTC on the Globalive file,” said Michael Hennessy, senior vice-president of regulatory and government affairs at Telus. “We did suggest to the CRTC what the process should be for the public hearing because no process was set down by the Commission when they put out their public notice.”

Hennessy added that everything Telus suggested in its process letter was lifted from the Commission’s own rules of procedure regarding foreign ownership issues. “Everything we presented was cited with precedence and we laid it out in such a way that there is no delay in the process that the Commission set out,” he said.

Telus did not intend to delay the proceedings with its latest submission, Hennessy said. He added that the CRTC has issues on how to deal with confidentiality requests and anything Globalive chooses to file with the Commission can be submitted on the public record in full or as an abridged version with the claim of confidentiality.

“Our biggest issue remains that Orascom has been quite public that they hold 65 per cent of the equity in Globalive and when they do their global investor presentations, they always say in their slide decks that they like to control the day-to-day operations of their undertaking around the world,” Hennessy said.

“We have a right to know if the Canadian ownership restrictions are still operating in this country, which by law, they’re supposed to be,” he said. He added that Telus has never been opposed to the removal of such restrictions, but do want to see the rules enforced fairly for all parties.

Despite Telus’ claims that Orascom holds a 65 per cent stake in Globalive, Lacavera has insisted that Orascom only holds a 33 per cent voting share in the operation. That would satisfy the CRTC’s foreign ownership rules, which allows up to one-third of voting shares to be foreign-owned, he said.

Lacavera compared Telus’ current submission to a company trying to tell a judge how to do his job. “The current chairman of the CRTC, Konrad von Finckenstein, is a [former] judge. He doesn’t need Telus to advise him on how to conduct a control and ownership review,” Lacavera said.

And many wireless industry analysts tend to agree.

Carmi Levy, a London, Ont.-based independent technology analyst, said that while Telus is attempting to buy itself time and figure out how to position itself to handle the new wireless players heading to the market, the move will likely be unsuccessful.

“Tactics like this don’t tend to permanently alter the direction taken by the CRTC,” he said. “The regulatory agency, after all, has a set process framework in place, and like all good bureaucratic government organizations, it will follow its processes until its very last breath of existence.”

For Mark Tauschek, lead analyst with London, Ont.-based Info-Tech Research Group Ltd., Telus’ motivation is “absolutely” to stall the proceedings, as the company knows Globalive is on track to launch later this year. The company is also aware, he added, that Globalive received the go-ahead from Industry Canada to spend $442 million on spectrum last year.

“It would be absolutely ludicrous if the CRTC said that the ownership or management control structure does not constitute a Canadian company and, in fact, you can’t build a network and sell services,” Tauschek said.

“Telus knows that would be contradictory. They’re really just giving them a hard time and trying to slow them down,” he added.

Tony Olvet, vice-president of communications and segments research with IDC Canada Ltd., agreed, saying that for Globalive to get this far and potentially be told they can’t enter the market would be “astonishing.”

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