Stumped on Canadian telecom foreign ownership restrictions
On Thursday, I got an e-mail from Eriko Rowe, a reporter with the Tokyo Shimbun newspaper asking questions about Canada’s foreign ownership restrictions on telecommunications carriers.

At IT World Canada, we often respond to queries from other media asking for comment on matters affecting the technology industry. So I responded to Eriko, but to prepare, I quickly read through some articles we had published. Rubbing my hands in self satisfaction, I thought, ‘Here’s a chance to show off my knowledge and expertise.’

But my smugness evaporated when she stumped me with the most basic question.

Her first question: Why does Canada have these restrictions? I waffled and speculated, but in the end I really couldn’t answer the question. Am I just plain dumb, or did no one ever provide a good explanation as to why we have these restrictions in the first place?

It’s not as if I have never asked the same question. But the only reply I ever got was an explanation of the restrictions on broadcasters and Canadian content. That doesn’t answer the question. Whether you agree with Canadian content rules or not, the issue of foreign ownership of telecom carriers is not about foreign control of broadcasters. If you believe it is, then explain to me how Orascom Telecom’s influence on Globalive Wireless Management Corp., which was initially denied permission to start its Wind Mobile service,will affect the ability of Canadians to watch re-runs of King of Kensington or the Littleist Hobo.


Though the major telcos also carry television signals to customers, and some actually own broadcasting stations and publications, this in itself is not the reason for foreign ownership restrictions on telecom carriers. Even if Rogers Communications Inc. did not own any radio stations, TV stations or magazines, it would still not be allowed to have more than 20 per cent of voting shares held by foreigners.

During my interview, I was able to tell Rowe that the federal Telecommunications Act states at least 80 per cent of voting shares of telcos must be held by Canadians. I was able to state that in 2003, the House of Commons Standing Committee on Industry, Science and Technology recommended the restrictions be lifted. I was able to state that in 2006, the Telecommunication Policy Review Panel released a report that recommended “phased liberalization” of the restrictions.

So why do we actually have these restrictions in the first place? Sorry, but I just don’t get it. To reiterate, the restrictions on broadcasters, whether you agree with them or not, is a separate issue. After all, Globalive was not initially turned down for its cellular wireless license over concerns that Canadians would have fewer opportunities to watch re-runs of Wok with Yan or the Friendly Giant.

Maybe I watched too many episodes of Night Heat and not enough episodes of Readalong, but I’m still stumped. Can you answer the question? If so, please enter your comments.  

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