Network World : CRTC

Canadian broadband ranking debate gets another weapon

Howard Solomon — Thu, 02 Feb 2012 21:05:00 GMT

The country's big three Internet carriers have complained for some time that they get a raw deal from studies suggesting Canadians aren't getting good value from its Internet providers. Now Rogers Communications Inc. is waving a study it paid for as evidence the carriers do better than experts say -- at least for fixed broadband.

Authoredby the Montrealtelecommunications consultantcy LeMay-Yates Associates Inc., the study in particular takes a swipe at the reports by the Organization for Economic Co-operation and Development (OECD).

The OECD report and others are used as weapons at regulatory hearings and before Parliament to show more competition is needed in the industry.

In its most recent report, covering 2010, the OCED ranked Canada 25th in the cost of a megabyte of data and 23rd in speeds offered by carriers -- based on advertised speeds. LeMay-Yates calculates Canada ranked 12th in cost and 15th in average speed -- using a different method of calcuation. It took the results of Internet subscriber tests on the Web site Speedtest.com, letting it claim it used speeds users are likely to see. To get an average,it also weighed the numbers by the market share of Internet service providers to even things out (for example, an ISP may only cover a small area).

I won't get into the details of the methodology, except to say any study has to make some guesses and massage some numbers to make measurements meaningful. LeMay-Yates, for example, tries to factor in the possibility that people who have really fast Internet service might run Speedtest more than others. Or maybe it's the other way around. That's one of the problems with using Speedtest.

The fact is download speeds can vary for a number of reasons, and there are always bundles and special pricing that affects the cost per megabit. And in the past 12 months the country's cable and telco carriers have been pushing speeds faster, so almost any study is out of date by the time it's published.

Note that the CRTC in its latest Communications Report used speedfigures from Akamai to show Canada ranked second out of eight large countriesin average fixed broadband speeds in 2010, and, using advertised speeds, we were third out of six countries in average price per month for Internet service with speeds of between 10 and 20 Mbps in 2010

Still, I'm not moved by a study that says we're not as bad as some say. That's not reassuring.

You can get a copy of the LeMay-Yates report here.

The latest OECD report is here.

The CRTC report is here.

Bell to end Internet traffic throttling

Howard Solomon — Tue, 20 Dec 2011 19:22:00 GMT

Almost four years afterBell Canadastarted throttling traffic of its Sympatico Internet customers, the telecom carrier has promised to stop the controversial practice in March, 2011.

Owned by BCE Inc., Bell said in a letter Monday to the Canadian Radio-television and Telecommunications Commission (CRTC) that while the slowing of certain peer-to-peer traffic was necessary in 2008 to ensure all customers were getting adaquate speeds, upgrades to network capacity means it's not longer important.

The decision, it said,is a direct outcome of last month's CRTC decision allowing Bell and other wholesale providers of Internet connectivity to offer capacity-based billing to independent Internet service providers (ISPs).

The capacity-related rate scheduleties wholesale rates to the amount of capacity customers use. In theory, those who use more pay more.

So ends -- for the time being at least -- a controversial act by Bell. It caused an uproarwhen it askedCRTC to allow throttling of traffic not only to its own customers but also to subscribers of independent Internet service providers who buy wholesale connectivity from it.

Throttling is called by the CRTC an economic "Internet traffic management practice" (sometimes called traffic shaping) which it allowed in 2009 under certain conditions. ISPs have always felt that Bell [TSX:BCE] had no right to impose traffic management on them, or that itis necessary. But Bell said it needed throttling as an economic disincentive to subscribers who could abuse their ability to download unlimited amounts of videos, games and other large data files.

Bellhopes capacity-based billing will mean ISPs set rates that will be the disincentive to abuse.

Those wholesale rates are set to come into effect in February. However,some ISPs unhappy with the capacity decision may appeal.

The Leafs and Ottawa's telecom policy

Howard Solomon — Mon, 12 Dec 2011 06:03:00 GMT

The announcement that Bell Canada parent BCE Inc. and Rogers Communications Inc. – normally arch telecom rivals – are teaming up to take control of the company that owns the Toronto Maple Leafs and basketball’s Raptors (MapleLeaf Sports and Entertainment, or MLSE)has been analyzed relentlessly from a number of angles over the past two days.

Most observers note that it ensures the most lucrative sports franchise in the country won't fall into one telecommunications giant's hands at the expense of the other, and it keeps a third party from taking control over the valuable sports broadcasting rights.

But here’s another way of looking at it: Both Bell and Rogers are sending a message to Ottawa: We’re not going to stand still while you push us around on telecommunications policy.

The deal – should it be approved – poses problems for Ottawa in terms of competition and media concentration. The partners have already said they’ll divvy up Leaf broadcasting rights that the team owns for their own properties, Rogers’ Sportsnet and Bell’s TSN.

But Bell and Rogers are in no mood to do the Harper government any favours, a party they had hoped would be on their side. After all, it was this government that soon after it was elected told the Canadian Radio-television and Telecommunications Commission (CRTC) that the regulator was to lean in favour of the market doing its work.

What it got instead was a number of rulings that favour competitors: A 2008 spectrum auction that set aside frequencies for new entrants (and forced Bell, Rogers and Telus to spend more than they expected on spectrum); a cabinet order overturning the CRTC that allowed Wind Mobile’s parent to open its doors with a lot of foreign financing; pressure on the CRTC from the PM and Industry Minister Tony Clement to ditch a favourable decision to Bell on usage-based billing; and, if reports in the Globe and Mail are accurate, another loss on the upcoming spectrum auction rules.

If Bell [TSX, NYSE: BCE] and Rogers [TSX: RCI.A and RCI.B] haven’t already quietly sussed out the government’s feelings on the partnership, I can imagine a conversation going this way: “You guys have kicked us enough. Growth in our core businesses is slowing, wireless is the real growth area and you’re squeezing us by leaning over backwards for Wind, Mobilicity, Public Mobile and Videotron. We’re got obligations to our shareholders. This is about revenue growth. You owe us.”

I suppose the government will suppress a tear and reply that Rogers and Bell found no trouble coming up with $1.32 billion to buy the Leafs et al. And though it’s early days, it looks like Bell, Rogers and Telus still have about 90 per cent of the wireless market.

My point is, though, that this deal isn’t merely about the Leafs or broadcasting. It’s also about Ottawa’s telecom policy and what it plans to do.

U.S. private sector leads in closing digital divide

Howard Solomon — Fri, 11 Nov 2011 21:10:00 GMT

Earlier this year the chairman of the U.S. telecommunications regulator, the Federal Communications Commission (FCC), challenged broadband providers to come up with ways of getting more low-income Americans on the Internet.

On Wednesday, a group of cable operators and a computer recycler came up with an answer: A program called “Connect 2 Compete” under which cablecos will offer US$9.95 a month service for poor households with a cable connection, and the recycler will sell refurbished PCs and laptops for US$150.

Where’s the leadership in this country?

According to our telecom regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), at the end of 2010 just over 25 per cent of Canadian households didn’t subscribe to an Internet service. Money plays a role. According to a Statistics Canada survey last year, 54 per cent of households with incomes of $30,000 or less didn’t have Internet.

Why is this important? When it launched its digital strategy consultation over a year ago, the Harper government explained that “it is essential that all Canadians have the skill sets to be able to access, use and interpret a growing and increasingly complex range of digital information. As the rapid development and adoption of technology continues, effective participation in the labour market and society will be increasingly dependent on digital skills.”

The Connect 2 Compete initiative is one way the private sector can help. “We have the means of doing the same identification” of the poor,” telecom consultant Mark Goldberg told me. In the U.S., those eligible are families in a federal school lunch program. Here it could be families eligible for the National Child Care Supplement. “We don’t need this to show up as an extraordinary item in the government’s next budget. What we need is leadership, either from the government or an association or member of the [ICT] community.”

Worth thinking about.

(Meanwhile, where is that federal digital strategy?)

What a Harper majority means for ICT

Howard Solomon — Tue, 03 May 2011 05:20:00 GMT

By winning a majority, Prime Minister Stephen Harper will have a free hand for the next four years to implement the Conservative Party's policies. WIth the last of the votes being tallied; here's a quick guess at what's coming:

--Who will be the new Industry Minister?
Among industry analysts, there is a general consensus that Tony Clement has done a fine job in this position. He oversaw the 2008 spectrum auction that brought in new wireless carriers, persuaded the cabinet to over-rule the Canadian Radio-television and Telecommunications Commission (CRTC) when it said Wind Mobile's parent, Globalive Wireless Management, wasn't controlled by Canadians, stickhandled the resulting problem with foreign telecom ownership rules by presenting three options and was on the verge of announcing a national digital strategy before the election was called.

There have been no slips at Industry -- unless the Supreme Court overturns Globalive decision. But first the Federal Appeal Court will have its say. (Arguments will be made later this month).

Now Harper has to decide if he wants stability at Industry as it formulates investment policy, or if he should he reward Clement for his efforts with a bigger portfolio. Clement has been mum. In an interview during the campaign he said his future is in Harper's hands -- he will do as the leader wishes.

Had the Tories faced another minority, Harper might have wanted to keep Clement at Industry, at least for a year. Now, if Clement wants to move, the PM will oblige.

--When will the digital strategy be released?
This is a straightforward: Before the election was called Clement was set to announce the government's policy Monday at the Canada 3.0 conference in Stratford, Ont. Even if a new Industry Minister is appointed, it's highly unlikely a new review will be ordered of a previously-approved cabinet strategy. Common sense suggests the digital policy will be revealed shortly, followed by legislation.

--What's the status of foreign telecom ownership reform?
The Harper government has tied this to the rules it has to set for the upcoming 700 Mhz and 2100 Mhz spectrum auctions -- and rightly so. Having spent hundreds of millions of dollars on spectrum in 2008, some new carriers will need their coffers refreshed for the next auction. Quebecor's Videotron cable and wireless division will have no trouble raising money, but pure plays such as Globalive, Mobilicity and Public Mobile might.

Or will they? Mobilicity just announced that it raised $215 million from private equity, which is around what it paid for spectrum in 2008. That could be its war chest for the future. If Moblicity can go to private investors, why can't Globalive?

Again, had the Conservatives faced a minority it might have been timid -- deciding to raise the investment limit slightly. Now it has the freedom to be bold, raising the foreign telecom investment limit for carriers only (not broadcasters) with a small amout of market share for, say, five years, then opening the doors completely after that.

The question is, willthe invigorated Toriestake the plunge?

--Will a Tory majority mean the government will be even more impatient with the CRTC?

Yes.

Wind Mobile appeal to be heard in May

Howard Solomon — Tue, 01 Mar 2011 17:37:00 GMT

The Federal Court of Appeal didn't wasting any time clearing space on its calendar for the Wind Mobile case. The court has set May 18 as the day it will hear an appeal by theHarper governmentinto a lower court ruling that the cabinet exceeded its power in allowing the wireless startup to open its doors.

In the fall of 2009 the federal telecommunications regulator, the Canadian Radio-television and Telecommunications Commission (CRTC) ruled Wind is controlled by its Egyptian partner, Orascom Telecom Holdings. But six weeks later the cabinet said the commission was wrong.

Competing startup Public Mobile then took that decision to the Federal Court, complaining the government unlawfully made an exception for Wind in foreign financing that other wireless carriers couldn't take advantage of. Federal Court judge Rogers Hughes agreed.The government and Wind then appealed that ruling.

One reason the appeal court might have wanted to take the case quickly is that it deals with cabinet power. That doesn't mean however, it will make a quick decision.

Meanwhile, there continues to be uncertainty about the Canadian government's position on foreign telecom investment. If the cabinet is upheld, the Wind decision would be seen as an exception to the investment restrictions in the Telecommunications Act -- although the government insists that the act was followed. At the same time, however, the Harper government has said it wants to liberalize the telecom investment rules -- but any changes depend on its policy for encouraging foreign investors to take part in or back Canadian carriers in the upcoming 700 Mhz spectrum auction.

Should the cabinet lose in the Federal Court of Appeal it will almost certainly take the case to the Supreme Court.

Bell Canada back in the content business with CTV bid

Greg Meckbach — Fri, 10 Sep 2010 14:56:00 GMT

Bell Canada Enterprises (BCE) Inc. is getting back into the content business by agreeing to buy the CTV television network for $3.2 billion.

The television assets are currently owned by CTVglobemedia Inc., which in turn is held by BCE, Ontario Teachers Pension Plan, Torstar Corp. and the Woodbridge Co. Ltd. If the deal is approved, BCE would buy out the other owners and get 100 per cent of CTV. Meanwhile, The Globe and Mail newspaper, currently part of CTVglobemedia, would be spun off into a different company. Woodbridge is owned by the David Thomson, who is also chairman of Thomson Reuters Corp. Thomson’s father, who died in 2006, is Ken Thomson, who is the son of the late Canadian media tycoon Roy Thomson, who once controlled a large chain of Canadian newspapers including The Globe and Mail.

In 2000, BCE acquired a controlling interest in The Globe and Mail from Thomson Corp., combined it with CTV and named it Bell Globemedia Interactive. BCE later diluted its ownership by selling parts to Teachers and Torstar, the holding company that owns the Toronto Star newspaper and other publishers, including the Harlequin romance books.

The combination of telecommunications and media firms has been a bugbear for the Canadian Radio-television and Telecommunications Commission which regulates facilities-based carriers, radio and television stations. Other firms, such as Rogers Communications Inc., also own television and radio stations, plus wired and wireless networks.

See Network World Canada’s slide show

Top 7 telecommunications regulatory rulings in Canada

Last year, the CRTC ruled telecom carriers and cable providers who also provide wholesale and resale Internet service are allowed to throttle certain types of traffic using technologies such as deep packet inspection. This ruling resulted from hearings which in turn resulted from complaints from small ISPs who do not operate networks but who buy wholesale access from firms such as Bell and Rogers.

Although television and radio content is regulated by the federal government, information delivered by so-called new media firms is exempt from the Broadcasting Act. In 2009, the CRTC extended the exemption first declared in 1999.

Last month, the CRTC issued Broadcasting Regulatory Policy 2010-582, which requires “new media” firms whose owners are also broadcasting to report their revenues and expenditures to the CRTC. In the same policy, the CRTC also said it will establish the New Media Reporting Working Group, which would develop definitions and metrics for reporting content such as the type, origin, genre, accessibility and language of content published on the Internet. This was due to concerns from lobby groups representing artists, including the Canadian Independent Music Association (CIMA) and the Alliance of Canadian Cinema, Television & Radio Artists (ACTRA). It is not clear exactly how new media firms will gather and report such content.

The ruling minority Conservative party has stated it intends to loosen the foreign ownership rules for telecommunications carriers. This came after Cabinet overturned a CRTC ruling on Globalive Wireless Management Corp., which launched the Wind Mobile cellular service last year. Globalive is majority-owned by its chairman, Anthony Lacavera, its minority shareholder is Orascom Telecom Holdings SAE of Egypt, which loaned the firm money to start operations.

During a hearing before the House of Commons Standing Committee on Industry, Science and Technology,CRTC chairman Konrad von Fickenstein said the rules for broadcasters and carriers should be the same because of firms such as Bell and Rogers who control TV stations and the networks over which content is delivered. Bell’s acquisition of CTV helps bear out von Fickenstein’s argument but the fact remains, firms such as Globalive do not operate broadcasting companies.

CRTC vs Bell: You decide

Howard Solomon — Wed, 01 Sep 2010 17:30:00 GMT

There’s been some heat heaved at the federal telecom regulator forTuesday’s decision denying BCE Inc.’s Bell Canada and its Bell Aliant partner the right to extend broadband to small outlying communities with HSPA-based wireless service rather than through their phone lines with DSL technology.

In an era when the Harper government directly told the Canadian Radio-television and Telecommunications Commission (CRTC) in 2006 to let market forces meet objectives, the commission is still finding ways of saying no to incumbents. It has been relaxing its grip, but isn’t rolling over and playing dead. It won’t until it’s erased by Parliament.

Personally, on the wireless issue I think Bell boxed itself into a corner. Here are the relevant paragraphs from the commission’s decision, and the dissent by commissioner Len Katz. I've underlined portions I think are significant. You decide.

“In the [previous] deferral account decisions, the commission directed the Bellcompanies to deploy broadband services in the approved communities using least-cost technology and to make services available that would be comparable to the services they provide in urban areas in terms of rates, terms and conditions, upload and download speeds, and reliability. The commission also considered that it would be in the public interest for ILECs to offer various speed levels.

[These terms were also imposed on other phone companies.]

“As part of their revised plans, the Bellcompanies proposed to offer residents in the approved communities a wireless broadband service that would provide up to 2megabits per second (Mbps) of download speed and up to 800kilobits per second of upload speed, with a 2gigabyte (GB) monthly usage allowance, for a monthly rate of $31.95. Usage above the 2GB monthly allowance would cost $2.50 per GB ...

“The majority of the intervening municipalities and towns generally supported the Bellcompanies' proposal, provided that the proposed broadband wireless service is on par with the broadband service the Bellcompanies currently provide in urban areas ...

“The commission notes that, under their proposal, the Bellcompanies will provide a single service offering, unlike the variety of service options, including various speeds and usage caps, that they offer in urban areas. For example, the most popular broadband service in urban areas appears to be the Bellcompanies' Residential Performance Service option, which provides a downstream speed of up to 6Mbps with a monthly usage cap of 25GB in Ontario, and download speeds of up to 7Mbps with a monthly usage cap of 60GB in Quebec.

“Further, the commission notes that, based on evidence filed by the Bellcompanies, the average monthly usage of subscribers to all the Bellcompanies' existing wireless and wireline broadband services is well above the 2GB usage allocation proposed by the Bellcompanies. In this respect, the commission considers that the average usage requirements of subscribers in the approved communities will more closely approximate the average usage of all subscribers in other communities. Accordingly, in the commission's view, the 2GB usage allowance will not meet the needs of the average user of the service in the approved communities.

“The commission also notes that, for residential subscribers in urban areas with higher usage requirements, an insurance option is available that will provide an extra 40GB of usage each month for $5 per month. The commission notes that the Bellcompanies' proposal does not offer a comparable insurance option.

“Based on the above, the commission considers that the single service offering proposed by the Bellcompanies under the HSPA proposal does not satisfy the commission's requirements as set out in the [previous] deferral account decisions.”

Commission member Len Katz:

“ … I believe that the Bell companies' proposal to roll out broadband using alternative technologies [HSPA] is consistent with the commission's determinations in the deferral account decisions, while my colleagues have modified the Bell companies' proposal based on technological criteria. Having set a “hard cap” on the funds to be drawn from the Bell companies' deferral account for the purposes of deploying broadband services to the approved communities, the decision should then have limited itself to requiring the Bell companies to provide broadband services comparable to those offered in urban areas, as per the deferral account decisions …

“… By limiting the rollout of broadband services in these communities to DSL technology, the commission has taken a static view of technology and failed to recognize the dynamic changes taking place in functionality and cost from newer technologies ...

“…By limiting the deployment to DSL-based technology, I question whether Canada will really be keeping pace with technological developments and whether, during the 4-year implementation horizon for the rollout of the approved broadband expansion projects, DSLwill provide the “best” solution, the “least-cost” solution or even the equivalent solution to that which will be available in urban markets across Canada. I believe in many markets today, DSL is not the optimal solution.”

Katz also argued the decision doesn’t comply with the federal objectives in the Telecommunications Act, is inconsistent with previous CRTC decisions saying the commission has a policy of technology neutrality and the 2006 cabinet directive.

I note that in its decision commission also said Bell cost its HSPA solution at $463 million, whereas DSL would cost $406 million. That would violate the commission’s direction the telcos use the least-cost technology, but Bell argued there are advantages.

On the one hand, it can be argued that providers should be free to offer any service at any price where they want. On the other hand, why wouldn’t we expect a regulator to ensure rural areas some level of equality with urban centres?

All telcos were warnedfour years ago any rural service using deferral funds had to be similar to their urban offerings, including offering choice. Did Bell make a mistake by not taking the hint?

Looking forward to your opinions.

Time for telecom foreign control review

Howard Solomon — Mon, 01 Mar 2010 20:33:00 GMT

This might be Foreign Carrier Control Review Week. That's because some six weeks after the federal cabinet chucked the CRTC's Globalive Wirelessruling in the Rideau, we may actually hear from Parliament on the worth of the foreign control provisions of theTelecommunications Act . For those who don't recall, cabinet said the telecom regulator was wrong to conclude that Globalive Wireless Management Corp. is controlled by Orascom Telecom S.A.E. But, cabinet added, the ruling shouldn't be seen as a precedent for other companies hoping to structure themselves like Globalive.

The Liberal and NDP oppositionsay they will raise the ruling in Question Period when the House resumes this week. Mind you, we can't say ifthere will be a debate of substance. Liberal Industry critic Marc Garneau told Bloomberg News last week that his party's biggest complaint is that the decision was done without consulting Parliament. He didn't say it was wrong, leaving the impression that the Grits are upset with the process, which is legal. That doesn't tell us much about where the Liberals stand. Brian Masse of the NDP was more pointed: "The problem with Globalive is that they've gotten a different set of treatment and rules than other people," he told Bloomberg. "You have some operating under the old rules and some under the new rules and that's unfortunate." Unfortunate is a mild word. At least one industry analyst believes the current rules help keep wireless rates high.

Whether the government will sidestep any attack by launching a new review of foreign ownership and control regulations in the telecom industry is a question. Certainly it can duck the issue by doing so, although the opposition has shown no sign of making it a cause celebre. Still, remember that the 2008 Competition Policy Review Panel chaired by formerBCE Inc. president and CEOLynton Wilson called for an easing of investment restructions in the telecom and broadcast sectors, starting with a reveiw of the rules every five years. In making its decision the cabinet has created confusion over foreign investment in telecommunications. It's time that confusion was cleared up.

Meanwhlle,the CRTC last week notified carriers that it wants to know a bit more about their ownership structure. With corporate structures becoming multi-layered, the commission wants to know a lot more than it used to about parent companies, capital structure, shareholders and directors of any entity that has a piece of a carrier. Why now? Ostensibly, it's part of the foreign ownership review process the commission started last year, which creates four categories of review. No sense in having reviews, I suppose, if you don't have all the information. On the other hand, it may have something to do with the public grilling Globalive owners got from commission members last fall, when Globalive had to bare much of its secrets. It's a grilling that some of the startups aren't having to face. Perhaps the commission feels everyone should get the same scrutiny, incument and startup. On the other hand, with the commission not knowing which way cabinet is leaning on foreign control, why bother?

There's no substitute for a full review of the country's telecom competition and foreign control policy. If the Harper government hasn't got the strength to call a full debate on its telecom foreign control policy, if it can't propose legislation to clarify the Telecommunications Act, then it should at least fall back on a tried and true Canadian answer: Appoint a specialized review panel to report back in 12 months. That would be a great start.

I'll try this again

Howard Solomon — Tue, 27 Oct 2009 21:44:00 GMT

Lastweek whenI wrote an advancer for the CRTC-Globalive Wirelessruling, the commission announced a one-week delay just after I hit the 'Publish' button.Myidea was to set up readers on the background for a decision the day before it came out so you'd know what issues are at stake. I'm trying again. The ruling is now set to come out tomorrow (Thursday) and hopefully it won't get short-circuited. Globalive chairman Anthony Lacavera is also hoping the commission won't short-circuit his dream of leadinganother national wireless carrier. I won't hazard a guess at what the commission will rule, but as I suggested in my piece Globalive has handed it quite an explosive package. Lacavera and Orascom Telecom chief Naguib Sawiris have said that wasn't their intention, but because they'vebeen unable to find Canadian investorsthat's what's happened.

This ruling could mark a significant change in foreign investment inthe telecommunications sector as well as affecting competition. We've set up a Foreign Ownership Forum to hear your opinions on this sensitive topic. Please take a few minutes either today or after tomorrow's decision -- which will be posted here as soon as it's released by the CRTC -- to sound off.

Howard

Have your say on telco foreign ownership

Greg Meckbach — Thu, 22 Oct 2009 22:29:00 GMT

The federal government does not plan to lift the foreign ownership restriction on Canadian telecommunications carriers, but the policy has its opponents.

Want to have your say?

Participate in our online forum at this link.

Telecommunications Act says a firm can operate as a "telecommunications common carrier" if it is Canadian owned and controlled.

Although the Act makes it clear that a carrier is Canadian-owned only if 80 per cent of directors and 80 per cent of shareholders, another condition is not so clearly defined. The Act states the carrier also must be “not otherwise controlled by persons that are not Canadians."

This was the crux of the problem faced by the Canadian Radio-television and Telecommunications Commission (CRTC) when it heard from Globalive Wireless Management, and from incumbent carriers that don’t want Globalive to get permission to start its wireless service in Canada.

Globalive, which plans to offer service using the Wind Mobile brand, is, in theory, controlled by chairman Anthony Lacavera, who holds the majority of voting shares. But Egyptian firm Orascom holds 65 per cent of the total equity (including non-voting shares) and provided most of the money to buy spectrum and build the network.

While Orascom is a minority shareholder with 32 per cent of the votes in Toronto-based Globalive’s holding company, there are questions about Orascom’s power in the partnership. Orascom, which has interests in cellular companies around the world, has lent Globalive more than $500 million, owns 65 per cent of its shareholder equity and has a $100 million services contract.

“The investment community in Canada does not have the resources to fund startups that require huge amounts of capital,” said Eamon Hoey, senior partner of Toronto-based Hoey Associates Management Consultants Inc.“It's a barrier to entry and a barrier to competition and it creates an industry structure that we have in the wireless industry. In eight of the 11 regions in Canada, we have one carrier that dominates that market, meaning they have at least 50 per cent of subscribers.”

An Industry Canada spokesperson told Network World Canada Thursday the government does not plan to change the foreign ownership rules.