Canada's CRTC takes the air out of WIND's launch

By on Oct 30, 2009 at 9:38 AM
News October 30, 2009

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Back in August, Globalive, a big winner in Canada’s AWS auction, announced that it was going to launch its network under the WIND brand and shake up the Canadian wireless industry. Now it looks as if this will not be happening — at least in the immediate future — as the Canadian Radio-television and Telecommunications Commission (CRTC) ruled yesterday that WIND does not meet the Canadian ownership rules. The rules, which are set out in the Telecommunications Act, stipulate that wireless carriers must be majority owned and controlled to the sum of 80% by Canadians. Because Orascom, an Egyptian company, owns 65.1% of the equity in WIND as well as the rights to the WIND brand in Canada, the CRTC ordered that WIND not launch its network until the company is fully compliant with the Act. Strangely enough, during last years wireless spectrum auction, Industry Canada ruled that WIND did indeed meet Canadian ownership laws as set out in the Telecommunications Act, but strong opposition from the existing major carriers — Bell, Rogers and TELUS, companies whose ownership meets complies with the Act — at a hearing on October 1st likely helped the ruling. So what does the future hold for WIND and its $442mm CAD ($413.8mm USD) worth of 1700MHz UMTS/HSPA spectrum? Nothing unless it manages to re-organize its board and find new investors.Read

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38 Comments

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  • Ervel Flick

    What a BS law.

  • andrew

    @ Ervel Flick: it’s NOT a BS law. Unfortunately we (as Canadians) need laws like this to keep any kind of national identity and to prevent foreigners from owning everything.
    As corrupt as the CRTC is, it’s a necessary evil (I just happen to think they’re a little too strict with the Canadian content levels, though).

    Bottom line is, yeah this sucks, but I’m glad the law is there.

    • Pete

      So basically what you are saying is that shielding Bell, Telus, and Rogers from foreign competition is key to keeping your national identity? I feel sorry for Canadians that you allow your biggest corporations to brainwash you into thinking that if there is any foreign competition you will somehow lose your identity. If that’s all it takes, you don’t have much of an identity to begin with. Laws like that are what keep your wireless bills so high. If you had companies like T-mobile and even Verizon come in, Rogers, Bell, and Telus wouldn’t be able to screw you the way they currently do… but, Canadians will continue to bury their heads in the sand as the rest of the world passes them by.

      • jeff

        please don’t generalize based on this guy. there are plenty of us up here who are outraged by the CRTC’s pro-monopoly behavior.

      • Tdot

        Agreed, I live in Canada, and too many people think protectionism actually saves jobs, and preserves Canada. All it does is allow large Canadian companies to exploit Canadians through an oligopoly. If Rogers, TELUS, Bell cant compete with foreign competition, they got a lot more issues that previously thought.

      • synwars

        Again, another Canadian that is outraged by this ruling. Canadians in general pay more than anyone else for less than standard/equal services. I for one would love to see the collapse of the monopoly like structure that these corporations have used to bend over their customers for far too many years.

      • donv69

        Unlike the cellular carriers in the US, we do not suffer from dropped calls. And as proven recently, our cellular carriers are much more technologically advanced than those in the U.S.

      • Pete

        Right, it can’t possibly be because you have only 30 million people divided up between 3 national carriers, where in the US we have 300 million people divided up between 4 (with a few more regional carriers). Try putting 13 million iPhones on the Rogers network and see how it holds up… as for more advanced, you may have hsdpa 21 mbps running in a few major cities, but its not across the whole country and you definitely aren’t seeing speeds anywhere close to that.

      • iMiiTH

        We’ve got hspa+ covering like 90%+ of our population.

      • Tim

        Really, what national identity do we have associated with the Big 3 cellular carriers? They outsource everything to other countries anyway… they have more call centres in India than in Canada. That’s why I dumped Bell Sympatico to go with TekSavvy internet. I’ll be dumping Bell Mobility in another month when my 3 year contract is finished, and I can’t wait for WIND to launch. I was going to go with Koodo, but realized it’s just TELUS Jr.

  • andrew

    PS: what an awful logo!

  • Alex K

    I, as Canadian, am also glad we have this law. This way we can always be protected from competitive pricing and better quality services.

  • Rav

    WTF!! This is pathetic !! CRTC does not want any competition in Canada. They are supporting the crooks like Rogers, Bell and Telus. Come on CRTC consumer deserve better options.

    • Michael

      Rav, the CRTC is run by Rogers, Bell and Telus. This decision wasn’t a surprise at all. I just hope common sense prevails here.

  • Andrew

    This is absolutely horrible. Bell/TELUS/Rogers OWN Canada. We have the highest prices (hardware and plan wise) in almost the world. Any ANY possible competition that may help us with that? Lobbied to the point in which they no longer exist.

    Canada is Bush-era-USA-2.0 thanks to Harper and the conservatives.

    • Hardeep

      Actually Harper and the Conservatives would have had a say at the Industry Canada level.. where Wind was approved..

      The CRTC is supposed to be non-political.. so I doubt Harper and the Conservatives had any say.

    • Tdot

      Rulings like this from the CRTC has been going on long before Harper became prime minister. So you can’t blame Harper, its the big 3 that have the CRTC in their pocket that forced this ruling.

      Most of you think its a good thing Canada blocks foreign competition from setting up shop in Canada, well guess what because of the CRTC other countries DO NOT ALLOW Canadian telecommunication companies to set up shop because of Canada’s ridiculous protectionist rules. It goes tit-for-tat, dont let us into your country, you cant come into ours.

  • Mike

    WTF does it matter if Canadian companies are owned by international people. If we (the consumer) are treated better and get better pricing that is most important. If canadian business people can’t cut in on the global scale that is their fault. It’s like we think of ourselves is invalids who are inferior to others without the intelligence to operate a competitive business.

    It’s a joke, now were are stuck being price gouged and forced into 3 contracts.

  • Kevin2

    you guys are so stupid honestly,
    what does it matter if its owned by Canadians??
    It matters a lot actually, if you prefer your country being run by someone else you have no intelligence.
    All WIND has to do is gain 85% Canadian ownership and they CAN launch their damn company. It’s not an unreasonable request.

    Better customer service or not, it is an Egyptian company benefiting from your cash spent and will be investing it in their own interests…

    • Marc

      The problem is getting the 80% ownership. Billion dollar investments in new companies aren’t the norm in Canada especially if the company competes with monster incumbents like Rogers/Bell/Telus.

  • maxpayne79

    Damn…wind is gonna be carrying the 9700 and have no contracts…guess ill have to wait a bit longer at ugly fido. But wind better get organised before Dec.17 cause my contract runs out then and I aint going back. What I don’t understand is why wind didn’t have themselves in order before setting an opening date. They must have know about a this law…hell, I think anyone who’s anyone in the telecommunications industry knows about this law, yet they were arrogant enough to go through with everything prior to making sure their business is in order. Not a good sign from a consumers position cause they kinda look like they don’t know what they’re doing. Let’s hope I’m wrong.

  • Andrew

    Kinda BS in my opinion. WIND was “Canadian” enough for the government to take their money during the spectrum auction, but not Canadian enough to actually let them start their company? The world is flat guys; international trade barriers need to come down! I think it’s obvious that they only hurt the consumer in Canada, to the benefit of the big 3 carriers.

  • T

    Industry Canada allowed them to buy the spectrum and approved there business to poerate here, then CRTC shuts them down. I dont think it was completely based on the law. Pretty sure the CRTC is in the big 3′s pockets

  • FC1

    For all the armchair analysts who keep blaming the CRTC, their role is to make a decision based on the Telecommunications Act. Nothing more. Whether you’re pro or anti- foreign ownership laws, Globalive was either extremely naive or downright stupid if they thought their ownership model was compliant with Canadian law. This decision is disappointing, we all wanted to see more competition, but the CRTC did what was right under Canadian law. It’s kind of like when people bash judges in Canada. They just intrepret the laws as they are written.

    • Andrew

      I’m a lawyer myself, and I can tell you that laws are rarely so clear in that the answer is immediately obvious.

      Globalive apparently thought they had developed a compliant corporate structure, and Industry Canada had previous agreed with that assessment. It’s unfortunate that now they are facing a roadblock in bringing much-needed competition to Canada.

    • Tdot

      You seem to have our Canadian Common Law structure confused with Civil Law structure. In common law, laws are interpreted mostly through precedence (past rulings) not through the actual law itself, meaning interpretations are constantly changing. Judges in Canada have the authority to change how our laws are interpreted, and their rulings on that law. Where as in Civil law, what is written as law, is the law.

    • Mike

      TDot is right, should rule based on precedent, not set in stone codes (civil law). Although who knows if there is precedent for a case like this before.

  • Chris Wharton

    Ironically Nortel is being purchased by Ericcson, I guess no one noticed that. How does that make sense. I know that RIM was interested. CRTC laws are outdated and are in need of revision. A lot has changed since many of these laws were originally written – unfortunately Canadians aren’t vocal enough about what they want. I agree that laws are needed to guard against massive companies coming into a new market and crushing the competition. For example if Vodafone or Telefónica came into Canada they could swallow Rogers,Bell and Telus combined if they wanted to. There are certainly ways this could be done.

    This is a lose situation for Canadian consumers. But at least the big three are happy.

  • Mitchell

    Daaamit.

  • Anthony

    Maybe the SAF charged by the big three goes to the CRTC bureaucrats. LOL

  • Boogaloo Johnson

    Amidst all the rabid discussion here, the point that is being left out is *why* does Canadian law prohibit ownership of our telcos by foreign nationals. The answer, quite simply, is national security.

    No one at the CRTC gives a rat’s ass that the profits are leaving Canada. But money implies control, no matter how much Globalive protests to the contrary. The issue is that, under majority foreign control, Canadians could begin to rely on Wind for vital services. It is possible that Egypt could pressure the majority owners to put wiretapping, etc, into the network, and to report back to the Egyptian government. It is also possible that, at some point, Canada would no longer be friends with Egypt, and that through strategic decisions, possibly made over a long period of time, Wind could be used to further Egyptian interests in Canada, against the wishes of Canada.

    Is this likely? No. Is it possible? Of course.

    Back in the 1980s, the US government made the mistake of allowing the Soviets to build the American embassy in Moscow. Upon completion, it was found to be so full of bugs and wiretaps that it was useless. An extreme example, of course, but the message is there: you simply cannot allow a foreign country to control vital parts of your infrastructure.

    Having said that, it is quite possible to come up with a contained market space for Wind to participate in (eg they can have no more than x% market share, cannot service any governments or public corporations, etc etc).

    Boogaloo

    • Mitchell

      Ah, I never thought of that.. thanks :)

  • Splintr

    GSM Drageon creator Hugh Ford turns 40 this week

  • NT

    @ #2 regard national identity:

    - Canada right now has the identity of one of the countries that has the highest fees for using a cellphone anywhere in the world. All of this will be magnified by 100x when the world comes to Vancouver for the 2010 Olympic and everyone will be going “wow $30 for a sim card?? wow charging for incoming call? wow charging for incoming text messages? wow $0.30/min for long distance within canada itself? wow 3 year contracts?” When everything is said and done after the Olympics, it will all be clearer: Canada has the loonie, the beaver, maple syrup, oh and the cellphone.

    @ #16 regarding national security:

    Everyone have spies and counter spies. But I guess if all else fails, snoop the cellular network and filter out all the fictitious pay go account names. Oh crap there are like thousands of Michael Jacksons!

  • MSk12

    People forgot that Fido was once back up by T-mobile or Rogers by AT&T they where not able to have more then 49% of there shares, why would Wind be allowed. If Wind is allowed to do so the other should be allowed too.
    Last time i check, Wind has a bad reputation in Italy & in Greece.

    I notice lots of people complaining however they only see the small picture, last time i check Canada is not the most expensive. As per OECD.

    High usage
    http://dx.doi.org/10.1787/622320081807

    Low usage
    http://dx.doi.org/10.1787/622303805401

  • lessthanjoey

    You guys realize that the US does this for the airline industry (at least), right?

  • Tim

    No matter what the laws are, I think it’s time for a new player who’s independent of Rogers, Bell and Telus. Hopefully WIND won’t be bought out or absorbed into the Big 3 the way Fido and Virgin were. I remember when Fido (Microcell) launched in Toronto — I went down to their flagship store at Yonge & Eglinton and picked up the Ericsson flip phone they had. No contract, and 400 minutes for $40, which included call display. The ‘system access fee’ was $48 a year because it was a legitimate CRTC license fee. The CRTC dropped this licensing requirement but the phone companies kept charging it and pocketing the money. As for the 2 or 3 year contracts, if a cell phone provider was truly great, with great service and reasonable rates, they wouldn’t have to lock people in for any length of time – they would just stay where they were happy. Doesn’t this make sense?

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