Toronto, Dec. 16/09 - Staff at Wind Mobile as Wind Mobile, a subsidiary of Globalive Holdings opened the first store at 207 Queen's Quay West in Toronto, Ontario, Canada becoming the newest Canadian national wireless provider assist new customers at the Toronto location. Deborah Baic/The Globe and MailDeborah Baic/The Globe and Mail
Globalive Wireless Management Corp. will appeal the Federal Court ruling that overturned the federal cabinet decision that allowed the company to launch Wind Mobile.
Globalive will also seek an extension of a 45-day grace period set down in the Feb. 4 court decision, which found the Harper government illegally intervened when it overruled a Canadian Radio-television and Telecommunications Commission decision to block the launch of Wind Mobile wireless service.
The court said the cabinet erred in law when it issued a decision in December, 2009, that overturned a CRTC ruling that found Globalive's Egyptian financing meant the company was running afoul of Canadian foreign-ownership rules.
On Tuesday, Industry Minister Tony Clement said the federal government would appeal the ruling, which was expected given that the court effectively said cabinet had exceeded its authority. Now, Globalive will join the government in appealing the decision.
"Like the government, we disagree with several aspects of the Federal Court decision, and we are confident that the Federal Court of Appeal will overturn it," Globalive chairman Anthony Lacavera said in a statement on Thursday.
"The Federal Court decision is not about Globalive being 'Canadian enough.' The Government and Globalive have always agreed that we are fully compliant with the existing rules, and the Federal Court did not suggest otherwise. The decision was about two 'legal errors' in the Cabinet ruling, according to the judge," he said.
The court ruling came out of a judicial review asked for by another wireless provider, Public Mobile. Alek Krstajic, Public's CEO, said he was seeking clarity on foreign ownership rules, so that he, too, could seek more foreign financing.
No one expected that the court would actually shut down Globalive's Wind Mobile operation, which now has about 250,000 subscribers. But few expected the court to rule so unequivocally against the cabinet, a move that caught many in the telecom sector by surprise. The court ruling has placed the government's pro-competition agenda for the wireless sector in jeopardy and increased the uncertainty in a highly regulated industry.
Many wireless industry executives viewed the cabinet approval of Globalive's Wind Mobile as de facto approval of foreign ownership in the sector. The CRTC had rejected the service, ruling that Globalive was "controlled in fact" by its Cairo-based backer, Orascom Telecom.
With a minority government, and a possible election in the offing, it is not likely that the Conservatives could force through new legislation because foreign ownership legislation is so politically charged. (Telecom companies also own broadcasters, sparking concerns about the foreign ownership of Canadian culture).
In the Feb. 4 ruling, Mr. Justice Robert Hughes said the Telecommunications Act does not explicitly encourage foreign investment. "It is for Parliament, not the [cabinet]to rewrite the act," he wrote in his ruling.