CRTC: Limit foreign firms in communications

Regulator urges government to restrict their voting control

TORONTO -- Canada's communications regulator on Tuesday urged the federal government to step back from allowing foreign control of domestic phone giants to preserve Canadian control of domestic communications companies.

Konrad von Finckenstein, chairman of the Canadian Radio-television and Telecommunications Commission, told a hearing of the Standing Committee on Industry, Science and Technology that foreign companies should be restricted to 49% voting control of local telecommunications companies.

"Given its importance, control of the communications sector should stay in Canadian hands," von Finckenstein told the all-party committee during testimony on Parliament Hill.

His stance follows Ottawa in November overturning a CRTC ruling and allowing upstart mobile phone operator Globalive to enter the Canadian market, even though it is Egyptian-owned and controlled.

"Canadians did not have control of that corporation," von Finckenstein said of Globalive as he defended the initial CRTC decision to deny Globalive a domestic telecom license.

In its latest move to industry deregulation, Ottawa on Monday ignored the objections of domestic book sellers and publishers and gave a green light to U.S. internet retailer Amazon opening a warehouse and starting a new business in Canada.

Von Finckenstein said current rules for running Canada's telecom and broadcast sectors needed to be deregulated and simplified as they were open to abuse.

"As long as Canadians own 51% of voting shares (of telecom companies), and the control in fact is there, fine, you can invest as much as you can in Canada and you can be very successful," he argued.

At the same time, the CRTC chief insisted that allowing foreign control of the telecom sector will have a domino effect on the broadcast sector, and ultimately undermine the creation of culturally-sensitive Canadian media content.

But von Finckenstein's warnings against undue liberalization of the Canadian telecom sector were opposed by Dimitri Ypsilanti, head of the information, communications and consumer policy division at the Organization for Economic Co-operation and Development.

"Canada is the most restrictive in terms of foreign investment in the telecom sector," Ypsilanti told the Parliamentary committee, urging greater foreign investment and consumer choice in the domestic telecom sector.
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