Ottawa Lifting Foreign Ownership Limits on Telecom to Impact Media Players

Canadian cable and broadcaster players are expected to demand equal treatment in national legislation after the Feds okayed foreign control of small wireless firms.

TORONTO – The Canadian government has potentially put the country's entertainment industry in play by loosening foreign ownership restrictions on small telecom companies.

Federal industry minister Christian Paradis on Wednesday said Ottawa will end limits on foreign investment in telecom firms with less than 10 percent of market share.

And the restrictions will stay in place if a foreign-controlled telecom firm sees its market share grow organically beyond 10 percent.

The new policy only slightly opens the door to more foreign ownership of the Canadian wireless phone market as incumbent players like Rogers Communications and BCE have a stranglehold on the domestic telecom market that Ottawa is looking to pry loose.

But lifting restrictions on small telecom firms is expected to have a domino effect on domestic cable and broadcast players calling for equal treatment in national legislation.

Current Canadian media ownership rules force U.S. and other foreign companies to jump through a series of regulatory and financial hoops to acquire stakes in culturally-sensitive domestic media companies.

But with Canadian content distribution and broadcasting fast converging, any eventual sale of telecom companies to foreigners will inevitably lead top cable and broadcast players to also demand they be allowed to be controlled, or even sell out, to foreign interests.

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