MONTREAL — Wind Mobile will be at the centre of a legal case on Wednesday that questions how the federal cabinet intervened to allow the mobile phone carrier to operate in Canada, despite a CRTC ruling that decided it was foreign owned.
“Obviously, we will fight in the courts as far as we can,” Wind Mobile chairman Anthony Lacavera said of the case, which will be heard in the Federal Court of Appeal in Ottawa.
Wind Mobile and the federal government are appealing a decision that cabinet overstepped its authority when it let the Toronto telecom company go into business in December 2009 after the national regulator had already ruled it wasn’t Canadian owned.
Lacavera also said it could mean taking the case to the Supreme Court, or going back to the Canadian Radio-television and Telecommunications Commission to satisfy ownership requirements if he loses the appeal case.
“At the end of the day, there’s no scenario where Wind gets shut down,” Lacavera said.
Wind Mobile has almost 300,000 mobile phone customers and says it’s on track to have 1.5 million subscribers in three years. It’s aiming to be Canada’s fourth major wireless carrier after Rogers, (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T).
Back in October 2009, the CRTC said that Wind’s parent company Globalive didn’t meet Canadian ownership and control requirements to operate as a telecommunications carrier.
Egyptian telecom company Orascom owns 65 per cent of Globalive and holds the majority of its debt, a structure accepted by Industry Canada when Wind Mobile’s licence was originally granted, but the sticking point for the CRTC when ruling it wasn’t Canadian.
Rival wireless company Public Mobile took the issue of telecom ownership rules involving Wind Mobile to the courts. In February, the Federal Court of Canada quashed Industry Minister Tony Clement’s order-in-cabinet to overrule the CRTC.
Lacavera maintains the February court decision ruled the government didn’t follow the “correct legal procedure” when it issued the 2009 order-in-council that allowed Wind Mobile to go into business, and that his company is Canadian owned.
NDP member Brian Masse, who has been following the case, said there needs to be a level playing field for new wireless players.
“The objective was to have new entrants enter the market in a fair way that would increase competition and lower prices for consumers,” said Masse, who represents the Ontario riding of Windsor-West.
“Well that entire thing has been defeated by the way this government has handled the situation,” Masse said. “Instead, that story is trying to be sorted out through the court system.”
Masse said Wind Mobile should have been told by Industry Minister Tony Clement that it had to go back to the CRTC to satisfy ownership requirements.
“That way Wind and its competitors that were entering the market could have felt more comfortable with the competitive process and we could have moved past the speculation of throwing industry progress to the court system.”
It’s going to be tough for the majority Conservative government to move ahead quickly with relaxing foreign ownership rules with this case in the courts, Masse said.
“The problem is if they want to do that now, they have the fly in the ointment that is this case.”
Telecom lawyer Lorne Abugov said the CRTC and Industry Canada along with the federal cabinet reached two “diametrically different” conclusions under essentially the same ownership and control laws.
“Purely from a structural point of view, it seems to be needless double jeopardy,” said Abugov, who’s based in Ottawa.
“I am talking about the larger issue of the inherent weakness in the existing law that would allow a circumstance like this to happen.”