Monday, April 19, 2010

Canada - CRTC becoming 'outdated': chairman

[vancouver sun] Konrad von Finckenstein, the head of Canada's broadcasting and communications regulator, is calling for massive reforms to the country's media and telecom rules, but remains staunchly against opening the market to foreign takeovers.

As access to Internet and digital content increases, the chairman of the Canadian Radio-television and Telecommunications Commission told a parliamentary committee Tuesday that his commission's powers were becoming "outdated."

The convergence of broadcasting and telecommunications is now a "fact of life," the chairman said, as the country's major phone and cable firms offer services and content that historically were provided by broadcasters. He suggested the old framework that split regulation under the Broadcasting and Telecommunications Acts should be merged into a single law.

"Technological convergence has led to corporate convergence," he said.

Yet the hot-button issue for industry watchers was how von Finckenstein would address foreign-ownership rules.

True to the CRTC's long-held position, von Finckenstein said he was against foreign companies owning a majority stake in Canadian carriers, warning that throwing open the gates would result in a "branch plant" communications sector that would serve as nothing more than a "training ground for young executives from other countries."

If the federal government removes foreign ownership rules, "there is no way you can go back," he warned.

However, the chairman said he did support more foreign investment, saying that the commission would be comfortable with companies from other countries holding 49- per-cent control in a Canadian firm, up from about 47 per cent currently.

The "control in fact" provisions also remain critical in guarding the sector, he said, referring to rules addressing board, shareholder agreement thresholds among other measures.

He said if foreign firms wanted a presence in the Canadian communications market, they must "bet" on a Canadian to bring them returns.

"That's the way it works, and that's the way it should be," von Finckenstein said.

Tuesday's hearing followed a break between the federal government and and the CRTC last December, when the cabinet overturned a decision by the commission to bar Globalive Wireless Management Corp. from entering the market.

The CRTC ruled at the time that Globalive's partnership with Egypt's Orascom Telecom gave the foreign firm too much power: that control "in fact" was in the hands of the Cairo-based company.

CRTC becoming 'outdated': chairman

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