TORONTO-The federal government launched a review yesterday of the law restricting foreigners to minority stakes in domestic telephone companies. It is a process that could give Canadian firms greater room to raise capital.
The long-proposed review of the ownership law, which restricts outsiders to one-fifth of voting stock in telecom operating companies, will be conducted by the House of Commons industry committee. The committee has been asked to report to Industry Minister Allan Rock by the end of February 2003. Rock hopes to push recommended changes soon after.
In the United States, for instance, there are no ownership restrictions in principle, but carriers are licensed and the federal regulator can quash takeover bids if they are not deemed to be in the public interest. A licensing regime similar to the one in the United States would allow Canadian phone companies to pursue foreign capital, and the government could still protect national interests, such as preventing an outright takeover of a dominant domestic carrier like Bell Canada, which operates wireless carrier Bell Mobility.
The Canadian mobile carriers generally welcome any loosening of foreign ownership restrictions in telecom. They see easing the rules as an opportunity to increase the amount of money invested in their companies, encouraging further development of costly next-generation mobile networks.
