Wind weathers storm to blow rivals out of court

9 Jun 2011

A long-running legal argument over the ownership of Canadian cellco Globalive Wireless (Wind Mobile) that has pitted government against regulator is nearing its end following a judge’s decision yesterday which allows the company to continue operating under its existing structure. Canada’s Federal Court of Appeal ruled in favour of the federal government and Wind Mobile by allowing their joint appeal against a February 2011 ruling from the Federal Court of Canada, which had upheld complaints from Wind’s rivals Public Mobile and Telus, and restoring the Order in Council that permitted Wind Mobile to launch cellular services in December 2009. In overturning the February decision, the appeal court recognised that in December 2009 the Cabinet – which agreed with a decision by the minister for Industry Canada that month – acted properly in varying an earlier judgement from the Canadian Radio-television and Telecommunications Commission (CRTC). The regulator had ruled that Wind’s ownership contravened foreign ownership laws because it relied on Egypt-based investor Orascom Telecom (currently merging with Russia’s Vimpelcom) for the vast majority of its financing. Yesterday’s ruling also confirmed that Wind was a ‘Canadian owned and controlled’ telecoms carrier under the Telecommunications Act (as Orascom holds no more than the permitted maximum of 20% direct voting shares and 65% equity while the company’s board contains a sufficient majority of Canadian members).

‘The divergence between the CRTC and Governor in Council [cabinet] comes in the factual inferences, or conclusions, the Governor in Council drew from the evidence,’ Justice Edgar Sexton wrote in the unanimous decision, adding, ‘the Governor in Council simply had a different appreciation of things and that appreciation was rational and defensible.’

The matter is not officially closed yet, as Public Mobile issued a statement in which it said that it plans to appeal the latest legal ruling to the Supreme Court of Canada.