Copyright 2011, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Communications, June 2011
Wind Mobile has taken another step along what has become a long and difficult road, with many twists and turns. But whether the release of a Federal Court of Appeal decision, once again granting it the right to operate as a wireless carrier in Canada, is the end of this journey remains to be seen.
Background
Globalive Wireless Management Corporation (Globalive), now operating as Wind Mobile, successfully bid for various blocks of radio spectrum in Industry Canada's Advanced Wireless Spectrum Auction in 2008. However, before Wind Mobile could begin operations in Canada, its ownership structure also had to be approved by Canada's national telecommunications regulator, the Canadian Radio-television and Telecommunications Commission (the CRTC).
As noted in our October 2009 Blakes Bulletin, the CRTC conducted a lengthy hearing into Wind Mobile's ownership structure and concluded that it was controlled by a non-Canadian and therefore ineligible to operate in Canada as a telecommunications common carrier. The Minister of Industry immediately announced his intention to review the CRTC's decision.
As discussed in our December 2009 Blakes Bulletin, the Governor in Council issued an order-in-council overturning the CRTC's decision, finding in essence that Wind Mobile was owned and operated by Canadians. Public Mobile, another new entrant in the Canadian wireless market, then applied to the Federal Court for judicial review of the order-in-council.
In February 2011, the Federal Court quashed the order-in-council, finding that the Governor in Council had committed an error of law in relying on a previously unknown policy objective, namely, that the Telecommunications Act "... should be interpreted in a way that ensures that access to foreign capital, technology and experience is encouraged in a manner that supports all of the Canadian telecommunications policy objectives."
Federal Court of Appeal's Decision
The attorney general and Wind Mobile appealed the Federal Court decision. In a unanimous judgment, issued on June 9, 2011, the Federal Court of Appeal allowed the appeal and restored the order-in-council, finding that policy considerations did not play a role in the Governor in Council's decision. Rather, the Governor in Council simply reached a different conclusion after considering the same facts and applying the same law as the CRTC. As succinctly noted in the Court's reasons for judgment: "It is clear that in reaching its decision on control in fact, the Governor in Council decided the issue without referring at all to any policy issues."
The Federal Court of Appeal went on to note that the Governor in Council can incorporate policy considerations and take into account the statutory context in deciding whether a company is in fact controlled by a non-Canadian, provided that any such policies operate within the limits of the policy objectives enunciated in the Act. In this case, the Federal Court of Appeal noted that the promotion of foreign investment advanced a number of other policy objectives set out in the Act.
Next Steps
Preliminary indications are that Public Mobile will seek leave to appeal the decision to the Supreme Court of Canada. However, it is not at all certain that the Supreme Court would agree to hear the appeal. In any event, this current decision gives the federal government some time to consider its options before deciding whether to introduce legislation to further reduce foreign ownership restrictions for telecommunications common carriers in Canada – something the government has suggested it would do in both the 2010 and 2011 Throne Speeches.
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