Canada debates foreign ownership restrictions in telecom and broadcast industries

Posted on June 5, 2012  /  1 Comments

In most countries that we work in, the restrictions on foreign ownership are minimal. Bangladesh has become an exception in recent times. Bhutan had restrictions but they appear to be on the way out. Foreign investment and the refusal of foreign owned companies to play by the rules of the “club” resulted in the Thai market being transformed. We really do not see the point.

In this light,it was interesting to see the government of Canada seeking to relax ownership rules just a little, and a policy intellectual, Professor Michael Geist, asking why not throw out the whole set of restrictions?

I am supportive of the changes in Bill C-38, though I think these kinds of legislative changes belong in their own bill, not within omnibus legislation. In fact, I would support an even bolder vision. The government could have shaken up the Canadian market by removing telecom foreign ownership restrictions altogether and considered dropping foreign ownership limits on broadcasters as well.

I base my support for relaxing foreign ownership restrictions on four key factors that I will discuss with these remarks:

1. The Canadian telecom market is uncompetitive relative to other countries resulting in higher costs, less innovation, and limited choice.
2. Canadian rules on telecom foreign ownership are the most restrictive in the developed economy world.
3. There is broad support for change following years of study.
4. Concerns about negative effects are greatly overstated for both telecom and broadcast

A worthwhile discussion for the proponents of foreign ownership restrictions in our parts.

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