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Interview with Michael Hennessy from Telus about the future of Globalive… and a bit about Rogers

In the midst of all the glorious legal issues TELUS has going on right now, I got a few minutes on the phone to catch up with Michael Hennessy, he’s the SVP Regulatory and Government Affairs for Telus.

He’s very outspoken about what he believes the outcome of Globalive will be, stating that the cabinet will not overturn the CRTC’s decision and that Globalive made a “Hail Mary” pass about how their current organizational structure/financing is set up. In addition, we briefly spoke about their recent lawsuit with Rogers and how they mislead the public as being Canada’s most reliable network.

Competition in Canada is alive and very well… Check out the phone interview here:

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Discussion

9 comments for “Interview with Michael Hennessy from Telus about the future of Globalive… and a bit about Rogers”

  1. What an arrogant S.O.B.!!! You don’t buy that spin do you? Give me a break. This has nothing to do with foreign ownership. It has everything to do with the incumbents frustrating competition and under section 8 of the Telecom Act, there is consequences for that.

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    Posted by Tammy Flores | November 27, 2009, 4:40 pm
  2. The more time that passes, the more I am convinced that there was no breach of ownership rules in the case of Globalive. In paragraph 34 of the CRTC ruling in question, Mr. von Finckenstein himself admits to the fact that there is no definition of control in fact or de facto. I have been saying from the beginning that de facto is a very shady area to hang your hat on. The incumbents heavily influenced the CRTC’s decision. The government needs to stick to what it started when it gave Globalive the green light to compete by giving them the licenses. I don’t think it would be fair for the government to reward the incumbents behavior by putting any further restrictions on Globalive.

    It would be a mistake to allow the incumbents to continue to frustrate the new entrants from competing. Please read the following link. It is a letter from The Public Interest Advocacy Centre. http://tinyurl.com/ylrjenj . I especially like this part in the letter, “It also appears to PIAC that Minister may wish to also consider issuing a Policy Direction pursuant to sec. 8 of the Telecommunications Act that the Commission shall rescind any determination of forbearance in relation to a carrier where it finds that there has been intentional conduct on the part of a carrier or carrier that may result in a substantial lessening of competition, or the possibility of frustration of competitive entry. This would enable the Commission more directly control the actions of a carrier that are contrary to the public interest.”

    What is happening here has absolutely nothing to do with playing fair or foreign ownership. It has everything to do with the incumbents intentional conduct trying to lessen the competition and trying to frustrate the competitive entrant. Out of all 3 main new entrants, the only one that is a potential threat to the incumbents is Globalive because of the experience they have tapped into. I hope it backfires on them and the government acts on section 8 of the Telecommunications Act.

    Now Rogers is firing 900 management and executive people and hiring customer service rep’s. Why is that? They should have done that a long time before now. The writing is on the wall. Mr. Clement has to over rule CRTC’s decision. Listen to Canadians, please! Not some tight assed big wig that doesn’t give a damn about what Canadians think.

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    Posted by Tammy Flores | November 27, 2009, 4:45 pm
  3. First of all Public Mobile and DAVE have not gone through the CRTC yet. http://mobilesyrup.com/2009/09/11/rogers-requests-foreign-ownership-hearing-into-public-mobile-and-dave-wireless/ For anyone to say that the other new entrants met the standard……is ridiculous because they have not been through CRTC’s hearing. Now I doubt that the incumbents will put them under a microscope like they did to Globalive because the other new entrants are not as much as a threat to them as Globalive is. Public Mobile is run by someone that worked for the incumbents for years and is afraid to compete with the incumbents and basically admitted that he would sell out. DAVE is only launching in 5 – 10 cities. That’s it. Globalive is launching on a National scale except for Quebec. The other new entrants are basically jumping on the band wagon because they are no where ready to come to market yet and since they are the direct competitors of Globalive….that’s why they are complaining. This has nothing to do with a fair playing field for them.
    The questions that I find troubling that needs answers to are: Why haven’t the CRTC implemented the governments policy direction that has been given to them since 2006? Why are the incumbents allowed to have so much influence over the CRTC?
    The decision Industry Canada made was uninfluenced by the incumbents. The CRTC’s decision was heavily influenced by the incumbents. There was no favoritism played. Defacto is a very shady area of law to hang your hat on. It is subjective. It is a matter of opinion what constitutes control in fact. Orascom has no more control over Globalive than a Canadian bank would had it loaned them the money. Konrad von Finckenstein said it himself in his ruling in paragraph 34 that there is no definition of control in fact.
    The only thing that is truly going to fix the problem we have in Telecom is serious competition. Everyone has to be forced to look at the product they are offering Canadians and compete with each other to see who is truly offering the best.
    I am tired of being force fed what ever the incumbents tell us. It is time for a change. This ruling by the CRTC is not about an issue of foreign control……it’s about a monopoly that is trying to hang on to its power.

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    Posted by Tammy Flores | November 27, 2009, 4:53 pm
  4. I realize that some people thing the solution to the problem is restructuring. Some may feel it is the lesser of all evils, but let me tell you this. The more I see what’s happening, the more I am disillusioned. The incumbents influence must be quashed. The only way to do that is to allow Globalive to go ahead.
    Do you realize there is a petition that has thousands and thousands of signatures to shut the CRTC down? I have seen it. There were over ten thousand signatures on it when I saw it. I don’t believe that the CRTC had no other choice. Telus poked the finger and made this unprecedented review happen. Why?There are many Canadians that feel exactly how I do about this situation. Konrad von Finckenstein relied heavily on the influence of the incumbents in his decision. Have you listened to the hearing?
    Globalive is a Canadian company. It is Canadian controlled. You should not be hanging your hat on such a shady, matter of opinion, point. Section 16 of the Telecom Act is as follows:

    16. (1) A Canadian carrier is eligible to operate as a telecommunications common carrier if it is a Canadian-owned and controlled corporation incorporated or continued under the laws of Canada or a province.

    16. (3) For the purposes of subsection (1), a corporation is Canadian-owned and controlled if

    (a) not less than eighty per cent of the members of the board of directors of the corporation are individual Canadians;
    (b) Canadians beneficially own, directly or indirectly, in the aggregate and otherwise than by way of security only, not less than eighty per cent of the corporation’s voting shares issued and outstanding; and
    (c) the corporation is not otherwise controlled by persons that are not Canadians.

    Let’s break this down now:
    a) not less than eighty per cent of the members of the board of directors of the corporation are individual Canadians;

    Globalive meets this one, no problem.

    “(b) Canadians beneficially own, directly or indirectly, in the aggregate and otherwise than by way of security only, not less than eighty per cent of the corporation’s voting shares issued and outstanding; and”

    Globalive meets this as well. While Orsacom owns a significant portion of equity they have non-voting shares.

    “(c) the corporation is not otherwise controlled by persons that are not Canadians.”

    THIS is what the CRTC ruled against Globalive for. They ruled that, even though Orsacom didn’t have many voting shares and didn’t have many members on the board of directors they would still ‘otherwise control’ Globalive by virtue of holding so much of it’s debt and non-voting shares.

    This is, of course, a very vague definition and subject to a lot of wiggle room. That is why Industry Canada reviewed things and said Globalive was fine while the CRTC reviewed it and said it wasn’t.

    So really what we have here is a case of how the law is INTERPRETED and not how the law is WRITTEN. In this sense the CRTC very much was going their own way.

    I don’t think it is wise for anyone to uphold the CRTC’s decision. It was very much a decision that was heavily influenced by the incumbents. Industry Canada’s initial ownership review was not influenced by the incumbents.
    The fear mongering I see in the press about foreign ownership is unfounded and out right ridiculous. You should not be supporting it.

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    Posted by Tammy Flores | November 27, 2009, 5:00 pm
  5. The decision that the CRTC rendered on the unprecedented review of Globalive’s ownership and control, it is without a doubt, made based on an opinion and not law or rules. An opinion that was heavily influenced by the incumbents Bell, Telus and Rogers. All one has to do is listen to the hearing to realize that. When Industry Canada issued spectrum licenses to Globalive on March 13th, 2009. It completed its ownership review and found in fact that it was Canadian owned and controlled. That decision was made uninfluenced by the incumbents.

    Paragraph 33 of the CRTC’s decision states “the Commission determines that Globalive has met the test for legal control.” Paragraph 34 states “There is no one standard definition of control in fact” Then Konrad von Finckenstein drew on an example from The National Transportation Agency. Konrad von Finckenstein went out of his way to set a precedent. In the process he has brought embarrassment to the government and the Canadian people. Not just Nationally, but Globally as well.

    On April 3rd, 2009, Globalive put its documents into the CRTC. Telus, on April 20th, 2009, went out of their way to cause embarrassment to the government by requesting that the Commission initiate an open and transparent proceeding to review the ownership and control of Globalive. Telus was so threatened by Globalive that they pointed fingers to Industry Canada’s ruling about Globalive being a Canadian company and asked to review ownership and control. In a letter dated 22 April 2009, Shaw Communications Inc. (Shaw) supported the request for a public proceeding. Mr. Clement, can not allow the incumbents to do this to the Canadian people. They are an embarrassment and a disgrace and don’t deserve to be operating.

    There is a lot of confusing media reports surrounding the decision made by CRTC. To me, there is no confusion. It is clear that the government has clearly defined goals. I am bothered by the lack of will for the CRTC to implement clearly defined policy direction. The CRTC can implement something on a dime when it benefits the incumbents, but when it comes to the goals of the government, the CRTC has a problem. I am of course referring to how the CRTC initiated a public process, inviting comment on whether it is appropriate in some instances to conduct Canadian ownership and control reviews under the Act on a public basis as opposed to a confidential basis. The CRTC issued its determination in this matter in Telecom Regulatory Policy 2009-428, establishing a flexible, four-type review framework for ownership and control reviews under the Act. The CRTC determined that in certain cases, including those where the review involves complex or novel governance structures or financing arrangements, the public interest may be served by conducting that review via a public, multi-party process with an oral hearing phase. If the CRTC could quickly come up with that……why couldn’t they implement what the government gave them direction to do since at least 2006. That being to regulate in a less intrusive manner…..to get the job done. What the CRTC has done here is more than intrusive……it stalls/paralyzes the system.

    Now you have the new entrants jumping on the band wagon. Public Mobile, who will just sell out to one of the incumbents later and DAVE, trying to grab some of Globalive’s lime light. If the government’s vision is for all Canadians to have access to services such as telecommunications, then it has to over rule the CRTC’s decision. This will be the only way forward to accomplish the goal. They can’t allow their decision to be influenced by the incumbents. The incumbents are making a mockery out of the process.

    Cabinet’s intervention will be a blessing for the Canadian consumer because Globalive is the one and only company out of all the new entrants that are interested in what Canadians want and are capable of delivering. No laws or rules were broken and Globalive should be rewarded for being a great Canadian company.

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    Posted by Tammy Flores | November 27, 2009, 5:05 pm
  6. Why should Canadians be interested in Michael Hennessy opinion about globalive. if it was up to him, TELUS would be the only company providing CELL services and charging sky hight prices…..

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    Posted by Mike | November 27, 2009, 5:20 pm
  7. First of all congratulations to Mobile Syrup for getting someone at Telus to speak so candidly about the whole Globalive fiasco. It is obvious that Telus will try anything and everything to keep WIND from launching for as long as possible. I was stunned to hear that in essence they threatened the government with anything from a court challange to a “You don’t want to go there before you have a majority in Parliament” attitude. Unbelievable arrogance, but the reality is where billions of dollars are concerned any company would fight to preserve their obscene profit taking for as long as possible and frankly so would any of us.

    In the long run however when Globalive and others launch this sort of attitude will just store up yet more ill-will towards Rogellus and increase the customer base for their competiitors. What they should be doing is aggressively cutting their data/voice plans in prepapration for a real war, but I highly doubt this will happen until a gun is put to their heads and Telus has to lower theirs pointing at Clement.

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    Posted by Matthew | November 27, 2009, 7:04 pm
  8. First of all congratulations to Mobile Syrup for getting someone at Telus to speak so candidly about the whole Globalive fiasco. It is obvious that Telus will try anything and everything to keep WIND from launching for as long as possible. I was stunned to hear that in essence they threatened the government with anything from a court challange to a “You don’t want to go there before you have a majority in Parliament” attitude. Unbelievable arrogance, but the reality is where billions of dollars are concerned any company would fight to preserve their obscene profit taking for as long as possible and frankly so would any of us.

    In the long run however when Globalive and others launch this sort of attitude will just store up yet more ill-will towards Rogellus and increase the customer base for their competiitors. What they should be doing is aggressively cutting their data/voice plans in preparation for a real war, but I highly doubt this will happen until a gun is put to their heads and Telus has to lower theirs pointing at Clement.

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    Posted by Matthew | November 27, 2009, 7:08 pm
  9. Too bad it seems as if ‘Competition [to attempt and maintain the level of exploitation of mobile consumers] in Canada is alive and very well’.

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    Posted by Andrew Pederson | November 27, 2009, 7:20 pm

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