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Globalive to appeal Federal Court ruling

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Globalive Wireless Management Corp. said on Thursday it will appeal the Federal Court ruling that overturned the cabinet approval that allowed the company to launch Wind Mobile. It will also seek an extension of the 45-day stay granted by the court.

On Feb. 4, the Federal Court said the federal cabinet erred in law when it issued a cabinet decision in Dec. 2009 that overturned an earlier CRTC decision that found Globalive's Egyptian financing threw the company afoul of Canada's strict foreign ownership rules.

On Tuesday, Industry Minister Tony Clement said the federal government would appeal the ruling, which was expected given the awkwardness created by the court ruling—which effectively said cabinet had exceeded its authority. Now, Globalive, also as expected, will join the government in appealing the decision.

“Like the government, we disagree with several aspects of the Federal Court decision, and we are confident that the Federal Court of Appeal will overturn it,” said Globalive chairman Anthony Lacavera in a statement.

“The Federal Court decision is not about Globalive being ‘Canadian enough’. The Government and Globalive have always agreed that we are fully compliant with the existing rules, and the Federal Court did not suggest otherwise. The decision was about two ‘legal errors’ in the Cabinet ruling, according to the judge,” he added.

No one ever expected that Globalive's Wind Mobile operation, which now has around 250,000 subscribers, would be shut down. But the court ruling placed the government's pro-competition agenda for the wireless sector in jeopardy and threw even more uncertainty into an industry that has seen policy-making and regulations become wildly unpredictable.

Many wireless industry executives viewed the cabinet approval of Globalive—which followed from an Oct. 2009 rejection by a Canadian Radio-television and Telecommunications Commission ruling that found Globalive was “controlled in fact' by its Cairo-based backer Orascom Telecom—as a de facto approval of foreign ownership in the sector.

But with a minority government, it is likely impossible that the Conservatives could force through new legislation because foreign ownership legislation is so politically charged (telecom companies also own broadcasters, sparking concerns about the foreign ownership of Canadian culture).

In the ruling, Justice Robert Hughes wrote that the Telecommunications Act does not explicitly encourage foreign investment. “It is for Parliament, not the [cabinet] to rewrite the act,” he wrote in his ruling.

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