The high court decided it will not hear an appeal of a Federal Court decision involving Wind Mobile, meaning it's business as usual for the wireless carrier and its roughly 400,000 customers.
Rival wireless company Public Mobile had argued rules for Canadian ownership and control had not been applied to Wind Mobile and wanted the Supreme Court to hear the case. As usual, the high court did not give reasons for refusing to hear the appeal.
"The two-year long, silly battle brought by our competitor is finally over and we've won," Wind Mobile chairman Anthony Lacavera said from Toronto.
Wind Mobile was one of several new entrants into the mobile phone market in Canada following a wireless spectrum auction in 2008. Its major backer was an Egyptian telecom company.
Lacavera said now that the legal battle is over he can focus on raising money for the next auction of the wireless spectrum — radio waves over which cellphone networks operate — to expand Wind Mobile's footprint.
"I feel really good now about approaching our investors and new potential investors that can back us now with confidence that all of our regulatory and legal issues are fully and finally behind us."
Canadian federal law had required telecommunications companies to be majority owned and controlled by Canadians.
But the Conservative government now has lifted foreign ownership restrictions on telecom companies with less than 10 per cent of the market, which would apply to new players like Wind Mobile, Public Mobile and Mobilicity.
Wind Mobile's legal problems started with a decision by the Canadian Radio-television and Telecommunications Commission in 2009.
The CRTC prevented Wind Mobile from initially entering the cellphone market. The regulator said Wind wasn't Canadian owned and controlled because most the debt owed by its corporate parent, Globalive, was held by Egyptian telecom company Orascom.
Orascom is now majority-owned by Russia's Vimpelcom.
But the CRTC's decision was overruled by the government in December 2009, allowing Wind to go into business. Public Mobile objected and took the case to the courts.
Lacavera said the high court's refusal to hear the case sends a message to his competitors.
"I think they should stop complaining and start competing."
Public Mobile said although it's disappointed the Supreme Court won't hear the appeal, it has put a spotlight on the issue of foreign ownership of wireless carriers in Canada.
"The core issue in this case has always been the uneven playing field created by the (federal government's) Globalive decision, a decision which gave special treatment to a single foreign investor," said Bob Boron, lawyer for Public Mobile.
Public Mobile said it believes its actions helped influence the government's decision to remove foreign ownership and control restrictions for smaller, new wireless players.
"These legislative changes will restore a level playing field for access to capital," Boron said.
Following Wind's launch in late 2009, Mobilicity and Public Mobile entered the market in the spring of 2010 and Quebecor's Videotron (TSX:QBR.B) later that fall.
They're up against Canada's three established and deep-pocketed players, Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T), which have a total of more than 24 million subscribers.
The next spectrum up for auction is the 700 megahertz spectrum and bidding could be held late this year or early in 2013. It will have limits on the amount of spectrum any one wireless carrier can buy.
That spectrum has the ability to allow cellphone calls in elevators, deep in underground parking lots and in tunnels in big cities, and in basements and attics in suburban areas. It also provides better and more affordable coverage in rural Canada because fewer cellphone towers are needed to provide coverage.
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