06/09/2011 07:25 EDT | Updated 08/09/2011 05:12 EDT

Wind Mobile: Canada Court Clears Way For Mobile Player Globalive To Stay

AP File

THE CANADIAN PRESS -- OTTAWA - The Federal Court of Appeal wiped away a cloud over Wind Mobile on Wednesday and backed a cabinet decision to allow the mobile phone company to launch its service over the objections of a federal regulator.

The ruling means it will be business as usual for Wind Mobile and its roughly 300,000 customers.

Globalive Communications Corp., Wind Mobile's parent company, said the decision is vindication.

"Wind is here to stay and we will continue to bring Canadians the first real choice in wireless in over a decade," chairman Anthony Lacavera wrote in an email.

The appeal court overturned a lower court decision that ruled the government overstepped its authority when it allowed the company to go ahead over the objections of the Canadian Radio-television and Telecommunications Commission.

"The divergence between the CRTC and Governor in Council (cabinet) comes in the factual inferences, or conclusions, the Governor in Council drew from the evidence," Justice Edgar Sexton wrote in the unanimous decision.

"The Governor in Council simply had a different appreciation of things and that appreciation was rational and defensible."

Globalive was one of several new entrants into the mobile phone market in Canada following a wireless spectrum auction in 2008. The federal court challenge had been brought by rival Public Mobile, also a recent entrant.

Public Mobile said Wednesday it would now seek to have the case heard by the Supreme Court of Canada.

"There have been five different decision makers in this process with a flip-flopping of the decision each time," Public Mobile CEO Alek Krstajic said in a statement.

"Today's decision shows us just how clouded this issue has become and demonstrates more than ever the national importance for consistent rules that should be applied equally to all Canadian wireless carriers."

Canadian federal law requires telecommunications companies to be majority owned and controlled by Canadians.

The CRTC had raised concerns that the vast majority of the debt owed by Wind Mobile's corporate parent, Globalive, was held by an Egyptian company, but its rejection was overruled by the government in December 2009.

In addition to the debt, Egyptian company Orascom holds a 65 per cent equity stake in Globalive, but it does not hold voting control and holds only a minority of the seats on the company's board.

Telus (TSX:T), which had supported Public Mobile in its challenge at the Federal Court of Appeal, also declined to comment Wednesday.

Ottawa has indicated that it plans to allow greater foreign ownership in the telecom sector, but so far has not made changes.

On Wednesday, the government, which had supported Wind Mobile in its bid to overturn the lower court decision, said it was committed to encouraging choice and competition in the wireless and Internet business.

"We have always believed that Globalive is a Canadian company which meets the Canadian ownership and control requirements under the Telecommunications Act," Industry Minister Christian Paradis said in a statement.

Last May, the government outlined three possible options to loosen the requirements -- removing all restrictions, increasing the limit of foreign investment from the current 20 to 49 per cent or lifting restrictions for carriers with less than 10 per cent market share.

But it has yet to take action on any of those proposals.