Archived — SOR/99-108

Industry Canada

Registration
SOR/99-108 4 March 1999

Radiocommunication Act

Regulations Amending The Radiocommunication Regulations

P.C. 1999-321 4 March 1999

His Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to section 6a of the Radiocommunication Actb, hereby makes the annexed Regulations Amending the Radiocommunication Regulations.

Amendment

1. The Radiocommunication Regulations1 are amended by adding the following after section 10:

10.1 (1) The definitions in this subsection apply in this section.

"earth station" means a fixed or mobile station that operates either in the fixed satellite service or in the mobile satellite service. (station terrienne)

" fixed satellite service" means a radiocommunication service that provides for communications between fixed stations and space stations.
(service fixe par satellite)

"mobile satellite service" means a radiocommunication service that provides for communications between mobile stations and space stations.
(service mobile par satellite)

" radiocommunication service" means a service provided by means of radiocommunication but excludes telecommunications services supplied for the transmission of services regulated under the Broadcasting Act where such services are intended for direct reception by the public. (service de radiocommunication)

(2) Notwithstanding sections 9 and 10, the following persons, who operate an earth station in a fixed satellite service, are eligible to be issued, in respect of that earth station, a radio licence as a radiocommunication user, a radiocommunication service provider other than a radiocommunication carrier, or a radiocommunication carrier:

  1. an individual who is
    1. a citizen within the meaning of subsection 2(1) of the Citizenship Act,
    2. a permanent resident within the meaning of subsection 2(1) of the Immigration Act, or
    3. a non-resident who has been issued an employment authorization under the Immigration Act;
  2. a corporation that is incorporated or continued under the laws of Canada or a province;
  3. a partnership or joint venture where each partner or co-venturer is eligible to be issued a radio licence under this subsection; and
  4. a Canadian government, whether federal, provincial or local, or an agency thereof.

(3) Notwithstanding sections 9 and 10, the following persons, who operate an earth station in a mobile satellite service, are eligible to be issued, in respect of that earth station, a radio licence as a radiocommunication user, as a radiocommunication service provider other than a radiocommunication carrier, or a radiocommunication carrier:

  1. an individual who is
    1. a citizen within the meaning of subsection 2(1) of the Citizenship Act,
    2. a permanent resident within the meaning of subsection 2(1) of the Immigration Act, or
    3. a non-resident who has been issued an employment authorization under the Immigration Act;
  2. a corporation that is incorporated or continued under the laws of Canada or a province;
  3. a partnership or joint venture where each partner or co-venturer is eligible to be issued a radio licence under this subsection; and
  4. a Canadian government, whether federal, provincial or local, or an agency thereof.

(4) This section applies beginning on March 1, 2000 in respect of earth stations that are fixed stations in the fixed satellite service and that provide telecommunication services between points in Canada and between points in Canada and the United States.

Coming Into Force

2. These Regulations come into force on the day on which they are registered.


a S.C. 1989, c. 17, s. 4
b S.C. 1989, c. 17, s. 2
1 SOR/96-484


Regulatory Impact Analysis Statement
(This statement is not part of the Regulation.
)

Description

On February 15, 1997, at the World Trade Organization (WTO), Canada and 68 other countries concluded a multilateral agreement, the General Agreement on Trade in Services Agreement on Basic Telecommunications (GATS-ABT), to liberalize trade in telecommunications services.

Under this agreement Canada committed to eliminating monopolies in overseas telecommunications services and fixed satellite services. As a result of these commitments, Teleglobe's monopoly on the provision of facilities for overseas ended on October 1, 1998. Telesat's monopoly on the provision of fixed satellites services will end on March 1, 2000. These measures will enable Canadians to have access to all types of competing domestic and foreign satellites (except direct-to-home and direct-broadcast satellite).

Amongst other commitments concerning the mobile satellite service (MSS), and traffic routing requirements, Canada also agreed to consider removing foreign ownership and control restrictions for earth stations that operate in the fixed satellite service (FSS). The FSS uses fixed earth stations and one or more space stations to route radio signals between fixed locations. The MSS provides for communications between mobile stations (i.e. radio apparatus on board aircraft, ships and other vehicles) and space stations.

This amendment to the Radiocommunication Regulations concerns the eligibility requirements for licensing earth stations in the fixed and mobile satellite services. The existing regulations require that radiocommunication carriers be Canadian owned and controlled. These licensing eligibility requirements are broadened to meet or to exceed Canada's GATS-ABT commitments.

Accordingly, a new provision is being added to the Regulations that complements the provision in Telecommunications Act under which Canadian ownership and control provisions do not apply to earth stations that provide telecommunications services by means of satellites.

The new provision removes the requirement for Canadian ownership and control of licence holders for earth stations in the FSS and MSS that provide telecommunications services by means of satellites.

The new section of the Regulations will allow a service provider that is not Canadian owned and controlled to be eligible to hold a radio licence as a radiocommunication carrier for earth stations in the fixed satellite service and the mobile satellite service.

The new provision excludes telecommunications services supplied for the transmission of services regulated under the Broadcasting Act where such services are intended for direct reception by the public, i.e. direct-to-home and direct-broadcasting satellite.

The effective date of the Regulations is their date of registration.

Alternatives

There is no alternative: these are enabling Regulations required to meet or to exceed Canada's trade commitments.

Benefits and Costs

Benefits

The GATS agreement on basic telecommunications allows the Canadian telecommunications industry greater access to the United States, Europe and other important markets. Through this agreement Canadian telecommunications companies are able to capture a larger share of the multi billion dollar global market in telecommunications services. From a consumer perspective, implementation of the agreement is expected to result eventually in cheaper international long distance rates as competition in the overseas long distance market increases.

Costs

No additional costs to the Department in administering the licensing of service providers is anticipated.

Consultation

The development of Canada's offer to the WTO was done with full public consultation and support of Canadian industry. The implementation of the agreement has been the subject of extensive consultation during the approval of legislative amendments to the Telecommunications Act (Bill c-17) and with the release of various policy and discussion papers.

In February 1998, the Department published a Canada Gazette notice (DGTP-001-98) that announced amendments to the Policy Framework for the Provision of Mobile Satellite Services Via Regional and Global Satellite Systems in the Canadian Market (RP-007). The amendments rescinded the provision of the policy framework that required that the Canadian licensee for the provision of mobile satellite services in Canada hold an equity share in the entity owning the satellite system at least proportional to the expected Canadian usage. It also made other amendments that liberalized the routing of mobile satellite services.

The revised policy, however, maintained that the applicant (MSS service provider) must be a Canadian owned and controlled corporation incorporated or continued under the laws of Canada or a province.

In March 1998, the release of a document entitled Policy Consultation Paper Respecting the Authorization of Earth and Space Stations for Fixed Satellite Services Following the Coming into Force of the GATS Agreement on Basic Telecommunications, solicited public comment on issues relating to the Canadian satellite policies (other than the policies governing satellites providing mobile satellite and broadcasting services) that are to be implemented as a result of the agreement.

Overall, the response to the policy paper was favourable with many of the respondents supporting the Government's commitment to open its fixed satellite services market to full competition by March 1, 2000. Some respondents, such as the Teleglobe and the Satellite Industry Association (SIA) favour accelerating the timetable for the change from monopoly to competitive market conditions in order to offer new services to Canadian consumers. In response to this call, the date for the removal of certain routing restrictions on international services and on foreign ownership of fixed satellites used to provide service between points in Canada and all points outside Canada, except in the United States has been advanced to October 1, 1998 from December 31, 1999.

In response to the FSS policy paper, The Radio Advisory Board of Canada (RABC) requested that Industry Canada clarify the application of Canadian ownership and control requirements to radio apparatus communicating with fixed satellites that are interconnected with the public switched network. The RABC believes that a satellite service provider that supplies an earth station interconnected with the PSN should not be subject to Canadian ownership and control restrictions when it does not operate other telecommunication facilities. The Department has clarified these requirements with this new provision.

The different foreign ownership and control licensing eligibility requirements for earth stations in the MSS and FSS may unnecessarily restrict strategic business alliances that may wish to offer both services. Accordingly, the Department initiated public consultations to solicit views on liberalizing these requirements for the mobile satellite service by publishing (Notice No. DGTP-014-98) and this regulatory initiative in the Canada Gazette on October 10, 1998.

The Department received comments from eight respondents: Canadian Wireless Telecommunication Association (CWTA), CANCOM "Canadian Satellite Communication Inc.", Globalstar Canada Co., Global U Network Inc., Iridium Canada Communications Inc., Stratos Wireless Inc., Teleglobe Canada Inc., and Telesat Canada Communications Inc.

All of the respondents welcomed Industry Canada's commitment for improving market access to facilitate the availability of mobile and fixed satellite services for Canadians and to give Canadian satellite operators greater access to international markets. Many applauded the Department's effort to meet or to exceed Canada's WTO commitments and expressed hope that these prompt and efficient market liberalization commitments will be mirrored in other jurisdictions, such as the United States, where Canadian entities may have an interest in offering service.

One of the respondents disagreed with the Department's view that the liberalization of the licencing regime for earth stations of the mobile satellite service should not lag that for fixed satellite services. However, the respondent's arguments that Canadian ownership of service providers ensure greater control over the quality of the service provided or that it offers control of the revenue of satellite carriers companies from Canadian sources or that foreign carriers may bypass Canadian service providers are not compelling reasons to require MSS service providers to be Canadian owned and controlled. The purpose of removing trade barriers in telecommunications services is to move global satellite services to full and open competition and to give Canadians access to cost effect satellite telecommunication services.

Another respondent pointed out that services regulated under theBroadcasting Act that are excluded from the application of Canada's WTO commitment required further clarification. This has been done with the publication of the Policy Framework for the Provision of Fixed Satellite Services in December 1998. Essentially, the existing satellite policies which apply to Direct-To-Home (DTH) or Direct Broadcast Satellite (DBS) services, whether provided by fixed or broadcast satellites, remains unchanged.

In light of the comments received, under the new section of the Regulations, a service provider that is not Canadian owned and controlled is eligible to hold a radio licence as a radiocommunication carrier for earth stations in the fixed satellite service and the mobile satellite service. Furthermore, a minor modification has been made to the definition of "radiocommunication service" in the provision for consistency with the existing satellite policies regarding broadcasting services.

Compliance and Enforcement

Service providers that are not Canadian owned and controlled and who are issued earth station licences will be subject to the same compliance and enforcement regime and laws as Canadian owned and controlled service providers. The Minister, through due process, will be able to suspend or revoke these licences for contraventions of the Radiocommunication Act, theRadiocommunication Regulations or terms and conditions of the licence.

Contact

Mr. Ronald Amero, Director
Space and International Regulatory Activity Directorate
Radiocommunication and Broadcasting Regulatory Branch,
Industry Canada, 300 Slater Street
Ottawa, Ontario
K1A 0C8
Telephone: 613-998-3759;
Fax: 613-952-9871;
Internet: Amero.Ron@ic.gc.ca

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