Shaw 2009 Annual Report Download - page 21

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objectives, and when relying on regulation to use measures that are efficient and proportionate to
their purpose and that interfere with the operations of competitive market forces to the minimum
extent necessary to meet the policy objectives”. Over the past several years this has resulted in
numerous forbearance orders being granted to TELUS Corporation (“TELUS”), Manitoba Telecom
Services Inc. (“MTS”), BCE Inc. and/or Bell Canada (collectively “Bell”), and SaskTel that cover the
majority of Shaw’s operating territory.
New Media and Internet
In June, 2009, the CRTC issued its decision on “new media” by extending its exemption of the
provision of new media undertakings for another five years. It also decided against imposing any
regulatory measures, including financial contribution requirements on ISPs, to support Canadian
new media content. In August 2009, the CRTC initiated a reference to the Federal Court of Appeal
on the legal question of whether the Broadcasting Act applies to ISPs. If the Court decides that it
does, the CRTC could seek to introduce regulatory measures in support of Canadian content on
ISPs. Shaw is participating in the Federal Court of Appeal Reference and submitting that ISPs are
not subject to the Broadcasting Act.
In October 2009 the CRTC issued its regulatory framework governing the internet traffic
management practices (“ITMPs”) of ISP’s. The new framework recognizes that some measures
are required to manage Internet traffic on ISP networks. ISP’s may continue to apply appropriate
ITMPs with no requirement for prior CRTC approval. Shaw will not be prevented from using its
existing ITMPs. Under the new framework, ISP’s are required to inform consumers of their ITMPs
and are encouraged to give preference to ITMPs based on economic measures. The CRTC has also
adopted special rules which require that ISP’s do not use ITMPs to cause competitive harm to their
wholesale customers.
Limits on Non-Canadian ownership and control for broadcasting undertakings
Non-Canadians are permitted to own and control, directly or indirectly, up to 33.3% of the voting
shares and 33.3% of the votes of a holding company that has a subsidiary operating company
licensed under the Broadcasting Act. In addition, up to 20% of the voting shares and 20% of the
votes of the licensee may be owned and controlled, directly or indirectly, by non-Canadians. As well,
the chief executive officer (CEO) and not less than 80% of the board of directors of the licensee
must be resident Canadians. There are no restrictions on the number of non-voting shares that may
be held by non-Canadians at either the holding company or licensee level. Neither the holding
company nor the licensee may be controlled in fact by non-Canadians, a question of fact that is
under the jurisdiction of the CRTC.
The same restrictions apply to Canadian carriers pursuant to the Telecommunications Act and
associated regulations, except that there is no requirement that the CEO be a resident Canadian.
The same restrictions are also contained in the Radiocommunication Act and associated
regulations. Shaw must file a foreign ownership compliance report annually with the CRTC
confirming that it meets the Canadian ownership requirements for Canadian carriers.
The Corporation’s Articles contain measures to ensure the Corporation is able to remain compliant
with applicable Canadian ownership requirements and its ability to obtain, amend or renew a
licence to carry on any business.
17
Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2009