Telus 2007 Annual Report Download - page 22

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The Telecommunications Act also provides that in order for a company that holds shares
in a carrier to be considered Canadian, not less than 66-2/3 per cent of the issued and
outstanding voting shares of that company must be owned by Canadians and that such
company must not otherwise be controlled in fact by non-Canadians. Accordingly, not
less than 66-2/3 per cent of the issued and outstanding voting shares of TELUS must be
owned by Canadians and TELUS must not otherwise be controlled in fact by non-
Canadians. To the best of TELUS’ knowledge, Canadians beneficially own and control
in the aggregate not less than 66-2/3 per cent of the issued and outstanding Common
Shares of TELUS and TELUS is not otherwise controlled in fact by non-Canadians.
The regulations under the Telecommunications Act provide Canadian carriers and
carrier holding companies, such as TELUS, with the time and ability to rectify ineligibility
resulting from insufficient Canadian ownership of voting shares. Under these
regulations, such companies may restrict the issue, transfer and ownership of shares, if
necessary, to ensure that they and their subsidiaries remain qualified under such
legislation. For such purposes, in particular but without limitation, a company may, in
accordance with the provisions contained in such regulations:
(i) refuse to accept any subscription for any voting shares;
(ii) refuse to allow any transfer of voting shares to be recorded in its share register;
(iii) suspend the rights of a holder of voting shares to vote at a meeting of its
shareholders; and
(iv) sell, repurchase or redeem any voting shares.
To ensure that TELUS remains Canadian and that any subsidiary of TELUS, including
TCC, is and continues to be eligible to operate as a telecommunications common carrier
under the Telecommunications Act, to be issued radio authorizations or radio licences as
a radiocommunications carrier under the Radiocommunication Act, or to be issued
broadcasting licences under the Broadcasting Act, provisions substantially similar to the
foregoing have been incorporated into TELUS’ Articles permitting the directors to make
determinations to effect any of the foregoing actions.
REGULATION
General
The provision of telecommunications services and broadcasting services in Canada is
regulated by the Canadian Radio-television and Telecommunications Commission (the
“CRTC”) pursuant to the Telecommunications Act and the Broadcasting Act,
respectively. In addition, the provision of cellular and other wireless services using radio
spectrum is also subject to regulation and licensing by Industry Canada pursuant to the
Radiocommunication Act.
The Telecommunications Act gives the CRTC the power to regulate the provision of
telecommunications services, and to forbear from regulating certain services, classes of
services or locations (i.e. not subject them to rate regulation) if they are subject to a
degree of competition which is sufficient to protect the interests of customers. However,
even when the CRTC forbears from price regulation of certain services or locations, it