In their recent speech from the throne, the Canadian Government indicated their intention to raise foreign ownership limits with regard to the telecom industry. This is a decision long overdue, although one that requires balance and diplomacy when it comes to achieving the desired goal, something that the ruling Conservative Party has not been able to accomplish.

On the one hand they want to increase competition so as to lower consumer's monthly bills, yet on the other hand they also want to spur innovation by allowing existing companies access to foreign capital investment.

The demand for Internet and mobile networks is growing far faster than companies had anticipated and they will need to continually invest and expand their infrastructure which requires a lot of capital. The fear is that without foreign investment there would be further consolidation so as to pay for ongoing upgrades.

Canadians are of course effectively united in their distaste of their monthly mobile phone bill, which is the real target of this propposed policy. Allowing foreign competition in the mobile marketplace so as to increase competition and reduce what we have to pay.

In fact it was the earlier Cabinet decision to over-rule the CRTC with regard to Orascom/Wind that has precipitated this change in foreign ownership limits. Wind is the first of a number of new entrants who participated in the Government's recent spectrum auction, and they have started providing service in Toronto, Ottawa, Calgary, and Edmonton.

Since the federal cabinet gave Wind an exemption they pretty much have to extend that similar ability to raise foreign capital to the other companies. It is expensive to enter the telecom market, and so in order to ensure competition, the Government will raise foreign ownership limits.

The real fear is that if they do not raise foreign ownership limits, then the existing dominant companies would just buy up the new entrants as soon as they started to run into trouble. In fact many industry analysts saw this as inevitable without foreign investment.

Yet while telecom was an area mentioned in the throne speech, it was not addressed in the budget. Instead I suspect it will get it's own bill, and be dealt with distinct from the budget as it is a substantial issue that the government will want to be able to take credit for and spend time on the details.

The throne speech had a number of references to innovation and issues of the knowledge economy so I'm wondering if either the government has a larger "digital Canada" plan, or if they need and are scrambling to find one.

One of the other areas mentioned however was satellites, which while not as immediate and visible to Canadians as mobile companies, satellites do have a lot of potential for helping with rural internet access, as well as other communication services in general, such as television.

In fact I wonder if the satellite provision had a lot to do with dealing with the grey market that exists here in Canada with people using dishes to get US satellite TV. I think this decision will allow for those US companies to enter the market and therefore force those Canadians to either pay or get cut off.

Finally, when it comes to increased foreign investment in important communications infrastructure, there is the important issue of Canadian sovereignty and control.

The government for example did emphasize that foreign ownership of these areas was acceptable in so far as it did not harm Canada's national security, which is always used as a kind of blanket term to include anything related to the military, law enforcement, or the intelligence services. The subtext to that is surveillance. That foreign companies would be allowed to operate in so far as they allow the state to have the same type of access they already have to Canadian owned and operated networks.

However national security is only one side of sovereignty, the other being national identity, or culture. We underestimate just how much power and control our telecom companies have, and just how powerful the company that controls our internet connections will be.

Culture is such an abstract and evolving concept that it would be dangerous to allow external powers to decide what is and what is not appropriate use of the Internet. Copyright is one easy example of how this might become contentious, but political and religious expression are another.

Yet I also feel it's important to not be falsely romantic. The companies we currently have, who currently control our Internet, are effectively tyrants and oligopolists who gleefully gouge us. The idea of opening up the market to foreign competition is basically one of using the rest of the world to pressure our local bullies into playing a bit more nice with the rest of us.