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For-Profit Telecoms Could Cost Municipalities Money

By ReNew Canada 08:49AM June 23, 2010

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As the federal government considers open the door to foreign investment in Canada’s telecommunications sector, the Federation of Canadian Municipalities (FCM) is worried about how that could affect municipal taxpayers.

“Existing legislation already undermines the ability of municipal governments to manage our roads and recover costs, this costs taxpayers millions,” said FCM President Hans Cunningham in a release. “A decision to open the industry to foreign ownership could add millions more to this bill. Our taxpayers should not be subsidizing for-profit telecoms.”

In a submission made to Industry Canada, FCM argues that any move to open the telecommunications sector to foreign investment must be met with parallel steps to protect municipal taxpayers, including amendments to the Telecommunications Act.

Currently, telecoms install large amounts of infrastructure above or below municipal rights of way without paying the full costs associated with these activities (we covered this in our May/June issue). This contributes to the declining condition of local roads and other infrastructure and is, in effect, a subsidy by local taxpayers to for-profit telecoms.

“Our cities and communities are already sufficiently challenged trying to renew infrastructure and meet growing social needs without having to pay a de facto telecommunications tax,” said Cunningham. “Municipal governments must be consulted throughout this process. Cities and communities can facilitate infrastructure growth but we´re not in a position to subsidize it.”

FCM has already done some PR in an attempt to help municipalities know their rights when it comes to ROWs.

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