Supreme Court sides with cable, satellite companies on fee system

OTTAWA – The Supreme Court of Canada says the CRTC does not have the power to make cable providers to pay broadcasters for carrying their signals.

In a 5-4 decision Thursday, the court ruled that setting up such a system is not within the scope of the Canadian Radio-Television and Telecommunications Commission. In doing so, the justices overturned an earlier Federal Court of Appeal decision.

The Broadcasting Act can’t be interpreted to give the CRTC that power, Justice Marshall Rothstein wrote for the majority.

“First, a contextual reading of the provisions of the Broadcasting Act themselves reveals that they were not meant to authorize the CRTC to create exclusive rights for broadcasters to control the exploitation of their signals or works by retransmission,” Rothstein wrote.

“Second, the proposed regime would conflict with specific provisions enacted by Parliament in the Copyright Act.”

In their dissent, Justices Rosalie Abella and Thomas Cromwell argued that seeking a system that would be beneficial to local television stations was well within the mandate of the CRTC.

“As an expert body, the CRTC, not the courts, is in the best position to decide what measures are necessary to save local stations from going bankrupt,” they wrote

The CRTC had decided in 2010 to launch what’s known as a value-for-signal system as a response to a changing broadcasting landscape that saw local broadcasters struggling for revenue.

Currently, cable and satellite providers pluck TV signals out of the air for free and then redistribute them to their subscribers, who pay for access.

The new system would have allowed the broadcasters to charge the cable companies for taking their signals and possibly withhold programming if the companies wouldn’t pay up.

But first, the commission went to the Federal Court of Appeal to see if it had the jurisdiction to implement the changes.

In a 2-1 decision, the appeal court agreed that the Broadcasting Act gave the CRTC the broad mandate to regulate and supervise all aspects of the Canadian broadcasting system and there was no conflict with the Copyright Act.

The cable and satellite companies appealed the decision to the Supreme Court, arguing specific provisions in the Copyright Act denied the CRTC the power to force them to pay for signals.

They also argued that any costs incurred by them would just be passed on to consumers.

The television networks said the fees were essential to the survival for local programming and the new system was consistent with the CRTC’s role as the national policy-maker for broadcasting.

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