December 13, 2012 / 3:03 PM / 5 years ago

Canada court rejects plan for broadcasters to charge for signals

OTTAWA (Reuters) - Canada’s broadcast regulator does not have the authority to impose a value-for-signal plan under which television broadcasters would charge cable and satellite firms for their programming, the Supreme Court of Canada ruled on Thursday.

The industry regulator, the Canadian Radio-television and Telecommunications Commission, had in 2010 accepted the broadcasters’ arguments that local stations needed new money to stay viable. Before imposing a fee system on cable companies, it asked the courts to verify that it had the right to do so and the Supreme Court ruled on Thursday that it did not.

The 5-4 decision is a defeat for telecoms company BCE Inc, which owns CTV, Canada’s largest private broadcaster. Arguing on the cable side was Telus Corp, Cogeco Cable Inc, Rogers Communications Inc and Shaw Communications Inc.

Cable firms had warned the court that television blackouts could happen as they occasionally do in the United States if broadcasters were allowed to charge for their signals.

The broadcasters said the regulator had heard arguments about blackouts and concluded the American system was working well despite such concerns. About 90 percent of Canadians receive their signals through their cable subscriptions.

The case originally pitted broadcasters against cable and satellite-TV companies, but the lines became muddied after Canada’s two biggest private-sector TV networks were bought by BCE and Shaw.

Ultimately, at the pocketbook level it could have been consumers who would have been hit by a value-for-signal program, since the cable companies threatened to pass on any extra costs, estimated by the cable industry at C$10 ($10) on customers’ monthly bills.

The legal arguments in the case centered on whether the Copyright Act or the Broadcasting Act would have precedence. The Copyright Act grants broadcasters a copyright over their signals except in regard to cable companies.

The Broadcasting Act gives broad powers to the Commission but Justice Marshall Rothstein concluded for the majority that the law did not expressly give the regulator the right to impose a value-for-signal plan.

“No provision of the Broadcasting Act expressly grants jurisdiction to the CRTC to implement the proposed regime,” Rothstein wrote in the opinion.

Rothstein said the CRTC’s powers that are derived from the Broadcasting Act could not be allowed to create conflicts with the Copyright Act.

The case is Cogeco Cable Inc, et al v. Bell Media Inc (formerly CTV Globemedia Inc), V Interactions Inc, Newfoundland Broadcasting Co Ltd, et al, in the Supreme Court of Canada No. 34231

Editing by James Dalgleish, Sofina Mirza-Reid and Grant McCool

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