But this still isn’t the end of it. Bell appeal to Commission awaits a decision
OTTAWA – The Federal Court of Appeal ruled today that the CRTC does, in fact, have the jurisdiction to make new rules for an individual program, despite the “irony” of deploying rules which are normally used to protect and promote Canadian content to instead promote the airing of American advertising.
As readers may recall, in January of 2015 the Commission made a decision stemming from its Let’s Talk TV policy review process that revoked the Canadian broadcast rightsholder’s ability to simultaneously substitute its signal over the American broadcast of just the Super Bowl game (the decision doesn’t include the hours of pre-game programming or any other games).
The rest of the simsub regime, where Canadian broadcasters buy the territorial rights to U.S. shows airing on border broadcasters – and then can demand broadcast distribution undertakings (BDUs, or cable, satellite and IPTV providers) substitute the Canadian signals and their advertising over the American signals – was left alone by the Regulator.
The reasoning behind making the change for the Super Bowl at the time, according to former CRTC chair Jean-Pierre Blais, was that the expensive, highly touted, creative ads, were an “integral part” of the broadcast – even though virtually all of those commercials are made available to watch online often several days before the actual game.
The Super Bowl simsub ban was accomplished by the CRTC under paragraph 9(1)(h) of the Broadcasting Act (a section referred to by many as the must-carry section and is used primarily to support special Canadian channels like AMI and APTN which must be shown to Canadians thanks to that section of the law). Both Bell Media and the NFL attempted to make the argument that because the clause refers only to “programming services” and not programs, then the Commission didn’t have the authority to single out an individual show for special treatment.
Bell Media owns the rights to the Super Bowl though to the 2019 broadcast, having paid the NFL millions of dollars in rights fees – with the expectation it would be able to profit off of the exclusive airing of the most watched program of the year in the Canadian market. When the original decision was announced, Bell immediately took legal and regulatory action – none of which has yet to pay off, including today’s decision. The company says it lost $11 million in revenue last year, the first time that it was not allowed to simsub the game.
Justice David Near’s decision batted away all of the arguments made by both Bell Media and the National Football League (this decision was two cases brought by Bell and the NFL cobbled together as one). The judge said the CRTC can call a show (program) or a channel (programming service) what it wants and regulate accordingly, and that it was fine for the Commission to change the rules while a broadcaster was in the middle of an expensive rights deal (the judge said there are no guarantees that laws and rules can’t change just because a private contract is in play).
“The appellants argue, and I agree, that there is a certain irony that legislation that has the protection of the Canadian broadcasting industry and its employees as one of its important objectives is being used to allow for the broadcasting of American ads during the Super Bowl to the apparent detriment of the Canadian industry and its employees.” – Justice David Near, Federal Court of Appeal
Once the CRTC “found that simultaneous substitution of the Super Bowl is not in the public interest… it was entitled to exempt the Super Bowl from the simultaneous substitution regime,” wrote Justice Near.
However, the judge did side with Bell and the NFL on one point. “The appellants argue, and I agree, that there is a certain irony that legislation that has the protection of the Canadian broadcasting industry and its employees as one of its important objectives is being used to allow for the broadcasting of American ads during the Super Bowl to the apparent detriment of the Canadian industry and its employees,” continued Justice Near.
“But there are numerous disparate objectives set out in the Broadcasting Act and Parliament intended that the CRTC decide how best to balance competing policy objectives related to broadcasting in Canada. It is not for the Court to engage in weighing these competing policy objectives and substituting its own view in deciding which policy objectives should be pursued…
“Canada’s broadcasting regime does not confer rights but benefits. Bell only ever had the privilege to request simultaneous substitution, a privilege which flows from the Broadcasting Act and regulations… Bell only ever had the possibility to sell advertising space at a later date and so lost only a speculative opportunity for profit that is not sufficiently concrete to be considered vested,” reads the decision.
To Bell Media, the court decision today actually punts the ball back to the CRTC (Ed note: Too easy!). What the Commission has done, can be undone by the Commission, according to Bell. As Cartt.ca reported, the company filed another appeal with the CRTC in August – backed by national union Unifor, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Association of Canadian Advertisers (ACA) and the Canadian Media Directors’ Council (CMDC) – to overturn the decision.
Said Bell’s official statement on Tuesday afternoon: “The court deferred to the CRTC so we hope the Regulator will take a close look at the clear impact of its decision on Canadian broadcasting and all those who work in the industry. A broad range of Canadian creators, producers, unions and advertisers are asking the CRTC to prevent further damage by rescinding its decision.”
The Commission has yet to respond to that appeal but Bell executives are hoping it comes before the big game.
If that also comes down against Bell, another appeal, to the Supreme Court of Canada, remains a possibility.
