OTTAWA – Late Thursday, Bell Canada applied to the Federal Court of Appeal for leave to appeal the CRTC’s recently announced Wholesale Code of conduct which it established for the TV industry as part of its Let’s Talk TV policy review process.
The Commission released the Code September 24th.
The CRTC has overstepped its jurisdiction with this Code, says the Bell application to the court. “The purpose of the Wholesale Code is to govern the commercial relationships between Programming and Distribution Undertakings. In doing so, the Wholesale Code conflicts with the Copyright Act and exceeds the CRTC’s statutory grants of power under the Broadcasting Act,” reads the filing.
In fact, the Code itself says just that. “This code sets out the general provisions that shall govern the commercial arrangements between broadcasting distribution undertakings (BDUs), programming undertakings, and exempt digital media undertakings,” it reads.
“While such matters are generally best determined by negotiations between the parties, there may be circumstances where the Commission must intervene in the public interest. This would primarily occur in cases where the attainment of the objectives set out in the Broadcasting Act could be compromised including when the provisions set out in the code have not been respected by the parties engaged in commercial arrangements.”
However, says the Bell court application, “the Wholesale Code purports to give the CRTC jurisdiction to dictate the price and commercial terms on which Programming Undertakings may license their copyrighted programs to Distribution Undertakings, by prohibiting certain commercial terms in Affiliation Agreements, including any which the CRTC considers ‘commercially unreasonable’.”
Considering the Commission’s already existing Final Offer Arbitration Regime and its Anti-Competitive Head Start rule, too, “the Wholesale Code purports to give the CRTC jurisdiction to require that any programming be offered (i) at prices set by the CRTC; (ii) to the entire marketplace; (iii) on multiple distribution platforms; (iv) with an authorization to use and package the programming as mandated by the CRTC,” reads the petition.
“These are rights that the Copyright Act grants to Programming Undertakings to exercise in their sole discretion, not the CRTC.”
“The Broadcasting Act does not give the CRTC jurisdiction to regulate the direct economic relationship between Programming and Distribution Undertakings, or to dictate the terms of the carriage relationship between them." – Bell Canada
Add to this the Commission’s standstill rule, where programming cannot be removed from TV subscribers during a contract dispute by either party and Bell believes the Regulator has now inserted itself into all aspects of commercial negotiations between carriers and programmers and that it has no recourse at all if and when those negotiations break down between its specialty channels and other carriers, or for that matter, between programmers and Bell’s distribution arm. “The Broadcasting Act does not give the CRTC jurisdiction to regulate the direct economic relationship between Programming and Distribution Undertakings, or to dictate the terms of the carriage relationship between them,” the filing continued.
(The application names as respondents just about every large or small broadcaster or BDU, or association representing them in the country, except for Shaw Communications and Rogers Communications.)
In the Statement of Facts which Bell filed with its application for leave to appeal, it referenced the Supreme Court’s 2012 decision to strike down fee-for-carriage for local broadcasters as the strongest legal precedent which backs up its appeal of the Code.
In that decision, the Supreme Court said the CRTC had no right to set up such a new regime and so this new Wholesale Code, reads the Bell court filing, "is a frontal attack by the CRTC on the Supreme Court Canada's decision," where the SC said “(a) the CRTC cannot conflict with the Copyright Act by interfering with the careful balance between owner and user interests struck by Parliament in that act; and (b) the CRTC has no statutory jurisdiction under the Broadcasting Act to regulate the economic relationship between Programming and Distribution Undertakings, or to dictate the terms of their carriage relationship.”
The SC was clear, adds Bell's statement of fact "that s. 9(1)(h) of the Broadcasting Act, which is the very same provision relied on by the CRTC here, does not permit the CRTC to 'regulate the economic relationships' between Programming and Distribution Undertakings, or 'dictate the terms of the carriage relationship' between them."
This is what should have applied while the Commission contemplated the TV Wholesale Code and therefore shows it made “errors of law and jurisdiction in promulgating the Wholesale Code,” says the Bell petition, and so “leave to appeal should be granted under s. 31(2) of the Broadcasting Act.”
The Code is supposed to come into force on January 22, 2016 and it’s not known at this time if the Court can make a decision whether it will allow the appeal prior to that date.
