OTTAWA – Former CRTC chair Jean-Pierre Blais’ ears must have been on fire Monday.
While the new U.S.-Mexico-Canada trade agreement did away with the CRTC’s 2015 decision to ban the simultaneous substitution of Canadian ads into the broadcast of the Super Bowl here (one of the landmark rulings to come out of Blais’ so-called “Let’s Talk TV” process), the Federal Court of Appeal on Monday sided with Bell saying the Regulator has no right to dive deeply into affiliate contracts between broadcasters and carriers, what the Commission called its Wholesale Code.
The Wholesale Code, said the Regulator when it was released by Blais in September 2015 and informed by his Let’s Talk TV process, “will ensure (TV) subscribers have greater choice and flexibility in the programming services they receive, that programming services are diverse, available and discoverable on multiple platforms, and that negotiations between programming services and BDUs are conducted in a fair manner.”
It set out a number of new rules which BDUs and broadcasters had to abide. Contracts could not prohibit the distribution of programming services on a stand-alone basis, or prohibit the offering of programming services on a build-your-own-package or small package basis, or talk about minimum penetration, revenue or subscription levels, among other things.
It also laid out specific definitions of what the Commission considered reasonable or unreasonable and also that any agreements had to be passed through the CRTC for a look-see if they weren’t renewed within 120 days of their expiry.
The big BDUs and big broadcasters (same companies or ownership) didn’t like any of this. The independent broadcasters and carriers considered this a big win out of the Let’s Talk TV proceeding.
Now, thanks to a 2-1 Federal Court decision in favour of Bell’s appeal, the Code is comatose (the federal government or any of the other respondents, a great many independent operators and broadcasters) could appeal).
The Code was issued under paragraph 9(1)(h) of the Broadcasting Act, which authorizes the Commission to require BDUs to carry specified programming services and to mandate such terms and conditions of carriage of those services as the CRTC deems appropriate.
Bell’s appeal said the Commission had no authority under 9(1)(h) to meddle in private carriage contracts. "It's not for the CRTC to come along and put its thumbs on the scale,” Bell lawyers told the judges during the appeal last November.
In the majority decision by Justices Judith Woods and Marc Nadon, it states: “Paragraph 9(1)(h) of the Act cannot be reasonably interpreted as granting the CRTC a general power to regulate the terms and conditions of affiliation agreements.
“This interpretation goes beyond the ordinary meaning of the language in paragraph 9(1)(h) and is not reasonably supported by a textual, contextual and purposive interpretation of the legislation. Furthermore, it is not reasonable to expand the language of paragraph 9(1)(h) by way of necessary implication to include powers necessary to fulfill the CRTC’s mandate.”
Justice Donald Rennie disagreed. “Paragraph 9(1)(h) of the Act does not expressly grant authority to the CRTC to impose terms and conditions on the negotiation of affiliation agreements and their content. However, on the basis of the context within which paragraph 9(1)(h) is situated, the Order, and the Code which it implements, are by necessary implication within the CRTC’s jurisdiction.
“Parliament has stated that the purpose of paragraph 9(1)(h) is to enable the CRTC to fulfill its statutory mandate under subsection 5(1). Since the terms and conditions of affiliation agreements directly dictate the terms on which consumers are offered programming services, by necessary implication paragraph 9(1)(h) must include the ability to affect affiliation agreements. The evidence demonstrates that the measures in the Code are “practical necessities” for the CRTC to achieve the objectives in subsections 3(1) and 5(1) through its ability to impose terms and conditions on programming services.”
We’ll update this when we hear from the CRTC and some others in the industry.
