Parliament’s intent was to give CRTC broad powers, court says
By Ahmad Hathout
THE FEDERAL COURT OF APPEAL denied an application by Groupe TVA on Wednesday, which challenged the CRTC’s authority to regulate economic disputes between parties after the regulator forced TVA to continue supplying Bell with its sports channel signal in 2019 despite a disagreement on the financial terms of the arrangement.
In April 2019, on the first night of the NHL playoffs, TVA owner Quebecor cut the signal of its TVA Sports channel to Bell viewers because it felt the terms of distribution were unfair. Since the original agreement in 2011, Quebecor has said it has not been paid enough for the channel compared to Bell’s French-language sports channel RDS. However, the terms of the agreement have been held up by arbitration, with the CRTC selecting Bell’s offer instead of Quebecor’s for the channel.
The CRTC held an emergency hearing after the signal was cut and found Quebecor had violated the terms of the agreement and forced it to continue to provide the signal.
Both TVA and Bell argued in a May court hearing that the CRTC should not have the authority to govern over commercial arrangements through the use of the so-called standstill rule, which gives the regulator the ability to maintain the status quo – that is, to continue to provide the signal – in the event of a dispute between program owner and distributor. But Bell said because the standstill rule is currently the law, TVA’s appeal should be dismissed.
The Federal Court of Appeal ruled Wednesday that the CRTC, according to a careful reading of the relevant Section 10, has the broad authority to regulate commercial disputes and is therefore within its jurisdiction, rejecting TVA’s argument that the provision limits its discretion to cultural matters.
The court agreed with intervenor Cogeco, which said the provision must be given a “broad and liberal interpretation,” and the attorney general representing the CRTC, who noted it is difficult to imagine the regulator being able to resolve a dispute between the two parties “without influencing an economic aspect of their relationship, an aspect that is necessarily prominent.”
“The Act has a broad purpose,” the ruling noted, “and it is clear from some of the provisions of the Act that the objectives established by Parliament include not only the cultural aspects of broadcasting but also the economic aspects…it would be unreasonable to claim that there is no economic dimension to the CRTC’s mission.”
TVA tried to argue that the court in a previous case ruled narrowly on a Section 9 dispute, largely known as the mandatory carriage provision, which gives the regulator the authority to force programs to be carried on basic distributor packages. Since both sections need to be argued with the same objectives in mind, TVA tried to make the case that the two rulings should be viewed similarly.
The court rejected that argument as well, suggesting the previous case did not address Section 10 or the regulator’s power to deal with disputes, including the standstill rule.
“The scope of the provision at issue in this case, namely, paragraph 10(1)(h), is in no way altered by the courts’ restrictive interpretation of paragraph 9(1)(h) of the Act,” according to the decision.
The decision also reflected on the reason for Parliament giving such broad authority to the CRTC. It was intended, the court said, to protect against the power of vertically integrated companies, which own both programming and distribution and which the federal government allowed without restrictions. Both Quebecor and Bell are such companies.
“To address this challenge, it was decided that the CRTC would have the power to resolve disputes that might arise in the context of negotiations between a programming undertaking and a distribution undertaking,” the decision said.
TVA’s case partly hinged on the argument that, since it pulled the signal, it was no longer engaged in the affiliation agreement with Bell, and the CRTC’s actions therefore constituted its forced involvement in a distribution arrangement against its will.
The court, however, sided with intervenors when it ruled that TVA did not terminate the agreement by cutting the signal in April. TVA, the court said, did not provide notice of termination with an effective end date captured in a future communication, nor did it provide 180 days notice of termination, as stipulated in the terms of the arrangement.
If not appealed to the country’s highest court, Wednesday’s decision will end one of a number of legal sagas between perennial Montreal rivals, Quebecor and Bell.
A request for comment to Quebecor was not returned.
