By Ahmad Hathout
MONTREAL – Lawyers for Quebecor’s Groupe TVA and Bell Canada said Tuesday the CRTC shouldn’t be able to force the two companies to come to an agreement on retransmission of discretionary television channels when one or both sides disagree on the terms.
Just over two years ago, the CRTC said TVA must continue to provide its sports channel signal to Bell for retransmission under a provision in the law called the standstill rule, after TVA cut the signal during the NHL playoffs in April 2019 citing unfair economic terms of the agreement. That means, during commercial disputes, the regulator could enforce the status quo under the Broadcasting Act until amicable terms can be reached.
Groupe TVA was granted its appeal at the Federal Court, which held its first hearing Tuesday. Lawyers for both sides were on the same side on this point and argued the CRTC shouldn’t have the ability to foist on the parties an agreement because it would confer on the CRTC an unusual power that would, they claim, conflict with the Copyright Act by making it a “right” for Canadians to have certain channels, and allow the Regulator to creep on economic agreements where no such power exists under the law.
Neil Peden, counsel representing TVA, said Tuesday the CRTC effectively told the company that it can force it into economically untenable business contracts “against your will” under the guise that it is fulfilling its obligation as a regulator to protect Canadians.
“That clearly cannot be correct,” he said.
For TVA, that argument stands even within the period that the contract was still technically live. But it’s even more pertinent, TVA claims, because the contract had since lapsed. That’s because it claims the CRTC’s jurisdiction argument hinges on whether such an economic arrangement is considered a “dispute” or not. If the contract has expired, TVA says, then there is no way the regulator can assert its domain when the law it administers doesn’t reach that far.
Steven Mason, who represented Bell, agreed TVA shouldn’t be forced to distribute the signal if it doesn’t want to. But Bell also argued that so long as the standstill rule is the law, it should be enforced against TVA.
Bell is taking it a step further and suggesting the Federal Court — after dealing with this appeal — do away with provisions that force parties into economic agreements they don’t want to be party to. (Ed note: Other entities, such as small cable companies and broadcasters, would surely object to this change due to the serious power imbalance between large vertically integrated organizations like Bell and Quebecor and such independents.)
Since the original distribution agreement was signed in 2011, the two parties haven’t seen eye-to-eye on the cost of providing the signal. Both parties eventually went to final offer arbitration, where the CRTC selected Bell’s proposed distribution offer. TVA has maintained that Bell’s offer is well below market value compared to how much Bell’s RDS sports channel charges for distribution. The dispute had been on-going until TVA — after sending warnings to Bell and its customers — decided to just yank the plugin 2019.
In the aftermath of that decision, the CRTC convened an emergency hearing where it ruled that TVA violated the rules and forced it to continue to provide the signal. The issue also went to the Quebec superior court, where the law ruled similarly against TVA.
The CRTC, which was represented by the attorney general of Canada on Tuesday, said regardless of whether the contract had expired and one or both parties didn’t want any part in the agreement, it’s still incumbent on the Regulator to regulate the issue because, it argued, it’s still a dispute that impacts Canadians. The guiding mandate of the CRTC, it said, is to regulate and reach objectives that are social, cultural and economic in nature.
But lawyers for the Crown also argued that without the status quo rule and the CRTC’s ability to regulate in that way, there would be a dynamic where one party can create “undue pressure” on the other, effectively creating a “hostage” situation.
