By Ahmad Hathout
The Federal Court of Appeal has turned down an appeal by Rogers challenging two CRTC decisions forcing it to freeze movement of certain Corus channels it argued was within its contractual right to repackage and remove.
Following a hearing in September, the high court ruled Thursday that Rogers cannot change the terms of its agreement with Corus after the initiation of a dispute because that would be contrary to the standstill, which requires that the status quo be maintained until the dispute is resolved.
“If, following a dispute, Rogers could invoke any provision of the existing contract, Rogers could invoke a provision that would result in the termination of the contract,” the court said in its March 5 decision, almost exactly a year after the court agreed to hear the case. “Terminating the contract would not maintain the status quo.”
Rogers challenged two decisions of the CRTC – just days apart from each other in November 2024 – that first froze its ability to repackage Corus’s Slice channel and then barred it from removing Corus’s new Home and Flavour channels. Rogers said this was simply a commercial decision because it had no need for channels that previously carried licences to content that it now owned after a blockbuster deal with Warner Bros. Discovery and NBCUniversal that summer.
Rogers provided Corus with the requisite six months’ notice that it was terminating its affiliation agreement, which took effect at the end of 2024. Before then, Corus filed applications to the CRTC and the Ontario Superior Court asking for orders barring the cable giant from moving its channels from Rogers cable – representing significant viewership – pending a resolution of their dispute.
The Ontario Superior Court ruled in November 2024 that Rogers was within its right under their agreement to repackage Corus’s Slice channel, but the standstill matter was outside its domain. The CRTC ruled later that month that Rogers was not to repackage the channels until it can rule on the matter or until the parties resolved the issue on their own.
Rogers argued that the standstill rule only maintains the existing contract between the two companies, which includes provisions allowing it to make changes it deemed necessary for the business even after the dispute was initiated.
But the Federal Court of Appeal found a foundational problem with that interpretation. “If the standstill rule simply means that the parties are bound by the contract that they had signed and the provisions of that contract continue unabated, the standstill rule would be rendered meaningless,” the court said. “The parties would be bound by their contract with or without the standstill rule.
“If the standstill rule only means that a contract that would otherwise expire while a dispute is outstanding is extended until the dispute is resolved, the standstill rule could have simply extended the term of an existing contract until the dispute is resolved,” it added.
The court’s interpretation — which also applies after a term of the contract expires after the initiation of the dispute — breaks through what it conveyed as a vague statement made by the CRTC, which ruled that “each licensee or operator shall continue to provide its services or distribute the programming services on the same terms and conditions as it did before the dispute.” To the court, this is not a “clear statement” as to whether the standstill rule means the terms of the agreement are frozen or if they allow the changes that would otherwise be permitted outside the dispute.
To come to the conclusion that the standstill rule freezes the terms and conditions in place, the court drew a line starting from the rates to be paid to carry the channels. Because the standstill rule explicitly states that the rates must remain the same as before the dispute, the court said that must mean the right to repackage channels should also be frozen.
The court further noted that the context of the application of the standstill rule — that is, its impact on consumers — should be considered in the decision.
“The potential disruptive impact of allowing a change that, in the course of resolving a dispute, may be found to be one that should not have been made and the parties then revert to the original term or condition, is a relevant factor in determining whether the standstill rule means that the terms and conditions are frozen or that a party could still make changes permitted by the agreement,” the court said.
In its second decision, the CRTC turned down Rogers’s argument that the standstill rule should not apply to the three channels because they have materially changed following the cable giant’s purchase of content licences that made up a chunk of those channels’ programming. If the standstill rule requires the same terms and conditions for services, Rogers’s argument went, then it cannot apply to channels that are no longer the same. And because Rogers was forced to maintain Corus’s channels, while Corus was allowed to modify them, then the CRTC did not apply the standstill rule evenly.
But the appeal court ruled that this was not what the CRTC did. While the regulator ruled that the Corus channels would continue to operate in the same categories and have the same focus, it was not seized by the same concern as to the standstill’s application to Rogers, which did not argue that its proposed repackaging of Corus channels did not constitute a material change.
When asked for comment and whether it would appeal the decision to the Supreme Court of Canada, Rogers told Cartt it was reviewing the decision.
“We welcome yesterday’s decision, which we see as a ‘win’ for subscribers to our leading specialty channels,” a Corus spokesperson told Cartt. “The decision confirms our interpretation of the regulations and helps ensure customers continue to see popular services like Home, Flavour and Slice while carriage agreements are being negotiated. Corus continues to work with its distribution partners to deliver best in-class content and brands and to advocate for broadcasting regulations that promote fair competition.”
Rogers and Corus, which is going through a rough patch, had been in a regulatory standstill for more than two years prior to this decision.
