Focus On

BROADCASTING - Distribution undertakings - Simultaneous substitution - Content - Advertising

Thursday, December 19, 2019 @ 2:01 PM  

Lexis Advance® Quicklaw®
Appeals from a judgment of the Federal Court of Appeal that upheld a Final Order of the Canadian Radio-television and Telecommunications Commission (CRTC) holding that the broadcast of the Super Bowl should be exempt from the simultaneous substitution regime as of January 1, 2017 (Final Decision), which meant that Canadians would be free to view the U.S. broadcast that featured American commercials. Section 7 of the Broadcasting Distribution Regulations (Distribution Regulations) provided that television service providers could not alter or delete the signals of television stations while retransmitting them. Section 7(a) of the Distribution Regulations provided for simultaneous substitution, which was an exception to this rule. Simultaneous substitution allowed a television service provider to request that the signal of an American station airing an event (e.g. a station of the American Broadcasting Company) be replaced with a CBC station’s signal. The result was that local viewers would see the CBC’s broadcast of that event — with the same content as the U.S. broadcast but with different commercials. Bell Media Inc. (Bell) owned and operated television stations of the CTV network in large and small markets across the country. In 2013, the NFL granted Bell the exclusive right to broadcast the Super Bowl in Canada on CTV until the 2018-2019 season. In 2013, following a public consultation process, the CRTC announced its intention to continue the practice of simultaneous substitution generally, but to disallow it for (among other things) broadcasts of the Super Bowl beginning in 2017, based on “the comments received from Canadians and the fact that the non-Canadian advertising produced for the Super Bowl is an integral part of this special event programming”. Pursuant to s. 9(1)(h) of the Broadcasting Act, the CRTC issued Broadcasting Order 2016-335 (Final Order), which prohibited simultaneous substitution for the Super Bowl as of January 1, 2017. Bell and the NFL appealed the Final Order to the Federal Court of Appeal. The Court reviewed the Final Order on a standard of reasonableness and dismissed the appeals, holding that it was reasonable for the CRTC to have interpreted the term “programming services” in s. 9(1)(h) to include an individual program like the Super Bowl, and that the CRTC’s policy determination that simultaneous substitution for the Super Bowl was not in the public interest was entitled to deference.

HELD: The primary ground of appeal advanced by Bell and the NFL was that the CRTC lacked the authority to issue a specific order prohibiting simultaneous substitution for the Super Bowl under s. 9(1)(h) of the Broadcasting Act. This question went directly to the limits of the CRTC’s statutory grant of power, and the applicable standard was therefore correctness. The CRTC did not have the statutory authority to issue the Final Order. The CRTC’s authority under s. 9(1)(h) was limited to issuing orders that required television service providers to carry specific channels as part of their service offerings and attaching terms and conditions to such mandatory carriage orders. Section 9(1)(h) did not give the CRTC a broad power to impose conditions outside the context of a mandatory carriage order. A reading of s. 9(1)(h) within the context of the surrounding provisions supported this view of its scope. This provision set out but one power among many that the CRTC had in relation to the issuance of licenses to broadcasting undertakings. The existence of these other specific powers weighed against reading s. 9(1)(h) as conferring a general power to impose terms and conditions on any carriage of programming services. This interpretation was also confirmed by the purpose for which s. 9(1)(h) of the Broadcasting Act was enacted - to ensure carriage of important Canadian services which market forces might not otherwise dictate, and to strengthen and enrich the cultural, political, social and economic fabric of Canada. Further, the legislative history supported an interpretation that s. 9(1)(h) only conferred on the CRTC the authority to issue mandatory carriage orders on specified terms and conditions and did not establish a “broad power to regulate the cable industry and impose any conditions necessary to do so”. Because the CRTC did not purport to mandate the carriage of any particular programming services, but instead sought to add a condition that must be fulfilled should a television service provider carry a Canadian station that broadcasted the Super Bowl, the issuance of the Final Order was not within the scope of its delegated power under s. 9(1)(h) of the Broadcasting Act. The Final Order should be quashed.

Bell Canada v. Canada (Attorney General), [2019] S.C.J. No. 66, Supreme Court of Canada, R. Wagner C.J. and R.S. Abella, M.J Moldaver, A. Karakatsanis, C. Gascon, S. Côté, R. Brown, M. Rowe and S.L. Martin JJ., December 19, 2019. Digest No. TLD-December162019012-SCC