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BROADCASTING - Licensing - Broadcast undertakings - Television - Distribution undertakings - Discretionary television service - Non-Canadian TV stations

Tuesday, October 03, 2017 @ 8:38 AM  

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Appeal by VMedia Inc. (VMedia) from the decision of the Canadian Radio-television and Telecommunications Commission (CRTC) denying its application to add QVC to the List of non-Canadian programming services and stations authorized for distribution (List). VMedia was a licensed Canadian Broadcast Distribution Undertaking (BDU). QVC Inc. was a United States (US) company operating a television shopping channel, QVC, which was distributed by cable and satellite services in the US. The appellant, acting as a sponsor, applied to the CRTC to add QVC to the List. The respondent, Rogers Media Inc., intervened to oppose the appellant's application. The CRTC determined that QVC Inc. would be carrying on a broadcasting undertaking in Canada if added to the List, therefore QVC Inc. had to obtain a license or be otherwise authorized pursuant to a valid exemption order before QVC could be distributed in Canada by the appellant or a different BDU. The CRTC found that it could not issue a broadcasting license to QVC Inc. because it was non-Canadian. It also ruled that QVC Inc. was ineligible to operate pursuant to the Teleshopping Exemption Order. The CRTC noted that it had previously denied QVC’s request to remove the condition that a teleshopping service be Canadian from the Teleshopping Exemption Order because there was insufficient evidence of a benefit to Canada and its consumers.

HELD: Appeal allowed. The existence of the List implied that a non-Canadian programming service could be distributed in Canada without the non-Canadian being considered to be carrying on a broadcasting undertaking within Canada. If a service was added to the List, the non-Canadian broadcaster was not required to be licensed or to operate pursuant to an exemption. The Canadian BDU, which was required to be licensed under the Broadcasting Act (Act), distributed the authorized service. In its reasons, the CRTC stated that its general policy had been to authorize the distribution of those non-Canadian services in Canada that did not compete in whole or in part with Canadian pay or specialty services. Despite reiterating that competition was the principal determination, the CRTC also indicated, without any explanation, that the appellant's application to add QVC to the List engaged sections 4 and 32 of the Act. These provisions stipulated that the Act applied “in respect of broadcasting undertakings carried on in whole or in part within Canada” and that it was an offence to carry on a broadcasting undertaking without a license or pursuant to a valid exemption order. It appeared that the CRTC was requiring the sponsoring Canadian BDU to demonstrate that a non-Canadian broadcaster would not be carrying on a broadcasting undertaking within Canada and would not be competitive with any Canadian service if its programming service was added to the List. However, the most recent statement of the information requirements for sponsors did not suggest that an application to add a new service to the List would trigger sections 4 and 32, as opposed to just paragraph 20(1)(f) of the Broadcasting Distribution Regulations and the competition test. The Commission's failure to explain why this additional inquiry was engaged or, how this seemingly new basis for authorizing non-Canadian services was consistent with the Act, undermined the justification, transparency, and intelligibility of the decision. The CRTC did not assess whether the appellant's retransmission of the unaltered US feed of QVC in Canada constituted the transmission of programs by QVC Inc. The CRTC may have assumed that non-Canadian programming services were undertakings for the transmission of programs carried on within Canada. However, without any analysis as to whether QVC, in particular, met this definition, it was not clear how sections 4 and 32 of the Act were engaged. The matter was referred back to the CRTC for reconsideration.

2251723 Ontario Inc. (c.o.b. VMedia) v. Rogers Media Inc., [2017] F.C.J. No. 872, Federal Court of Appeal, W.W. Webb, D.G. Near and M.J.L. Gleason JJ.A., September 15, 2017. Digest No. TLD-Oct22017005