Content is Key: Supreme Court rules ISPs are not “Broadcast Undertakings”
Thursday, February 9, 2012 by Sundeep Chauhan
In a swift and short ruling (3 weeks & 11 paragraphs), the Supreme Court of Canada dismissed an appeal from a judgment of the Federal Court of Appeal brought by the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), Canadian Media Production Association (CMPA), Directors Guild of Canada (DGC) and Writers Guild of Canada (WGC) (collectively the “Coalition”). The Coalition argued that Internet Service Providers (ISPs) such as Shaw, Rogers, TELUS and Bell - who provide Internet access to their customers - should be considered “broadcasters” because they distribute content and therefore should contribute to the Canadian broadcasting system by way of cultural levies such as Canadian content funds in the same manner as traditional broadcasters. Canada’s highest court disagreed.
By way of a factual background, the Supreme Court offered the following:
In a 1999 report, the Canadian Radio-television and Telecommunications Commission (“CRTC”) concluded that the term “broadcasting” in s. 2(1) of the Broadcasting Act, S.C. 1991, c. 11, included programs transmitted to end-users over the Internet. At that time, the CRTC concluded that it was not necessary to regulate broadcasting undertakings that provided broadcasting services through the Internet. It exempted these “new media broadcasting undertakings” from the requirements of the Broadcasting Act. In 2008, after public hearings, the CRTC revisited this exemption. One of the issues raised was whether Internet service providers – ISPs – were subject to the Broadcasting Act when they provided end-users with access to broadcasting through the Internet. The CRTC opted to send this issue to the Federal Court of Appeal for determination on a reference (2010 FCA 178, 322 D.L.R. (4th) 339).
The specific question before the Supreme Court in this appeal was:
Do retail Internet service providers carry on, in whole or in part, “broadcasting undertakings” subject to the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to “broadcasting” requested by end-users?
The Supreme Court noted that the only function of ISPs placed in issue by the reference question before them was the provision of access to the Internet by the ISP.
The Supreme Court agreed with the reasoning given by Noël J.A. for the Federal Court of Appeal that the terms “broadcasting” and “broadcasting undertaking”, when interpreted in the context of the language and purposes of the Broadcasting Act, are not meant to capture those entities which “merely provide the mode of transmission”. The Supreme Court further noted that the Broadcasting Act makes it clear that broadcasting undertakings are “assumed to have some measure of control over programming”. In contrasting the service of an ISP, the Supreme Court stated ISPs “take no part in the selection, origination, or packaging of content.”
In further analyzing the applicability of the Broadcasting Act on ISPs, the Supreme Court referenced the policy objectives listed under s.3(1) of the Broadcasting Act which also focus on content, such as “the cultural enrichment of Canada, the promotion of Canadian content, establishing a high standard for original programming, and ensuring that programming is diverse.” In reaching its decision that an ISP is not a “broadcast undertaking”, the Supreme Court stated bluntly that “An ISP does not engage with these policy objectives when it is merely providing the mode of transmission” and the “term “broadcasting undertaking” does not contemplate an entity with no role to play in contributing to the Broadcasting Act’s policy objectives”.
The Supreme Court noted that their decision was consistent with their previous ruling in Electric Despatch Co. of Toronto v. Bell Telephone Co. of Canada. In Electric Despatch the Supreme Court was asked to determine whether the term “transmit” implicated an entity who provided the mode of transmission. It was decided that:
The owners of the telephone wires, who are utterly ignorant of the nature of the message intended to be sent, cannot be said ... to transmit a message of the purport of which they are ignorant
Comparing it to the ISPs in the current appeal, the Supreme Court noted that in Electric Despatch, Bell also had no knowledge or control over the nature of the communication being passed over its systems. The Supreme Court further noted that they relied on Electric Despatch in SOCAN v. CAIP where it was found that ISPs act as conduits for information and do not “communicate” the information.
The Supreme Court quickly dismissed two key arguments of the Coalition. In referencing Capital Cities Communications Inc. v. Canadian Radio-Television Commission, the Coalition argued that ISPs form part of a single broadcasting system that is subject to regulation under the Broadcasting Act. The Supreme Court distinguished this case from Capital Cities given the Court’s conclusion that ISPs have no ability to control the content of programming over the Internet.
The Supreme Court further noted that they did not, based on the record before them, need to decide “whether the fact that ISPs use “routers” prevents them from being characterized as telecommunications common carriers.”
The Coalition, representing Canadian actors, directors, producers and screenwriters, issued a statement immediately following the release of the decision that they "will continue to press for solutions to ensure all those involved in broadcasting, including ISPs, have a regulatory responsibility to contribute to the Canadian broadcasting system." Given the position of the Supreme Court as Canada’s court of last resort, one can only assume this means a lobbying effort geared at legislative reform.
Case Citation: Reference re Broadcasting Act, 2012 SCC 4
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