Tory government has no position on value-for-signal, broadcasters tell Supreme Court

The Conservative government's elusive position on value-for-signal continues to play out in a case before the Supreme Court as broadcasters say the government has been silent about the policy and never responded to a CRTC report to cabinet on the issue two years ago. Broadcast distributors, including Cogeco Cable Inc., Rogers Communications Inc., Telus Communications Co. and Shaw Communications Inc. have appealed to the Supreme Court to overturn a divided Federal Court of Appeal decision issued last year that said the CRTC has the jurisdiction under the Broadcasting Act to implement its value-for-signal regime. The commission policy, laid out in a decision in March 2010, said over-the-air, local broadcasters can negotiate with broadcast distributors for compensation for the carriage of their free signals. A hearing for the case (No. 34231) is scheduled to start at 9:30 a.m. on Tuesday. The distributors argue Parliament has historically chosen not to grant broadcasters an exclusive copyright authorizing them to block the retransmission of their signals by cable and satellite companies. They point to its positions at the World Intellectual Property Organization (WIPO), where it has held the position that any treaty dealing with a new broadcasting retransmission right (similar to that in the value-for-signal regime) should include an “opt-out” provision. In a response to the distributors filed with the court last month, broadcasters Bell Media Inc. (owned by BCE Inc.), V Interactions Inc., and Newfoundland Broadcasting Co. Ltd. said the Conservative government has never publicly weighed in on the policy as proposed by the CRTC. The government has the authority to overrule, direct, or amend the broadcast regulator's decisions. “he Appellants have filed copious evidence on the legislative history of the Copyright Act and the federal Government’s stance on international treaty negotiations,” the broadcasters' factum said. “f the Government’s position is important, then that position is best revealed by the fact that it issued an Order in Council directing the CRTC to hold hearings and to report on a value-for-signal regime,” the broadcasters said. The federal Conservative cabinet asked the commission in a directive in September 2009 to “hold hearings on the implications and the advisability of implementing a compensation for the value of local television signal regime” and to report back to cabinet on the issue. As part of the hearings, the government asked the CRTC to consider “the comments of the general public on the impact of such a measure on consumers,” including any effects on local and regional news, information and public affairs programming, as well as how such a regime could impact “current and emerging business models.” The CRTC issued its report to cabinet in March 2010, releasing its value-for-signal ruling in a separate decision the same week. The decision acknowledged a “valid dispute” about the commission's legal authority to implement the policy and referred the issue to the Federal Court of Appeal for a ruling on its jurisdiction. The distributors argue the CRTC's value-for-signal regime is outside of its jurisdiction because it effectively gives broadcasters a new entitlement to copyright, or a retransmission right, under the Copyright Act. The commission said in its report to cabinet that satellite and cable TV distributor revenues have risen since 2002 and that, if necessary, consumers could afford “modest” price increases to support the policy. The broadcasters wrote in their factum last month that the government never responded to the CRTC's report to cabinet or its value-for-signal policy, which they call the “option to negotiate regime.” “Clearly, the Government believed that the option to negotiate regime is within the jurisdiction of the CRTC or it would not have ordered the CRTC to review and report on this matter,” the broadcasters said, adding that the government “has chosen not to respond or take any action.” One source with knowledge of the situation said it's common for the government not to respond to reports to cabinet. The broadcasters said the government has also “chosen not to participate in this proceeding or in that of the lower court” and has refrained from amending the Broadcasting Act or Copyright Act to “to prevent the option to negotiate regime from being implemented.” The Conservative government's copyright reform bills C-32 and C-11 were also “silent on the issue,” the broadcasters said. In a report of the House of Commons heritage committee in June 2009, Conservative MPs on the committee issued a dissenting opinion on fee for carriage that said they have the “most fervent and rigorous opposition to any potential fee for carriage system, either negotiated or imposed, that would have a detrimental effect on the consumer.” A government response attached to the committee report, by Heritage Minister James Moore, said that by “directing the CRTC to consider consumer interests, our Government is providing leadership to ensure that Canadians have access to programming at affordable rates.” The positions of Conservative MPs represented a somewhat different opinion by the following fall. In a blog post in September 2009, Michael Geist, the Canada research chair of Internet and e-commerce law at the University of Ottawa, wrote that several Conservative MPs “sent roughly the same letter” to the CRTC for its government-requested consultation on a value for signal. “onsumers are billed by cable companies for local television, but cable companies do not compensate local television stations. A rebalancing of this system is needed in order to sustain local television and service to consumers,” the letter from several Conservative MPs said, according to Geist's blog. Pierre Manoni, a spokesman for the Heritage Department, said in an emailed statement that it would be inappropriate for the government to comment on the issue because it is before the Supreme Court. Shaw, which finalized its purchase of the Global Television network last year, is against value-for-signal. Bell, which purchased the CTV network in 2011, said last year that it would elect to negotiate value for signal under the regime. The CRTC held a separate hearing about fee-for-carriage in 2008, during which CTV and Global said over-the-air broadcasters should be permitted to charge distributors 50 cents per signal per subscriber each month for the carriage of local, over-the-air channels. The CRTC rejected that proposal in a subsequent decision. news@thewirereport.ca

Tory government has no position on value-for-signal, broadcasters tell Supreme Court

Broadcast | April 13, 2012

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us