Court orders Copyright Board to issue new distant signal tariff following dispute

The Copyright Board of Canada has been ordered by the Federal Court of Appeal to issue a new distant signal tariff for broadcasters after the court found the board went too far when asked to reconsider a previous tariff decision. The dispute began after BCE Inc., Cogeco Inc., Rogers Communications Inc., Shaw Communications Inc., Quebecor’s Inc.’s Videotron , and Telus Corp. applied for judicial review of a December 2018 decision of the Copyright Board in which the board increased the monthly tariff rate per subscriber for the rebroadcasting of out-of-market channels for the years 2014 to 2018 — to be applied retroactively. Several copyright groups also appealed the decision, including the Copyright Collective of Canada, Border Broadcasters Inc., the Canadian Broadcasters Rights Agency, the Canadian Retransmission Collective, the Canadian Retransmission Right Association, Direct Response Television Collective Inc., FWS Joint Sports Claimants Inc., and the Major League Baseball Collective of Canada, Inc. Federal Court of Appeal Justice Yves de Montigny ordered the board to issue a redetermination on the tariffs in July 2021, but according to a new decision written by Justice George Locke and released by the court on Thursday, May 8, the board went too far in what it altered when it finally issued its redetermination decision. Locke noted that as it decided to send the tariff decision back to the board for redetermination, instead of the court doing the recalculations itself, the court “expressed concern” about the long delay in calculating the tariffs to cover the 2014-2018 period. Locke noted the decision stated the recalculations would be “quite straightforward.” “Clearly, this court expected that the results of the redetermination would be quick and predictable enough to permit the parties to make business decisions in anticipation thereof even before the process was completed. In the end, the redetermination was not conducted expeditiously. It took almost 2½ years,” Locke wrote. In issuing its updated tariff decision, the board fixed the two issues identified by the court, including the issue of missing payment data for three Canadian proxy services — used to calculate royalty rates for the tariff — but it also went further, making two additional changes to its calculations which were not actually at issue, Locke wrote. (The first Court of Appeal judge’s decision noted that the Copyright Board used a “proxy” approach to setting the royalty rate, “which involves determining the initial value of a ‘proxy’ set of analogous services and then applying adjustments to bring that value into line with the characteristics of the distant signals to which the royalty applies.”) “After providing the parties with preliminary calculations, and hearing submissions from the parties thereon, the board removed what it concluded were double-counted payments in the original decision related to standard definition (SD) and high definition (HD) versions of a specialty service, and it added payments made by Telus related to the Fox News specialty service that the board concluded had been incorrectly omitted in the original decision,” Locke observed. The board also applied a 10 per cent profit margin adjustment for non-vertically integrated Canadian proxy services, as the court had contemplated in its decision, but it went further and determined that 10 per cent was "inappropriate" for U.S. specialty services and instead applied a 25 per cent profit margin adjustment, Locke said. The judge wrote that the board recognized its calculations “went beyond the issues that were considered” in the original appeal court decision, with the board saying in its redetermination decision that it should not “purposefully ignore apparent errors” and asserting that making the extra changes would not be in conflict with the original court decision, Locke wrote. But the copyright collective went back to the court to argue the board exceeded its jurisdiction. They argued the board “improperly overrode the treatment of evidence in the original decision” in regards to the profit margin error, Locke wrote, and that it “improperly reinstated the 25 per cent figure for profit margin adjustment in respect of U.S. proxy services after this court set aside that figure.” “The collectives also argue that, even if the board had the authority to make the contested adjustments to its calculations, its analysis on those issues was unreasonable,” Locke wrote. The judge noted the broadcasters disagreed with the copyright groups They argued the board “properly exercised its jurisdiction, and that its analysis was reasonable.” Ultimately, in Locke’s view, the board’s assessment of its jurisdiction was wrong and unreasonable. The board believed it was duty-bound to correct the additional errors it said it found, Locke wrote, but the judge decided that does not justify how they were handled, with the changes being added to the redetermination decision. Locke said the Copyright Board was wrong to find that the appeal court decision gave it space to make redeterminations on issues beyond those addressed by the first appeal court judge. “On a fair reading of the and the judgment therein, it is implicit that this court directed that the remainder of the original decision would be left undisturbed,” Locke wrote. “A conclusion that the provided for redetermination to extend beyond those two errors is unreasonable, and smacks of goal-oriented reasoning,” Locke found. The copyright collectives did not want the matter to go back to the Copyright Board for a redetermination yet again. They asked the court to make the board issue a new certified tariff. Locke ultimately decided to set aside the Copyright Board’s redetermination decision, and said the board should set per-month, per-subscriber royalty rates for large systems in the tariff, at rates suggested by the court ranging from a rate of $1.06 in 2014 to $1.38 in 2018. The rates for other systems should be determined based on the rates for large systems, the judge said. Sylvain Audet, general counsel for the Copyright Board, told The Wire Report in an email that the board is reviewing the decision and would not comment on the matter. hdaley@thewirereport.ca

Court orders Copyright Board to issue new distant signal tariff following dispute

Broadcast |
By Hannah Daley
| May 9, 2025

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

Court orders Copyright Board to issue new distant signal tariff following dispute

Broadcast | By Hannah Daley | May 9, 2025

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

FREE TRIAL

SUBSCRIBE

Related Stories

Google asks court to reverse Streaming Act contribution decision

SaskTel seeks judicial review, appeal of CRTC wholesale fibre decision

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Broadcast |
By Hannah Daley
| May 9, 2025