Bell argues at Federal Court the CRTC made a jurisdictional mistake
TORONTO — Bell Mobility finally had its day in Federal Court on Tuesday, a year after the CRTC ruled the wireless provider had violated the Telecommunications Act by giving undue preference to its Bell Mobile TV subscribers when it exempted the mobile TV service from the data caps generally applied to customers of its wireless services.
Shortly after CRTC Decision 2015-26 was issued in January 2015, Bell Mobility filed for leave to appeal the decision. (In the same decision, the CRTC also found Vidéotron was in violation of the Telecom Act for exempting its illico.tv service from data charges, but Vidéotron has since complied with the CRTC’s direction to eliminate the data cap exemption from its service and it is not appealing the CRTC’s decision.)
Bell’s position is that Bell Mobile TV is a broadcasting service, and therefore governed by the Broadcasting Act. In its memorandum of fact and law submitted to the Federal Court of Appeal in July 2015, the company argued the CRTC made a jurisdictional error when it applied the unjust discrimination section of the Telecom Act, Section 27(2), while ignoring the exclusionary provision in Section 4, which states the Telecom Act “does not apply in respect of broadcasting by a broadcasting undertaking.”
On Tuesday, Bell’s lawyer, Neil Finkelstein of law firm McCarthy Tétrault, appeared before a three-judge panel at the Federal Court of Appeal building in Toronto, to argue his client’s case. Arguing opposing sides were the Attorney General of Canada, the Canadian Network Operators Consortium (CNOC) and Ben Klass, who filed the original Part 1 application in November 2013 regarding Bell Mobility’s billing practices for its Bell Mobile TV service.
“This is not a case simply of statutory interpretation.” – Neil Finkelstein, McCarthy Tétrault
“This is not a case simply of statutory interpretation,” Finkelstein started by saying, arguing the question before the court was not which of the two statutes (the Telecom Act or the Broadcasting Act) applied to Bell Mobility, but which is applicable to the Bell Mobile TV service.
In a carefully and precisely worded oral argument, Finkelstein described how Bell Mobility delivers content to Bell Mobile TV subscribers and argued that it meets the definition of “broadcasting by a broadcasting undertaking,” as those terms are defined in Section 2(1) of the Broadcasting Act. In addition, Finkelstein said Bell’s Mobile TV service meets the broadcasting policy intent of Section 3(1)(h) of the Broadcasting Act which stipulates “all persons who are licensed to carry on broadcasting undertakings have a responsibility for the programs they broadcast.”
He explained to the three appeal court justices that the Bell Mobile TV service, from its acquisition of programming content at the front end all the way through the distribution of that content to end user devices, is “broadcasting and indivisible,” he said. That is to say, Bell Mobility controls the content it aggregates and delivers to Bell Mobile TV subscribers, to ensure the right content goes point-to-point to the right end user, Finkelstein said. His point was that Bell Mobility is responsible for the content it delivers via the Bell Mobile TV service, unlike an ISP that has no control over video content that travels through its network.
The reason Finkelstein emphasized this distinction between Bell Mobility’s control over its Mobile TV content and the lack of control ISPs generally have over data transmitted across their networks is that the company’s position is it does not act solely as a telecommunications provider, but operates as a broadcasting undertaking when it offers its Bell Mobile TV service.
He pointed out that the CRTC, in Decision 2015-26, recognized the Bell Mobile TV service as a broadcasting service when it stated in paragraph 15 of its decision: “The Commission considers that Bell Mobility and Vidéotron, in acquiring the mobile distribution rights for the content available on their mobile TV services, in aggregating the content to be broadcast, and in packaging and marketing those services, are involved in broadcasting. In this regard, it notes that no party to this proceeding disputed that mobile TV services constitute broadcasting services as contemplated by the DMBU (Digital Media Broadcasting Undertaking) exemption order.”
However, the CRTC followed that up by stating in its decision that the wireless access networks used by Bell Mobility and Vidéotron to transport their mobile TV services “are the very same networks they use to deliver their wireless voice and data telecommunications services, which are clearly telecommunications services subject to the Telecommunications Act. Moreover, these services’ traffic is currently treated the same as other traffic in Bell Mobility’s and Vidéotron’s wireless access networks.”
The CRTC went on to say in its decision rendered nearly one year ago that “the functions performed by Bell Mobility and Videotron to establish the data connectivity and provide transport over their wireless access networks would be the same whether the content being transported is their mobile TV services, other broadcasting services, or non-broadcasting services. That is, the purpose of these functions is to establish data connectivity and transport the content — agnostic as to the content itself.”
Addressing the appeals court, Finkelstein took issue with the CRTC’s assertion, saying the Commission had committed a legal error. Bell Mobility isn’t allowed to be agnostic about the content on its Bell Mobile TV service because it is responsible for the programming content, Finkelstein argued.
He concluded by saying whether the Telecom Act applies to Bell’s Mobile TV service is a “true question of jurisdiction”. If the Broadcasting Act applies, then the CRTC had no jurisdiction to rule Bell Mobility was in violation of Section 27(2) of the Telecom Act, Finkelstein said. Finally, he said CRTC Decision 2015-26 is unreasonable and asked that it be set aside.
“The appellant is trying to overstretch.” – Christian Tacit, CNOC
Representing CNOC, Ottawa lawyer Christian Tacit reiterated the CRTC’s conclusion that Bell Mobility transports its Bell Mobile TV service over the same access network it uses to deliver wireless voice and data telecom services, and is therefore subject to the Telecom Act. Unlike Bell’s FibeTV service, the Bell Mobile TV service is currently treated the same as any other traffic on the Bell Mobility network, he said. Further, the CRTC’s conclusion that the Bell Mobility network functions in a way that’s agnostic to the content being transmitted is “a finding of fact”, Tacit said, and is not a legal error on the part of the CRTC.
He took issue with Finkelstein’s suggestion that the CRTC made a jurisdictional error when it ruled Bell Mobility had violated the Telecom Act, saying “the appellant is trying to overstretch” in this argument, without providing a single piece of evidence to question the CRTC’s authority. There’s no decision-maker better suited to make the ruling that the CRTC did, Tacit said.
The CRTC’s solicitor, Daniel Roussy, appeared before the appeals court but said he had nothing to add to the memorandum of fact and law submitted in August by the CRTC to the Federal Court of Appeal. Essentially, the CRTC’s memorandum reasserts its findings and determination in Decision 2015-26 and counters the questioning of its authority by submitting it had the necessary jurisdiction to render its decision. A lawyer representing Telus Communications, Christopher Rootham, also appeared before the court but declined to present an oral submission.
Ottawa lawyer Philip Palmer appeared on behalf of Ben Klass and two other private individuals, David Ellis and Fenwick McKelvey. Palmer argued that Bell Mobility’s assertion that its Bell Mobile TV is an “indivisible” system is unsustainable. The content transmitted across the Bell Mobile TV service is broken up into data packets just like any data traffic is over the Internet, Palmer said. But while the transport of the data is treated the same, the implication of the Bell Mobile TV service being exempted from data caps is that every other Bell Mobility customer (who is not a Bell Mobile TV subscriber) is being discriminated against in terms of data costs, Palmer said.
“If Bell does win the appeal, then it leaves the CRTC in a very tough position because its power to oversee the operations of these vertically integrated companies would I think be severely restricted.” – Ben Klass
Essentially, Bell Mobility is trying to transform itself from being a vertically integrated telecom company in order to shield itself from complying with the provisions of the Telecom Act, Palmer said, adding it’s “a naked attempt” to escape regulation.
Representing the office of the Attorney General of Canada, John Tyhurst said the original complaint against Bell Mobility’s billing practices for the Bell Mobile TV service was about pricing and undue preference, and not about culture or programming or other aspects of the policy objectives included in the Broadcasting Act. The question of whether Bell Mobility, as a vertically integrated carrier, was giving undue preference to its Bell Mobile TV subscribers in violation of the Telecom Act was correctly addressed by the CRTC in its decision, Tyhurst said.
Speaking with Cartt.ca in a phone interview the day after the case was before the appeal court, Klass said he expects it will be several months before the judges issue a ruling. He also said that if Bell Mobility loses the appeal it could apply for the matter to be heard before the Supreme Court. But he didn’t want to speculate about what the next step might be if Bell Mobility wins the appeal.
“What I can say is if Bell does win the appeal, then it leaves the CRTC in a very tough position because its power to oversee the operations of these vertically integrated companies would I think be severely restricted,” he said.
“For companies who operate both as carriers and as broadcasters, as Bell and Rogers and the other vertically integrated companies do, they would essentially have escaped from the ability of the CRTC to regulate significant portions of their operation. That would be a situation that I don’t think is really in anyone’s interest, aside from those companies,” Klass said.
