OTTAWA – In a 2-1 decision, the Federal Court of Canada said the CRTC does, in fact, have jurisdiction and can let broadcasters demand a fee from satellite, cable and telco TV carriers for the broadcasters’ off-air signals.
Given that the big Canadian broadcasters are now all owned by large distributors (we’re assuming Bell will soon get approval for its CTV purchase), this seems a pyrrhic victory. During the often nasty debate throughout the second half of 2009 (Stop the TV Tax vs. Local TV Matters), broadcasters and carriers lobbed verbal and digital grenades, each accusing the other of trying to harm Canadians by either putting local TV out of business (said the broadcasters) or gouging Canadians with increased fees (said the BDUs).
In the end, the loud, cranky campaign harmed the whole industry as Canadians didn’t know who or what to believe.
But we digress…
“Based on the Commission’s analysis in the 2010 Policy and the statutory provisions referred to above, I conclude that the implementation of the proposed value for signal regime is within the statutory authority of the Commission, subject only to the legal objections raised by the BDUs in this reference based on the Copyright Act and its legislative history,” writes Justice Karen Sharlow in agreeing with the Commission and the broadcasters.
Then of that Copyright Act bit, she later wrote:
“Put another way… Parliament has ranked the objectives of Canada’s broadcasting policy ahead of those statutory retransmission rights (of BDUs). I see nothing in the Copyright Act that would justify a reversal of that ranking if the Commission determines that the objectives of Canada’s broadcasting policy require the imposition of a regulation or licensing condition that would permit a private local television station to demand cash or other consideration from a BDU for the right to retransmit its signals.
“For substantially the same reasons, I conclude that it is open to the Commission to adopt a regulation or a licensing condition that would oblige a BDU to pay money to a private local television station for the right to retransmit its signals,” writes Sharlow.
While Justice Carolyn Laden-Stevenson agreed, Justice Marc Nadon did not, writing that imposing such a VFS regime is beyond the Commission’s purview.
Ed note: Regardless of where this ends up, or if the BDUs appeal it or not, VFS now seems like an antiquated issue. With the carriers owning so much of the content now, contract negotiations with other BDUs for carrying that content are going to be far more complex involving the slicing and dicing of shows across the broadcasting arms’ entire spectrum of videos for availability on TV, web and mobile platforms.
A fee for carriage within the old silo of a local TV station makes VFS seem an old world media solution to what ails traditional broadcasters and that world, as we’ve seen by the recent M&A activity and other developments, is rapidly changing.
– Greg O’Brien
