CRTC has no expertise to determine ‘value’ for signals: Cogeco

The CRTC is a subordinate legislative body that does not have the authority or expertise to determine the value of over-the-air broadcasts as part of its proposed value-for-signal regime, Cogeco Cable Inc. said in a factum filed with the Supreme Court. Cogeco and other broadcast distributors are asking the Supreme Court to overturn a divided Federal Court of Appeal decision last year that said the CRTC has the jurisdiction under the Broadcasting Act to implement its value-for-signal regime, in which cable and satellite broadcast distributors would compensate conventional broadcasters for the carriage of their free, over-the-air signals. A hearing (case No. 34231) has been scheduled for April 19. Cogeco, Rogers Communications Inc., Telus Communications Co. and Shaw Communications Inc. are arguing at the Supreme Court, as they did at the court of appeal, that the value-for-signal regime is outside of the CRTC's jurisdiction because it effectively gives broadcasters a new entitlement to copyright, or a retransmission right, under the Copyright Act. Cogeco wrote in a factum filed Jan. 23 that the CRTC does not have the expertise to intervene in negotiations, if necessary, to help determine the value of carrying broadcast signals. “The Copyright Board has well-recognized institutional expertise in the valuation of private rights and the setting of terms and conditions for the usage of such rights, including retransmission rights. The CRTC does not,” Cogeco said. “Given the detailed treatment of such value in the retransmission regime administered by the Copyright Board, it cannot have been Parliament’s intention to accord the CRTC a right to step in as an arbitrator and determine good faith or fair value.” Cogeco said that, in previous regulatory decisions, the CRTC has acknowledged that the Copyright Board is the appropriate authority to look at the financial impact of broadcast rights on cable and satellite distributors. “he creation and arbitration of private rights in retransmissions of broadcast signals is not at the core of the CRTC’s competence, nor is it supported by unambiguous statutory language,” Cogeco wrote. The company said the royalties for retransmissions of foreign broadcast signals are set by the Copyright Board under the Copyright Act, “not by the CRTC, nor in market-based negotiations as proposed by the CRTC.” The CRTC's proposed value-for-signal regime, laid out in broadcasting decision 2010-167 in March 2010, said local, conventional broadcasters would have the option to negotiate “value” for their over-the-air signals in exchange for giving up the CRTC's regulatory protection for the over-the-air signals. The channels would have the authority to pull or “delete” their signals from distributors, including their rights to popular American programming, if the two sides could not reach a carriage deal. The CRTC said it would “minimize its involvement” in reaching the terms and conditions of disputed carriage arrangements, “intervening only in cases where there is evidence parties are not negotiating in good faith, and would consider acting as arbitrator only where both parties make a request.” At the time, the CRTC acknowledged there was a “valid dispute” about its legal authority to implement the regime due to interpretations of the Copyright Act, and referred the issue to the Federal Court of Appeal for a ruling on its jurisdiction in the matter. 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. “The CRTC's proposed retransmission consent regime would in pith and substance grant this copyright through regulation,” Rogers and Telus said in a joint factum filed Monday. “A subordinate legislative body such as the CRTC has only the jurisdiction granted to it by statute.” The companies wrote that the commission's proposed regime “would result in a serious conflict between copyright policy as set by Parliament and broadcasting policy as set by the CRTC.” The broadcasting landscape has changed significantly since the CRTC value-for-signal decision in March 2010 and the Federal Court of Appeal hearings in September the same year. The country's largest broadcast groups have been purchased by two major broadcast distributors. Shaw, in May 2010, announced a $2-billion acquisition of Canwest Global Communications Corp. In September 2010, BCE Inc. announced a $3.2-billion agreement to purchase CTVglobemedia's broadcasting assets, including the CTV network, just days before the Federal Court of Appeal hearings began. Neither acquisition had received regulatory approvals, and during the hearings, Canwest's and CTV's lawyers continued arguments in support of the CRTC's value-for-signal regime while distributors Bell Canada and Shaw argued it was a form of copyright outside the commission's jurisdiction. Shaw, now the owner of the Global Television network, remains against value-for-signal. It also filed a factum with the court Monday siding with the distributors. “It is well established that a subordinate legislative body such as the CRTC has only the jurisdiction granted to it by statute. Bodies of this nature must adhere strictly to the confines of their statutory authority and cannot trespass in areas where the legislature has not assigned them authority,” Shaw's factum said. Bell Canada is no longer arguing with the distributors but BCE's Bell Media Inc. subsidiary is arguing in support of the regime on the side of the broadcasters. Kevin Crull, president of Bell Media, which owns the CTV network, said in a statement last September that the “federal court was correct in finding that Value for Signal falls within the CRTC's jurisdiction, and we are confident the Supreme Court of Canada will agree when they are presented with the relevant facts and arguments.” The dollar value of the regime to over-the-air broadcasters is unclear, but during a similar debate about fee-for-carriage in 2008, 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, a proposal the CRTC rejected. Rogers, which has 2.3 million cable subscribers, says on its website that a “fee-for-carriage” regime could increase subscriber bills by $6 to $10 per month. Distributors could also absorb any potential costs. The broadcasters, or the respondents, have until the end of March to file responses. The respondents are expected to include Bell Media Inc., V Interactions Inc., and Newfoundland Broadcasting Co. sdoyle@thewirereport.ca

CRTC has no expertise to determine ‘value’ for signals: Cogeco

Broadcast | February 7, 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