Federal Court of Appeal dismisses BDUs’ appeal of distant signal tariffs

The Federal Court of Appeal ruled Friday partially in favour of a group that challenged a tariff increase by the Copyright Board of Canada for over-the-air distant signal retransmission while dismissing an appeal of the same decision by six of the country’s largest TV service providers. BCE Inc., Cogeco Inc., Rogers Communications Inc., Shaw Communications Inc., Quebecor's Inc.'s Videotron , and Telus Corp. had applied for judicial review of the 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 groups (the collectives) 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. Justice Yves de Montigny took note of how broadcast distribution undertakings (BDUs) are allowed to retransmit over-the-air broadcast signals without authorization of programs’ copyright owners, however, the retransmission of “distant” signals requires the payment of royalties to a variety of collective societies that have filed tariffs, he wrote in a decision released Friday, which dealt with both applications. The judge’s decision said that both the groups of companies and the collectives accept the Copyright Board’s overall “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.” However, de Montigny said they disagree with the application of that method. The BDUs argument to set aside the board’s decision asserted that it did not take into account the new realities of modern viewing. They said the board didn’t account for simultaneous substitution, how frequently people view distant signal programming, and the different ways distant programming is received, among other arguments. Meanwhile, the collectives argued with the court that the board failed to use the latest available version of key pricing and subscribership data, used an inapplicable profit margin figure, imposed “an arbitrary input and overhead reduction,” and misapplied its own precedent with respect to a purported market power deduction, de Montigny said. Justice de Montigny said that the BDUs’ request for a stand-alone simultaneous substitution adjustment was raised for the first time in the request for review, not before the board, so it would not be considered by the court. Ultimately, de Montigny decided to dismiss the BDUs’ appeal while granting the collectives’ in part by setting aside the board’s decision “to the extent of its use of the wrong pricing data in its proxy price calculation and of the wrong profit margin,” without awarding any costs. - Reporting by Hannah Daley at hdaley@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca

Federal Court of Appeal dismisses BDUs’ appeal of distant signal tariffs

Court | July 23, 2021

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Federal Court of Appeal dismisses BDUs’ appeal of distant signal tariffs

Court | July 23, 2021

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