Canada's Supreme Court Rules Against Retransmission Fees for Broadcasters

The highest legal bench said the CRTC, the country's TV regulator, has no jurisdiction to order so-called value for signal compensation from cable and satellite TV providers.

TORONTO – Canadian cable and satellite TV operators have won their fight in the Supreme Court of Canada against having to pay out retransmission fees for local TV signals.

The high court on Thursday in a narrow 5-to-4 decision ruled the CRTC, the country’s broadcast regulator, has no jurisdiction to impose a so-called value for signal regime on the broadcast industry.

“The provisions of the Broadcasting Act, considered in their entire context, may not be interpreted as authorizing the CRTC to implement the proposed value for signal regime,” Supreme Court justices McLachlin, LeBel, Fish, Rothstein and Moldaver said in their majority decision.

The win for cable and satellite TV operators marks a reversal from an earlier Federal Court of Appeal ruling that held the CRTC can allow domestic broadcasters to negotiate first-time compensation from carriers for their local TV signals.

The CRTC started the country’s retransmission debate when it referred the issue to the Federal Court of Appeals to secure the right to impose carriage fees for local TV signals.

As in the U.S., Canadian broadcasters have sought first-time compensation from cable and satellite TV operators as they argue their business model can no longer be sustained by advertising revenue alone.

But the Supreme Court, in ruling over-the-air TV should remain free for TV viewers, criticized the CRTC for over-reaching.

“Policy statements are not jurisdiction conferring provisions and cannot serve to extend the powers of the subordinate body to spheres not granted by Parliament,” the high court wrote.

Supreme Court justices Abella, Deschamps, Cromwell and Karakatsanis in a dissenting opinion said the CRTC’s regulatory jurisdiction under the Broadcasting Act did extend to allowing a proposed value-for-signal regime, and that there was no conflict with the federal Copyright Act, as cable and satellite operators argued.

The latest stage in Canada’s retransmission debate follows industry consolidation, which has seen major cable and satellite TV operators like BCE and Shaw Communications now avoid paying for local TV signals to newly-acquired conventional TV networks.