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Canada’s Surpeme Court Rules ISPs Shouldn’t Be Regulated as Broadcasters

Canada’s Supreme Court ruled that Internet service providers such as Rogers Communications Inc. (RCI/B) and BCE Inc. (BCE) shouldn’t be regulated as broadcasters when they offer video and audio content online.

The country’s broadcasting law isn’t meant to “capture entities which merely provide the mode of transmission,” such as companies that offer Internet access, the court said in a unanimous judgment.

The ruling may enable companies such as Rogers to contain costs as they look to expand offerings of on-demand TV shows and movies, and consumers spend more time watching video over the Internet.

The Canadian Radio-television and Telecommunications Commission, which oversees conventional broadcasters, asked the Federal Court of Appeal to rule on whether Internet service providers should be regulated as such when they provide access to content such as television shows and movies online.

The appeals court concluded that ISPs shouldn’t be considered broadcasters in such situations. Groups representing actors, musicians, writers and other content producers appealed the decision to the Supreme Court, noting that consumers are increasingly watching TV programs and listening to radio over the Internet.

The Alliance of Canadian Cinema, Television and Radio Artists proposed that ISPs pay a levy to fund development and production of Canadian content. Conventional broadcasters already pay such fees.

‘Content-Neutral Conduits’

A consortium of companies, including Rogers and Bell, argued that ISPs are “merely content-neutral conduits for content provided by others.”

The CRTC decided in 1999 that it would exempt content offered online or through mobile devices from the country’s broadcasting regulations. While the regulator reaffirmed that decision in 2009, it asked the Federal Court of Appeal for a ruling on the issue.

The country’s Broadcasting Act attempts to promote Canadian content, the Supreme Court noted in its judgment, adding that Internet service providers don’t contribute to the goal of this policy.

The case number is 33884 on the Supreme Court’s docket.

To contact the reporter on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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