In a legal manoeuvre that has sent ripples through the television sector, Bell Canada is taking the federal broadcast regulator to court to stop the country's big networks from charging cable and satellite companies for their TV signals.
Bell, which owns Canada's largest satellite service, known as Bell TV, alleges in documents filed with the Federal Court of Appeal that the broadcast regulator has overstepped its jurisdiction and has asked a judge to intervene.
The move comes after the Canadian Radio-television and Telecommunications Commission said in May it would let large conventional networks, such as CTV and Global Television, negotiate with cable and satellite carriers on compensation for their signals.
If an agreement on compensation for the networks could not be worked out, the matter would be sent to an arbitrator.
The CRTC argues it has not explicitly approved the fees, but is only opening the door for the two sides to negotiate. However, Bell argues that the regulator has effectively paved the way for the networks to collect, since an arbitrator would ultimately impose a settlement on both sides. That can't be done without holding a public hearing, Bell argues.
The networks want to charge about 50 cents a subscriber, similar to fees that specialty channels are allowed to collect. But the CRTC has twice turned down requests by the networks to charge that much for their signals, in 2007 and again in 2008.
Estimates peg the value of the proposal, known as fee-for-carriage, at between $60-million and $90-million a year in revenue for the broadcasters, depending on the size of the network.
"No proceeding has been held by the CRTC, other than the proceedings in 2007 and 2008 … to consider the appropriateness of requiring the payment of fee-for-carriage," Bell says in the court documents.
The court filing is unorthodox, since it is extremely rare for a company to challenge the CRTC so directly.
A lawyer representing Bell in the case said last night he didn't know whether other cable and satellite TV carriers, including Rogers Communications Inc. and Shaw Communications Inc. would be joining the court filing, or launching similar challenges of their own. Those companies are being called to comment on the application.
The bitter debate has driven a wedge down the middle of the broadcasting industry in Canada, and these court filings demonstrate how contentious the issue has become. There is already tension between Bell Canada and CTV, the television network in which Bell owns a stake, and this case will only increase it since the two sides could meet in court.
Bell owns 15 per cent of CTVglobemedia, which is the parent company of CTV and also owns The Globe and Mail. The lawyer representing Bell would not comment on the filing beyond what the court documents say.
Paul Sparkes, CTV executive vice-president of corporate affairs, also reserved comment. "As the matter is before the courts, it's not appropriate for us to comment on the substance of the appeal," he said. "We are confident that the Federal Court of Appeal will see this for what it is, a stall tactic."
The CRTC had planned to discuss the matter, along with several other issues facing the TV sector, at hearings slated to begin Sept. 29. Submissions for those hearings, which outline the positions being taken by all the broadcasters and cable and satellite carriers, are to be filed by next week.
However, Bell wants the fee issue taken off the agenda.
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Grant Robertson