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Bell argues that the CRTC mistakenly characterized the Mobile TV app as a telecom service, when really it is a broadcasting undertaking and should actually be exempt from the provisions of the Telecom Act.Brent Lewin/Bloomberg

A federal appeal court is set to hear arguments on Bell Mobility Inc.'s mobile television app in a case that rests on the intersection of the separate laws governing telecommunications and broadcasting.

BCE Inc.-owned Bell Mobility filed an application to the Federal Court of Appeal last February after the Canadian Radio-television and Telecommunications Commission (CRTC) ordered the company to change the pricing of its Mobile TV app, which lets customers stream live and on-demand television programming on their mobile devices.

Bell previously charged $5 a month for the app and allowed users to stream up to 10 hours of programming with no impact on their monthly wireless data caps. The CRTC found this gave Bell's own app an unlawful preference over other applications or Internet services, which do count against monthly data usage.

The company won leave to appeal, but was forced to amend its pricing model last spring. It now charges $8 a month for the app and applies standard rates for time spent viewing programs while using cellular data. The Federal Court of Appeal is set to hear Bell's case on Tuesday in Toronto.

Arguments in the case will revolve around whether the app should be considered a broadcasting or telecom service. Telecom providers – whether they sell Internet, home phone or wireless services – are generally expected to treat all of the content that flows through their networks equally. This is basis of the principle often referred to as "net neutrality."

In making its decision last January, the CRTC relied on a rule in the Telecommunications Act that bars telecom providers from giving themselves or any other player "an undue or unreasonable preference." The Broadcasting Act, which is aimed in part at promoting Canadian culture and programming, contains no such rule.

Bell argues that the CRTC mistakenly characterized the Mobile TV app as a telecom service, when really it is a broadcasting undertaking and should actually be exempt from the provisions of the Telecom Act.

"Bell Mobility's retransmission of its Bell Mobile TV programs by telecommunications is part and parcel of 'broadcasting,'" the company wrote in a filing with the court ahead of Tuesday's hearing. "The entire activity from the acquisition and aggregation of programming to its retransmission by telecommunications to the public is thus excluded from the Telecommunications Act when done by a broadcasting undertaking such as Bell Mobility operating Bell Mobile TV."

Bell has said previously that its app represents innovation that the CRTC should encourage, and that it helped to keep prices affordable and attracted 1.6 million subscribers by the time of the ruling last year.

Lawyers from the federal government are intervening in the case in support of the CRTC's decision. They argue that the commission's conclusion that the Telecom Act applies is reasonable, because "the activity in question involves providing a mode of transmission, or a mere carriage function."

"It does not involve the kind of programming-related activity to which the Broadcasting Act is directed and therefore does not fall within the exemption for broadcasting," the government lawyers wrote in a court filing. "The application of [the undue preference section of the Telecom Act] permits the CRTC to ensure that vertically integrated carriers such as [Bell] do not leverage their market position to favour certain services and reduce competition and consumer choice."

Benjamin Klass, a graduate student who launched the original complaint against Bell in 2013, and two other individual respondents, have also filed arguments with the court. They argue that Bell's Mobile TV pricing is an attempt by a vertically integrated telecom and broadcasting operator "to escape the key obligations imposed on telecommunications common carriers: the non-discriminatory access to their facilities and the non-discrimination provisions [of the Telecom Act]."

The Canadian Network Operators Consortium Inc. (CNOC), an industry group representing independent Internet service providers, has also filed materials on the appeal.

The original complaint at the CRTC was combined with similar complaints about apps offered by Rogers Communications Inc. and Videotron Ltd. However, Rogers changed its pricing before the ruling and Videotron has also changed its pricing and did not appeal the ruling.

The court is likely to reserve its decision on the appeal until later this year.

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