2012 SCC 4, 2012 SCC 4

SUPREME COURT OF CANADA Citation: Reference re Broadcasting Act , 2012 SCC 4, [2012] 1 S.C.R. 142 Date: 20120209 Docket: 33884 IN THE MATTER OF the Broadcasting Act , S.C. 1991, c. 11; AND IN THE MATTER OF the Canadian Radio-Television and Telecommunications Commission’s Broadcasting Regulatory Policy CRTC 2009-329 and Broadcasting Order CRTC 2009-452; AND IN THE MATTER OF an application by way of a reference to the Federal Court of Appeal pursuant to ss. 18.3(1) and 28(2) of the Federal Courts Act , R.S.C. 1985, c. F-7.

Alliance of Canadian Cinema, Television and Radio Artists, Canadian Media Production Association, Directors Guild of Canada and Writers Guild of Canada Appellants v. Bell Aliant Regional Communications, LP, Bell Canada, Cogeco Cable Inc., MTS Allstream Inc., Rogers Communications Inc., TELUS Communications Company, Videotron Ltd. and Shaw Communications Inc. Respondents - and - Canadian Radio-Television and Telecommunications Commission Intervener Coram: McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis JJ.

Reasons for Judgment: (paras. 1 to 11): The Court Reference re Broadcasting Act , 2012 SCC 4, [2012] 1 S.C.R. 142 IN THE MATTER OF the Broadcasting Act , S.C. 1991, c. 11; AND IN THE MATTER OF the Canadian Radio-television and Telecommunications Commission’s Broadcasting Regulatory Policy CRTC 2009-329 and Broadcasting Order CRTC 2009-452; AND IN THE MATTER OF an application by way of a reference to the Federal Court of Appeal pursuant to ss. 18.3(1) and 28(2) of the Federal Courts Act , R.S.C. 1985, c.

F-7 Alliance of Canadian Cinema, Television and Radio Artists, Canadian Media Production Association, Directors Guild of Canada and Writers Guild of Canada Appellants v. Bell Aliant Regional Communications, LP, Bell Canada, Cogeco Cable Inc., MTS Allstream Inc., Rogers Communications Inc., TELUS Communications Company, Videotron Ltd. and Shaw Communications Inc. Respondents and Canadian Radio-television and Telecommunications Commission Intervener Indexed as: Reference re Broadcasting Act 2012 SCC 4 File No.: 33884. 2012: January 16; 2012: February 9.

Present: McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis JJ. on appeal from the federal court of appeal Communications law — Broadcasting — Internet — Internet service providers providing end-users with access to broadcasting over Internet — Whether Internet service providers are broadcasters when they provide end-users with access to broadcasting through Internet — Broadcasting Act, S.C. 1991, c. 11, ss. 2 , 3 .

The Canadian Radio-television and Telecommunications Commission referred to the Federal Court of Appeal the question of whether retail Internet service providers (“ISPs”) carry on, in whole or in part, “broadcasting undertakings” subject to the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to “broadcasting” requested by end-users. The court held that they do not. Held : The appeal should be dismissed.

The terms “broadcasting” and “broadcasting undertaking”, interpreted in the context of the language and purposes of the Broadcasting Act , are not meant to capture entities which merely provide the mode of transmission. The Broadcasting Act makes it clear that “broadcasting undertakings” are assumed to have some measure of control over programming. The policy objectives listed under s. 3(1) of the Act focus on content. When providing access to the Internet, which is the only function of ISPs placed in issue by the reference question, they take no

part in the selection, origination, or packaging of content. The term “broadcasting undertaking” does not contemplate an entity with no role to play in contributing to the Act’s policy objectives. Accordingly, ISPs do not carry on “broadcasting undertakings” under the Broadcasting Act when they provide access through the Internet to “broadcasting” requested by end-users. Cases Cited Referred to: Electric Despatch Co. of Toronto v. Bell Telephone Co. of Canada (1891), 1891 CanLII 11 (SCC) , 20 S.C.R.

83; Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2S.C.R. 427; Capital Cities Communications Inc. v. Canadian Radio-Television Commission, (SCC), [1978] 2 S.C.R.141. Statutes and Regulations Cited Broadcasting Act, S.C. 1991, c. 11, ss. 2(1) “broadcasting”, (3), 3(1). Telecommunications Act, S.C. 1993, c. 38, s. 2(1) “telecommunications common carrier”. APPEAL from a judgment of the Federal Court of Appeal (Noël, Nadon and Dawson JJ.A.), 2010 FCA 178, 322 D.L.R.(4th) 337, 404 N.R. 305, [2010] F.C.J.

No. 849 (QL), 2010 CarswellNat 2092, in the matter of a reference brought by the CanadianRadio-television and Telecommunications Commission regarding the Broadcasting Act. Appeal dismissed. Thomas G. Heintzman, Q.C., and Bram D. Abramson, for the appellants. John B. Laskin, Yousuf Aftab and Nicole Mantini, for the respondents Bell Aliant Regional Communications et al. Nicholas McHaffie and Dean Shaikh, for the respondent Shaw Communications Inc. No one appeared for the intervener.

The following is the judgment delivered by [1] The Court — In a 1999 report, the Canadian Radio-television and Telecommunications Commission (“CRTC”)concluded that the term “broadcasting” in s. 2(1) of the Broadcasting Act, S.C. 1991, c. 11, included programs transmitted to end-usersover the Internet. At that time, the CRTC concluded that it was not necessary to regulate broadcasting undertakings that providedbroadcasting services through the Internet. It exempted these “new media broadcasting undertakings” from the requirements of theBroadcasting Act.

In 2008, after public hearings, the CRTC revisited this exemption. One of the issues raised was whether Internetservice providers — ISPs — were subject to the Broadcasting Act when they provided end-users with access to broadcasting through theInternet. The CRTC opted to send this issue to the Federal Court of Appeal for determination on a reference (2010 FCA 178, 322 D.L.R.(4th) 337).

The specific reference question was: Do retail Internet service providers (ISPs) carry on, in whole or in part, “broadcasting undertakings” subject to theBroadcasting Act when, in their role as ISPs, they provide access through the Internet to “broadcasting” requested by end-users? [2] ISPs provide routers and other infrastructure that enable their subscribers to access content and services madeavailable on the Internet. This includes access to audio and audiovisual programs developed by content providers. Content providersdepend on the ISPs’ services for Internet delivery of their content to end-users.

The ISPs, acting solely in that capacity, do not select ororiginate programming or package programming services.

Noël J.A. held that ISPs, acting solely in that capacity, do not carry on“broadcasting undertakings”. [3] We agree with Noël J.A., for the reasons he gave, that the terms “broadcasting” and “broadcasting undertaking”,interpreted in the context of the language and purposes of the Broadcasting Act, are not meant to capture entities which merely providethe mode of transmission. [4] Section 2(1) of the Broadcasting Act defines “broadcasting” as “any transmission of programs . . . by radio wavesor other means of telecommunication for reception by the public”.

The Act makes it clear that “broadcasting undertakings” are assumedto have some measure of control over programming. Section 2(3) states that the Act “shall be construed and applied in a manner that isconsistent with the freedom of expression and journalistic, creative and programming independence enjoyed by broadcastingundertakings”.

Further, the policy objectives listed under s. 3(1) of the Act focus on content, such as the cultural enrichment of Canada,the promotion of Canadian content, establishing a high standard for original programming, and ensuring that programming is diverse. [5] An ISP does not engage with these policy objectives when it is merely providing the mode of transmission. ISPsprovide Internet access to end-users. When providing access to the Internet, which is the only function of ISPs placed in issue by thereference question, they take no

part in the selection, origination, or packaging of content. We agree with Noël J.A. that the term“broadcasting undertaking” does not contemplate an entity with no role to play in contributing to the Broadcasting Act’s policyobjectives. [6] This

interpretation of “broadcasting undertaking” is consistent with Electric Despatch Co. of Toronto v. BellTelephone Co. of Canada (1891), 1891 CanLII 11 (SCC), 20 S.C.R. 83. In Electric Despatch, the Court had to interpret the term“transmit” in an exclusivity contract relating to messenger orders. Like the ISPs in this case, Bell Telephone had no knowledge orcontrol over the nature of the communication being passed over its wires. This Court had to determine whether the term “transmit”implicated an entity who merely provided the mode of transmission.

The Court concluded that only the actual sender of the messagecould be said to “transmit” it, at p. 91: It is the person who breathes into the instrument the message which is transmitted along the wires who alone can be said tobe the person who “transmits” the message.

The owners of the telephone wires, who are utterly ignorant of the nature of the messageintended to be sent, cannot be said . . . to transmit a message of the purport of which they are ignorant. [Emphasis added.] [7] This Court relied on Electric Despatch in Society of Composers, Authors and Music Publishers of Canada v.Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427, a proceeding under the Copyright Act, R.S.C. 1985, c. C-42, toconclude that since ISPs merely act as a conduit for information provided by others, they could not themselves be held to communicatethe information.

[8] The appellants in this case argued that we should instead follow Capital Cities Communications Inc. v. CanadianRadio-Television Commission, (SCC), [1978] 2 S.C.R. 141. In Capital Cities, decided under a 1968 version of theBroadcasting Act, the CRTC had amended Rogers Cable’s licence, allowing Rogers to delete and substitute the television advertisementsin the American broadcasts it received before it distributed the broadcast to viewers.

The American broadcasting stations argued that theBroadcasting Act was ultra vires Parliament since it purported to regulate systems situated wholly within provincial boundaries. As partof this argument, the American stations attempted to sever the function of receiving television signals from the distribution orretransmission of those signals within a particular province. The Court rejected this severance of reception and distribution, stating that itwas a “single system” coming under federal jurisdiction.

The appellants argue before this Court that ISPs similarly form part of a singlebroadcasting system that is subject to regulation under the Broadcasting Act. [9] Like Noël J.A., we are not convinced that Capital Cities assists the appellants. The case concerned Rogers Cable’sability to delete and substitute advertising from American television signals. There was no questioning in Capital Cities of the fact thatthe cable television companies had control over content.

ISPs have no such ability to control the content of programming over theInternet. [10] Contrary to the submissions of the appellants, we need not decide whether the fact that ISPs use “routers” preventsthem from being characterized as telecommunications common carriers. Noël J.A. was not asked to decide whether ISPs are a“telecommunications common carrier” under s. 2(1) of the Telecommunications Act, S.C. 1993, c. 38.

Nor, based on the record beforeus, do we feel it appropriate for us to do so. [11] We therefore agree with Noël J.A.’s answer to the reference question, namely, that ISPs do not carry on“broadcasting undertakings” under the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to“broadcasting” requested by end-users. We would therefore dismiss the appeal with costs. Appeal dismissed with costs. Solicitors for the appellants: McCarthy Tétrault, Toronto. Solicitors for the respondents Bell Aliant Regional Communications et al.: Torys, Toronto.

Solicitors for the respondent Shaw Communications Inc.: Stikeman Elliott, Ottawa.