Interpreting the Message in Reference re Broadcasting Act

In a recent reference, the Supreme Court of Canada confirmed that when Internet Service Providers (ISPs) provide consumers with access to “broadcasting” programs through the Internet, they do not carry on “broadcasting undertakings” and are thus not subject to the Broadcasting Act (the “Act”). The Reference re Broadcasting Act, 2012 SCC 4, came about in 2008 when the Canadian Radio-television and Telecommunications Commission (CRTC) was reviewing a policy decision from 1999 that had exempted all “new media broadcasting undertakings” from Part II of the Broadcasting Act. Cultural groups that had proposed a levy on ISPs to fund the creation and presentation of new media broadcasting content were especially keen to determine whether ISPs fell within the category of new media. In response, the CRTC asked for the issue to be determined on a reference.

The Parties’ Positions

The CRTC submitted that broadcasting does take place on the Internet because the process of delivering content from a host server to end-users “involves the ‘transmission’ of the content…for reception by the public.” The core of the CRTC’s submission relied on the functional aspect of ISPs as the providers, and thus ultimately the broadcasters, of Internet content.

The Coalition, composed of Bell Aliant Regional Communications, LP, Bell Canada, Cogeco Cable Inc., MTS Allstream Inc., Rogers Communications Inc., Telus Communications Company and Videotron Ltd., and Shaw Communications Inc., submitted that the reference should be answered in the negative. It argued that ISPs “do not exercise any control over creating, choosing, or acquiring rights to the content that end-users receive.” As “mere conduits” for content, the Coalition submitted that ISPs play no “meaningful role” in achieving the Act’s policy objectives to promote Canadian artistic creativity and talent.

The Cultural Group, composed of the Alliance of Canadian Cinema, Television & Radio Artists (ACTRA), Canadian Film & Television Production Association (CFTPA), Directors Guild of Canada (DGC) and Writers Guild of Canada (WGC), submitted that the question should be answered in the affirmative. It argued that although the Internet makes no use of publicly owned radio frequencies, this fact should not automatically exclude it from the scope of Parliament’s intent. The Group suggested that Parliament intended for the Act to be “technologically neutral” and that the “passive role” of ISPs is irrelevant because the Act does not distinguish between the active or passive nature of a “distribution” or “programming undertaking.”

The Federal Court of Appeal’s Analysis

Justice Noël’s analysis hinged on whether the definition of broadcasting should be extended to the actor “whose sole involvement is to provide the mode of transmission.” In theory he agreed with the cultural group’s argument that the passive role of ISPs should not preclude it from the Act. However, he concluded that when considering “the context of the scheme and purpose” of the Act, this position could not be adopted.

Justice Noël relied largely on the 1891 precedent set by Electric Despatch v Bell Telephone, 20 SCR 83, which determined the meaning of “transmit”:

It is the person who breathes into the instrument the message which is transmitted along the wires who alone can be said to be the person who “transmits” the message. The owners of the telephone wires, who are utterly ignorant of the nature of the message intended to be sent, cannot be said … to transmit a message of the purport of which they are ignorant.

He also relied on Society of Composers, Authors and Music Publishers of Canada v Canadian Assn of Internet Providers (CAIP), 2004 SCC 45, which applied Electric Despatch to determine that ISPs “could not themselves be held to communicate information.”

In regards to the Act’s underlying policy objectives, Justice Noël agreed with the Coalition’s submission that because ISPs lack control over the content delivered to their customers, they are unable to promote the Act’s policy objectives. He thus rejected the Cultural Group’s assertion that Parliament intended to extend the definition of “broadcasting” on the basis that “only those who ‘transmit’ the ‘program’ can contribute to the policy objectives.”

The SCC Decision

The SCC unanimously upheld Justice Noël’s decision and agreed that “broadcasting undertaking,” when interpreted within the context of the Broadcasting Act, is “not meant to capture entities which merely provide the mode of transmission.” The SCC also emphasized that the Act’s policy objectives are clearly geared towards the production of Canadian “content.” Since ISPs do not play a role in the “selection, origination or packing of content,” the court concluded that ISPs do not engage the Act’s policy objectives, and thus they should be considered exemption from the definition of broadcasting.

Implications for the future of Canadian Content

Beneath the policy issues debated in this reference lies the tension between competing definitions of communications content. One view suggests that content is shaped by the technology that transmits it. This approach is most famously articulated by the communications scholar Marshall McLuhan, who coined the phrase, “The medium is the message.” In contrast, a more traditional view suggests that content is inherently distinct from the medium that communicates it. From this perspective, content is the product of its human creator and is thus independent from technology.

The decision in this reference clearly privileges the latter view. This approach is demonstrated by the court’s reliance on Electric Despatch, which firmly asserts that the message communicated is distinct from the medium used to transmit it. While McLuhan’s ideas may be intellectually fashionable, this decision demonstrates that in reality there is resistance to the idea that technology plays a fundamental role in shaping the products of human expression.

McLuhan’s theories are particularly relevant in the Internet age where modern communicators are both consumers and producers of Internet content. With simple technology, a music consumer can mash together downloaded songs to produce a new dance hit. YouTube allows those seeking fifteen minutes of fame to broadcast their talent for millions to watch, and more and more Canadians are opting to cancel their cable and watch their favourite television shows online. As a result of all these developments, the traditional conception of “broadcasting” is in danger of becoming obsolete.

As with many cases that require statutory interpretation, the court rightly looked towards the policy objectives behind the Act, which turned on the controversial matter of funding for Canadian content (CanCon). While the Cultural Group asked the courts to apply a liberal interpretation of the Act’s objectives, both the FCA and the SCC opted for the narrow interpretation advanced by the Coalition and concluded that it is not the court’s role to provide expansive interpretations of government policy.

While the court’s reasoning provided a sound judgment, their decision to exclude ISPs from the Act’s definition of broadcasting leads to further questions about the future of funding for Canadian content. According to the CRTC’s 1997 regulatory framework, all broadcasting distribution undertakings must contribute a minimum of 5% of their gross annual revenues “to the creation and presentation of Canadian programming.” While this policy is not uncontroversial, it has proven to be a success for Canadian artists and performers.

As more Canadians opt to watch their favourite television programs online, it is not difficult to imagine a world where cable TV is extinct. Without the need for cable television companies, there is a real danger that a significant source of funding for CanCon will be lost. This concern may be one reason why the Cultural Group was so adamant to ensure that ISPs are included within the definition of new media broadcasting undertakings.

The Future of “Broadcasting”

By suggesting that the exclusion of ISPs from the definition of broadcasting might have to be reassessed should the “content-neutral” role of ISPs change, Justice Noël alluded to the possibility that the Act’s current definition could evolve to be more in line with the digital age. From the US government’s attempt to introduce the Stop Online Piracy Act to the Canadian government’s recent introduction of a new online security bill, it is clear that the debate over who controls the Internet is continuously shifting. As a result, there is no certainty as to the degree of control that ISPs might exercise in the future. While their role remains content-neutral for now, it is possible that one day they might operate more like cable television companies which charge consumers based on the amount of content they choose to receive.

In this case, the message is clear that the task of re-defining broadcasting with the Legislature. The Broadcasting Act was conceived of in part to ensure that Canadian content had a fighting chance against the wealth of programming from south of the boarder. However, in the digital age, Canadian artists are now forced to compete against talent from all over the world. If the Act’s original policy objectives are still viewed as valid, then there are sound reasons for Parliament to re-visit the definition of broadcasting. Until then, the legal medium will continue to enforce Parliament’s original message.