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Federal Court of Appeal Rules ISPs Not Broadcasters: May Be End of ISP Levy Proposal

Wednesday July 7, 2010

The Federal Court of Appeal issued is decision today [not online yet] on whether Internet providers can be considered broadcasters within the context of the Broadcasting Act.  The case is the result of last year's CRTC New Media decision in which many cultural groups called on the Commission to establish an ISP levy to fund Canadian content.  The ISPs argued that such a levy was illegal since they fell under the Telecommunications Act, not the Broadcasting Act.  The cultural groups argued that ISPs should be considered broadcasters in the case of the transmission of video programs.  The CRTC punted the issue to the Federal Court of Appeal.

The Federal Court of Appeal sided with the ISPs, ruling that providing access to broadcasting is not the same as broadcasting.  So long as ISPs maintain a content-neutral approach, they fall outside of the Broadcasting Act and should not be expected to play a role in promoting the policies found in the legislation.  The case is a huge win for the ISPs and - subject to an appeal to the Supreme Court of Canada or a legislative change - puts an end to the ISP levy proposal.  The case is also noteworthy from a net neutrality perspective, since the court emphasized that ISPs fall outside the Broadcasting Act so long as they remain content-neutral.  Should ISPs play a more active role, their ability to rely on the broadcast/transmission distinction would be lost.

The court set out the issue as follows:

the issue to be decided is whether, when providing access to the "transmission of programs ...", ISPs are broadcasting. The answer to this question hinges on a consideration of the findings of the CRTC as to how programs are transmitted on the Internet on the one hand, and the exact purport of the definition of the word "broadcasting", on the other.

The conclusion, which relied heavily on the Supreme Court of Canada Tariff 22 decision between SOCAN and the Canadian Association of Internet Providers:

Relying on the logic adopted by Binnie J. in CAIP in construing the word "communicate" under the Copyright Act, I am of the view that the definition of "broadcasting" is also directed at the person who transmits a program and that a person whose sole involvement is to provide the mode of transmission is not transmitting the program and hence, is not "broadcasting".

As for promoting the Broadcasting Act objectives, the court stated:

Because ISPs' sole involvement is to provide the mode of transmission, they have no control or input over the content made available to Internet users by content producers and as a result, they are unable to take any steps to promote the policy described in the Broadcasting Act or its supporting provisions. Only those who "transmit" the "program" can contribute to the policy objectives.

Finally, the comment that puts net neutrality back on the table:

In providing access to "broadcasting", ISPs do not transmit programs. As such, they are not "broadcasting" and therefore they do not come within the definition of "broadcasting undertaking". In so holding, I wish to reiterate as was done in CAIP that this conclusion is based on the content-neutral role of ISPs and would have to be reassessed if this role should change (CAIP, para. 92).

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