Copyright 2012, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Litigation & Dispute Resolution, February 2012
On February 9, 2012, the Supreme Court of Canada (the SCC) held in Reference re Broadcasting Act that Internet service providers (ISPs) are not subject to regulation by the Canadian Radio-television and Telecommunications Commission (CRTC) under the Broadcasting Act.
Background
In September 2008, the CRTC initiated a proceeding to consider its regulation of new media broadcasting organizations. In the course of this proceeding, a number of cultural groups advocated that the CRTC use its powers under the Broadcasting Act to impose a levy on ISPs that would go to support the creation and presentation of Canadian new media broadcasting content. The ISPs argued that the CRTC had no authority to regulate them under the Broadcasting Act because they are not broadcasters.
The CRTC eventually decided not to impose the levy. However, the issue of whether ISPs fell under the Broadcasting Act was important enough to justify referring the question to the Federal Court of Appeal (the FCA), which was asked to consider the following question:
Relying principally on the policy goals of the Broadcasting Act, the FCA held that ISPs were not broadcasting undertakings.
Decision of the Supreme Court
In a brief decision, the SCC affirmed the decision of the FCA. The SCC focused on the policy objectives of the Broadcasting Act, as reflected in provisions emphasizing the importance of "freedom of expression and journalistic, creative and programming independence" and the promotion of Canadian content.
According to the SCC, these provisions indicate that the Broadcasting Act is only intended to apply to undertakings with some measure of control over the content of programming. ISPs, on the other hand, have "no role to play in contributing to the Broadcasting Act's policy objectives." They simply act as a conduit for the transmission of programming, and play no role in the selection, origination, or packaging on content.
In drawing this distinction between a company with control over content and a company merely providing a means of transmission, the SCC relied on its decision in the 2004 case of Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers (SOCAN), a copyright case in which it concluded that the ISPs were not liable for copyright infringement for which they have simply acted as passive conduits.
Trend Continues Toward Limiting Liability of Mere Conduits
The decision in Reference re Broadcasting Act only applies to ISPs acting as passive conduits for broadcasting created and selected by others. An ISP that decides to get into the business of providing content could still be regulated under the Broadcasting Act.
The decision is the latest of several SCC decisions that limit the responsibility of intermediaries. In the SOCAN case, as noted above, the SCC stated that ISPs should not be held liable for copyright infringement passing through their servers. Similarly, in the SCC's 2011 decision in Crookes v. Newton, a majority of judges held that an ISP not warned of defamatory content on its servers is entitled to raise an "innocent dissemination" defence.
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