Court File No. 34231 IN THE SUPREME COURT OF CANADA (ON APPEAL FROM THE FEDERAL COURT OF APPEAL) IN THE MATTER OF AN APPLICATION BY WAY OF A REFERENCE TO THE FEDERAL COURT OF APPEAL PURSUANT TO SECTIONS 18.3(1) AND 28(2) OF THE FEDERAL COURTS ACT, R.S.C. 1985, C.F-7 B E T W E E N: COGECO CABLE INC. Appellant - and - BELL MEDIA INC. (FORMERLY CTV GLOBEMEDIA INC.), CANWEST TELEVISION LIMITED PARTNERSHIP, NEWFOUNDLAND BROADCASTING CO. LTD., V INTERACTIONS INC. AND ATTORNEY GENERAL OF CANADA Respondents A N D B E T W E E N: ROGERS COMMUNICATIONS INC. and TELUS COMMUNICATIONS Appellants - and - BELL MEDIA INC. (FORMERLY CTV GLOBEMEDIA INC.), CANWEST TELEVISION LIMITED PARTNERSHIP, NEWFOUNDLAND BROADCASTING CO. LTD., V INTERACTIONS INC. AND ATTORNEY GENERAL OF CANADA Respondents A N D B E T W E E N: SHAW COMMUNICATIONS INC. Appellant - and - BELL MEDIA INC. (FORMERLY CTV GLOBEMEDIA INC.), CANWEST TELEVISION LIMITED PARTNERSHIP, NEWFOUNDLAND BROADCASTING CO. LTD., V INTERACTIONS INC. AND ATTORNEY GENERAL OF CANADA Respondents THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION (CRTC) Intervener FACTUM OF THE RESPONDENTS, BELL MEDIA INC. (formerly CTVglobemedia Inc.), NEWFOUNDLAND BROADCASTING CO. LTD. and V INTERACTIONS INC. (Rules 36 and 42 of the Rules of the Supreme Court of Canada) Goodmans LLP Nelligan O’Brien Payne LLP Bay Adelaide Centre 55 O’Connor Street 333 Bay Street Suite 1500 Suite 3400 Ottawa, Ontario Toronto, ON M5H 2S7 K1P 6L2 Benjamin Zarnett Dougald Brown Robert Malcolmson Tel: (613) 231-8210 Peter Ruby Fax: (613) 788-3661 Julie Rosenthal Tel: (416) 979-2211 Ottawa Agent for the Respondents, Fax: (416) 979-1234 Bell Media Inc. (formerly CTVglobemedia Inc.), Newfoundland Broadcasting Co. Ltd. Lawyers for the Respondents, and V Interactions Inc. Bell Media Inc. (formerly CTVglobemedia Inc.), Newfoundland Broadcasting Co. Ltd. and V Interactions Inc. ORIGINAL TO: THE REGISTRAR Supreme Court of Canada 301 Wellington Street Ottawa, ON K1A 0J1 COPIES TO: Parties Counsel Agent Cogeco Cable Inc. McCarthy Tétrault LLP Cavanagh Williams Suite 5300, Toronto-Dominion Conway Baxter LLP Bank Tower Suite 401 Toronto, ON M5K 1E6 1111 Prince of Wales Drive Ottawa, ON K2C 3T2 Neil Finkelstein Steven G. Mason Colin S. Baxter Daniel G.C. Glover Tel: (613) 780-2011 Tel: (416) 601-8200 Fax: (613) 569-8668 Fax: (416) 868-0673 Ottawa Agent for the Appellant Rogers Communications Fasken Martineau Dumoulin LLP Inc. and TELUS 55 Metcalfe Street Communications Company Suite 1300 Ottawa, ON K1P 6L5 Gerald (Jay) Kerr-Wilson Julia Kennedy Tel: (613) 236-3882 Fax: (613) 230-6423 Shaw Communications Inc. Davies Ward Philips & Vineberg Gowlings LLP LLP 160 Elgin Street 1 First Canadian Place Suite 2600 44th Floor Ottawa, ON K1P 1C3 Toronto, ON M5X 1B1 Kent E. Thomson Ed Van Bemmel James Doris Tel: (613) 786-0212 Sarah Weingarten Fax: (613) 788-3500 Tel: (416) 863-0900 Fax: (416) 863-0871 Attorney General of Department of Justice Canada Canada Civil Litigation Section Bank of Canada Building East Tower – Room 1104 234 Wellington Street Ottawa, ON K1A 0H9 Attention: Alexander Gay / Noreen Majeed Canadian Radio-Television Canadian Radio-Television and and Telecommunications Telecommunications Commission Commission Central Building 1 Promenade du Portage Gatineau, QC J8X 4B1 Attention: John Keogh / Valerie Dionne / Crystal Hulley TABLE OF CONTENTS OVERVIEW ........................................................................................................................1 PART I – Statement of Facts ...........................................................................................................5 (a) The Regulatory Regime Established by the Broadcasting Act ........................ 5 (i) The CRTC’s General Mandate, the Canadian Broadcasting System and Canadian Broadcasting Policy ...................................................... 5 (ii) Licensing and Regulation Under the Broadcasting Act ...................... 6 (iii) Local Television Stations and BDUs ................................................... 7 (iv) The Current Regulated Relationship Between Local Television Stations and BDUs ............................................................................... 9 (b) The CRTC Determines that, in Order to Fulfill Canadian Broadcasting Policy, There Is a Need for Change, Namely, a Need for the Option to Negotiate Regime ........................................................................................... 13 (c) The Proposed Option to Negotiate Regime ................................................... 16 (d) The Decision Under Appeal ........................................................................... 19 PART II – Question in Issue ..........................................................................................................23 PART III – Statement of Argument ...............................................................................................23 (a) The Broadcasting Act Grants Jurisdiction to the CRTC to Implement The Option to Negotiate Regime ........................................................................... 23 (i) The Statutory Powers of the CRTC ................................................... 23 (ii) The Test for Assessing the Jurisdictional Validity of a Regulatory or Licensing Measure Imposed by the CRTC ................................... 29 (iii) The Option to Negotiate Regime Is Designed to Implement the Broadcasting Policy Objectives Set Out in the Broadcasting Act ..... 30 (iv) The Case Law Cited by the Appellants Makes It Clear that the CRTC Has Jurisdiction Under the Broadcasting Act to Implement the Option to Negotiate Regime ........................................................ 35 (v) The Option to Negotiate Regime Is Not Inconsistent With Government Policy ............................................................................ 39 (b) The Conclusion that the Broadcasting Act Grants Jurisdiction to the CRTC Is Not Affected by the Copyright Act ............................................................ 40 (i) The Option to Negotiate Regime Does Not Conflict With the Copyright Act .................................................................................... 42 (ii) The Copyright Act Was Not Intended to Provide an Exhaustive Declaration of the Law Applicable to BDUs’ Retransmission of Local Television Signals .................................................................... 53 (c) The Legislative History of the Copyright Act Does Not Limit the CRTC’s Jurisdiction and Powers Under the Broadcasting Act .................................... 58 (i) The Copyright Act Does Not Implement Broadcasting Policy ......... 61 (ii) The CRTC’s Past Statements as to Its Jurisdiction Are of No Assistance .......................................................................................... 62 (d) Conclusion ...................................................................................................... 66 PART IV – Submissions on Costs .................................................................................................66 PART V – Order Sought ................................................................................................................66 PART VI – List Of Authorities ......................................................................................................67 PART VII – Statutes And Regulations Relied Upon ..................... Error! Bookmark not defined. OVERVIEW 1. This factum is filed on behalf of the Respondents, Bell Media Inc. (formerly CTVglobemedia Inc.), V Interactions Inc. and Newfoundland Broadcasting Company Limited, each of whom operates one or more private local television stations. The Respondents file this single factum in response to the three facta filed by the Appellants. 2. The question before this Court is whether the majority of the Federal Court of Appeal was correct in its answer to the question posed by the CRTC’s Reference to that court. The Reference Question was: Is the CRTC empowered under the Broadcasting Act to establish a regime to enable private local stations to choose to negotiate with BDUs a fair value in exchange for the distribution of the programming services broadcast by those local stations? 3. The correct answer to the Reference Question is yes. As held by the majority below, the CRTC has the jurisdiction to establish such a regime. (This proposed regime is referred to herein as the “option to negotiate regime”.) 4. The CRTC has determined that such a regime, whereby broadcast television stations can negotiate for compensation for the fair value of their respective programming services “is necessary for the fulfillment of the policy objectives set out in section 3” of the Broadcasting Act. The CRTC made this factual determination after a public hearing process, which included the review of tens of thousands of written submissions, and an oral hearing that lasted for over two weeks. While the Appellants refer to concerns about blackouts, increased cost - 2 - to consumers and thus the wisdom of such a regime,1 such considerations, which were raised before the CRTC, are here misplaced. The critical factual finding, which informs the analysis of the CRTC’s jurisdiction, is the CRTC’s finding that such a regime is necessary to fulfil Canadian broadcasting policy. 5. The option to negotiate regime would form part of the regulatory regime established by the Broadcasting Act whereby cable companies and satellite companies (formally referred to as “broadcasting distribution