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Advertising and Canadian Cable Television: a Problem in International Communications Law Katherine Swinton

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Advertising and Canadian Cable Television: a Problem in International Communications Law Katherine Swinton Osgoode Hall Law Journal Article 1 Volume 15, Number 3 (December 1977) Advertising and Canadian Cable Television: A Problem in International Communications Law Katherine Swinton Follow this and additional works at: http://digitalcommons.osgoode.yorku.ca/ohlj Article Citation Information Swinton, Katherine. "Advertising and Canadian Cable Television: A Problem in International Communications Law." Osgoode Hall Law Journal 15.3 (1977) : 543-590. http://digitalcommons.osgoode.yorku.ca/ohlj/vol15/iss3/1 This Article is brought to you for free and open access by the Journals at Osgoode Digital Commons. It has been accepted for inclusion in Osgoode Hall Law Journal by an authorized editor of Osgoode Digital Commons. OSGOODE HALL LAW JOURNAL Vol. 15 No. 3 December 1977 ADVERTISING AND CANADIAN CABLE TELEVISION- A PROBLEM IN INTERNATIONAL COMMUNICATIONS LAW By KATHERINE SWINTON* A. INTRODUCTION While both Canadians and Americans are generous with rhetoric about good neighbourliness and "the longest undefended border in the world," there have been periods in which such words are said with tightened lips, as one side or the other pursues unilateral policies that seem to bely belief in the undefended border myth and indicate, instead, support for Robert Frost's statement that "[glood fences make good neighbours."1 The last few years have witnessed several examples of unilateral action by Canada in various sectors of the economy aimed at controlling foreign investment and resource export, nationalization of key industries, and regulation of broadcasting in ways that appear inimical to the traditional open relationship with the United States. The purpose of this article is to study one facet of the Canadian-Am- erican relationship-specifically, Canadian action taken to regulate cable television operation in Canada and the American reaction to the measures adopted. © Copyright, 1977, Katherine Swinton. * The author is an Assistant Professor, Osgoode Hall Law School, York University. The author would like to express her appreciation to Professor Michael Reisman, Yale Law School, who read and commented on earlier drafts of this paper. 1 Robert Frost, "Mending A Wall" in Selected Poems (Toronto: Holt, Rinehart & Winston, 1966) at 23. OSGOODE HALL LAW JOURNAL [VOL. 15, NO. 3 On December 21, 1972, the Canadian Radio-Television Commission2 granted an application to amend the broadcasting licence of a Calgary cable television company carrying television signals from a station in Spokane, Washington. In issuing its order, the CRTC included a novel condition in the licence, requiring the applicant to delete or permit the deletion of com- mercial advertisements received from broadcasting stations not licensed to broadcast in Canada (that is, American stations) on the request of local broadcasting stations with whom it had entered into an agreement on this subject approved by the CRTC. In the vacated spots, the licensee was to sub- stitute advertisements from the local broadcaster or other appropriate replace- ment material.3 The imposition of this condition was a significant event, which the United States Department of State had awaited with some appre- hension since July, 1971, when the CRTC had issued a comprehensive policy statement on cable television in Canada.4 The most controversial component of that policy was the termination of the prohibition on altering received broadcast signals. The CRTC would now permit cable televisionu operators to remove commercial advertising from the signals of stations not licensed to serve Canada and to substitute other material. In the reality of Canadian broadcasting, the unlicensed station was a euphemism for American television broadcasters. Shortly after the order, on February 13, 1973, the State Department is- sued a protest to the Canadian government with regard to the Calgary licence. A widespread implementation of this policy, or any other communications policy bearing upon advertising carried by United States television stations, carries grave implications. Canadians are the heaviest users of cable television in the world, and most of the CATV operations rely on American television stations for their signals. Certain border stations in the United States have come to rely on the access provided to Canadian markets by CATV in order to attract an advertising clientele wishing to reach Canadians. The commer- cial deletion policy and other governmental policies threatened this estab- lished situation. The State Department's protest was the first of many interchanges on the issue of advertising and cable television between Canada and the United States over the next few years. In that period, a wide variety of participants, including domestic courts, regulatory agencies, legislative bodies, and private corporations, had an impact on the dispute and the evolution of cable tele- vision policy and law. Their roles and contributions provide an interesting basis for studying the international decision-making process in operation. The word "international" is used advisedly, despite a tendency towards parochialism which often emerges in studies of Canadian-American relations. Frequently, the relationship is described as unique and isolated from the inter- 2 Now the Canadian Radio-Television and Telecommunications Commission, estab- lished by S.C. 1974-75-76, c. 49, s. 3(1). Hereinafter referred to as CRTC. SCalgary Cable TV Ltd., Community Antenna Television Ltd., 72 CRTC Decisions 364. 4 CRTC, Canadian Broadcasting: A Single System (July 16, 1971). The contents of this policy will be discussed in the text, infra, following footnote 100. 5 Hereafter referred to as CATV. 19771 Cable Television national system. Indeed, while sometimes contentious, the relationship is far more cordial than that between most states. A recognition of interdependency, coupled with a similarity of cultures and, in the past, a Canadian deference to American policy, has led to cooperative efforts to address problems, either institutionally or informally.6 While the current broadcasting dispute is geo- graphically a Canadian-American problem that will be worked out through dialogue and cooperation, it cannot be regarded in isolation from the larger system of international relations. The issue involved is communications-who, if anyone, should control the flow of communications in the world and to what extent. There is currently an avid global interest in communications, and that consciousness, plus decisions taken in this larger system, affect the positions adopted by various participants in the Canadian-American dispute. Any decisions taken in the regional context similarly have an impact upon international communications law. In an interdependent world, no regional problem is insulated from the global arena.7 B. THE SIGNIFICANCE OF COMMUNICATIONS Communications is an especially sensitive concern in the world today. Various elite groups seek to dominate the media because of their multiple uses for economic, political, cultural, military, and educational purposes. Any resource which is in limited supply and capable of many uses is valuable be- cause of the law of supply and demand. Telecommunications media fall with- in such a category of valuable resources because of their scarcity. The number of frequencies available for broadcast use is limited, and excessive demand by any one state for control of the radio spectrum, or large parts thereof, creates the risk of serious interference with the broadcast demands of another state, either by preventing access to the spectrum by that state or by causing technical interference with actual broadcasts of programmes. 8 Elites in societies today realize the advantages that derive from the con- trol of telecommunications media. Before discussing the uses to which control can be put, one should first consider the impact of telecommunications. The impact of television, and to a much lesser degree of radio, is instantaneous and not delayed, as in the print medium. While the reader must use his ima- 8 The International Joint Commission, established by the Boundary Waters Treaty of 1909 R.S.C. 1970, c. 1-20, Sch., is often cited as a prime example of such coopera- tion. See, for example, M. Cohen, The Regime of Boundary Waters - The Canadian- United States Experience (1975), 146 Receuil des Cours 219. 7 The problem, from one perspective, is communications, since advertisements, which are the focus of the Canadian restrictions, can be regarded as both an integral part of the broadcast and as a vital way to finance programming. Yet from another per- spective, the problem is an economic one, with the Canadian measures no more than a commonplace trading measure designed to restrict the flow of a certain class of goods (in this case, advertisements) across the border. It is difficult to regard the economic issue divorced from the communications issue, as further discussion will demonstrate. 8 D. Leive, International Telecommunications and International Law: The Regula- tion of the Radio Spectrum (Leyden: Sijthoff, 1970) at 1, 16; H. Leroy, Treaty Regu- lation of International Radio and Short Wave Broadcasting (1938), 32 Am. J. of Int. L. 719. As both Leive and Leroy point out, the first efforts to regulate telecommunica- tions at an international level focused on questions of frequency allocation and reduction of interference with broadcast signals. OSGOODE HALL LAW JOURNAL [VOL. 15, No. 3 gination to concretize the information conveyed by print, the television viewer is presented with a picture of reality
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