33884

IN THE SUPREME COURT OF (ON APPEAL FROM THE FEDERAL COURT OF APPEAL)

BETWEEN:

ALLIANCE OF CANADIAN CINEMA, TELEVISION & ARTISTS, CANADIAN MEDIA PRODUCTION ASSOCIATION, DIRECTORS GUILD OF CANADA AND WRITERS GUILD OF CANADA Appellants - and -

BELL ALIANT REGIONAL COMMUNICATIONS, LP, , CABLE INC., MTS ALLSTREAM INC., COMMUNICATIONS INC., COMMUNICATIONS COMPANY, VIDEOTRON LTD. AND INC. Respondents - and -

CANADIAN RADIO-TELEVISION AND COMMISSION Intervener

FACTUM OF THE RESPONDENTS REGIONAL COMMUNICATIONS, LP, BELL CANADA, COGECO CABLE INC., MTS ALLSTREAM INC., INC., TELUS COMMUNICATIONS COMPANY AND VIDEOTRON LTD. (Rule 42 of the Rules of the Supreme Court of Canada)

Torys LLP Borden Ladner.Gervais LLP Suite 3000 World Exchange Plaza 79 Wellington St. W. 100 Queen Street, Suite 1100 Box 270, TD Centre , K113 1J9 , Ontario M5K 1N2 Nadia Effendi John B. Laskin Tel: 613.787.3562/[email protected] Tel: 416.865.7317/[email protected] : 613.230.8842 Yousuf Aftab Agent for the Respondents Bell Aliant Regional Tel: 416.865.7376/[email protected] Communications, LP, Bell Canada, Cogeco Fax: 416.865.7380 Cable Inc., MTS Allstream Inc., Rogers Communications Inc., TELUS Communications Counsel for the Respondents Bell Aliant Regional Company and Videotron Ltd. Communications, LP, Bell Canada, Cogeco Cable Inc., MTS Allstream Inc., Rogers Communications Inc., TELUS Communications Company and Videotron Ltd. McCarthy Tetrault LLP Cavanagh Williams Conway Baxter LLP Suite 5300, 66 Wellington St. W. Suite 401, 1111 Prince of Wales Drive Toronto Dominion Bank Tower Ottawa, Ontario K2C 3T2 Toronto, Ontario M5K 1E6 Colin S. Baxter Thomas G. Heintzman Tel: 613.780.2012/[email protected] Tel: 416.601.7627/theintzm mccarthy.ca Fax: 613.569.8668 Bram Abramson Agent for the Appellants, Alliance of Canada Tel: 416.601.8354/[email protected] Cinema, Television & Radio Artists, Canadian Fax: 416.868.0673 Media production Association, Directors Guild of Canada and Writers Guild of Canada Counsel for the Appellants, Alliance of Canada Cinema, Television & Radio Artists, Canadian Media production Association, Directors Guild of Canada and Writers Guild of Canada

Stikeman Elliott LLP Stikeman Elliott LLP Suite 1600 Suite 1600 50 O'Connor Street 50 O'Connor Street Ottawa, Ontario K 1 P 6L2 Ottawa, Ontario K1P 6L2

Nicholas McHaffie Nicholas McHaffie Tel: 613.566.0546/[email protected] Tel: 613.566.0546/[email protected] Fax: 613.230.8877 Fax: 613.230.8877 Counsel for the Respondent, Shaw Communications Agent for the Respondent, Shaw Inc. Communications Inc.

Canadian Radio-television and Telecommunications Commission Central Building 1 Promenade du Portage Gatineau, QC J8X 4B1 Mailing address: Ottawa, Ontario KlA ON2 John Keogh Tel: 819.953.3990/613.952 .7226/j [email protected] James Wilson Tel: 819.953.0633/[email protected] Fax: 819.994.0218 Counsel for the Intervener, Canadian Radio-Television and Telecommunications Commission TABLE OF CONTENTS

PART I — OVERVIEW AND FACTS 1 Overview 1 The ISP Coalition 3 Definition of "ISP" in the reference 3 The regulation of and telecommunications in Canada 3 The Broadcasting Act 4 Legislative history of the Broadcasting Act 7 The Telecommunications Act 9 Provisions addressing relative application of the two statutes 10 ISPs have been regulated only under the Telecommunications Act 11 The 13 The main participants in the Internet 13 Content, application and service providers 14 End-users 14 ISPs 15 ISPs function as mere conduits for the transfer of online content 15 The CRTC' s reference to the Federal Court of Appeal 16 The factual record before the Federal Court of Appeal 17 The decision of the Federal Court of Appeal 18 PART II — QUESTIONS IN ISSUE 21 PART III — ARGUMENT 22 Overview 22 Standard of review 23 No reason to disturb finding that ISPs are content-neutral transmission intermediaries 23 ISPs in the copyright context 24 ISPs in the defamation context 25 The Court of Appeal applied well-established principles of statutory interpretation 26 Broadcasting Act context shows that ISPs are not "broadcasting" and cannot be "broadcasting undertakings" 27 The Court of Appeal properly considered and applied this Court's reasoning in Electric Despatch and SOCAN Tariff 22 30 Electric Despatch speaks to the issue of "transmission" 30 SOCAN Tariff 22 addresses the scope of the exemption and the meaning of "broadcasting" 32 The Court of Appeal properly distinguished Capital Cities, Dionne and the Radio Reference 33 The Broadcasting Act and the Telecommunications Act work symbiotically to regulate ISPs as "telecommunications common carriers" 34 "Technological neutrality" is neither threatened nor relevant 36 PART IV — SUBMISSIONS ON COSTS 36 PART V — ORDER REQUESTED 37 PART VI — AUTHORITIES 38 A. Statutory Authorities 38 B. Jurisprudence 38 C. Secondary Sources 39 PART VII — STATUTES 40 Broadcasting Act, S.C. 1991, c. 11 40 Copyright Act, R.S.C. , 1985, c. C-42 45 Telecommunications Act, S.C. 1993 c. 38 46 PART I — OVERVIEW AND FACTS Overview 1. This case concerns a discrete issue: whether there is any reason for this Court to interfere with the holding of the Federal Court of Appeal that Internet Service Providers (ISPs) do not broadcast, and therefore do not become "broadcasting undertakings" within the meaning of the Broadcasting Act, when they provide end-users to broadcasting available on the Internet. There is no dispute that ISPs are otherwise regulated as telecommunications service providers under the Telecommunications Act.

2. The Court of Appeal arrived at its decision in two stages. First, it assessed the evidence of what ISPs do in the context of how programs are transmitted on the Internet to conclude that "ISPs' sole involvement is to provide the mode of transmission," and that ISPs "have no control or input over the content made available to Internet users by content producers." Second, the Court applied established principles of statutory construction to determine that the Broadcasting Act does not capture as "broadcasting undertakings" persons whose sole involvement is to provide the mode of transmission. The Court of Appeal committed no reviewable error of fact or law in reaching this conclusion.

3. The appellants attempt to impugn the Court of Appeal's decision by raising fact and policy issues that do not bear on, and did not help to answer, the question referred to it. This case does not concern whether broadcasting is available on the Internet. That fact is not in dispute. Nor does it concern whether Parliament intended the Broadcasting Act to be " neutral." As the Federal Court of Appeal recognized, that broadcasting is available over myriad says nothing about "who is doing the broadcasting." Nor does this appeal concern whether the Canadian broadcasting system constitutes a "single system." That assertion does not answer the question of what does or does not comprise part of that "system."

4. The Court of Appeal's decision turned, as all parties agreed it should, on the meaning of "broadcasting undertaking" under the Broadcasting Act. The interpretive exercise required the Court to consider the ordinary meaning of the phrase in the context of the Broadcasting Act as a whole. Moreover, it required the Court to consider the scope of the Telecommunications Act, to 2 which ISPs are ordinarily subject, because the reference was framed by the boundaries of the respective Acts.

5. A proper interpretation of the term "broadcasting undertaking" in the context of the two statutes leads inexorably to the conclusion that ISPs do not act as "broadcasting undertakings" within the meaning of the Broadcasting Act. First, as the Court of Appeal found, ISPs are merely content-neutral conduits for content provided by others. In their role as Internet-access providers, they do not generate, edit, manipulate or package content that is transmitted through their infrastructures. They provide only the "pipes" through which traffic associated with Internet content (such as web pages), applications (such as video games), and services (such as email) are transferred between content, application, and service providers and end-users, or between end- users. They exchange Internet traffic in the same fashion regardless of the nature or substance of that traffic — and, in particular, regardless of whether that traffic comprises "programs." Their role is analogous to that of a company in the transmission of a telephone call. This finding echoes prior rulings of this Court and many others.

6. Second, to regulate content-neutral conduits as broadcasting undertakings would be to ignore the express words and objectives of the Broadcasting Act. The Act seeks to protect and promote Canadian culture. To this end, it is concerned with content and imposes on its licensees mandatory obligations regarding the substance of programming. The Act provides that all broadcasting undertakings are expected to exercise control in the "creation and presentation of programming" to maximize use of Canadian resources. The Act further provides that all broadcasting undertakings are responsible for the programs they broadcast, and that distribution undertakings are expected to give priority to the carriage of Canadian programming.

7. ISPs are by their very nature unable to comply with any of these specific requirements — let alone the Broadcasting Act's broader policy objectives. As the Federal Court of Appeal cautioned, "it would be highly unusual for a statute to be construed in a manner that overshoots its objectives."

8. Third, the structure of the Telecommunications Act and the Broadcasting Act reveals a complementary system, under which each Act's jurisdiction is limited by the other. Both Acts expressly account for the possibility that "broadcasting undertakings" will rely on 3

"telecommunications common carriers," like ISPs, to disseminate broadcasting. In each instance, however, the Acts leave little doubt that the character of the "telecommunications common carrier" does not change merely because the "broadcasting undertaking" uses its facilities as a mode of transmission.

9. There is thus no basis to transform an ISP, which this Court has recognized as being a content-neutral conduit, into a "broadcasting undertaking" simply because a subscriber uses the ISP to access broadcasting available on Internet.

The ISP Coalition

10. The respondents filing this memorandum of argument comprise a coalition of Canadian ISPs: Bell Aliant Regional Communications, LP, Bell Canada, Cogeco Cable Inc., MTS Allstream Inc., Rogers Communications Inc., TELUS Communications Company and Videotron Ltd. (collectively, the "ISP Coalition").

11. The ISPs comprising the ISP Coalition, combined, serve every province in Canada and provide over 80 percent of the country's consumer high- connections.'

Definition of "ISP" in the reference

12. The Canadian Radio-television and Telecommunications Commission narrowly defined the ISP activity at issue in this reference: "the legal question relates solely to the functions of retail ISPs in providing access to the Internet to end-users and not to other roles that an ISP may assume.552 The term "ISP" is therefore used in this factum to refer only to an ISP performing its signature function — providing end-users access to content available on the Internet.

The regulation of broadcasting and telecommunications in Canada

13. The Broadcasting Act and the Telecommunications Act are distinct federal statutes, conferring authority on the CRTC to regulate, respectively, broadcasting and

telecommunications . 3

I Engelhart Affidavit, paras. 5-6, Appellants' Record ("AR"), Vol. III, Tab 30, pp. 122-123 2 Broadcasting Order CRTC 2009-452, Reference to the Federal Court of Appeal dated July 28, 2009, para. 10, AR, Vol. I, Tab 4, p. 57 3 Broadcasting Act, S.C. 1991, c. 11; Telecommunications Act, S.C. 1993, c. 38 4

14. The reference question before the Court of Appeal concerned the scope of the Broadcasting Act. This question necessarily implicated the Telecommunications Act — under which ISPs have always been regulated — because the CRTC asked the Court of Appeal to determine the appropriate boundary between the two statutes. As the CRTC stated in the proceeding leading to this reference:

The legal issue as to whether ISPs are subject to the Broadcasting Act raises fundamental questions regarding the distinction, for the purpose of the Broadcasting Act and the Telecommunications Act, between telecommunications common carriers and broadcasting undertakings.4

15. To date, ISPs have been regulated under the Telecommunications Act, even when providing their end-users access to audiovisual content over the Internet.5 The issue in the reference was not whether ISPs fall into an unregulated void when they provide access to broadcasting on the Internet. The issue was whether ISPs should continue to be subject to the Telecommunications Act when end-users access broadcasting over the Internet or whether they should sometimes be subject to the Telecommunications Act and sometimes to the Broadcasting Act, depending only on end-users' choices at any given moment.

The Broadcasting Act

16. The Broadcasting Act defines the scope of the CRTC's authority to regulate "broadcasting undertakings." Section 4 specifies that the CRTC's jurisdiction under the Act extends to "broadcasting undertakings" operating wholly or partially within Canada.6 These undertakings include those that are not-for-profit and those that are part of another undertaking or activity.? Section 4(4), however, makes clear that "telecommunications common carriers" are not "broadcasting undertakings" by specifying that the Act does not apply "to any telecommunications common carrier, as defined in the Telecommunications Act, when acting solely in that capacity."8

4 Broadcasting Order CRTC 2009-452, paras. 4-9, AR, Vol. I, Tab 4, pp.56-57

5 Telecom Regulatory Policy CRTC 2009-657, Appellants' Book of Authorities ("ABOA"), Tab 35

6 Broadcasting Act, s. 4(2) Id at s. 4(3)

8 Id at s. 4(4)

5

17. Section 5 identifies the manner in which the CRTC should exercise its regulatory authority. The CRTC is to regulate the Canadian broadcasting system "with a view to implementing the broadcasting policy set out in subsection 3(1)" and with regard for the regulatory policy set out in s. 5(2).9 The Act reiterates the importance of the broadcasting policy by noting in s. 5(3) that the objectives in s. 3(1) shall be the CRTC' s "primary consideration" and shall, in the event of conflict, take precedence over the regulatory policy concerns in s. 5(2) .1 0

18. Section 3(1) provides that the Act's focus is to-ensure that the entire broadcasting system protects and promotes Canadian identity and culture. To this end, s. 3(1) provides an extensive list of normative and mandatory directives applying to participants in the broadcasting system. With regard to the system as a whole, s. 3(1) provides, in part:

(1) the Canadian broadcasting system operates primarily in the English and French languages and provides, through its programming, a public service essential to the maintenance and enhancement of national identity and cultural sovereignty;

(2) the Canadian broadcasting system should serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada, encourage the development of Canadian linguistic duality and the multicultural and multiracial nature of Canadian society; and

(3) programming provided by the Canadian broadcasting system should be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes, and should be drawn from local, regional, national and international sources.11

19. With respect to "broadcasting undertakings" in particular, s. 3(1) illuminates the nature of their activities by laying out their mandatory obligations within the system as a whole. These provisions establish that "broadcasting undertakings" are expected to exercise their control over content in a manner that serves the Act's broader policy objectives:

9 1d. at s. 5(1) i° Id. at s. 5(3)

II Id at s. 3(1) 6

(1) each element of the Canadian broadcasting system must contribute to the creation and presentation of Canadian programming;12

(2) "each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming";13

(3) all persons who carry on "broadcasting undertakings have a responsibility for the programs they broadcast";14 and

(4) distribution undertakings "should give priority to the carriage of Canadian programming services and, in particular, to the carriage of local Canadian stations."15

20. Section 2(3) of the Act reinforces the Act's expectation that "broadcasting undertakings" will control content. It requires that the Act "be interpreted in a manner that is consistent with the freedom of expression and journalistic, creative and programming independence enjoyed by

broadcasting undertaking s ."16

21. Section 2 of the Act defines the activities and elements of the broadcasting system to which the Act applies. The Act focuses on "broadcasting undertakings," which include "distribution undertakings" (commonly known as broadcasting distribution undertakings or BDUs), "programming undertakings" and "networks."17

22. A BDU is "an undertaking for the reception of broadcasting and the retransmission thereof by radio waves or other means of to more than one residence or dwelling unit, or to another such undertaking."18 BDUs select certain programming services for distribution, and create packages of programs for that purpose. They decide what broadcasting programming is made available to their users and may, in doing so, enter into affiliation

12 Id. at s. (3)(1)(e)

13 Id. at s. (3)(1)(f) [emphasis added]

14 Id. at s. (3)(1)(h) [emphasis added]

15 Id. at s. (3)(1)(t)(i)

16 1d. at s. 2(3)

17 Id. at s. 2(1) ("broadcasting undertaking")

18 Id at s. 2(1) ("distribution undertaking") 7 agreements or otherwise acquire copyright or other licences to retransmit broadcast signals. Selecting content and establishing pricing for different content packages offered to the public is the essence of a BDU's business.19 An ISP does not engage in any of these functions.

23. A "programming undertaking" is defined as "an undertaking for the transmission of programs, either directly by radio waves or other means of telecommunication or indirectly through a distribution undertaking, for reception by the public by means of broadcasting receiving apparatus."2° Programming undertakings either produce their own programming content or acquire licenses from rights-holders to broadcast such programming. CTV, for example, operates numerous programming undertakings, which make programming, some owned and some licensed, available over the Internet (at CTV.ca or an affiliated website) and over-the-air.21 An ISP does not engage in any of these functions.

24. A "network" is "any operation where control over all or any part of the programs or program schedules of one or more broadcasting undertakings is delegated to another undertaking or person."22 An ISP neither exercises nor delegates control over programming.

25. The essential activity with which the Act is concerned is "broadcasting," which is defined as any transmission of programs by radio waves or other means of telecommunication for reception by the public by means of a broadcasting receiving apparatus.23 The term "program," in turn, is defined to mean sounds or visual images that are intended to inform, enlighten or

entertain. 24

Legislative history of the Broadcasting Act

26. The legislative history of the Broadcasting Act evidences the Act's predominant concern with the content of programming. The current version of the Act was enacted in 1991 to replace the 1968 Act.25 The 1968 Act defined "broadcasting" with reference to technology: "any

19 Engelhart Affidavit, paras. 51-53, AR, Vol. III, Tab 30, pp. 133-134

20 Broadcasting Act, s. 2(1) ("programming undertaking")

21 Engelhart Affidavit, paras. 40-43, 53, AR, Vol. III, Tab 30, pp. 131-132, 134

22 Broadcasting Act, s. 2(1) ("network")

23 Id at s. 2(1) ("broadcasting")

24 Id at s. 2(1) ("program")

25 S.C. 1968, c. 25 as consolidated in R.S.C. 1985, c. B-9 8 radiocommunication in which the transmissions are intended for direct reception by the general public."26 Parliament's primary motivation in amending the 1968 Act was to decouple the definition of "broadcasting" from any particular technology. Given that new and emerging technology was affecting the way in which programs could be disseminated, Parliament redefined "broadcasting" with reference to content: "'broadcasting' ... means any transmission of programs ...." The 1991 Act also defined "program" for the first time to reinforce the Act's focus on content: "'program' ... means sounds or visual images ... that are intended to inform, enlighten or entertain."27

27. The change was therefore not to expand the technologies to which the Act would apply, but to ignore the nature of technology altogether. In other words, the Act's technology neutrality is born of indifference: Parliament cares only for what is broadcast, not how it is broadcast.

28. Parliamentary proceedings leading to the adoption of the 1991 Act showcase the Act's redirected emphasis on content alone. Two bills, C-136 and C-40, preceded the passage of the 1991 Act.28 The Legislative Committee considering Bill C-136 emphasized the new Act's focus on the substance of broadcasting:

[T]he Broadcasting Act urgently needs updating to encompass and manage new broadcasting technologies not covered by the 1968 act. The wording of the bill has therefore been made technology- neutral. That is, the bill addresses the activities of programming and program distribution rather than the specific technologies involved ... programming is of primary concern, because it is the programming content of broadcast media that represents the substance of broadcasting.29

29. The result of these amendments was to sharpen the Act's focus on the activities of content creation and distribution to ensure the protection of Canadian culture. Debates

26 R.S.C. 1985, c. B-9, s. 2 ("broadcasting") [emphasis added]; "radiocommunication" was defined as "any transmission, emission or reception of signs, signals, writing, images, sounds or intelligence of any nature by means of electromagnetic waves of frequencies lower than 3,000 Gigacycles per second propagated in space without artificial guide" 27 Broadcasting Act, s. 2(1), ("broadcasting", "program") 28 Bill C-136, 2nd Session, 33rd Parliament (1986-1988), ABOA, Tab 1; Bill C-136 was passed by the House of Commons but never reached the Senate before Parliament was dissolved; Bill C-40, 2nd Session, 34th Parliament (1989-1991), ABOA, Tab 2 29 Statements of the Hon. Flora MacDonald, House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C-136, August 8, 1988 at p. 1:23, AR, Vol II, Tab 13, p. 18 [emphasis added] 9 surrounding the Act's passage highlight Parliament's particular concern with limiting the influence of American content and culture.

This is a key step toward combating all that U.S. programming up in the sky. Once the entire country is cabled, then Parliament will have the power to see that our homegrown, Canadian programming is protected to the maximum extent possible.3°

30. Cultural protectionism thus inspired the Act's content emphasis. In directing its concern away from technology to the "substance of broadcasting" — the activities of selecting, creating and distributing programs in Canada — the 1991 Act ensured that the CRTC was properly armed to limit the ability of "broadcast media" to select and distribute foreign content at the expense of Canadian content.

The Telecommunications Act

31. In stark contrast to the Broadcasting Act, the objectives of Canadian telecommunications policy, prescribed in section 7 of the Telecommunications Act, are content neutral, and focus on the ends of efficiency, competition, accessibility and fostering market forces. These objectives include:

(1) the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions;

(2) the provision of reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada;

(3) enhancement of the efficiency and competitiveness (at the national and international levels) of Canadian telecommunications; and

3° Statements of the Hon. Geoff Scott, House of Commons Debates, 2nd Session, 34th Parliament, Vol. XII, 1990, pp. 16267, Coalition Book of Authorites ("CBOA"), Tab 27 - 10 -

(4) fostering increased reliance on market forces for the provision of telecommunications services and ensuring that regulation, where required, is efficient and effective.31

32. In service of this policy, the Telecommunications Act is concerned with the activities of "telecommunications common carriers" and with "telecommunications services." "Telecommunications common carriers" are defined as persons who own or operate a transmission facility that is used to provide telecommunications services to the public for compensation. "Telecommunications service" means a service provided by means of "telecommunications facilities," which are facilities, apparatuses or other things that are used or could be used for telecommunications or for any operation directly connected with telecommunications.32

33. "Telecommunications" itself is defined by the Telecommunications Act to mean the emission, transmission or reception of intelligence by any wire, cable, radio, optical or other electromagnetic system, or by any similar technical system. "Intelligence" is defined as signs, signals, writings, images, sounds or intelligence of any nature.33

Provisions addressing relative application of the two statutes

34. The Broadcasting Act and the Telecommunications Act work symbiotically, each referencing the other. Section 4 of the Telecommunications Act states that it does not apply in respect of broadcasting by a broadcasting undertaking, and s. 4(4) of the Broadcasting Act states that, "for greater certainty," it does not apply to a telecommunications common carrier acting solely in that capacity.34 Parliament's use of the phrase "for greater certainty" emphasizes its intention that the Act not apply.

35. Both the Telecommunications Act and the Broadcasting Act also specifically contemplate that a "broadcasting undertaking" may use a "telecommunications common carrier" as a mode of transmission. Section 28(1) of the Telecommunications Act addresses the transmission of

31 Telecommunications Act, s. 7 32 Id. at s. 2(1) ("telecommunications common carrier," "telecommunications facilities" and "telecommunications service") 33 1d. at s. 2(1) ("intelligence", "telecommunications"); see also s. 28 34 Telecommunications Act, s. 4; Broadcasting Act, s. 4(4) programs to the public "by satellite" or "through the terrestrial distribution facilities of a Canadian carrier, whether alone or in conjunction with facilities owned by a broadcasting undertaking."35 It requires the CRTC to have regard to the broadcasting policy set out in the Broadcasting Act in determining whether any discrimination is unjust or any preference or disadvantage is undue or unreasonable in relation to any transmission of programs.36 Section 28(2) authorizes the CRTC to allocate satellite capacity to particular broadcasting undertakings when there is a dispute about transmitting programs between "a person who carries on a broadcasting undertaking" and "a Canadian carrier".37 Section s. 9(1)(f) of the Broadcasting Act authorizes the CRTC to require any licensee under the Act to seek its approval "before entering into any contract with a telecommunications common carrier for the distribution of programming directly to the public using the facilities of that common carrier."38 These provisions reflect Parliament's expectation that a telecommunications common carrier will remain a telecommunications common carrier when broadcasting undertakings use it as a mode of transmission.

ISPs have been regulated only under the Telecommunications Act

36. To date, the CRTC has treated ISPs solely as "telecommunications common carriers" (where they own their transmission facilities) or resellers providing "telecommunications services" (where they lease transmission facilities from other Canadian carriers), and has subjected them to regulation only under the Telecommunications Act. 39 All the members of the ISP Coalition have been regulated as "telecommunications common carriers" because they own and operate their own transmission facilities.

37. The CRTC regulates secondary ISPs, which purchase wholesale access to the facilities of primary ISPs in order to offer "competing Internet access services to their own customers," by supervising their contractual relationships with primary ISPs.4° Thus, while the CRTC has

35 Telecommunications Act, s. 28(1)

36 Id.

37 Id. at s. 28(2)

38 Broadcasting Act, s. 9(1)(f)

39 Telecom Order CRTC 95-868, CBOA, Tab 21; Telecom Decision CRTC 98-9, AR, Vol. II, Tab 16, pp. 93-105; Broadcasting Order CRTC 2009-452, paras. 8-9, AR, Vol. I, Tab 4, p. 57

49 Telecom Regulatory Policy CRTC 2009-657, ABOA, Tab 35 at para. 13 -12- forborne from exercising its rate regulation powers (and in some cases certain other powers) in relation to ISPs providing retail services directly to end-users, it has not done so with respect to wholesale services provided to secondary ISPs.41

[T]he Commission has not forborne from regulating the services that primary ISPs provide to secondary ISPs, which remain subject to tariff approval. This approach ensures that services required by secondary ISPs, as competitors of primary ISPs, are made available according to rates, terms, and conditions that are consistent with the Act.42

38. The exercise of the CRTC's regulatory authority in this manner accords with Parliament's intention that the primary focus of the Telecommunications Act be on the telecommunications providers who own their transmission facilities.43

39. The CRTC has never purported to regulate ISPs as broadcasting undertakings subject to the Broadcasting Act.44

40. The CRTC's treatment of ISPs is similar to its treatment of Telesat Canada's satellite services, which have always been regulated under the Telecommunications Act, and its proposed treatment of "Video Dial Tone" (VDT) services. This is so even though a considerable portion of what is transmitted via Telesat Canada's satellites, and what was proposed to be transmitted via VDT, consists of "broadcasting."

41. Telesat delivers broadcasting signals from its satellites to Canadian homes. But it is not regulated under the Broadcasting Act. Instead, it is the direct-to-home undertaking, which uses Telesat's carrier facilities to deliver programming signals, that is subject to the Broadcasting Act, because it is that undertaking that buys, packages and sells programming to Canadians.45

41 Telecommunications Act, s. 34(1); Telecom Order CRTC 99-592, CBOA, Tab 23; Telecom Regulatory Policy CRTC 2009-657, ABOA, Tab 35

42 Telecom Regulatory Policy CRTC 2009-657, ABOA, Tab 35 at para. 13

43 Communications Canada, Telecommunications: New Legislation for Canada, February 1992, CBOA, Tab 26

44 Telecom Order CRTC 95-868, CBOA, Tab 21; Telecom Decision CRTC 98-9, AR, Vol. II, Tab 16, pp. 93-105; Broadcasting Order CRTC 2009-452, paras. 8-9, AR, Vol. I, Tab 4, p. 57

45 Telecom Decision CRTC 97-38, CBOA, Tab 22; Order CRTC 2001-435, CBOA, Tab 24 - 13 -

42. In the VDT context, the CRTC made an explicit reference to the distinction between the act of broadcasting the mode of delivering broadcasting:

[T]elephone companies may, operating in their role as common carriers, carry a range of services, including licensed broadcast programming and other services. This would include VDT applications. VDT refers to the technological capability through which broadband services may be offered, not to the services themselves. VDT is therefore not a broadcasting activity. Rather, it is the use of the technology that will determine the nature of the activity.46

The Internet

43 The Internet is a decentralized worldwide network of interconnected computers. It is a "meta-network" that emerges from the participation of countless computer networks of all sizes linking Internet users, institutions, , and governments all over the world.47

44. The Internet is described as "decentralized" because it is not owned or controlled by any single entity or user. Rather, its constituent elements are owned and controlled by the users and organizations that own and operate the computers and networks that collectively comprise what is referred to as the Internet. These computers and computer networks voluntarily use common data transfer protocols to exchange content with each other in standardized ways. Any organization or individual can become part of the Internet simply by connecting one or more computers to the Internet and running the appropriate .48

The main participants in the Internet

45. The Internet is comprised of three main types of participants: (1) content, application and service providers, (2) end-users, and (3) ISPs.49

46 Telecom Decision CRTC 94-19, CBOA, Tab 20 at §E.4

47 Engelhart Affidavit, para. 8, AR, Vol. III, Tab 30 , p. 123; Broadcasting Order CRTC 2009-452, para. 11, AR, Vol. I, Tab 4, p. 57

48 Engelhart Affidavit, para. 9, AR, Vol. III, Tab 30 , p. 123

49 Id. at para. 11, AR, Vol. III, Tab 30 , p. 124 -14-

Content, application and service providers 46. Internet content, application and service providers create or present content such as websites, music, and video, support applications such as video games, and provide services such as video conferencing and remote storage. They typically make this content and software available by uploading them onto Internet-connected computers, known as "servers," which are accessible to anybody with access to the Internet. Content, application and service providers do not need to have any relationship with ISPs to reach end-users.5°

End-users 47. End-users access content, applications or services made available by content, application and service providers. Each Internet-connected computer, including end-users' computers and the servers of content, application and service providers, is generally identified by a unique "IP address." End-users access content, applications or services by sending a request from an Internet-connected computer to the IP address of the server from which they wish to obtain them. To do this, the end-user will typically input into a "browser," such as Microsoft Internet Explorer, the "uniform resource locator" (or "URL") that corresponds to the content he or she is seeking. This URL is then translated into the IP address of the server on which the content is stored, and the user's request is transmitted to the server.51

48. When the server receives the end-user's request, it responds by transmitting the requested content to the end-user's computer. The content is transmitted in pieces known as "packets": the requested content is broken up into small chunks of data (packets), each of which is transmitted independently over the Internet, through physical devices called "Internet routers," to the end- user's computer. Each packet has a header, which contains the IP address that corresponds to its destination (in this case, the end-user's computer). The routers through which the packets travel read the address in the header, and then forward the packet successive steps closer to that

5° Id. at paras. 30, 35-50, AR, Vol. III, Tab 30 , pp. 129, 130-133 51 Id. at paras. 31-32, AR, Vol. III, Tab 30, pp. 129-130; Karsten Affidavit, para. 9, Shaw Record ("SR"), Tab 2, p. 5 -15- destination. Once the packets have arrived at the end-user's computer, they are reassembled. The end-user is then able to view or play the audio-visual or other content he or she requested.52

ISPs 49. The primary function of retail ISPs, and the only function that was at issue in the reference, is to provide the infrastructure through which their customers (or end-users) access content, applications and services through the Internet.53 As the Federal Court of Appeal noted, while ISPs may perform other functions, "this activity is separate and distinct from their role as ISPs which is to provide for the transmission of content requested by their end-users."54

50. ISPs link their subscribers to a point of interconnection between the ISP's network and the multitude of other networks, described above, that comprise the Internet, and they do so using either their own facilities or facilities leased from another ISP, or a combination of both. Each of the ISPs comprising the ISP Coalition is a "facilities-based" ISP, which provides Internet access using either its own infrastructure, or a combination of owned and leased infrastructure.55

51. Not all end-users access the Internet through a retail ISP. Many large educational institutions and corporations use their own or leased facilities to connect directly to the Internet and then provide Internet access service to students, faculty or employees by means of these connections. By providing this kind of Internet access service, these large institutions and corporations perform the function of an ISP.56

ISPs function as mere conduits for the transfer of online content 52. When they provide end-users with access to content made available on the Internet by content, application and service providers, ISPs function as mere conduits for this content. They "effectively provide the physical 'pipes' through which online content is transferred between

52 Engelhart Affidavit, para. 33, AR, Vol. III, Tab 30, p. 130; Karsten Affidavit, paras. 10-12, SR, Tab 2, pp. 5-6; Broadcasting Order CRTC 2009-452, at para. 12, AR, Vol. I, Tab 4, p. 58

53 Engelhart Affidavit, para. 12, AR, Vol. III, Tab 30 , p. 124; Broadcasting Order CRTC 2009-452, paras. 13-16 , AR, Vol. I, Tab 4, pp. 58

54 Reasons for Judgment of the Federal Court of Appeal, 2010 FCA 178 ("Reasons"), para. 14, AR, Vol. I, Tab 3, p. 13

55 Engelhart Affidavit, para. 15, AR, Vol. III, Tab 30, pp. 124-125

56 Id at para. 14, AR, Vol. III, Tab 30, p. 124 -16- content providers and end-users."57 Content-related packets are carried through these pipes without regard to the nature and substance of the content.58 ISPs exchange Internet traffic "in the same fashion regardless of whether the traffic comprises emails, pictures, news, celebrity gossip, e-commerce transactions or other content, and regardless of the content's source."59

53. The CRTC itself has acknowledged that ISPs are conduits for the transfer of online content. It has found that "in their role as providers of access to broadcasting, ISPs do not select or originate programming or package or aggregate programming services," that their only role as ISPs is to "provide for the transmission of content requested by their end-users," and that "the functions and operations of ISPs do not generally differ according to the type of content being delivered to the end-user — whether it be alphanumeric, audio or audiovisual."60

54. The CRTC has likened the role of the ISP in the transfer of content over the Internet to the role of a telephone company in the transmission of a telephone call: [An ISP is] [a] company or other organization which provides access to the Internet to its customers via one or a combination of dial-up lines (similar to telephone service), ISDN, xDSL or other dedicated lines.... The connection is made by a "modem" which makes the electronic data from the home user's computer transmittable over a telephone line. The data then passes through the telephone company's facilities in the same way as a normal telephone call. The "call" is received by the ISP which "routes" the user's requests for information to the server that is "hosting" the desired data.61

The CRTC's reference to the Federal Court of Appeal 55. The reference question arose in the CRTC's "Canadian Broadcasting in New Media" proceeding. The CRTC decided not to determine whether ISPs become "broadcasting undertakings" when they provide their subscribers access to broadcasting available on the

57 Id. at para. 20, AR, Vol. III, Tab 30, p. 125 58 Id. at paras. 20-21, 50, AR, Vol. III, Tab 30, pp. 125-126, 133-134; Wodelet Affidavit, paras. 20-21, AR, Vol. III, Tab 32, pp. 163-164; Karsten Affidavit, paras. 18, 20, 26, SR, Tab 2, pp. 8, 9, 12

59 Engelhart Affidavit, para 21, AR, Vol. III, Tab 30, pp. 125-126 6° Broadcasting Order CRTC 2009-452, paras. 13, 16, AR, Vol. I, Tab 4, p. 58

61 Broadcasting Public Notice CRTC 1999-84, AR, Vol. III, Tab 25, pp. 42-62 -17-

Internet.62 The Federal Courts Act empowers the CRTC, at any stage of its proceedings, to refer to the Federal Court of Appeal any question of law, jurisdiction or practice.63

56. The CRTC had already determined, in 1999, that some content delivered over the Internet (which it describes as "new media") comes within the Broadcasting Act's definitions of "program" and "broadcasting." The reference question was expressly confined to ISPs' role in providing access through the Internet to "broadcasting" requested by end-users.64

The factual record before the Federal Court of Appeal 57. The factual record before the Federal Court of Appeal in the reference consisted of an affidavit filed by the CRTC and affidavits filed by various participants. All participants were given an opportunity to file affidavit evidence, and several participants, including the appellants, did so.65

58. The ISP Coalition furnished the only evidence comparing the roles and functions of well- accepted "broadcasting distribution undertakings" to those of ISPs. That evidence is clear that ISPs do not perform any of the roles or functions of cable or satellite retransmitters or BDUs: Unlike a Broadcasting Distribution Undertaking, such as a satellite or cable company, an ISP does not enter into affiliation agreements or otherwise acquire copyright or other licenses to retransmit broadcast signals. An ISP does not decide what broadcasting programming is available to Internet users. It does not assemble or sell packages of broadcasting programming to be offered to Internet users. Rather, ISPs assemble and sell to their customers packages of Internet access service, as described above...66

59. Despite ample opportunity to do so, the appellants placed no evidence before the Court of Appeal with respect to the role and functions of satellite retransmitters, cable retransmitters or "broadcasting distribution undertakings" more generally. This omission is significant: the appellants protest that ISPs are "broadcasting undertakings" just like cable and satellite

62 Broadcasting Regulatory Policy CRTC 2009-329, paras. 66-70, AR, Vol. III, Tab 27, p. 76-77

63 Federal Courts Act, R.S.C. 1985, c. F-7, ss. 18.3, 28(2)

64 Broadcasting Order CRTC 2009-452, para. 1, AR, Vol. I, Tab 4, p. 55

65 Order of Noel J.A. dated July 31, 2009, paras. 2, 7, AR, Vol. I, Tab 6, pp. 65-66 66 Engelhart Affidavit, para. 52, AR, Vol. III, Tab 30, p. 134 - 18- retransmitters without any evidence comparing ISPs to other "broadcasting undertakings."67 There was therefore no basis in the record before the Federal Court of Appeal, and there is none before this Court, to make findings about ISPs based on analogies to cable and satellite retransmitters.

The decision of the Federal Court of Appeal 60. The Court of Appeal answered the question referred to it in the negative. It concluded that ISPs do not become "broadcasting undertakings" regulated by the Broadcasting Act when they provide their customers access to broadcasting available on the Internet.68

61. The Court accepted the premise of the reference question that "broadcasting" takes place on the Internet. The question before it was who is doing the broadcasting. The answer to this question turned on the definitions of "broadcasting" and "broadcasting undertaking" in the Broadcasting Act.69

62. The Court of Appeal first considered the evidence before it regarding the functioning of ISPs in the context of the Internet as a whole. In assessing this evidence, it relied on the CRTC's findings that accompanied the reference, including the CRTC's New Media Report. Drawing on these findings, it found that "ISPs provide the infrastructure to enable end-user subscribers to access the content applications and services made available by others on the Internet" and that "ISPs do not select or originate programming or package or aggregate programming services."70

63. The Court then proceeded to identify the critical issue — accepted by all parties — as "whether ISPs, when providing access to "broadcasting," are themselves "broadcasting."71 The Court framed this central issue in terms of "transmission" by asking whether ISPs are broadcasting when they grant their users access to "transmission of programs." After considering the CRTC's explanation of "transmission" on the Internet, the Court observed that whether programs are transmitted on the Internet was ultimately not at issue in the reference:

67 Appellants' Factum, para. 105

68 Reasons, paras. 1, 59-60, AR, Vol. I, Tab 3, p. 32

69 Id. at paras. 31-35, 38, AR, Vol. I, Tab 3, pp. 21-22, 24

70 Id. at para. 13, AR, Vol. I, Tab 3, pp. 12-13 71 Id. at para. 34, AR, Vol. I, Tab 3, p. 22 -19-

The referred question assumes that programs are transmitted on the Internet. The issue which must be elucidated is by whom? The answer turns on whether the definition of "broadcasting", beyond being aimed at the person who transmits the program, extends to the person whose sole involvement is to provide the mode of transmission.72

64. To answer this critical question, the Court turned to interpret "transmit" and "broadcasting" in their statutory context, "having regard to the scheme and purpose of the Broadcasting Act." The Court concluded that, when properly interpreted, neither the term "transmit" nor the term "broadcasting" could extend to capture the passive and content-neutral activities of ISPs, which provide only a "mode of transmission." 73

65. The Court's reasoning drew on case law from this Court and the content focus of the Broadcasting Act. In considering whether the provider of a "mode of transmission" can be said to "transmit," the Court of Appeal turned to this Court's decision in Electric Despatch,74 which considered exactly that question and held that providers of the mode of transmission cannot be said to "transmit a message of the purport of which they are ignorant."75 The Court also reviewed and applied this Court's decision in Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers76 (known as the "SOCAN Tariff 22" case), which considered an exemption to the Copyright Act that is analogous to s. 4(4) of the Broadcasting Act. In SOCAN Tariff 22, this Court held that content-neutral Internet intermediaries do not "communicate" a work under the Copyright Act when they provide only the "means of telecommunication."77

66. The Court of Appeal reasoned that, like the Copyright Act in issue in SOCAN Tariff 22 and the covenant at issue in Electric Despatch, the focus of the Broadcasting Act is on the actual content being transmitted rather than the means of dissemination. Thus, "a person whose sole

72 Id. at paras. 35, 38, AR, Vol. I, Tab 3, pp. 22, 24 [emphasis added] 73 Id. at paras. 35-48, AR, Vol. I, Tab 3, pp. 22-28 74 Electric Despatch Co. of Toronto v. Bell Telephone Co. of Canada (1891), 20 S.C.R. 83, ABOA, Tab 18 75 1d. at p. 91 76 Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427 , CBOA, Tab 18

77 Reasons, paras. 40-48, AR, Vol. I, Tab 3, pp. 24 - 28 -20- involvement is to provide the mode of transmission is not transmitting the program and hence, is

not 'broadcasting' ."78

67. Having construed "transmit" and "broadcasting" with reference to prior jurisprudence and the structure of the Broadcasting Act, the Court observed that this construction also conformed to the broadcasting policy established in section 3(1) of the Broadcasting Act. In the Court's words, the Broadcasting Act's focus is on "the cultural enrichment of Canada," to which end it sets out specific content requirements of licensees:

The Broadcasting Act sets out specific provisions on programming content ... such as the allocation of broadcasting time, the character and volume of advertising, and the carriage of foreign programming...79

Moreover, section 2(3) of the Broadcasting Act requires that the Act be interpreted with reference to the "freedom of expression and journalistic, creative and programming independence enjoyed by broadcasting undertakings."8°

68. Returning to its factual findings, the Court of Appeal reiterated that ISPs' only involvement in broadcasting transmitted over the Internet is "to provide the mode of transmission."81 This limited function renders ISPs inherently "unable to take any steps to promote the policy described in the Broadcasting Act or its supporting provisions."82

69. The Court then specifically addressed a number of the appellants' arguments, beginning with their argument that ISPs' intrinsic inability to comply with the Broadcasting Act should not prevent them from being subject to the Act. The appellants based this argument on s. 9(4) of the Act, which authorizes the CRTC to exempt persons who carry on broadcasting undertakings from any or all of the requirements of Part II of the Act where it is satisfied that their compliance will not contribute in a material manner to the implementation of the broadcasting policy set out in s. 3(1). The Court found this argument unconvincing.83 The Broadcasting Act specifically

78 Id. paras. 40-48, AR, Vol. I, Tab 3, pp. 24-28

79 Id. at para. 49, AR, Vol. I, Tab 3, p. 28

"

81 Id. at paras. 49-50, AR, Vol. I, Tab 3, pp. 49-50 82 m. 63 Id. at paras. 51-54, AR, Vol. I, Tab 3, pp. 29-30 -21- excludes "telecommunications common carriers" acting solely in that capacity. Moreover, "it would be highly unusual for a statute to be construed in a manner that overshoots its objects," and the appellants had "not identified any logic or reason that could possibly justify such an odd result."84

70. The Court then addressed the argument that this Court's decision in Capital Cities85 stands for the proposition that all undertakings implicated in broadcasting transmission, no matter how tangentially or passively, ought to be subject to the Broadcasting Act.86 The Court observed that Capital Cities speaks only to the scope of federal government's power to regulate interprovincial undertakings.87

71. Third, the Court considered the Cultural Group's repeated reference to the concept of technological neutrality. The Court stated that this concept had been embraced in the reference through the CRTC's premise that "broadcasting" takes place on the Internet. The concept served no function, however, in resolving the essential reference issue: "who is doing the `broadcasting'."88

72. The Court concluded that ISPs do not "transmit" programs when they provide access to "broadcasting" on the Internet. Therefore, ISPs are not themselves "broadcasting" and cannot be considered "broadcasting undertakings" under the Broadcasting Act.89

PART II — QUESTIONS IN ISSUE

73. The sole issue referred by the CRTC to the Federal Court of Appeal was:

Do ISPs carry on, in whole or in part, "broadcasting undertakings" subject to the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to "broadcasting" requested by end-users?

84 Id at para. 53, AR, Vol. I, Tab 3, p. 30

85 Capital Cities Communications Inc. v. Canadian Radio-television Commission et al., [1978] 2 S.C.R. 141, ABOA, Tab 16

86 Reasons, paras. 55-57, AR, Vol. I, Tab 3, pp. 30-31

87 Id. at para. 57, AR, Vol. I, Tab 3, p. 31

88 Id. at para. 58, AR, Vol. I, Tab 3, pp. 31-32

89 Id at para. 59, AR, Vol. I, Tab 3, p. 32

-22-

74. The issue before this Court is whether the Court of Appeal committed any reviewable error in answering this question in the negative. The ISP Coalition submits that the Court made no reviewable error.

75. In resolving the question on appeal, this Court is presented with two issues, one of fact and one of law: (1) Did the Court of Appeal commit a palpable and overriding error in finding that ISPs are "content-neutral transmission intermediaries" whose sole involvement in the transmission of "broadcasting" over the Internet is "to provide the mode of transmission"? (2) And, did the Court of Appeal commit a reviewable error of law in holding that "broadcasting" under the Broadcasting Act does not comprehend the content- neutral activities of those who provide only a "mode of transmission"?

PART III — ARGUMENT Overview

76. The ISP Coalition submits that the Court of Appeal committed no error of fact or law in determining that ISPs are content-neutral Internet intermediaries that are not, unless Parliament chooses to amend the Broadcasting Act, subject to the Act when they provide their subscribers access to broadcasting on the Internet.

77. First, the Court's factual finding that ISPs are content-neutral Internet intermediaries was amply supported by the record on the reference, including the evidence filed by the CRTC, and is consistent with this Court's prior findings and the findings of courts in other jurisdictions.

78. Second, construing "broadcasting" under the Broadcasting Act is necessarily a purposive and context-sensitive exercise. The Court of Appeal's approach recognized and respected this necessity. It appropriately considered precedent and the principles of statutory construction to determine that ISPs do not "transmit" broadcasting and are therefore not "broadcasting undertakings" within the meaning of the Broadcasting Act. - 23 -

79. Third, the Telecommunications Act and the Broadcasting Act together create a coherent system that accounts for the intermediary role that ISPs play in disseminating broadcasting. The Acts' cross-referencing provisions leave no doubt that ISPs remain subject only to the Telecommunications Act when "broadcasting undertakings" transmit programs using the ISPs' facilities.

Standard of review

80. The legal issue referred to the Court of Appeal had a factual component. To render a decision on the reference question, the Court of Appeal (1) found as fact that ISPs are content- neutral conduits that provide only the "mode of transmission" and (2) construed the Broadcasting Act to determine if content-neutral conduits could be "broadcasting undertakings" under the Act. The factual finding animated the Court's construction of the Broadcasting Act. It may not be disturbed absent a finding of "palpable and overriding error."90 The legal construction of the Broadcasting Act is subject to a standard of correctness.9'

No reason to disturb finding that ISPs are content-neutral transmission intermediaries

81. The Court of Appeal concluded as a fact that ISPs are mere conduits that permit end- users to access content and services on the Internet. There was ample evidence before the Court to support this finding. As discussed at paragraphs 52 to 54 above, that ISPs provide only a conduit for intelligence transfer is attested to by evidence showing the following:

(1) The function of the ISP is virtually identical no matter the content of the Internet traffic carried. E-mails, pictures, e-commerce transactions, music, news and videos are all transmitted in the same way. 92 In the CRTC's own words, "the functions and operations of ISPs do not generally differ according to the type of content being delivered to the end-user — whether it be alphanumeric, audio or

audiovisual ."93

Housen v. Nikolaisen, [2002] 2.S.C.R. 235, CBOA, Tab 13 at paras. 1, 10 and 25

91 Id. at para. 8

92 Engelhart Affidavit, paras. 20-21, 51, AR, Vol. III, Tab 30, pp. 125-126, 133-134; Karsten Affidavit, paras. 18, 20, 26, SR, Tab 2, p. 8 ,9, 12

93 Broadcasting Order CRTC 2009-452, paras. 13, 16, AR, Vol. I, Tab 4, p. 58 - 24 -

(2) ISPs have no role in choosing, creating, packaging or aggregating programming. The content carried over an ISP's "pipes" depends entirely on the content provider and the end-user.94 Their only role as ISPs is to "provide for the transmission of content requested by their end-users."95

(3) The CRTC analogizes an ISP's function in routing data from the host server to the end-user to that of a telephone company. In the CRTC's words, the data itself travels over telephone facilities in the manner of "a normal telephone call."96

82. In short, ISPs' only involvement in broadcasting available on the Internet is to provide their subscribers with "the mode of transmission" to access content.97 The appellants offer no reason to disturb this finding.

83. The Court of Appeal's factual conclusion aligns with the findings of this Court and of courts in other jurisdictions. In recent years, courts have had to consider the role of ISPs in a variety of contexts. In the copyright and defamation contexts, in particular, courts have concluded that when ISPs are providing end-users access to the Internet, they are mere conduits without the ability to influence content.

ISPs in the copyright context

84. This Court considered ISPs' role in the dissemination of content on the Internet in SOCAN Tariff 22. The case concerned ISPs' liability for copyright infringement when infringing works were distributed on the Internet. Relying on the factual findings of the Copyright Board — which, as the Court of Appeal noted, were very similar to the CRTC's findings in this case — Binnie J. found that, when ISPs act purely in their Internet-access role, supplying the software and the hardware to facilitate the use of the Internet, they function as content-neutral conduits.98 The Court likened ISPs acting in this role to the owners of telephone wires.99 ISPs provide only

94 Engelhart Affidavit, para. 51, AR, Vol. III, Tab 30, pp. 133-134

95 Broadcasting Order CRTC 2009-452, paras. 13, 16, AR, Vol. I, Tab 4, p. 58

96 Broadcasting Public Notice CRTC 1999-84, AR, Vol. II, Tab 25, p. 61

97 Reasons, para. 50, AR, Vol. I, Tab 3, p. 29

98 SOCAN Tariff 22, supra note 76 at paras. 93-95, 101

99 Id. at para. 96, citing Electric Despatch, supra note 74 at 91 - 25 -

"'a conduit' for information communicated by others"; they therefore constitute only "the means of telecommunication" necessary for others to communicate the works.) °°

85. Courts in Australia and the United States have reached similar conclusions regarding ISPs as mere conduits. In a copyright case, the Federal Court of Australia found that an ISP is only an intermediary: it is incapable of controlling the system used by subscribers to download films in a manner that infringed copyright.1°1

86. Similarly, a United States Court of Appeals has found that an ISP is akin to a "traditional telephone company" that functions as a pure conduit of information: When an electronic infrastructure is designed and managed as a conduit of information and data that connects users over the Internet...the ISP provides a system that automatically transmits users' material but is itself totally indifferent to the material's content. In this way, it functions as does a traditional telephone company when it transmits the contents of its users' conversations.1°2

87. Recognition that ISPs are mere conduits is now codified in a copyright statute in the United States and in an e-commerce directive in the European Union.'°3

ISPs in the defamation context 88. Courts have also held ISPs to be passive and neutral conduits of content in the defamation context. In an English defamation case, the Court of Queen's Bench held that the ISP "performs no more than a passive role in facilitating postings on the internet."104 In reaching this conclusion, the Court cited with approval a text on defamation and the Internet, which analogized ISPs to telephone carriers and postal services: Mere conduit intermediaries who carry particular Internet communications from one computer to another...are analogous to

too SOCAN Tariff 22, supra note 76 at para. 92 1°1 Roadshow Films Ply Ltd. v. iiNet Limited (2010), 216 A.L.R. 215 (Fed. Ct. of Australia), CBOA, Tab 17 1°2 CoStar Group, Inc. v. LoopNet, Inc. 373 F.3d 544 (4th Cir. 2004), CBOA, Tab 10 at 550-51 103 Digital Millennium Copyright Act, 17 U.S.C. §512(b) (2008), CBOA, Tab 2; EC, Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, [2000] O.J. L 178/1, CBOA, Tab 3 at art. 12 104 Bunt v. Tilley, [2006] 3 All E.R. 336 (Q.B.), CBOA, Tab 9 at paras. 35-37 -26-

postal services and telephone carriers in the sense that they facilitate communications, without playing any part in the creation of preparation of their content, and almost always without actual knowledge of the content.105

89. The New York Court of Appeals has made a similar finding, holding that an ISP' s role in transmitting email is "akin to that of a telephone company, which one neither wants nor expects to superintend the content of its subscribers' conversations."106 Like a telephone company, an ISP is "merely a conduit."1°7

90. In another Internet defamation case, a U.S. Court of Appeals drew the same comparison, describing an ISP as "like a delivery service or phone company" and "an intermediary" that is "normally indifferent to the content of what it transmits."108

91. As in the copyright context, American legislators have acknowledged the conduit function of ISPs in legislation immunizing ISPs from liability for defamatory statements made by third parties using their Internet access services.109

The Court of Appeal applied well-established principles of statutory interpretation 92. Based on its factual determination regarding the conduit role of ISPs, the Court of Appeal turned to the construction of "broadcasting" and "transmit" under the Broadcasting Act to determine if the provider of a "mode of transmission" could be a "broadcasting undertaking." In concluding that it could not, the Court committed no reviewable error. Its interpretive approach followed established principles of statutory construction, and was carefully attuned to the context and purposes of the Broadcasting Act as a whole and its relationship with the Telecommunications Act.

105 Id at para. 15 (Q.B.), citing Matthew Collins, The Law of Defamation and the Internet, 2d ed. (Oxford: Oxford University Press, 2005) at para. 15.43

106 Lunney v. Prodigy Services Co., 723 N.E.2d 539 (N.Y. 1999), CBOA, Tab 14 at 542 107 Id.

1°8 Doe v. GTE , 347 F.3d 655 (7th Cir. 2003), CBOA , Tab 12 at 659

109 Section 230(c) of the Communications Decency Act states: "[n]o provider or user of an interactive computer service shall be treated as a publisher or speaker of any information provided by another content provider." Communications Decency Act, 47 U.S.C. §230(c) (1996), CBOA, Tab 1. The term "interactive computer service" includes ISPs, id. at §230(f). See also, Zeran v. America Online, 129 F.3d 327 (4th Cir. 1997), CBOA, Tab 19 at 330, cert. denied, 524 U.S. 937 (1998) -27-

93. Statutory interpretation cannot be conducted in a vacuum. Rather, the modern approach, as this Court has consistently stated, demands that courts read the words of a statute in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.11°

94. This well-established rule ensures that discrete terms of a statute derive their meaning from the entire statute.111 The cornerstone of this approach is a respect for the statute's ends: "in current practice purposive analysis is a part of every interpretive exercise."112 This is particularly relevant where the statute contains an express statement of purpose; such statements can infuse

every provision with meaning. 113

Broadcasting Act context shows that ISPs are not "broadcasting" and cannot be "broadcasting undertakings"

95. The appellants suggest that, in providing the "mode of transmission," ISPs are transmitting and are therefore "broadcasting undertakings." This argument overlooks the express purposes of the Broadcasting Act and the specific obligations of (and rights enjoyed by) "broadcasting undertakings" in particular. When read in the context of the Act as a whole, the terms "broadcasting" and "broadcasting undertaking" do not capture ISPs.

96. First, the ends of the Broadcasting Act must animate the interpretation of its provisions. These leave no doubt that Parliament's concern with the Act was to capture only the active producers and disseminators of content, not the content-neutral and content-ignorant conduits of that content. Section 3(1) of the Act repeatedly focuses on the content of broadcasting. By its express terms it is directed towards protecting and promoting Canadian culture, expression, and language by ensuring the broadcasting of programs that involve a significant amount of

10 Ruth Sullivan, Sullivan on the Construction of Statutes, 5th Ed.(Markham: LexisNexis Canada Inc, 2008), CBOA, Tab 28 at p. 1; Re Rizzo & Rizzo Shoes Ltd, [1998] 1 S.C.R. 27, CBOA, Tab 16 at paras. 21, 23

III Sullivan, supra note 110 at 16; Re Rizzo & Rizzo Shoes Ltd, supra note 110, at para. 21; ATCO Gas & Pipelines Ltd. v. (Energy & Utilities Board), 2006 SCC. 4, [2006] 1 S.C.R. 140, CBOA, Tab 7 at para. 48; Bell Express Vu Limited Partnership v. Rex, 2002 SCC 43, [2002] 2 S.C.R. 559, CBOA Tab 8 at paras. 26-30

112 Sullivan, supra note 110 at 255-256, 259; see also, ATCO Gas & Pipe-lines Ltd v. Alberta (Energy & Utilities Board), supra note 111 at para. 48; Bell Express Vu Limited Partnership v. Rex, supra note 111 at para. 30; R. v. Adams, [1995] S.C.J. NO. 105, [1995] 4 S.C.R. 707, CBOA, Tab 15 at 719; Interpretation Act, R.S.C. 1985, c. I- 21, s. 12

113 Sullivan, supra note 110 at 271; Council of Canadians with Disabilities v. Via Rail Canada Inc., 2007 SCC 15, [2007] 1 S.C.R. 650, CBOA, Tab 11 at para. 287 -28-

Canadian artistic creativity in their production, that encourage Canadian expression and the use of Canadian talent, and that reflect Canada's linguistic duality and multicultural and multiracial society.114

97. Against this backdrop, "broadcasting" must have a meaning that incorporates content. A conduit with no control (or knowledge) regarding the programs for which it is providing the "mode of transmission" is intrinsically unable to comply with the Broadcasting Act's prescriptions or contribute to the Act's policies. To cite examples from s. 3(1), ISPs inherently cannot (1) engage Canadian talent, (2) promote linguistic duality, or (3) enrich the cultural, political and social fabric of Canadian society. To treat the conduit functions of ISPs as "broadcasting" would therefore be to stretch the concept beyond the reach of the Act.

98. Second, the Broadcasting Act's specific requirements of "broadcasting undertakings" cannot sensibly be applied to ISPs. Section 3(1)(f), for instance, dictates that "broadcasting undertakings" are required to "make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming".1" ISPs do not, and cannot, create or present programming. Complying with this requirement is simply impossible. The same is true of the responsibility all "broadcasting undertakings" are deemed to have for programs they broadcast under s. 3(h). ISPs cannot reasonably be held "responsible" for content of which they are ignorant and which they are inherently unable to control. The appellants contend that ISPs are BDUs. Yet s. 3(1)(t)(i) obliges "distribution undertakings" to give priority to the carriage of Canadian programming services and local Canadian stations.116 ISPs are by their very nature incapable of meeting this requirement.

99. Third, the Broadcasting Act indicates the nature of the activities Parliament envisioned for "broadcasting undertakings" in s. 2(3), by stating that these undertakings enjoy "freedom of expression and journalistic, creative and programming independence."117 An ISP could never enjoy these rights in providing access to end-users. It is merely a conduit.

114 See s.3(1) of the Broadcasting Act

115 Broadcasting Act, s. 3(1)(f) 116 Idd at s. 3(1)(t)(i) H7 Id. at s. 2(3) -29-

100. Fourth, in contrast to "broadcasting undertakings," the CRTC does not have the power under the Act to exempt ISPs from the exercise of its general powers under the Broadcasting Act. Section 9(4) provides that the CRTC may exempt "broadcasting undertakings" only where "compliance with [the Act's] requirements will not contribute in a material manner to the implementation of the broadcasting policy set out in subsection 3(1)."118 The first prerequisite for the exemption is that an ISP be able to comply with the Act's requirements. For a mere conduit, however, compliance is impossible. The second prerequisite is that compliance not contribute in a material manner to the broadcasting policy of s. 3(1). Just as ISPs cannot comply with the Act, the Court of Appeal found that they are unable to contribute in any manner to the Act's broadcasting policy.119

101. No sensible construction of s. 9(4) would inflate the CRTC's exemption authority to capture entities over which its regulatory power under the Broadcasting Act would inevitably be futile. As the Court of Appeal observed on this point, "it would be highly unusual for a statute to be construed in manner that overshoots its objects."12°

102. The appellants nonetheless argue that, in answering the CRTC's reference question, the Court of Appeal overstepped its bounds by denying the CRTC the right to make its own decision.121 They suggest that the Court should have deemed ISPs "broadcasting undertakings" and let the CRTC exempt them from the Broadcasting Act under s. 9(4) of the Act if the CRTC was of the view that the Act's requirements should not apply.122

103. The appellants' suggestion is belied by the structure of s. 9(4). The exemption power is not directed at entities that could never (no matter how much they so desired) possibly comply with the Broadcasting Act. Rather, the exemption assumes that the undertaking is a "broadcasting undertaking" capable of complying with the Broadcasting Act's requirements in the first place. The CRTC has expressly acknowledged as much by stating that such exemptions generally apply to undertakings "that have minimal impact upon the broadcasting system by

118 Id. at s. 9(4)

119 Reasons. para. 54, AR, Vol. I, Tab 3, p. 30

120 Reasons, para. 53, AR, Vol. I, Tab 3, p. 30

121 Appellants' Factum, para. 104 122 1d. -30- virtue of their temporary nature, low power or limited reach."123 Such minimal-impact undertakings include, for example, radio programming undertakings using ultra-low-power transmitters to allow real estate agents, store owners and local authorities to communicate commercial information to the public through "talking signs," and low-power radio programming undertakings that provide tourist and traffic information in national and provincial parks and on historic trails.

The Court of Appeal properly considered and applied this Court's reasoning in Electric Despatch and SOCAN Tariff 22

104. As the Court of Appeal properly recognized, this Court's decisions in Electric Despatch and SOCAN Tariff 22 are relevant in considering whether ISPs are "broadcasting undertakings" under the Broadcasting Act when they provide end-users access to broadcasting available on the Internet. First, the definition of "broadcasting" under the Act turns on the contextual meaning of "transmission," which was the precise word interpreted by this Court in Electric Despatch. Second, SOCAN Tariff 22 considered the role of ISPs in the context of an exemption from the Copyright Act that is analogous to the exemption for "telecommunications common carriers" under s.4(4) under the Broadcasting Act.

Electric Despatch speaks to the issue of "transmission"

105. The reference question was put to the Federal Court of Appeal on the premise that "broadcasting," or the "transmission of programs," occurs on the Internet. The critical remaining issue was who does the broadcasting. As the Court of Appeal noted, and all the parties agreed, if ISPs were "broadcasting" (or transmitting programs), they would be "broadcasting undertakings" under the Broadcasting Act. If they were not, they would not.

106. Once the Court found as a fact that an ISP's sole involvement is as a conduit that provides the "mode of transmission," the essential question could be reframed: does the provider of a mere "mode of transmission" for certain content "transmit" that content? This Court addressed this precise issue in Electric Despatch.

123 Broadcasting Public Notice CRTC 1996-59, ABOA, Tab 32; Broadcasting Public Notice CRTC 2003-35, CBOA, Tab 25 - 31 -

107. Electric Despatch concerned a contract in which Bell Canada agreed not to "transmit ... any messenger orders" to anyone but Electric Despatch. Electric Despatch sued Bell Canada for breach when it learned that Bell Canada's wires were carrying messages to competitor messenger companies.

108. Writing for the majority, Gwynne J. noted that the essential issue in the dispute was whether the word "transmit" in the contract implicated the activities of a person who provides only the "mode of transmission" for the message. He concluded that it could not, because only the actual sender of the message could be said to "transmit" it: Doubtless the word "transmit" is an accurate expression to make use of in relation to every message which is sent from one subscriber to the respondents' system to another. Every message is transmitted from one person to another along the respondents' wires, but in such case the person who transmits the message is no other than the sender of it. The wires constitute the mode of transmission by which the one lessee transmits the message along the wires to the other. 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.124

109. Justice Gwynne's interpretation was based, in part, on Bell Canada's ignorance of the messages transmitted on its wires:

The owners of the telephone wires, who are utterly ignorant of the nature of the message intended to be sent, cannot be said within the meaning of the covenant to transmit a message of the purport of which they are ignorant.125

110. The reasoning of Electric Despatch is apposite here. First, the technology at issue was of the same type — a content-neutral mode of transmission. Indeed, the analogy between ISPs and telephone companies recurs throughout court decisions in Canada and elsewhere.126 Second, the interpretive issue was identical: whether the provider of a mere "mode of transmission" "transmits." The Broadcasting Act defines "broadcasting" with reference to "transmission", and

124 Electric Despatch, supra note 74 at 91 [emphasis added] 125 Id. [emphasis added] 126 See paragraphs 84-91, above. -32- it is the latter term on which the appellants base their submissions. Third, like Bell Canada in Electric Despatch, the ISPs in this case are entirely ignorant of what is being transmitted.

SOCAN Tariff 22 addresses the scope of the exemption and the meaning of "broadcasting"

111. SOCAN Tariff 22 provides a technologically updated version of Electric Despatch by considering whether ISPs fall under an exemption from the Copyright Act that is analogous to s.4(4) of the Broadcasting Act. The Society of Composers, Authors and Music Publishers of Canada (SOCAN) sought to collect royalties from ISPs for copyrighted works that were disseminated in Canada over the Internet. Among the issues before this Court was whether ISPs could claim the protection of an exemption from the Copyright Act on the basis that, as intermediaries, they did not "communicate" the works. Writing for the majority, Binnie J. held that they could.

112. The relevant provision in the Copyright Act, s.2.4(1)(b) provides:

For the purposes of communication to the public by telecommunication,

(b) a person whose only act in respect of the communication of a work or other subject-matter to the public consists of providing the means of telecommunication necessary for another person to so communicate the work or other subject-matter does not communicate that work or other subject-matter to the public.127

113. Justice Binnie interpreted the exemption provision in its "ordinary and grammatical sense in the proper context."128 He concluded that, since ISPs are content-neutral conduits that do not "engage ... in acts that relate to the content of the communication," they do not "communicate" a work under the Copyright Act.129 In doing so, he referred to Electric Despatch and affirmed the Copyright Board's conclusion that an ISP would be exempt from the operation of the Copyright

127 Copyright Act, R.S.C. 1985, c. C-42, s.2.4(1)(b) [emphasis added] 128 SOCAN Tariff 22, supra note 76 at para. 91 129 Id. at para. 92 - 33 -

Act to the extent that "its role in respect of any given transmission is limited to providing the means necessary to allow data initiated by other persons to be transmitted over the Internet."130

114. Having reached this conclusion, Binnie J. noted that his interpretation was consistent with an international copyright treaty and a European directive.131 He also emphasized that his conclusion was informed by ISPs' ignorance of the content disseminated using their services and the impracticality of having ISPs monitor the "prodigious" amount of material on the Intemet.132

115. Like Electric Despatch, SOCAN Tariff 22 is illuminating in this case. First, the exemption for "means of telecommunication" under the Copyright Act bears a close resemblance to the "telecommunications common carrier" exemption under the Broadcasting Act. As the Court of Appeal stated, "the distinction between the means of communication and the communication itself is as fundamental to the Broadcasting Act as it is to the Copyright Act."133 Second, this Court considered the exact technology at issue in this case, and concluded that ISPs are mere content-neutral intermediaries. Third, this Court laid emphasis on the fact that ISPs' content neutrality was a central element in determining that they are conduits that do not "communicate."

The Court of Appeal properly distinguished Capital Cities, Dionne and the Radio Reference

116. While drawing on Electric Despatch and SOCAN Tariff 22, the Court of Appeal correctly found that the decisions in Capital Cities, Dionne, and the Radio Reference cast no light on the critical issues in this reference.134 None of these decisions concerned the meaning of "transmission", the meaning of "broadcasting" under the 1991 Broadcasting Act, or the function of ISPs.

(1) Capital Cities is irrelevant for three reasons. First, it concerned the scope of federal jurisdiction rather than the relative scope of the Broadcasting Act and the Telecommunications Act. Second, it concerned an entirely different definition of "broadcasting" under the Broadcasting Act, which did not focus on the

130 Id. at para. 95 131 Id. at paras. 97-98 132 1d. at para. 101 133 Reasons, para. 44, AR, Vol. I, Tab 3, p. 27

134 Capital Cities, supra note 85; Public Service Board v. Dionne, [1978] 2 S.C.R. 191, ABOA, Tab 22; Re Radio Reference, [1932] A.C. 304 (P.C.), ABOA, Tab 25 -34-

"transmission of programs." Third, the activities at issue were those of one overarching undertaking, Rogers, with the ability to select and control content. There was never any doubt that Rogers, as a cable company, was a BDU, or what is defined under the current Broadcasting Act as a distribution undertaking.

(2) Dionne is similarly unavailing to the appellants. First, the case concerned only the constitutional limits on federal jurisdiction when distinct entities were broadcasting and receiving television signals. Second, as in Capital Cities, there was no dispute that the undertakings exercised control over the content they broadcast.

(3) The Radio Reference is irrelevant based on the issues before the Privy Council: "(1.) Has the Parliament of Canada jurisdiction to regulate and control radio communication? (2.) If not, in what particulars is the jurisdiction limited?"135 The entire discussion regarding the distinction between transmitting and receiving apparatuses was to the end of determining whether, for the purposes of jurisdiction, one apparatus could fall under federal jurisdiction and the other under provincial jurisdiction.

The Broadcasting Act and the Telecommunications Act work symbiotically to regulate ISPs as "telecommunications common carriers"

117. The Broadcasting Act and the Telecommunications Act complement each other as part of an overarching regulatory structure. The appellants' "single system" refrain is therefore unhelpful, no matter how often they repeat it: the task at hand is to trace the contours of each Act as part of a system defined by both Acts. As the appellants themselves recognize, "the statutory scheme with which the Broadcasting Act is integrated is ... the Telecommunications Act."136 Neither governs a single, all-encompassing system. Rather, each Act references the other in defining its own scope. These references establish that, when ISPs are acting as conduits for content furnished by others, they are to be regulated under the Telecommunications Act.

135 Re Radio Reference, id. at 305 136 Appellants' Factum, para. 95 -35-

118. First, the Broadcasting Act establishes in s. 4(4) that its reach does not extend to the dominion of the Telecommunication Act:

For greater certainty, this Act does not apply to any telecommunications common carrier, as defined in the Telecommunications Act, when acting solely in that capacity.137

This provision demonstrates that Parliament never intended for the Broadcasting Act to capture all activities that may be tangentially related to "broadcasting." To the contrary, the Broadcasting Act recognizes that the activities of telecommunications common carriers should never be caught by the Act, and to remove all doubt explicitly exempted them from the Act's operation. The effect, as the Court of Appeal found, is akin to that of the Copyright Act's exemption of content-neutral conduits that might otherwise be considered to be under its purview.

119. Second, s. 28 of the Telecommunications Act demonstrates that Parliament accounted for the role that telecommunications common carriers, such as facilities-based ISPs, may play in the dissemination of "broadcasting" and endeavoured to regulate such activities under the Telecommunications Act itself. Section 28 provides that the CRTC may have regard to the policy of the Broadcasting Act when determining if there has been unjust discrimination "in relation to any transmission of programs ... through the terrestrial distribution facilities of a Canadian carrier".138 Were the Broadcasting Act intended to be a monolithic system to capture all incidental elements of broadcasting, this provision would not have been enacted.

120. Section 28 further illuminates the scope of "transmission" under the Broadcasting Act. In referring to the possibility that a "transmission of programs" may be made "by satellite" or "through the terrestrial distribution facilities of a Canadian carrier," the provision highlights Parliament's view that neither satellites nor distribution facilities transmit programs: they simply provide the structures "by" or "through" which others transmit.139

121. Third, s. 9(1)(f) of the Broadcasting Act reinforces s. 28 of the Telecommunications Act by demonstrating that Parliament accounted for the possibility that "broadcasting undertakings"

137 Broadcasting Act, s. 4(4)

138 Telecommunications Act, s. 28(1) [emphasis added] 139 Id -36- may seek to distribute their content using the facilities of a telecommunications common carrier. The provision allows the CRTC to require that broadcasting undertakings get permission from the Commission before entering into such agreements.I4° In effect, Parliament intended that a telecommunications common carrier could retain its status as a telecommunications common carrier even when distributing "broadcasting." Were a telecommunications common carrier automatically subject to the Broadcasting Act when distributing broadcasting, this provision would be entirely superfluous.

"Technological neutrality" is neither threatened nor relevant

122. The appellants claim that the Court of Appeal's decision "allows the intent of Parliament to be thwarted by the nature of technology."141 This assertion is unfounded.

123. The Court of Appeal proceeded on the twin premises that the Broadcasting Act is "technology neutral" and that "broadcasting" is available on the Internet. Embracing these premises, however, did not resolve the question. In the Court's words: "this does not assist in determining who is doing the 'broadcasting'."142

124. The only question in the reference was whether ISPs are "broadcasting undertakings" when they provide their subscribers access to "broadcasting" available on the Internet. The only effect of the Court's decision, in line with the question posed by the CRTC, is to confirm that the CRTC's long-standing practice is correct, and that ISPs are not "broadcasting undertakings" subject to the Broadcasting Act when operating as content-neutral Internet conduits.

125. The Court's decision has no bearing on the CRTC's power to regulate "broadcasting undertakings" that do "broadcast" on the Internet.

PART IV — SUBMISSIONS ON COSTS

126. Consistent with its position in the Court of Appeal, the ISP Coalition agrees with the appellants that no costs should be awarded.

140 Broadcasting Act, s. 9(1)(f) 141 Appellants' Factum at para. 91

142 Reasons, paras. 31-33, 58 -37-

PART V — ORDER REQUESTED

127. The ISP Coalition requests an order dismissing this appeal.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

Counsel for the Respondents, Bell Aliant Regional Communications, LP, Bell Canada, Cogeco Cable Inc., MTS Allstream Inc., Rogers Communications Inc., TELUS Communications Company and Videotron Ltd. -38-

PART VI — AUTHORITIES A. Statutory Authorities

Authority Paragraph(s) in Part III

Broadcasting Act, S.C. 1991, c. 11 96-100, 118, 121

Communications Decency Act, 47 U.S.C. §230(c), (f) (1996) 91

Copyright Act, R.S.C. 1985, c. C-42 112-113

Digital Millennium Copyright Act, 17 U.S.C. §512(b) (2008) 87

EC Directive 2000/31/EC of the European Parliament and of the Council of 8 87 June 2000 on certain legal aspects of information society services, in particular electronic commerce, [1000] 0. J. L. 178/1 at art. 12

Interpretation Act, R.S.C. 1985 c. 1-21 94

Telecommunications Act, S.C. 1993, c. 38 119-120

B. Jurisprudence

Authority Paragraph(s) in Part III

ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board), 2006 SCC 4, 94 [2006] 1 S.C.R. 140

Bell Express Vu Limited Partnership v. Rex, 2002 SCC 43, [2002] 2 S.C.R. 559 94

Bunt v. Tilley, [2006] 3 All E.R. 336 (Q.B.) 88

Capital Cities Communications Inc. v. Canadian Radio-television Commission 116 et al., [1978] 2 S.C.R. 141

CoStar Group, Inc. v. LoopNet, Inc., 373 F 3d 544 (4th Cir. 2004) 86

Council of Canadians with Disabilities v. VIA Rail Canada Inc., 2007 SCC 15, 94 [2007] 1 S.C.R. 650

Doe v. GTE Corporation, 347 F 3d 655 (7th Cir. 2003) 90

Electric Despatch Co. of Toronto v. Bell Telephone Co. of Canada, [1891] 20 84, 104, 107-109 S.C.R. 83 -39-

Housen v. Nikolaisen, [2002] 2 S.C.R. 235 80

Lunney v. Prodigy Services Co., 723 N.E. 2d 539 (N.Y. 1999) 89

Public Service Board v. Dionne, [1978] 2 S.C.R. 191 116

R. v. Adams, [1995] 4 S.C.R. 707 94

Re Radio Reference, [1932] A.C. 304 (P.C.) 116

Re Rizzo & Rizzo Shoes Ltd., [1998] 1 S.C.R. 27 93-94

Roadshow Films Ply Ltd. v. iiNet Limited (2010), 216 A.L.R. 215 (Fed. Ct. of 85 Australia)

Society of Composers, Authors and Music Publishers of Canada v. Canadian 84, 104, 111-114 Assn. of Internet Providers, [2004] 2 S.C.R. 427

Zeran v. America Online, 129 F 3d 327 (4th Cir. 1997), cert. denied, 524 U.S. 91 937 (1998)

C. Secondary Sources

Authority Paragraph(s) in Part III

Matthew Collins, The Law of Defamation and the Internet, 2d ed. (Oxford: 88 Oxford University Press, 2005), as cited in Bunt v. Tilley, [2006] 3 All E.R. 336 (QB)

Ruth Sullivan, Sullivan on the Construction of Statutes, 5th Ed. (Markham: 93-94 LexisNexis Canada Inc., 2008) -40-

PART VII – STATUTES

Broadcasting Act, S.C. 1991, c. 11 2. (1)

"broadcasting" means any transmission of "radiodiffusion" Transmission, a l'aide programs, whether or not encrypted by radio d'ondes radioelectriques ou de tout autre waves or other means of telecommunication moyen de telecommunication, d'emissions for reception by the public by means of encodees ou non et destinees a etre revues par broadcasting receiving apparatus, but does not le public a l'aide d'un recepteur, a l'exception include any such transmission of programs that de celle qui est destine a la presentation dans is made solely for performance or display in a un lieu public seulement. public place;

"broadcasting undertaking" includes a "enterprise de radiodiffusion" S ' entend distribution undertaking, a programming notamment d'une entreprise de distribution ou undertaking and a network; de programmation, ou d'un reseau.

"distribution undertaking" means an "enterprise de distribution" Entreprise de undertaking for the reception of broadcasting reception de radiodiffusion pour and the retransmission thereof by radio waves retransmission, a l'aide d'ondes or other means of telecommunication to more radioelectriques ou d'un autre moyen de than one permanent or temporary residence or telecommunication, en vue de sa reception dwelling unit or to another such undertaking; dans plusieurs residences permanentes ou temporaires ou locaux d'habitation, ou en vue de sa reception par une autre entreprise semblable.

"network" includes any operation where "reseau" Est assimilee a un reseau toute control over all or any part of the programs or exploitation on le controle de tout ou partie des program schedules of one or more broadcasting emissions ou de la programmation d'une ou undertakings is delegated to another plusieurs entreprises de radiodiffusion est undertaking or person; delegue a une autre entreprise ou personne.

"program" means sounds or visual images, or "emission" Les sons ou les images — ou leur a combination of sounds and visual images, combinaison — destines a informer ou divertir, that are intended to inform, enlighten or a l'exception des images, muettes ou non, entertain, but does not include visual images, consistant essentiellement en des lettres ou des whether or not combined with sounds, that chiffres. consist predominantly of alphanumeric text;

"programming undertaking" means an "enterprise de programmation" Entreprise undertaking for the transmission of programs, de transmission d'emissions soit directement either directly by radio waves or other means l'aide d'ondes radioelectriques ou d'un autre of telecommunication or indirectly through a moyen de telecommunication, soit par distribution undertaking, for reception by the l'intermediaire d'une entreprise de distribution, public by means of broadcasting receiving en vue de leur reception par le public a l'aide -41- apparatus; d'un recepteur.

2.

(3) This Act shall be construed and applied in a (3) L' interpretation et l'application de la manner that is consistent with the freedom of presente loi doivent se faire de maniere expression and journalistic, creative and compatible avec la liberte d'expression et programming independence enjoyed by l'independance, en matiere de journalisme, de broadcasting undertakings. creation et de programmation, dont jouissent les entreprises de radiodiffusion.

3.

(1) It is hereby declared as the broadcasting (1) Il est declare que, dans le cadre de la policy for Canada that [...] politique canadienne de radiodiffusion : [...]

(e) each element of the Canadian e) tous les elements du systeme doivent broadcasting system shall contribute in an contribuer, de la maniere qui convient, a la appropriate manner to the creation and creation et la presentation d'une presentation of Canadian programming; programmation canadienne;

(f) each broadcasting undertaking shall f) toutes les entreprises de radiodiffusion make maximum use, and in no case less sont tenues de faire appel au maximum, et than predominant use, of Canadian creative dans tous les cas au moths de maniere and other resources in the creation and predominante, aux ressources — creatrices presentation of programming, unless the et autres — canadiennes pour la creation et nature of the service provided by the la presentation de leur programmation undertaking, such as specialized content or moins qu'une telle pratique ne s'avere format or the use of languages other than difficilement realisable en raison de la French and English, renders that use nature du service — notamment, son impracticable, in which case the contenu ou format specialise ou l'utilisation undertaking shall make the greatest qui y est faite de langues autres que le practicable use of those resources; [...] francais ou l'anglais qu'elles fournissent, auquel cas elles devront faire (h) all persons who are licensed to carry on appel aux ressources en question dans toute broadcasting undertakings have a la mesure du possible; [...] responsibility for the programs they broadcast; h) les titulaires de licences d'exploitation d'entreprises de radiodiffusion assument la (t) distribution undertakings responsabilite de leurs emissions; [...]

(i) should give priority to the carriage t) les entreprises de distribution : of Canadian programming services and, in particular, to the carriage of local (i) devraient donner priority a la Canadian stations, [...] fourniture des services de programmation canadienne, et ce en particulier par les stations locales -42-

canadiennes, [...]

4.

(2) This Act applies in respect of broadcasting (2) La presente loi s'applique aux entreprises undertakings carried on in whole or in part de radiodiffusion exploitees — meme en partie within Canada or on board [...] — au Canada ou a bord : [...]

(3) For greater certainty, this Act applies in (3) La presente loi s'applique aux entreprises respect of broadcasting undertakings whether de radiodiffusion exploitees ou non dans un but or not they are carried on for profit or as part lucratif ou dans le cours d'une autre activity. of, or in connection with, any other undertaking or activity.

(4) For greater certainty, this Act does not (4) Il demeure entendu que la presente loi ne apply to any telecommunications common s'applique pas aux entreprises de carrier, as defined in the Telecommunications telecommunication — au sens de la Loi sur les Act, when acting solely in that capacity telecommunications — n'agissant qu'a ce titre.

5.

(1) Subject to this Act and the (1) Sous reserve des autres dispositions de la Radiocommunication Act and to any directions presente loi, ainsi que de la Loi sur la to the Commission issued by the Governor in radiocommunication et des instructions qui lui Council under this Act, the Commission shall sont donnees par le gouverneur en conseil sous regulate and supervise all aspects of the le regime de la presente loi, le Conseil Canadian broadcasting system with a view to reglemente et surveille tous les aspects du implementing the broadcasting policy set out systeme canadien de radiodiffusion en vue de in subsection 3(1) and, in so doing, shall have mettre en oeuvre la politique canadienne de regard to the regulatory policy set out in radiodiffusion. subsection (2). (2) La reglementation et la surveillance du (2) The Canadian broadcasting system should systeme devraient etre souples et a la fois : be regulated and supervised in a flexible manner that a) tenir compte des caracteristiques de la radiodiffusion dans les langues francaise et (a) is readily adaptable to the different anglaise et des conditions differentes characteristics of English and French d'exploitation auxquelles sont soumises language broadcasting and to the different les entreprises de radiodiffusion qui conditions under which broadcasting diffusent la programmation dans l'une ou undertakings that provide English or l'autre langue; programming operate; b) tenir compte des preoccupations et des (b) takes into account regional needs and besoins regionaux; concerns; c) pouvoir aisement s'adapter aux progres (c) is readily adaptable to scientific and scientifiques et techniques; - 43 -

technological change; d) favoriser la radiodiffusion a l'intention des Canadiens; (d) facilitates the provision of broadcasting to Canadians; e) favoriser la presentation d' emissions canadiennes aux Canadiens; (e) facilitates the provision of Canadian programs to Canadians; f) permettre la mise au point de techniques d'information et leur application ainsi que (f) does not inhibit the development of la fourniture aux Canadiens des services information technologies and their qui en decoulent; application or the delivery of resultant services to Canadians; and g) tenir compte du fardeau administratif qu'elles sont susceptibles d'imposer aux (g) is sensitive to the administrative burden exploitants d'entreprises de radiodiffusion. that, as a consequence of such regulation and supervision, may be imposed on persons carrying on broadcasting undertakings. (3) Le Conseil privilegie, dans les affaires dont it connait, les objectifs de la politique (3) The Commission shall give primary canadienne de radiodiffu.sion en cas de conflit consideration to the objectives of the avec ceux prevus au paragraphe (2). broadcasting policy set out in subsection 3(1) if, in any particular matter before the Commission, a conflict arises between those objectives and the objectives of the regulatory policy set out in subsection (2).

9.

(1) Subject to this Part, the Commission may, (1) Sous reserve des autres dispositions de la in furtherance of its objects, [...] presente partie, le Conseil peut, dans Pexecution de sa mission [...] (f) require any licensee to obtain the approval of the Commission before f) obliger les titulaires de licences a entering into any contract with a obtenir l'approbation prealable par le telecommunications common carrier for the Conseil des contrats passes avec les distribution of programming directly to the exploitants de telecommunications pour la public using the facilities of that common distribution — directement au public — de carrier; programmation au moyen de Fequipement de ceux-ci;

(4) The Commission shall, by order, on such (4) Le Conseil soustrait, par ordonnance et aux terms and conditions as it deems appropriate, conditions qu'il juge indiquees, les exploitants exempt persons who carry on broadcasting d'entreprise de radiodiffusion de la categorie undertakings of any class specified in the order qu'il precise a toute obligation decoulant soit from any or all of the requirements of this Part de la presente partie, soit de ses reglements or of a regulation made under this Part where d'application, dont it estime l'execution sans -44- the Commission is satisfied that compliance consequence majeure sur la mise en oeuvre de with those requirements will not contribute in a la politique canadienne de radiodiffusion. material manner to the implementation of the broadcasting policy set out in subsection 3(1). - 45 -

Copyright Act, R.S.C. , 1985, c. C-42

2.4(1)

For the purposes of communication to the Les regles qui suivent s'appliquent dans les cas public by telecommunication, de communication au public par telecommunication : (b) a person whose only act in respect of the communication of a work or other (b) n'effectue pas une communication au subject-matter to the public consists of public la personne qui ne fait que fournir a providing the means of telecommunication un tiers les moyens de telecommunication necessary for another person to so necessaires pour que celui-ci l'effectue; communicate the work or other subject- matter does not communicate that work or other subject-matter to the public; -46-

Telecommunications Act, S.C. 1993 c. 38

2.(1)

"Canadian carrier" means a "enterprise canadienne" Entreprise de telecommunications common carrier that is telecommunication qui releve de la subject to the legislative authority of competence federale. Parliament;

"intelligence" means signs, signals, writing, "information" Signes, signaux, ecrits, images, images, sounds or intelligence of any nature; sons ou renseignements de toute nature

"telecommunications" means the emission, "telecommunications" La transmission, transmission or reception of intelligence by l'emission ou la reception d'information soit any wire, cable, radio, optical or other par systeme electromagnetique, notamment par electromagnetic system, or by any similar fil, cable ou systeme radio ou optique, soit par technical system; tout autre procede technique semblable.

"telecommunication common carrier" "entreprise de telecommunications" means a person who owns or operates a Proprietaire ou exploitant d'une installation de transmission facility used by that person or transmission grace a laquelle sont fournis par another person to provide telecommunications lui-merne ou une autre personne des services services to the public for compensation; de telecommunication au public moyennant contrepartie.

"telecommunications facility" means any "installation de telecommunications" facility, apparatus or other thing that is used or Installation, appareils ou toute autre chose is capable of being used for servant ou pouvant servir a la telecommunications or for any operation telecommunication ou a toute operation qui y directly connected with telecommunications, est directement liee, y compris les installations and includes a transmission facility; de transmission.

"telecommunications service" means a "service de telecommunications" service provided by means of Service fourni au moyen d'installations de telecommunications facilities and includes the telecommunication, y compris la fourniture — provision in whole or in part of notamment par vente ou location — , meme telecommunications facilities and any related partielle, de celles-ci ou de materiel connexe. equipment, whether by sale, lease or otherwise;

"telecommunications service provider" "fournisseur de services de means a person who provides basic telecommunication" La personne qui fournit telecommunications services, including by des services de telecommunication de base, y exempt transmission apparatus; compris au moyen d'un appareil de transmission exclu.

"transmission facility" means any wire, cable, "installation de transmission" Tout systeme radio, optical or other electromagnetic system, electromagnetique — notamment fil, cable ou - 47 - or any similar technical system, for the systeme radio ou optique — ou tout autre transmission of intelligence between network procede technique pour la transmission termination points, but does not include any d'information entre des points d'arrivee du exempt transmission apparatus. reseau, a l'exception des appareils de transmission exclus.

4. This Act does not apply in respect of La presente loi ne s'applique pas aux broadcasting by a broadcasting undertaking. entreprises de radiodiffusion pour tout ce qui concerne leurs activites de radiodiffusion.

7. It is hereby affirmed that telecommunications La presente loi affirme le caractere essentiel performs an essential role in the maintenance des telecommunications pour l'identite et la of Canada's identity and sovereignty and that souverainete canadiennes; la politique the Canadian telecommunications policy has as canadienne de telecommunication vise a : its objectives a) favoriser le developpement ordonne des (a) to facilitate the orderly development telecommunications partout au Canada en throughout Canada of a un systerne qui contribue a sauvegarder, telecommunications system that serves to enrichir et renforcer la structure sociale et safeguard, enrich and strengthen the social economique du Canada et de ses regions; and economic fabric of Canada and its regions; b) permettre l'acces aux Canadiens dans toutes les regions — rurales ou urbaines (b)to render reliabl'e and affordable — du Canada a des services de telecommunications services of high telecommunication stirs, abordables et de quality accessible to Canadians in both qualite; urban and rural areas in all regions of Canada; c) accroitre l'efficacite et la competitivite, sur les plans national et international, des (c) to enhance the efficiency and telecommunications canadiennes; competitiveness, at the national and international levels, of Canadian d) promouvoir l'accession a la propriete telecommunications; des entreprises canadiennes, et a leur controle, par des Canadiens; (d)to promote the ownership and control of Canadian carriers by Canadians; e) promouvoir l'utilisation d'installations de transmission canadiennes pour les (e) to promote the use of Canadian telecommunications a l'interieur du transmission facilities for Canada et a destination ou en provenance telecommunications within Canada and de l'etranger; between Canada and points outside Canada; f) favoriser le libre jeu du marche en ce qui concerne la fourniture de services de (f) to foster increased reliance on market telecommunication et assurer l'efficacite - 48 -

forces for the provision of de la reglementation, dans le cas oil celle- telecommunications services and to ensure ci est necessaire; that regulation, where required, is efficient and effective; g) stimuler la recherche et le developpement au Canada dans le (g) to stimulate research and development domaine des telecommunications ainsi que in Canada in the field of l'innovation en ce qui touche la fourniture telecommunications and to encourage de services dans ce domaine; innovation in the provision of telecommunications services; h) satisfaire les exigences economiques et sociales des usagers des services de (h) to respond to the economic and social telecommunication; requirements of users of telecommunications services; and i) contribuer a la protection de la vie privee des personnes. (i) to contribute to the protection of the privacy of persons.

28.

(1) The Commission shall have regard to the (1) Le Conseil doit tenir compte de la politique broadcasting policy for Canada set out in canadienne de radiodiffusion expos& au subsection 3(1) of the Broadcasting Act in paragraphe 3(1) de la Loi sur la radiodiffusion determining whether any discrimination is pour determiner s'il y a eu discrimination, unjust or any preference or disadvantage is preference ou desavantage injuste, indu ou undue or unreasonable in relation to any deraisonnable, selon le cas, dans une transmission of programs, as defined in transmission d'emissions — au sens du subsection 2(1) of that Act, that is primarily paragraphe 2(1) de cette loi — principalement direct to the public and made destinee a etre captee directement par le public et realisee soit par satellite, soit au moyen des (a) by satellite; or installations de distribution terrestre de l'entreprise canadienne, en liaison ou non avec (b) through the terrestrial distribution des installations de l'entreprise de facilities of a Canadian carrier, whether radiodiffusion. alone or in conjunction with facilities owned by a broadcasting undertaking. (2) En cas de desaccord entre une entreprise de (2) Where a person who carries on a radiodiffusion et une entreprise canadienne sur broadcasting undertaking does not agree with a l'attribution des canaux de satellite en vue de la Canadian carrier with respect to the allocation transmission par celle-ci d'emissions — au of satellite capacity for the transmission by the sens du paragraphe 2(1) de la Loi sur la carrier of programs, as defined in subsection radiodiffusion — par satellite, le Conseil peut 2(1) of the Broadcasting Act, the Commission attribuer des canaux a certaines entreprises de may allocate satellite capacity to particular radiodiffusion, s'il est convaincu que cela broadcasting undertakings if it is satisfied that favorisera la mise en oeuvre de la politique the allocation will further the implementation canadienne de radiodiffusion. of the broadcasting policy for Canada set out in -49- subsection 3(1) of that Act.

34.

(1) The Commission may make a (1) Le Conseil peut s'abstenir d'exercer — en determination to refrain, in whole or in part tout ou en partie et aux conditions qu'il fixe — and conditionally or unconditionally, from the les pouvoirs et fonctions que lui conferent exercise of any power or the performance of normalement les articles 24, 25, 27, 29 et 31 a any duty under sections 24, 25, 27, 29 and 31 l'egard des services — ou categories de in relation to a telecommunications service or services — de telecommunication fournis par class of services provided by a Canadian les entreprises canadiennes dans les cas ou it carrier, where the Commission finds as a conclut, comme question de fait, que son question of fact that to refrain would be abstention serait compatible avec la mise en consistent with the Canadian oeuvre de la politique canadienne de telecommunications policy objectives. telecommunication.