Majority
The judgment of Pigeon, Beetz and de Grandpré JJ. was delivered by
PIGEON J. (dissenting)
PIGEON J. (dissenting)—Each of the appellants operates a Buffalo TV station whose broadcasts are received in an area including Toronto. Rogers Cable TV Limited, Coaxial Colourview Limited and Bramalea Telecable Limited operate cable networks ("CATV") distributing TV and FM signals to some 120,000 subscribers (as of October 1, 1973) in and around Toronto. They will be hereafter referred to as "Rogers".
On July 16, 1971, the respondent Canadian Radio-Television Commission (the "Commission") issued a "Policy statement on cable television" including the following:
... The Commission will permit the removal by cable television licensees of the commercial value contained in
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the signals of stations not licensed to serve Canada. While cable television licensees will not be permitted to sell replacement commercial messages themselves, they will be encouraged to make contractual arrangements with Canadian television stations in their areas to insert replacement signals carrying commercial messages sold by the Canadian television stations.
On August 16, 1973, Rogers sent to the respondent the following Telex message:
Three threatening registered letters just arrived on behalf of Channels 2, 4 and 7, Buffalo signed by Gordon Henderson pursuant to our random commercial deletion and substitution policies. The Rogers Group of Companies hereby apply for a licence amendment to permit commercial deletion and substitution on a random basis on all United States Television Stations carried from time to time on the basic service which presently includes channels 2, 4 and 7 Buffalo. A random basis means three or more substitutions per evening on at least one of the Channels in alternation. All substitution messages would be special promotional information to subscribers such as free antenna removal, discounts for annual prepayment, additional channel offerings and the like as well as messages of general public interest. Please include as part of our licence amendment application which we hope will be heard at the public hearing in November.
The appellants intervened to oppose this application which was granted by the Commission under date May 1, 1974. An appeal to the Federal Court of Appeal, together with an application under s. 28 of the Federal Court Act, was dismissed on January 17, 1975. An appeal to this Court was taken by leave of this Court. On this appeal notice of a constitutional question was given with respect to the Commission's authority "to license and to regulate the content of programs carried by CATV systems situated wholly within provincial boundaries". The Attorney-General for Canada intervened to support the legislation and the Attorneys-General for the provinces of Ontario, Quebec, British Columbia, Saskatchewan and Alberta, to challenge it.
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It does not appear to me that there is any need in the present case to consider in a general way the extent of federal jurisdiction over CATV. We are concerned here exclusively with the Commission's jurisdiction to authorize the deletion of commercials from TV programs received by hertzian waves from U.S. broadcasting stations. This means that we are solely concerned with the regulation of the use that may be made of signals received from a foreign country by persons licensed to receive them for commercial purposes i.e., distribution to subscribers. In my view, this means that, irrespective of any other consideration, the judgment of this Court in Caloil Inc. v. Attorney General of Canada[18], is conclusive authority in support of federal jurisdiction to control such use. Laskin J., as he then was, stated as follows the ground on which there was unanimous agreement (at p. 553):
… the admitted authority of Parliament to regulate importation of goods from foreign countries was validly exercised in this case in including as part of the regulatory scheme a provision restricting the area of distribution of the goods within Canada by their importer.
Without dwelling at any length on the technical aspects of TV broadcasting and CATV, I find it necessary to devote some consideration to the economic structure of those operations. The income of TV broadcasters is essentially derived from the sale of commercials. The value of their programs lies therefore in the size of the audience they attract because the price they can obtain for the advertising spots depends on the size of that audience. They may, of course, sell time for broadcasting speeches and the like, but it is clear from the material in the case that, when the commercials are deleted from an ordinary TV program its commercial value is taken away. TV stations are not presently operating in a way which would enable them to obtain payment from program viewers.
On the other hand, CATV operates on the basis of providing a service to subscribers in consideration of an installation charge and a monthly fee. For some subscribers CATV is the only practical way of obtaining satisfactory signals, for many others, besides eliminating problems inherent in an
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antenna, it also provides a greater variety or better quality of signals. Irrespective of the reasons which bring set owners to CATV, the fact is that it reaches a large and growing number of TV set owners amounting to a commercially significant proportion of the TV stations audience, in some cases as much as 60 per cent. As mentioned in Notes published in the Harvard Law Review (Vol. 79, 1965-66, pp. 366-367), connection of a TV set to CATV usually means that signals are no longer received otherwise.
It is therefore apparent that if CATV operators were allowed to delete commercials from TV programs generally and to sell substitute messages for their own benefit, the whole economic basis of TV broadcasting stations, as well as of private FM radio stations, could ultimately be seriously affected. Hence the question: Does the TV and FM broadcasters' interest in their signals carried over CATV, depend exclusively on the policy of the licensing authority in that respect? The Policy statement of July 16, 1971, seems to imply the view that CATV operators could lawfully appropriate the commercial value of programs distributed to their subscribers, if not prohibited to do so by the licensing authority. It says:
While cable television licensees will not be permitted to sell replacement commercial messages themselves, they will be encouraged to make contractual arrangements with Canadian television stations in their areas to insert replacement signals carrying commercial messages sold by the Canadian television stations. (Italics added)
Rogers did not contract for the sale of substitute commercials through Canadian TV stations and it is therefore unnecessary to consider how such appropriation of the commercial value of appellants' program should be characterized. However, when threatened with legal proceedings, Rogers obviously became concerned with the validity of the assumptions inherent in the Policy statement. They therefore sought and obtained from the
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Commission an order which they now seek to support as a condition appended to their licences. To avoid, as much as possible, going into matters which are or may be the subject of other litigation, I will not dwell upon the civil aspect of the operation authorized by the Commission beyond noting that it involves the appropriation by the CATV operators of some of the commercial value of the appellants' broadcasts in the area served by Rogers, to the extent that TV sets in that area are fed by CATV rather than by an antenna. This appropriation is being made partly to Rogers' benefit (promotional information), partly the benefit of what Rogers consider a general public interest to be served.
I fail to see on what basis a distinction should be made in respect of the validity of the impugned order depending on the beneficiary of the substitute messages, Furthermore, there is no minimum proportion of general public interest messages specified. It seems to me that, from a legal point of view, the question must be considered on the basis that the impugned order authorizes Rogers to appropriate the commercial value of the appellants' programs carried on their CATV network. While the order does not permit the appropriation for the purpose of realizing a profit by selling substitute messages, I do not see what difference it makes whether the possible benefit is limited to the promotion of their business or may be expanded to include a realization by sale, as contemplated in the Policy statement. It therefore appears to me that in order to uphold the impugned order, it must be found that the Commission has the power of authorizing CATV operators to appropriate to themselves the value of TV programs carried on their network or it must be held that those operators may lawfully do it without such authorization unless prohibited by the Commission.
In considering whether either position is sustainable, one should bear in mind the nature of the right enjoyed by broadcasters. We must not be misled by the statement that licensees do not own the channel assigned to them, that they only enjoy a privilege which may be revoked by the licensing authority. The licence is not revokable at will but
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only for cause and, furthermore, it is really exclusive. The licensees of TV channels are not in the same situation as operators on citizen band or amateur band channels. A channel is assigned to a TV station in exclusivity within the area it is designed to serve and no licence will be granted to a station in another area if its signals are likely to cause interference. The Policy statement calls the TV station licence a "franchise". Although immaterial, the channel licensed to a TV station is therefore just as exclusive in its service area as the territory licensed to a CATV operator. These operators are clearly in the situation of utilities licensed to serve a definite territory on terms and conditions subject to control by the licensing authority. It is clear that each of them enjoys by his licence an exclusive franchise to serve his allotted territory. I can see no reason why the situation of each TV broadcaster in respect of his assigned channel would be legally inferior because his channel is immaterial.
In view of what I have just said, it appears to me that the Commission could not authorize a CATV operator to delete commercials from TV programs broadcast by a station licensed for a channel in the area. It would be an interference with the rights conferred by the licence. It would mean that the Commission would take away a part of the broadcaster's rights in respect of its legitimate clientele. It is equally clear, in my view, that CATV operators could not, apart from any condition or policy established by the Commission, appropriate to themselves the commercial value of broadcasts from licensed stations carried on their network, by selling commercials to be substituted for those that are broadcast by the station. It would be an infringement of the rights derived from the licence and possibly other rights also. The case of broadcasts from remote stations brought in by CATV would be different. It is doubtful if they would suffer injury by alteration of their signals in an area where they would otherwise not be received. In the Policy statement the Commission was concerned
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with the detriment suffered by a local station under those conditions due to the competition for the audience, but it is not an invasion of the licensed channel.
In the instant case, the programs from which commercial messages were being removed and replaced by Rogers did not come from Canadian licensed stations but from neighbouring U.S. stations. However, this was done in an area where the signals from those stations can be received directly on their assigned channels. The Policy statement makes it clear that, while it intended to guard jealously the interest of the Canadian TV stations, it intended to promote in their interest the kind of economic aggression against U.S. stations in which Rogers has been indulging at its urging:
The Commission has indicated in previous policy announcements how unlimited penetration by United States stations on a wholesale south to north basis would completely destroy the licensing logic of the Canadian broadcasting system as established by the Broadcasting Act. If a solution is not found to integrate cable into the overall system, the impact, by fracturing the economic basis of the private broadcasters, would also disrupt the Canadian cultural, educational and information imperatives of both the public and private sectors of the Canadian broadcasting system.
Of course, there is nothing new in protectionism. Governments have for a long time been levying customs duties, setting quotas or decreeing embargoes for a variety of reasons with which courts of law are not to be concerned. However, the Commission is not the Government and it does not enjoy the executive privilege which sometimes results in what is called "acts of state" against which a foreigner has no remedy before the courts. The Commission is an agency directed by the statute governing it, the Broadcasting Act (R.S.C., c. B-11) to implement the broadcasting policy enunciated in s. 3 of the Act. The first two paragraphs of s. 3 read:
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3. It is hereby declared that
(a) broadcasting undertakings in Canada make use of radio frequencies that are public property and such undertakings constitute a single system, herein referred to as the Canadian broadcasting system, comprising public and private elements;
(b) the Canadian broadcasting system should be effectively owned and controlled by Canadians so as to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada;
…
In addition to those provisions, it is necessary to consider that Canada is a party to the Inter-American Radiocommunications Convention of December 13, 1937 of which articles 11 and 21 are as follows:
Article 11 General Principles
(a) The contracting Governments recognize the sovereign right of all nations to the use of every radio broadcasting channel.
(b) The American Governments, upon the sole condition that no interference will be caused to the services of another country, may assign any frequency and any type of wave to any radio station under their authority.
(c) Nevertheless, the Governments recognize that, until technical development reaches a state that permits the elimination of radio interference of international character, regional arrangements are essential in order to promote standardization and to minimize such interference.
(d) For the solution of those problems which, because of special propagation characteristics and interference conditions of radio transmission in the various geographical zones require special provisions, the contracting Governments agree to divide the American continent into three regions, designated as the northern zone, the central zone, and the southern zone (Annex 3).
Article 21 Retransmissions
The contracting Governments shall take appropriate measures to ensure that no program transmitted by a broadcasting station may be retransmitted or rebroadcast, in whole or in part, by any other station without the previous authorization of the station of origin.
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The rebroadcasting station shall announce at suitable periods during the retransmission the nature of the broadcast, the location and the official call letters or other identification of the station of origin.
In respect of those stipulations of the Convention, the first questions arising are whether the deletion of the commercials effected by Rogers is an "interference" with the signals of the U.S. stations and whether the distribution of the U.S. stations programs by Rogers to their subscribers is a retransmission or rebroadcast by another station. Rogers' submission is that the Convention contemplates only interference with hertzian waves and rebroadcast by the same means. When the Convention was executed, CATV was unknown and unforeseen and, if articles 11 and 21 are read in light of the techniques available at the time, Rogers' submission may be unassailable, but I do not think they are properly to be so read.
The Ianguage of the Convention shows that the parties were well aware that they were dealing with a developing technology. It appears to me that the general intention should be given effect in the Iight of present developments, rather than on a strict construction of the language used. I must agree that Rogers do not interfere with hertzian waves radiating from the appellants' antennae, these waves can still be received on their assigned channels by a suitable antenna. However, the effect of the CATV set-up is that, in effect, the appellants' programs are now available to CATV subscribers only as delivered by Rogers. The latter are "broadcasting undertakings" under the Broadcasting Act. They should therefore be considered as broadcasting to their numerous subscribers. It seems to me that to hold that this is not a retransmission or rebroadcast within the meaning of article 21 of the Convention, is to fail to give effect to the true intention. It is to allow the intention to be defeated by using a different means to accomplish the same result. If Rogers after picking-up the appellants' programs with a suitable aerial were rebroadcasting them by hertzian waves on another channel against appellants' opposition, it would be a clear violation of article 21. Why
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should it make a difference from the point of view of the Convention if this rebroadcasting is done by means of coaxial cables, when the net result is essentially the same?
Some of the legal consequences of the transmission of TV programs by coaxial cable were considered, in respect of copyright legislation, in two cases that came at the same time, one before this Court, the other before the Supreme Court of the United States. The case in this Court was Composers, Authors and Publishers Association of Canada Ltd. v. CTV Television Network Ltd.[19] The question was whether CTV was infringing composers' copyright by transmitting programs to stations holding licences to broadcast the copy-righted works. After finding that such transmission to the stations was not "a communication of the works" within the literal meaning of the statute, this Court held that, on the basis of the intention disclosed by the language of the treaty annexed to the statute, it did not constitute an infringement, the treaty provision being aimed only at radio communications to the public i.e., broadcasts. Shortly afterwards, the Supreme Court of the United States reversed the judgment of the Federal Court of Appeals which has been pressed on us (Fortnightly Corp. v. United Artists[20]. Its conclusion was that the CATV operator (Fortnightly Corp.) did not infringe the rights of the copyright holders in distributing to its subscribers television programs broadcasts by stations holding a copyright licence. Stewart J. said in giving the opinion of the Court (at pp. 395-396):
At the outset it is clear that the petitioner's systems did not "perform" the respondent's copyrighted works in any conventional sense of that term, or in any manner envisaged by the Congress that enacted the law in 1909. But our inquiry cannot be limited to ordinary meaning and legislative history, for this is a statute that was drafted long before the development of the electronic phenomena with which we deal here. In 1909 radio itself was in its infancy, and television had not been invented.
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We must read the statutory language of 60 years ago in the light of drastic technological change.
In my view the same principle is a fortiori to be applied in construing an international convention as in construing a statute. While the language may reflect the state of technological development at the time of writing, this should not serve to stifle the application of the principles enunciated. The intention disclosed should be applied to unforeseen developments instead of being restricted to what was in existence at the time of writing. In Fortnightly Corp. CATV was adjudged to be merely a conduit bringing to the viewers the programs broadcast by the licensed TV stations. In view of the grounds of the decision, a different conclusion would, I think, have been reached if the programs had been recorded and rebroadcast by the CATV operator. It would have been new performances rather than a means of bringing the broadcasts to their audience.
In the present case, I doubt whether Rogers can properly be said to be interfering with the reception of appellants' broadcasts when deleting commercials and substituting new messages. I rather incline to the view that Rogers are rebroadcasting appellants' programs. However, I feel sure that it must be one or the other. If Rogers are not considered as rebroadcasting, then this means that they are considered as a mere conduit and, in that view of the case, the deletion of commercials is an interference.
I can find no merit in the contention that no TV station has so far complained of a CATV operator rebroadcasting its programs without its authorization. It is obvious that when the whole programs of a station are carried by a CATV operator it suffers no detriment, but on the contrary may gain an advantage. However, the situation becomes radically different when, instead of delivering to the subscribers the whole programs as received, commercials are deleted and other messages are substituted. In so doing, as I have previously pointed out, the CATV operator, instead of allowing the broadcasting station to retain the commercial
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value of its programs, appropriates it to itself or to other interests. I can see no reason why, under such circumstances, the broadcasters may not rely on the Convention provisions to object to such rebroadcasting without their authorization.
The next question is whether the appellants can rely on the international convention on an appeal to the courts from the decision of the Commission. The Radio Act, (R.S. c. R-1, s. 7) includes the following provision:
7. (1) The Minister may make regulations
(d) to carry out and make effective the terms of any international agreement, convention or treaty respecting telecommunications to which Canada is a party;
Pursuant to the predecessor of this enactment, the General Radio Regulations established by SOR/63/297 included the following provision which is still in force:
11. The licensee shall observe the provisions of the International Telecommunication Convention and any bilateral or multi-lateral telecommunication agreements for the time being in force and those regulations pertaining to the operation of radio that are made under the said convention and agreements.
When this regulation was enacted, all radio licences including those of TV stations and CATV networks were issued under the Radio Act. However, when the Broadcasting Act was enacted in 1968 (1967-1968 (Can.) c. 25), it was provided that licences to broadcasting undertakings, an expression which includes CATV as well as TV stations, would be issued by the Commission with the Department of Transport issuing a "technical construction and operating certificate". Rogers' submission is that, as a result of this change, they are not licensees within the meaning of Regulation 11. In my view, such technical construction of the Regulation is unjustified. The word "licensee" is not defined in the General Radio Regulations or
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in the Radio Act. Under ordinary circumstances it would apply only to licensees under that Act. However, this is a very special situation. The licensing function has been divided between two governmental authorities. Although Rogers are not licensees under the Radio Act, they are licensees in respect of their broadcasting undertaking. Nothing in the legislation enacted in 1968 or in the amendments to the Regulations indicates any intention to free broadcasting undertakings from the obligation of complying with Convention provisions. Regulation 11 was merely left unchanged. Under such circumstances this should mean that its scope and meaning remain unchanged.
Even on the assumption that Reg. 11 is now inapplicable to broadcasting undertakings, I cannot agree that the Commission may properly issue authorizations in violation of Canada's treaty obligations. Its duty is to implement the policy established by Parliament. While this policy makes no reference to Canada's treaty obligations, it is an integral part of the national structure that external affairs are the responsibility of the Federal Government. It is an oversimplification to say that treaties are of no legal effect unless implemented by legislation. In this connection I would refer to the judgment of the English Court of Appeal in Post Office v. Estuary Radio Ltd.[21] The question was whether a broadcasting station erected in the sea beyond the three-mile limit in force when the Wireless Telegraphy Act, 1949 was enacted, could be said to be operating illegally because it was now within the extended limits established by an international convention proclaimed by an Order in Council. Diplock L.J. said (at pp. 756-7):
It is common ground that the area included in the internal waters of the United Kingdom under the Convention, at any rate as respects "bays," is greater than that previously claimed by the Crown. No question,
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therefore, arises as to the Crown's right to abandon sovereignty without the authority of Parliament; and the Convention, of which this court must take judicial notice, thus constituted a declaration by the Crown of an extension to the area over which it would claim to exercise territorial sovereignty as internal waters of the United Kingdom when the Convention came into force, as it did, on September 10, 1964-a matter which lies within the sole prerogative power of the Crown without any constitutional need for the consent of Parliament. Had the Convention stood alone, it would have been binding upon this court and conclusive as to the area comprised in the "territorial waters" of the United Kingdom. But on September 25, 1964, it was followed by another declaration by the Crown in the form of an Order in Council, and this, since it is later in date, is the document by which we are bound and which we have to construe. If its meaning is clear, we must give effect to it, even if it is different from that of the Convention, for the Crown may have changed its mind in the period which elapsed between its ratification of the Convention on March 14, 1960, and the promulgation of the Order in Council, and the Crown has a sovereign right, which the court cannot question, to change its policy, even if this involves breaking an international convention to which it is a party and which has come into force so recently as fifteen days before.
But there is a presumption that the Crown did not intend to break an international treaty (see Salomon v. Commissioners of Customs and Excise), and if there is any ambiguity in the Order in Council, it should be resolved so as to accord with the provisions of the Convention in so far as that is a plausible meaning of the express words of the order…
Applying those principles, I would say that, on the appeal from the decision of the Commission, judicial notice ought to be taken that, by virtue of the Convention the appellants had a legal interest entitled to protection in the use of their assigned channels, for broadcasts in an area extending into Canada. Therefore the Commission could not validly authorize an interference with this interest in violation of the convention signed by Canada. I do not think it was argued that such interference was a tort and, on that account also, it could not be lawfully authorized by the Commission. I wish to stress that I am expressing no opinion either way on those two questions.
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It was contended on behalf of the appellants that the Commission's decision was invalid because it could properly be made only by regulation rather than in the exercise of administrative discretion. I do not find it necessary in this case to consider to what extent the Commission may exercise its powers by means of conditions appended to licences rather than by regulations. However, I wish to state that nothing in these reasons is to be taken as implying a departure from what was decided by the majority in Brant Dairy Co. v. Milk Commission of Ontario 22
For those reasons, I would allow the appeal and set aside the judgment of the Federal Court of Appeal and orders 74-100, 74-101, 74-102 of the Canadian Radio-Television Commission. The appellants are not asking for costs and none should be awarded to or against any party.
Appeal dismissed, PIGEON, BEETZ and DE GRANDPRÉ J.J. dissenting.
Solicitors for the appellants: Gowling & Henderson, Ottawa.
Solicitor for the respondent: J. E. Lawrence, Ottawa.
Solicitors for the intervenant Rogers Cable TV Limited: Peyton, Biggs & Graham, Toronto.
Solicitor for the Attorney General of Canada: D. S. Thorson, Ottawa.
Solicitor for the Attorney General of Ontario: F. W. Callaghan, Toronto.
Solicitors for the Attorney General of Quebec: Langlois, Drouin, Roy, Fréchette & Gaudreau, Quebec.
Solicitor for the Attorney General of British Columbia.' David H. Vickers, Victoria.
Solicitor for the Attorney General of Alberta: W. Henkel, Edmonton.
Solicitor for the Attorney General of Saskatchewan: K. Lysyk, Vancouver.
[1] [1975] F.C. 18.
[2] [1975] F.C. 18.
[3] [1932] A.C. 304.
[5] [1973] 3 O.R. 819.
[7] [1932] A.C. 54.
[8] [1954] A.C. 541.
[9] (1967), 377 F. 2d 872, reversed (1968), 392 U.S. 390.
[10] (1968), 392 U.S. 390.
[12] [1954] A.C. 541.
[13] [1950] A.C. 122.
[15] [1919] 1 K.B. 176.
[16] [1971] A.C. 610.
[17] [1976] 3 All E.R. 843.
[18] (1971] S.C.R. 543.
[20] (1968), 392 U.S. 390.
[21] [1968] 2 Q.B. 740.
Footnotes
- [1] [1975] F.C. 18.
- [2] [1975] F.C. 18.
- [3] [1932] A.C. 304.
- [4] (1965), 52 W.W.R. 286.
- [5] [1973] 3 O.R. 819.
- [6] [1978] 2 S.C.R. 191.
- [7] [1932] A.C. 54.
- [8] [1954] A.C. 541.
- [9] (1967), 377 F. 2d 872, reversed (1968), 392 U.S. 390.
- [10] (1968), 392 U.S. 390.
- [11] [1955] S.C.R. 529.
- [12] [1954] A.C. 541.
- [13] [1950] A.C. 122.
- [14] [1971] S.C.R. 543.
- [15] [1919] 1 K.B. 176.
- [16] [1971] A.C. 610.
- [17] [1976] 3 All E.R. 843.
- [18] (1971] S.C.R. 543.
- [19] [1968] S.C.R. 676.
- [20] (1968), 392 U.S. 390.
- [21] [1968] 2 Q.B. 740.
Cases cited
- Brant Dairy Co. v. Milk Commission of Ontario item-4211-1972-10-18
- F.C. 18 F.C. 18
- A.C. 304 A.C. 304
- 3 O.R. 819 3 O.R. 819
- A.C. 54 A.C. 54
- A.C. 541 A.C. 541
- Validity and Applicability of the Industrial Relations and Disputes Investigation Act scr-1955-529
- A.C. 122 A.C. 122
- Caloil Inc. v. Attorney General of Canada item-4923-1970-11-24
- A.C. 610 A.C. 610
- Composers, Authors and Publishers Assoc. of Canada Limited v. CTV Television Network Limit scr-1968-676