The Supreme Court of Canada has announced that it will hear an important “convergence” case respecting regulatory treatment of Internet access to broadcasting content.

On March 24, the Court granted leave to appeal last summer’s judgement of the Federal Court of Appeal, which found that Internet Service Providers (ISPs) do not carry on “broadcasting undertakings”, within the meaning of the Broadcasting Act, when they provide access through the Internet to broadcasting material requested by users.

That decision, Re Canadian Radio-television and Telecommunications Commission (2010) FCA 178, was initiated by a Reference Order issued by the CRTC, in order to resolve fundamental questions respecting the distinction, for the purpose of the Broadcasting Act and the Telecommunications Act, between telecommunications service providers and broadcasting undertakings. In that case, the Federal Court of Appeal found that in providing content-neutral access to “broadcasting” material on the Internet, ISPs do not transmit programs, are therefore are not broadcasting undertakings, and accordingly do not fall within the regulatory ambit of the Broadcasting Act.

The reference arose from a proceeding initiated to consider issues pertaining to broadcasting in new media, in which the CRTC heard proposals from various cultural groups to impose a levy on ISPs, to be paid into a fund to support the creation and presentation of Canadian new media broadcasting content. Stakeholders opposed to the levy, including many ISPs, argued that the CRTC lacked jurisdiction to impose such a levy, since ISPs were not properly considered to be “broadcasting undertakings”, and therefore fell outside of the Commission’s jurisdiction under the Broadcasting Act. Extensive and contradictory legal opinions were submitted.

Although in its subsequent decision, Review of broadcasting in new media, the Commission determined that additional funding for new media content was neither necessary nor appropriate at this time, resolution of the threshold question of applicability of the Broadcasting Act to ISPs would clarify, in the near term, whether the reporting requirements and undue preference restrictions currently applicable to new media broadcasting undertakings would apply to ISPs. In the longer term, a finding by the Court that ISPs were broadcasting undertakings could allow the CRTC to impose a levy, or other regulatory restrictions, at some future date.