Oh what a tangled web: Bell vs the Internet at Federal Court

mobiletv-fca-jan19-1219

Bell Mobility’s legal team conferred on a break

~~~

On Tuesday, January 19, the Federal Court of Appeal heard oral arguments from several parties about Bell’s Mobile TV service and whether it had violated Canadian law. In attendance were 13 lawyers, not counting the panel on the bench, which made it 16 lawyers, just shy of the spectator count in the gallery.

The spectators included several staunch advocates for the open Internet (Ben, Reza, JF, Laura, Cynthia, me), not to mention our tireless legal counsel, Philip Palmer, who agreed to represent a ragtag bunch he barely knew. 

mobiletv-fca-jan19-1218

Philip Palmer acted as counsel for respondents Klass, Ellis and McKelvey

________________________________________________________________________

ben-nowak-feb8-150x93Ben Klass filed a complaint at the CRTC in November 2013 against Bell Mobility; the CRTC found in Ben’s favor in January 2015; Bell appealed the CRTC’s decision in March 2015; the appeal was heard January 19th, 2016. Ben argued Bell’s Mobile TV service was illegal because it ran without data charges, whereas other (competing) TV services on Bell Mobility did carry such charges, making them 8 times more expensive, thus creating an “undue preference” for Bell’s own (much cheaper) content, which violates the Telecommunications Act. My first post on the case: Ben Klass asks CRTC to stop Bell’s delinquency on Mobile TV (Nov 24, 2013).

_______________________________________________________________________

What’s the problem?

The issues raised by Bell’s appeal from the CRTC decision are not easy to explain. To begin with, the Federal Court rules stipulate that appeals can only address issues of law and jurisdiction, not issues of fact (though it’s hard to avoid them altogether). angelsThe lawyers spent most of the day parsing legislation, working from widely divergent interpretations of the Broadcasting and Telecommunications Acts.

The goal of this exercise is to lead the court to a determination as to exactly what legal provisions should apply when a licensee like Bell is acting as both a broadcaster and a telecommunications carrier. If a licensee is engaged in broadcasting, argues Bell, then it doesn’t have to care about undue preference or unjust discrimination, since broadcasters decide for themselves what to program, and when and how to transmit their programs to viewers (the CRTC does have a say).

The outcome of this case could have a major role in shaping our online future. If Bell prevails, that will provide a huge boost to its long-term plan to make the Internet like cable-TV. And the other vertically integrated ISPs (Rogers, Shaw and Quebecor Media Inc) will follow suit, since they have the same incentives and opportunities to act as gatekeepers rather than as a simple access link to the public Internet.

Angels and pins

In the highly circumscribed discourse of an appellate court, there’s no room for broad policy concerns: e.g. will Bell’s actions make the Internet less open and even more expensive? Everyone in the room was having enough trouble with the mystifying distinction between broadcasting and telecommunications. Bell was saying: Mobile TV is broadcasting and it doesn’t matter that Bell Mobility was also acting as a telecom carrier, because once you’re broadcasting, that trumps telecom. We were saying: sorry, Bell, you can’t escape the telecom role, since if you could, you’d be effectively choosing for yourself which regulatory regime to follow so as to minimize regulatory discipline imposed on you by the CRTC.

Canada treats broadcasting as a treasure of such great magnitude that the goal of protecting our national cultural sovereignty takes precedence over the parallel goal of protecting individual consumers engaged in communicating over networks.

That set of priorities flows from decisions made by Parliament 23 years ago when passing the original Telecommunications Act. The key provision here is the carve-out applied to the telecom fairness rules on behalf of broadcasting. Normally, telecom carriers like Bell may not play arbitrary favorites on their networks (hence the charge brought by the CRTC that Bell Mobility was giving itself an undue preference). But in this country, broadcasting transmissions are given special status. Thus, section 4 of the Telecommunications Act provides in a two-liner that the Act “does not apply in respect of broadcasting by a broadcasting undertaking.”

The CRTC’s insights

In its decision, the Commission made two important points grounded in reality, for lack of a better word. One was that “the consumer accesses the Mobile TV service on its mobile device in the same way that it accesses other apps” (para 19). In other words, the fact that two apps of whatever kind are used in the same way for very similar purposes by the consumer is a material consideration in this case.

The CRTC’s other point concerned the Internet as a content-agnostic platform:

“… the Commission finds that the functions performed by Bell Mobility and Vidéotron to establish the data connectivity and provide transport over their wireless access networks would be the same whether the content being transported is their mobile TV services, other broadcasting services, or non-broadcasting services. That is, the purpose of these functions is to establish data connectivity and transport the content – agnostic as to the content itself” (para 18, emphasis added).

This is a powerful argument that happens to coincide with the standard view of the Internet as a dumb transmission platform. When reiterated in the courtroom, however, it was vehemently rejected by Bell’s counsel as a “legal error.” It may well be that this court will agree – in strictly legal terms – that the Commission misspoke. But if they do agree and find for Bell, their ruling will be doing violence to the widely accepted views of what happens, factually speaking, when data is transmitted over the Internet.

I don’t imagine for a minute Parliament is going to get around to undoing these vexing distinctions any time soon. One reason for pessimism is that this outmoded view of the world is still very helpful to some actors – especially vertically integrated conglomerates like Bell, which has a huge vested interest in the regulatory arbitrage that is part and parcel of Canadian communications. It’s too bad that what’s helpful for Bell is distinctly unhelpful for the rest of us.

D.E.


PS: Some people have been unclear as to why third parties were in court when Bell’s beef was with the CRTC. We were unclear, indeed shocked, when we were served a motion document from Bell’s lawyers that began: “A legal proceeding has been commenced against you.” The “you” made for a strange list. In order of appearance: Ben Klass; Consumers’ Assoc of Canada; BC Council of Senior Citizens and the Public Interest Advocacy Centre (PIAC); Canadian Network Operators Consortium; Bragg Communications (Eastlink); Fenwick McKelvey; Jean-François Mezei (Vaxination Informatique); Canadian Internet Policy and Public Interest Clinic; David Ellis; Teresa Murphy; Telus.

How did a grad student, a young single mom, a bunch of seniors and a sprinkling of other private citizens end up on a list with Eastlink and Telus? We were all intervenors of record in the proceeding initiated by Ben’s complaint, and that made us respondents of record in Bell’s appeal from the CRTC decision. If that outcome sounds a little rococo, that’s what we thought too, especially when we read Bell was coming after us for costs.

We were angered by the way our participation in a democratic process at the CRTC was turned into a long-winded legal quagmire that had us facing off against the largest communications company in Canada, represented by one of the country’s most powerful law firms (McCarthy Tétrault). Random dudes (i.e. non-lawyers) have no say in the Federal Court and none of us had the $800/hr to retain counsel from one of the other Seven Angels.

These arrangements are an affront to due process and to our rights to participate in CRTC proceedings in which the public interest is at stake. They should be fixed.