Bell Canada has dropped its controversial court action against the federal broadcast regulator, capping off a week of tension between the company, the government and the broadcasting sector.
In a move last week that surprised many in the broadcast sector for its brashness, Bell TV, owner of the country's largest satellite television service, served notice it was taking the Canadian Radio-television and Telecommunications Commission to court.
It was an unusual move because companies rarely clash so directly with the regulator - and certainly not in the court system.
However, the CRTC wasn't the intended target. Instead, Bell TV was fighting a bid by Canada's major networks to begin charging cable and satellite companies for their signals, and was looking to block the CRTC from forcing the two sides into negotiations
The networks, led by CTV and Global Television, want to begin collecting subscriber fees for their signals, just as cable channels do. The proposal, which the cable companies say will be passed on to consumers if approved, has divided the industry and turned into a major lobbying effort in Ottawa for both sides.
The CRTC has turned down the idea twice, but the regulator said in May it would allow the TV networks to negotiate a settlement with the cable and satellite companies, and if a deal could not be reached the matter could go to an arbitrator.
Seeing this as having the fees imposed on them, Bell filed documents with the Federal Court of Appeal last week arguing the CRTC couldn't make such a change without a formal hearing.
This week, the CRTC responded by putting the fee issue on the agenda at existing hearings set for the fall. The hearings, set for September, are now delayed until mid-November.
With the matter now formally on the agenda, Bell backed off. Borden Ladner Gervais LLP, the law firm representing Bell TV in the matter, sent letters to the CRTC, the Attorney-General of Canada and other parties yesterday informing them that the court action was being dropped.
The notice said Bell had chosen to "wholly discontinue this proceeding." Lawyers representing the company could not be reached.
Observers say CRTC chairman Konrad von Finckenstein was upset this week with Bell over being pushed to add the matter to the hearings.
In a move not normally seen in regulatory circles, in which companies generally try to stay in the good graces of the CRTC, the original court documents took aim at Mr. von Finckenstein, directly quoting comments he had made during hearings and pointing out that he was wrong in allowing negotiations to occur between the networks and the carriers.
This is said to have further increased the tensions over the matter.
The networks want to charge cable and satellite carriers 50 cents a subscriber for their signals.
Estimates peg the value of the proposal, known as fee for carriage, at between $60-million and $90-million a year in revenue for the broadcasters, depending on the size of the network.
The feud is also notable since Bell Canada is battling with CTV, the television network in which Bell owns a stake. Bell owns 15 per cent of CTVglobemedia, which is the parent company of CTV and also owns The Globe and Mail.
Grant Robertson