Quebec hotel company keeps exempt BDU status, despite protests of Quebecor and Bell

The CRTC has denied Quebecor Inc.’s request to sanction Coopérative de câblodistribution Hill Valley, and to remove it from the list of exempted broadcasting distribution undertakings (BDUs) after the federal court found Hill Valley was in violation of copyright laws for rebroadcasting TVA and TVA Sports. Hill Valley was founded in 2020 and operated without a licence in certain localities until its service was registered as an exempt BDU in February 2021. The order exempts broadcasters with fewer than 20,000 subscribers from certain regulatory requirements. “The commission’s general practice is to bring undertakings back into compliance rather than prosecute them,” the CRTC wrote in its Wednesday decision. “The commission finds that no measures should be imposed for Hill Valley’s distribution of TVA during the period of operation prior to 2021, since Hill Valley is now in compliance.” In regard to TVA Sports, the commission found that Hill Valley appears to be distributing its service contrary to what is permitted by the Copyright Act, which does not fall within the CRTCs jurisdiction. Prior to February 2021, Hill Valley was not registered as an exempt terrestrial BDU with the commission. In February 2022, the Federal Court ruled that Hill Valley and Konek Technologies Inc. (a provider of the hardware and software that receive broadcast signals in hotel rooms) operated illegally by rebroadcasting TVA Sports. Neither Konek nor Hill Valley were qualified as a retransmitter under the act. The court also found that Hill Valley’s “activities were not lawful pursuant to section 32 of the Broadcasting Act with respect to the unlawful or improper operation of a business as required by the Copyright Act,” according to the CRTC decision. Quebecor filed a Part 1 application in April on behalf of TVA Group and Videotron asking the CRTC to revoke Hill Valley’s status as an exempt BDU in response to the court's decision. Quebecor argued to the commission that although Hill Valley can now distribute TVA, it continues to illegally benefit from TVA Sports’ programming without paying compensation to TVA Group. “Quebecor argued three things: Hill Valley and Konek exhibit a concerning corporate behaviour; the actions, if left unpunished by the commission, would set a dangerous precedent for the Canadian broadcasting system; and the presence of businesses that can pirate content is worrisome and creates a climate of distrust,” the CRTC decision states. Hill Valley argued to the commission that the dispute was already settled in court; it is required to distribute TVA as an exempt BDU; it is distributing TVA Sports pending the signing of a distribution agreement with Quebecor; and that the incumbent’s refusal to negotiate a distribution agreement for its discretionary services is evidence of anti-competitive and bad faith conduct. Bell said it supported Quebecor’s position because of its own “direct experience with Hill Valley’s illegal activities.” Interveners supporting Hill Valley argued that its technology is more advanced than that of other cable providers and is provided at a reasonable cost and cable companies do not offer comparable services and that they have not introduced innovations in the services they offer to the hotel industry. The commission opted to keep Hill Valley’s exempt BDU status, noting that it meets all criteria for exemption. “It serves fewer than 20,000 subscribers, appears to comply with the technical requirements of the Department of Industry, and would not be precluded from being licensed by virtue of any act of Parliament or by the Governor in Council’s direction. In addition, Hill Valley is in compliance with the commission’s regulatory requirements as set out in the Exemption Order,” the commission wrote in its Wednesday decision. The commission then encouraged Quebecor and Bell to negotiate in good faith with Hill Valley. The hotel company previously asked the commission to order Bell to enter into good faith negotiations regarding the terms of distribution of Réseau des sports. There is no regulatory requirement to distribute discretionary services, including TVA Sports. “Despite this, the commission notes that Hill Valley is a small business that offers an innovative alternative to the hotel industry. Accordingly, and given the conclusions set out above, the commission encourages the parties to negotiate a mutually acceptable agreement,” it wrote, adding that it encourages the same for Bell. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Quebec hotel company keeps exempt BDU status, despite protests of Quebecor and Bell

News | January 4, 2023

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Quebec hotel company keeps exempt BDU status, despite protests of Quebecor and Bell

News | January 4, 2023

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