UNCLAS OTTAWA 002967

SIPDIS

PASS USTR FOR CLUNE, BALASSA, BURCKY AND SCHNARE

STATE FOR EB/CIP, EB/DCT AND WHA/CAN

DOC FOR ITA/MAC -- OFFICE OF NAFTA

FCC FOR INTERNATIONAL BUREAU

E.O. 12958: N/A
TAGS: ECPS ETRD CA
SUBJECT: CANADIAN BROADCAST REGULATION ON THE ROPES?

REF: 03 OTTAWA 2657 AND PREVIOUS


1. A Quebec court ruled on October 28 that the GOC's
measures to prevent Canadians from subscribing directly to
U.S.-origin satellite television services are
unconstitutional. Industry lawyers are scrambling to
interpret the repercussions of this ruling, which could be
read as striking down any GOC measure to prevent Canadians
from viewing foreign-origin television broadcasts. If it
stands, it would come into broad effect in one year and,
based on initial analysis, would undermine Canada's
obsolescent broadcast regulatory structure - which is
already under attack, notably for its restrictions on "third
language" channels (those in languages other than French or
English).


2. Until the ruling takes broad effect, it remains
illegal for non-Canadian satellite TV services (such as
DirecTV) to market directly in Canada. Canadians who want
such services must either steal the signal using
unauthorized decoding equipment ("black market"), or
subscribe via a U.S. mailing address ("gray market"). It is
not yet clear whether the ruling "decriminalizes" only the
latter activity, or the former as well.


3. Canada has long-standing, complex regulatory
arrangements to restrict non-Canadian "cultural products,"
particularly in broadcasting, and to promote the
availability of Canadian content. In recent years, this
included raiding and prosecuting businesses which provided
hardware and services to connect Canadians to foreign
satellite TV by "black" or "gray" methods. In 2003, the
government announced plans to increase the associated
penalties (reftel).


4. The October 28 court ruling, known as "R. c. Theriault"
(criminal charges against two accused, Theriault and
d'Argy), found the charges to be inconsistent with the
Canadian constitution's guarantee of "freedom of thought,
belief, opinion and expression, including freedom of the
press and other media of communication." (The ruling is
available, though as yet only in French, at website
"jugements.qc.ca" under "Cour du Quebec").


5. The Coalition Against Satellite Signal Theft (CASST), a
Canadian broadcast industry group which has struggled to
preserve the existing broadcast regulatory structure, says
that a GOC appeal is both necessary and certain. If the
ruling stands, according to CASST, it would mean "the end of
the existing Canadian broadcasting system." (Comment:
While they may be right, CASST tend to identify the "system"
with the current structure. It may not adequately represent
those whom that structure excludes or disadvantages. End
comment).

CELLUCCI