US embassy cable - 04OTTAWA2967

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, Communication 
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