The Supreme Court of Canada says the CRTC does not have the power to make cable providers pay broadcasters for carrying their signals.
In a 5-4 decision Thursday, the court ruled that setting up such a system is not within the scope of the Canadian Radio-television and Telecommunications Commission. In doing so, the justices overturned an earlier Federal Court of Appeal decision.
The Broadcasting Act can't be interpreted to give the CRTC that power, Justice Marshall Rothstein wrote for the majority.
"First, a contextual reading of the provisions of the Broadcasting Act themselves reveals that they were not meant to authorize the CRTC to create exclusive rights for broadcasters to control the exploitation of their signals or works by retransmission," Rothstein wrote.
"Second, the proposed regime would conflict with specific provisions enacted by Parliament in the Copyright Act."
In their dissent, Justices Rosalie Abella and Thomas Cromwell argued that seeking a system that would be beneficial to local television stations was well within the mandate of the CRTC.
"As an expert body, the CRTC, not the courts, is in the best position to decide what measures are necessary to save local stations from going bankrupt," they wrote.
The CRTC had decided in 2010 to launch what's known as a value-for-signal system as a response to a changing broadcasting landscape that saw local broadcasters struggling for revenue.
The CRTC declined comment on the high court's decision.
"We're just reviewing the decision," a spokeswoman for the commission said.
Currently, cable and satellite providers pluck TV signals out of the air for free and then redistribute them to their subscribers, who pay for access.
Bell Media said it's disappointed that the Supreme Court has found that the CRTC doesn't have the jurisdiction to implement such a system. TV viewers across the country would have benefited from long-term stability for their local television stations, which can no longer rely on advertising to cover their costs, said Bell.
"Local news, entertainment and other programming distinguishes Canadian broadcasting from everything else on TV," said Mirko Bibic, Bell's chief legal and regulatory officer.
Bell (TSX:BCE) said the television industry needs to find another way to help local TV survive,.