Capital Cities Comm. v. C.R.T.C.

Capital Cities Comm. v. C.R.T.C.
Collection
Supreme Court Judgments
Date
1977-11-30
Report
[1978] 2 SCR 141
Judges
Laskin, Bora; Martland, Ronald; Judson, Wilfred; Ritchie, Roland Almon; Spence, Wishart Flett; Pigeon, Louis-Philippe; Dickson, Robert George Brian; Beetz, Jean; de Grandpré, Louis-Philippe
On appeal from
Federal Court of Appeal
Subjects
Communications law
Constitutional law
Decision Content
SUPREME COURT OF CANADA
Capital Cities Comm. v. C.R.T.C., [1978] 2 S.C.R. 141
Date: 1977-11-30
Capital Cities Communications Inc., Taft Broadcasting Company and WBEN, Inc. Appellants;
and
Canadian Radio-Television Commission Respondent;
and
Rogers Cable TV Limited, Coaxial Colourview Limited and Bramalea Telecable Limited
and
The Attorney General for Canada, The Attorney General for Ontario, The Attorney General for Quebec, The Attorney General for British Columbia, The Attorney General for Saskatchewan, The Attorney General for Alberta Intervenants.
1977: January 26, 27, 28; 1977: November 30.
Present: Laskin CJ. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.
ON APPEAL FROM THE FEDERAL COURT OF APPEAL
Constitutional law — Cabletelevision — Deletion of commercial messages — Regulation by C.R.T.C. — Treaties — Broadcasting Act, R.S.C. 1970, c. B-11, ss. 3, 17, 29 — Radio Act, R.S.C. 1970, c. R-1, s. 2 — General Radio Regulations — Inter-American Radio-communications Convention of December 13, 1937 — B.N.A. Act, ss. 91, 92(10).
Radio and television — Cablevision — Deletion of commercial messages — Regulation by C.R.T.C. — Treaties — Broadcasting Act, R.S.C. 1970, c. B-11, ss. 3, 17, 29 — Radio Act, R.S.C. 1970, c. R-I, s. 2 — General Radio Regulations — B.N.A. Act, ss. 91, 92(10).
The appellants operated television broadcasting sta­tions in Buffalo, New York, and their broadcasts were receivable in nearby Canadian communities. Some of their programmes and commercial messages were paid for by Canadian sponsors. The intervenant Rogers Cable TV Limited was licensed under the Broadcasting Act to operate, within a specified area in a part of Toronto, a community and cable television distribution system and to receive broadcasts of the appellants' stations. The appellants were not, and were not required to be, li­censed under the Broadcasting Act by the respondent CRTC. What precipitated the matters giving rise to this appeal was Rogers' decision to delete commercial messages from the programmes received from the appellants' stations and to transmit the appellants' programmes to its subscribers with substituted announcements of its own.
Previous to July 1971 there had been a long standing Department of Transport policy accepted by CRTC that cable television systems should not alter the signals received from broadcasting stations. This policy against alteration was withdrawn by CRTC on July 16, 1971, after public hearings and the consideration of numerous briefs and letters in response "to the urgency of adopting a cablevision policy to facilitate a harmonious development of television and cable television". Rogers applied to the CRTC for amendment of its licence to permit deletion of commercial messages and substitution of commercial messages of its own. The appellants inter­vened to oppose the amendment. The CRTC decided that it would not permit Rogers to insert replacement signals carrying commercial messages but did authorize deletion of the commercial messages received by Rogers on condition that public service announcements be inserted in replacement. Following the decision of the CRTC the appellants appealed to the Federal Court of Appeal pursuant to s. 26 of the Broadcasting Act and concurrently brought applications to that Court for review of the CRTC decisions pursuant to s. 28 of the Federal Court Act R.S.C. 1970 (2nd Supp.), c. 10. These appeals and applications were dismissed. Leave to appeal further was granted on certain questions of law [see pp. 150-1].
Held (Pigeon, Beetz and de Grandpré JJ. dissenting): The appeal should be dismissed.
Per Laskin C.J. and Martland, Judson, Ritchie, Spence and Dickson JJ.: On the question of the status of the appellants (Question 5); the substantive issues of proprietary or legal right (of the appellants) were being directly litigated in other proceedings. The appellants should not however be denied standing. Their position was somewhat inconsistent but there were economic considerations behind the constitutional challenge.
On the question of constitutionality (Question 2): While the Supreme Court is not bound by judgments of the Privy Council, any more than by its own judgments, the Radio Case, [1932] A.C. 304, was correctly decided under ss. 91 and 92(10)(a) of the B.N.A. Act and is relevant. That and other precedents on the definition of "undertaking" leave no doubt that federal legislative authority extends to the regulation of the reception of television signals emanating from a source outside Canada and to the regulation of the transmission of such signals within Canada. Further, it would be incongruous to admit this federal legislative jurisdiction to the extent conceded but to deny the continuation of regulatory authority because the signals are intercepted and sent on to the viewing public though a different technology. There are not two undertakings involved in the operation of a cable distribution system simply because the recep­tion is through Herzian waves and the transmission is not. Programme content regulation is inseparable from regulating the undertaking through which programmes are received and sent on as part of the total enterprise. Finally, since programmes of local origination were not involved in the facts on which the constitutional issue was raised, the argument that a cable distribution system was necessarily a local work or undertaking in respect of 'signals transmitted within the Province by coaxial cable could not be accepted.
On the question of the jurisdiction of the CRTC (Question l): The challenge to the authority of the CRTC was rightly rejected by the Federal Court of Appeal. A cable distribution system, at least one which receives signals from a broadcaster and sends them through the system, is broadcaster and is, in that respect at least, within the regulatory and licensing authority of the CRTC; a view reinforced by s. 29(3) of the Broadcasting Act. The present case was not concerned with closed circuit systems independent of broadcasting as defined in the Act. Section 3(c) of the Act does not protect cable distribution systems from CRTC authority to permit deletion of commercial messages received by them. Further the Act read as a whole and s. 17(1)(a) read in its context make it clear that s. 17(1)(6) refers simply to any change in the terms governing any licence issued by the Executive Committee.
On the question of alleged excess of jurisdiction (Question 3): Having regard to the embracive objects committed to the CRTC under s. 15 of the Act, extend­ing to all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in s. 3, it was quite proper for the CRTC to lay down guidelines in respect of cable television.
On the international convention issue (Question 4): The CRTC is not an agent or arm of the Canadian Government and as such bound by the terns of a convention (in this case the Inter-American Radio Com­munication Convention of 1937 to which the U.S.A. was also a party) in the same way as the Government. The CRTC is a federal regulatory agency with defined statutory powers. In any event there would be no domestic, internal consequences of the Convention unless they arose from implementing legislation giving the Conven­tion legal effect within Canada.
Per Pigeon, Beetz and de Grandpré JJ. dissenting: On the question of constitutionality. The issue on appeal concerns exclusively the jurisdiction of the CRTC to authorize the deletion of commercials from TV televi­sion programmes received by hertzian waves from U.S. stations. Irrespective of any other consideration, Caloil Inc. v. Attorney General of Canada, [19711 S.C.R. 543, is conclusive authority in support of Federal jurisdiction to control such matters.
On the question of jurisdiction of the CRTC: This question must be considered on the basis that the impugned CRTC order authorized Rogers to appropri­ate the commercial value of the appellants programmes carried on their cable network. To sustain such order it must be found either that CRTC has the power to authorize such appropriation or that the operators may lawfully do it without such authorization unless prohib­ited from so doing by CRTC. Neither position is sus­tainable. While licensees do not own the channel assigned to them and only enjoy a privilege which may be revoked by the licensing authority, the licence is revocable only for cause and is really exclusive (quite a different situation from operators on citizen band or amateur channels). For the CRTC to authorize the deletion in question was an interference with the rights conferred by the licence of the broadcasters and the taking away of part of the broadcasters' rights in respect of their legitimate clientele.
On the international convention issue: as Canada is a party to the Inter-American Radiocommunication Con­vention which deals with radio interference of an international character and with retransmissions. The lan­guage of the Convention shows that the parties were well aware that they were dealing with a developing technology. The general intention should be given effect to in the light of the present developments, rather than on a strict construction of the language used. While Rogers does not interfere with the hertzian waves from the appellants stations Rogers should be considered as broadcasting to their numerous subscribers. That the rebroadcasting is done by coaxial cable should make no difference when the net result is the same. If Rogers were not considered to be rebroadcasting they would have to be considered as a conduit and, on that view of the case, the deletion of commercials would be interfer­ence. Rogers is subject to the General Radio Regula­tions and thereby obliged to observe the Convention. The CRTC is bound to take judicial notice of the Convention and cannot validly authorize any violation of its provisions.
[In re Regulation and Control of Radio Communi­cation in Canada, [1932] A.C. 304; Public Utilities Commission v. Victoria Cablevision Ltd. (1965), 52 W.W.R. 286; Re CFRB and Attorney-General of Canada, [1973] 3 O.R. 819; La Régie des Services Publics v. Dionne, [1978] 2 S.C.R. 191; Attorney-Gene­ral for Ontario v. Winner, [1954] A.C. 541; United Artists Television, Inc. v. Fortnighlty Corporation (1967), 377 F. 2d 872, reversed (1968), 392 U.S. 390; Validity and applicability of the Industrial Relations and Disputes Investigation Act (the Stevedoring case), [1955] S.C.R. 529; C.P. Ry. Co. v. A.G. (B.C.) et al., [1950] A.C. 122; Caloil Inc. v. Attorney-General of Canada, [1971] S.C.R. 543; R. v. Port of London Authority ex p. Kynoch, [1919] 1 K.B. 176; British Oxygen Co. v. Board of Trade, [1971] A.C. 610; R. v. Chief Immigration Officer, Heathrow Airport, [1976] 3 All E.R. 843, referred to.]
APPEAL from a judgment of the Federal Court of Appeal[1] dismissing an application for judicial review and appeal under the Federal Court Act, s. 28 and the Broadcasting Act, s. 26. Appeal dismissed, Pigeon, Beetz and de Grandpré JJ. dissent­ing.
G. F. Henderson, Q.C., B. A. Crane, and E. Binavince, for the appellants.
J. J. Robinette, Q.C., T. G. Heitzman, and Peter Grant, for the respondent. D. J. Wright, Q.C., and B. C. MacDonald, for the intervenants Rogers et al.
G. W. Ainslie, Q.C., D. Friesen, and A. Desjar­dins, for the intervenant Attorney General of Canada.
D. Hilton, Q.C., and E. Goldberg, for the intervenant Attorney General for Ontario.
R. Langlois, and A. Tremblay, for the interve­nant Attorney General for Quebec.
M. H. Smith, for the intervenant Attorney Gen­eral for British Columbia.
W. Henkel, Q.C., and Peter Feasdale, for the intervenant Attorney General for Alberta.
Lysyk, Q.C., for the intervenant Attorney General for Saskatchewan.
The judgment of Laskin C.J. and Martland, Judson, Ritchie, Spence and Dickson JJ. was deliv­ered by
THE CHIEF JUSTICE—The issues in this appeal arise out of three decisions of the Canadian Radio-Television Commission (now the Canadian Radio-television and Telecommunications Commission: see 1975 (Can.), c. 49) issued on May 1, 1974, made in pursuance of applications by Rogers Cable TV Limited, Coaxial Colourview Limited and Bramalea Telecable Limited for amendment of their respective cable television licences "to permit commercial deletion and substitution on a random basis on all United States television sta­tions carried from time to time on the basic service which presently includes channels 2, 4 and 7 Buf­falo". The applications, made by telex, went on to say: "A random basis means three or more substi­tutions per evening on at least one of the Channels in alternation. All substitution messages would be special promotional information to subscribers such as free antenna removal, discounts for annual prepayment, additional channel offerings and the like as well as messages of general public interest." Since Rogers and the other two applicants are associated companies with a common interest, it will suffice to deal with Rogers' application alone as a basis for crystallizing and dealing with the issues that are now before this Court.
Rogers' licence, which is formally a licence to carry on a "broadcasting receiving undertaking", as defined in the Broadcasting Act, 1967-68 (Can.), c. 25, now R.S.C. 1970, c. B-l 1 (to which reference will be made later in these reasons) authorized it to serve certain areas of Metropolitan Toronto with an off-air broadcasting receiving antenna at a specified location. The licence speci­fied eleven television broadcasting stations whose signals or programmes could be received by Rogers and distributed or retransmitted by it on the same or different channels, a large number of AM and FM Radio stations whose signals or programmes it could similarly receive and distrib­ute and seven channels which the licensee could use for programmes of its own local origination. Among the eleven television broadcasting stations included in the licence were three Buffalo stations, operated respectively by the three appellant com­panies and whose signals or programmes were carried over channels 2, 4 and 7.
The appellants were not and were not required to be licensed by the respondent CRTC. Their programmes reached Canadian viewers in areas adjacent to Buffalo, including Toronto, and were freely available to those whose television sets could directly receive those programmes. They could however receive them, and other programmes too which their sets could not attract, by becoming subscribers of Rogers through the latter's cable operation. I will consider the nature of that opera­tion later on in these reasons. What precipitated the matters now before this Court was Rogers' decision, made and carried out some time prior to October, 1973, to delete commercial messages from the programmes received from the appel­lants' stations and to transmit those programmes to its subscribers without those messages but with substituted announcements of its own. The appel­lants threatened and, indeed, took legal action against Rogers, and this litigation is pending in lower Courts. Rogers thereupon applied for amendment of its licence in terms already noted.
The appellants intervened, apparently without objection, in the public hearings held by CRTC to consider the applications of Rogers and the two other applicants. Among the grounds advanced by the appellants in opposition to the licence amendment sought by the applicants was a challenge to the jurisdiction of CRTC. The respondent Com­mission granted the applications in part in a deci­sion dated May I, 1974. Since a strong attack was mounted by counsel for the appellants on the reference to and reliance upon a policy statement of the CRTC in the making of its decision, it is desirable that 1 reproduce here the material parts of the decision. It is as follows:
With regard to the licensee's proposal to implement commercial deletion and substitution on a random basis on all United States television stations carried from time to time on its basic service, the Commission's Cable Policy Statement of July 1971 states that:
The Commission will permit the removal by cable television licencees of the commercial value contained in the signals of stations not licensed to serve Canada. While cable television licensees will not be permitted to sell replacement commercial messages themselves, they will be encouraged to make contractual arrange­ments with Canadian television stations in their areas to insert replacement signals carrying commercial messages sold by the Canadian television stations.
In accordance with its policy statement, the Commission authorizes the licensee to delete commercial messages from U.S. television signals on a random basis as applied for. The objectives of the Commission's com­mercial deletion policy is to restore the logic of the local licence and strengthen Canadian Television service. Revenue and other benefits derived from the implemen­tation of the policy are intended to strengthen broadcasters. Accordingly, since the licensee has not made contractual arrangements with Canadian television sta­tions in its area, the Commission will not permit the licensee to insert replacement signals carrying commer­cial messages. Nor is the Commission willing to permit the licensee to insert messages containing promotional information to its subscribers since this is not consistent with the Commission's policy objective. Instead, the Commission authorizes the licensee to delete on condi­tion that it inserts in replacement of the deleted messages public service announcements and other similar suitable replacement material.
The Commission is aware that statements of claim have been' filed in the Federal Court against the licensee by stations in Buffalo. Where litigation occurs that may affect the ability of licensees to carry out their obliga­tions under the Broadcasting Act, the Commission is properly concerned that licensees not voluntarily settle such litigation on terms that may inhibit their ability to conform with Commission policy and requirements under the Broadcasting Act. Hence, in such circum­stances, the Commission's consent must first be obtained before any terms of settlement and, in particular, any injunction is voluntarily consented to by any licensee.
The application to distribute an announcement and message service is approved on an experimental basis until expiry of the present licence. It is understood that this service will not be supported by commercial advertising.
The application to distribute airport arrival and other digital information is approved on an experimental basis until expiry date of the present licence. It is understood that this service will not be supported by commercial advertising and that it will be a visual rather than an audio service.
The policy statement referred to and quoted in small part in the decision aforesaid is embodied in a document of considerable length, dated July 16, 1971, and entitled,
Canadian Broadcasting
"A Single System"
Policy Statement on Cable Television
There had been a prior policy statement on cable television issued on May 13, 1969 in which CRTC said that "[it] accepted, for the time being, the long-standing Department of Transport policy that cable television systems should not alter the signals received from broadcasting stations". The quota­tion is from the policy statement of July 16, 1971, and it continues as follows: Since then, the Commission has carried out extensive studies which demonstrate that the unaltered carriage of some of these signals disrupts the ability of Canadian television stations to fulfil their mandate.
The policy statement of July 16, 1971 was made after public hearings and the consideration of numerous briefs and letters, and in response, as CRTC saw it, to the urgency of adopting a cablevision policy to facilitate a harmonious de­velopment of television and cable television.
Following the decisions of May l, 1974 the appellants took appeals to the Federal Court of Appeal pursuant to s. 26 of the Broadcasting Act and, concurrently, brought applications to that Court for review of the decisions pursuant to s. 28 of the Federal Court Act, R.S.C 1970 (2nd Supp.), c. C-10. The appeals and applications were dismissed on January 17, 1975, reasons of the Federal Court of Appeal[2] being delivered by Thurlow J.A. (as he then was) and by Ryan J.A., with whom Urie J.A. concurred. Leave to appeal to this Court was granted on five questions as follows:
1. Did the Federal Court of Appeal err in holding that the Canadian Radio-Television Commission had jurisdiction, pursuant to the Broadcasting Act, R.S.C. 1970, c. B-11, to regulate cable distribution systems which receive and distribute television signals?
2. Did the Federal Court of Appeal err in holding that the Broadcasting Act insofar as it conferred such jurisdiction on the Canadian Radio-Television Com­mission, was intra vires of the Parliament of Canada'?
3. Did the Federal Court of Appeal err in failing to hold that the Canadian Radio-Television Commission exceeded its jurisdiction?
(a) in attempting to regulate in accordance with a policy statement which was without legal force and effect, and,
(b) by stating that the licensee should obtain the Com­mission's consent before entering into terms of settlement which might inhibit its ability to conform with the Commission's policy and require­ments under the Broadcasting Act.
4. Did the Federal Court of Appeal err in failing to hold that the Decisions of the Canadian Radio-Television Commission were contrary to the Inter-American Radio-communications Convention, 1937 and there-fore invalid?
5. Did Thurlow J. err in holding that the applicants had no proprietary or other legal rights in the signals transmitted into Canadian air space from their broadcasting stations in the United States?
Following the granting of leave to appeal on the foregoing five questions, the appellants applied ex parte, pursuant to the Rules of this Court, to give notice to the Attorney-General of Canada and to the Attorneys-General of the Provinces of the con­stitutional question raised in the appeal and refor­mulated the question as follows:
Whether the Broadcasting Act, RSC 1970, Chapter B-11, and regulations made thereunder, are ultra vires the Parliament of Canada insofar as they purport to regulate, or to authorize the Canadian Radio-Television Commission to licence and to regulate the content of programs carried by CATV systems situated wholly within Provincial boundaries.
An order to that effect was made on April 30, 1975. For some unexplained reason the order, including the reformulated question, was not included in the Appeal Case that was filed on September 9, 1975. It had, however, been served on the respective Attorneys-General and it stipu­lated that applications to intervene were returnable on June 6, 1975.
In their factums, the intervening Attorneys-General did address themselves to the question of which they were given notice. The question merely sharpened the issue reflected in the constitutional question which was among those on which leave to appeal was given, and may be taken as responsive to the scope of the constitutional issue reflected in the reasons given by Ryan J.A. in the Federal Court of Appeal. I do not think that anything turns on the different ways in which the constitu­tional issue in this case was framed, and I regard that issue, in both of its manifestations, as contained in question 2 of the questions in appeal.
I propose to deal with these questions in the following order: first, question 5; second, question 2, the basic constitutional question; third, question l; fourth, question 3, and fifth, question 4.
Question 5, Status of the Appellants
Although this question is raised in terms which would invite this Court to determine what, if any, are the proprietary or other legal rights of the appellants in their signals upon their entry into Canadian air space, especially as against Rogers and its associated companies, the issue arising out of Thurlow J.A.'s observations was related by counsel to the status of the appellants in the Federal Court and now in this Court. The substan­tive issues of proprietary or legal right are being litigated directly in other proceedings.
Ryan J.A., with whom Urie J.A. agreed, did not question the appellants' status which, as I have already noted, was not challenged in the proceedings before CRTC. In these circumstances, and having regard to the fact that the issues now before us arose out of the deletion of commercial messages from the appellants' programmes received by Rogers and its associated companies, at their antennae, I would not, at this stage of the proceedings, deny standing to the appellants. I hold this opinion notwithstanding the somewhat inconsistent position of the appellants, who do not complain of the free and untrammelled reception of their programmes by television receiving sets in Canada and who, indeed, as their counsel put it, are very happy to have their programmes received so long as the entire programmes, commercials included, are received; but who do complain of deletion of commercial messages by cablevision systems which receive the programmes and transmit them to subscribers. Economic considerations are thus behind the constitutional challenge. Question 2, Constitutionality
The submissions of the appellants on this ques­tion were supported by the Attorneys-General of Ontario, Quebec, British Columbia and Alberta. The contrary position of CRTC was supported by the Attorney-General of Canada, in large part by the Attorney-General of Saskatchewan and by Rogers and its associated companies, intervenors as were the various Attorneys-General.
In dealing with the constitutional authority of Parliament to regulate cable distribution systems which receive and distribute television signals, I leave to one side, so far as the present case is concerned, the determination of regulatory author­ity over programmes carried by such systems which are of their own origination and which are transmitted to their subscribers in the Province of such origination, and hence not received by other owners of television sets in the Province.
The main argument of the appellants and of those in support of their position is that legislative jurisdiction is divided in respect of regulation of television signals received by cablevision compa­nies. Exclusive federal jurisdiction is conceded so far as concerns the reception of foreign or domes-tic television signals at the antennae of the cablevi­sion companies. It is contended, however, that once received at those antennae federal legislative power is exhausted, and any subsequent distribu­tion of those signals, whether in the same or modified form, within a particular Province is a matter exclusively for that Province.
In advancing this contention, the appellants and supporting Attorneys-General would both distin­guish and limit the effect of the Radio case (In re Regulation and Control of Radio Communication in Canada[3]), and, consequently, of cases in provin­cial Courts which have followed and relied on the Radio case, such as Public Utilities Commission v. Victoria Cablevision Ltd.[4], Re CFRB and Attor­ney-General of Canada[5], and La Régie des Services Publics v. Dionne, a recent judgment of the Quebec Court of Appeal, delivered on January 12, 1977 and as yet unreported, and now on appeal to this Court[6]. The point strongly made by counsel for the appellants was that the issue in the Radio case had to be assessed according to its particular facts, based as they were on the technology of the time which did not include cable distribution systems.
There were two questions referred to the Supreme Court of Canada in the Radio case, as follows:
1. Has the Parliament of Canada jurisdiction to regulate and control radio communication, including the transmission and reception of signs, signals, pictures and sounds of all kinds by means of Hertzian waves, and including the right to determine the character, use and location of apparatus employed?
2. If not, in what particular or particulars or to what extent is the jurisdiction of Parliament limited?
This Court, by a majority, answered the first question in the affirmative and hence did not have to answer the second question. When the case came to the Privy Council, that tribunal noted that the Supreme Court had given its decision in the Radio case without the advantage, if any, of the Privy Council's decision in the Aeronautics case (In re Regulation and Control of Aeronautics in Canada[7], which had not then been handed down but which did come down before the appeal was heard in the Radio case. Although both cases invited a consideration of federal treaty-imple­menting powers, I need not pursue that aspect for the purposes of the present case. [The Privy Coun­cil did hold in the Radio case that federal legisla­tion implementing the International Radiotele­graph Convention of 1927, to which Canada was a party as an independent signatory, was competent to Parliament as being for the peace, order and good government of Canada, since it dealt with a matter that was not explicitly mentioned in s. 91 or s. 92 of the British North America Act.]
Since the two Provinces, Quebec and Ontario, which opposed federal competence in relation to radio broadcasting, had urged that even if federal power embraced enforcement of an international convention it did not extend to inter-provincial broadcasting, the Privy Council went further in its reasons to deal more broadly with the question of competence in the field of radio broadcasting, as, indeed, it was obliged to in order to answer the main question referred to the Supreme Court. The Privy Council, addressing itself to the provincial contention, phrased it in these words (at pp. 313-315):
… even supposing that it were possible to draw a rigid line between inter-Provincial and Dominion broadcasting, there is something more to be said. It will be found that the argument for the Provinces really depends on a complete difference being established be­tween the operations of the transmitting and the receiv­ing instruments. The Province admits that an improper use of a transmitting instrument could by invasion of a wavelength not assigned by international agreement to Canada bring into effect a breach of a clause of the convention. But it says this view does not apply to the operation of a receiving instrument... .
The argument of the Province really depends on making, as already said, a sharp distinction between the transmitting and the receiving instrument. In their Lordships' opinion this cannot be done. Once it is conceded, as it must be, keeping in view the duties under the convention, that the transmitting instrument must be so to speak under the control of the Dominion, it follows in their Lordships' opinion that the receiving instrument must share its fate. Broadcasting as a system cannot exist without both a transmitter and a receiver. The receiver is indeed useless without a transmitter and can be reduced to a nonentity if the transmitter closes. The system cannot be divided into two parts, each independent of the other. In rejecting the provincial contention, the Privy Council founded exclusive federal power in the combined effect of the concluding words of s. 91 and of s. 92(10)(a). It stated its view as follows (at p. 315):
Their Lordships have therefore no doubt that the undertaking of broadcasting is an undertaking "connect­ing the Province with other Provinces and extending beyond the limits of the Province". But further, as already said, they think broadcasting falls within the description of "telegraphs".
No doubt in everyday speech telegraph is almost exclu­sively used to denote the electrical instrument which by means of a wire connecting that instrument with another instrument makes it possible to communicate signals or words of any kind. But the original meaning of the word "telegraph," as given in the Oxford Dictionary, is: "An apparatus for transmitting messages to a distance, usu­ally by signs of some kind." Now, a message to be transmitted must have a recipient as well as a transmitter. The message may fall on deaf ears, but at least it falls on ears. …
And it added, in conclusion (at p. 317):
Although the question had obviously to be decided on the terms of the statute, it is a matter of congratulation that the result arrived at seems consonant with common sense. A divided control between transmitter and receiv­er could only lead to confusion and inefficiency.
The Privy Council's attribution of federal au­thority to that portion of s. 92(10)(a) which by exception invests Parliament with power in rela­tion to undertakings "connecting the Province with any other or others of the Provinces or extending beyond the limits of the Province" may properly be amplified, in my opinion, by what emerged from its reasons for judgment in Attorney-General for Ontario v. Winner[8], at p. 574, namely, that an undertaking will fall within the quoted words of the exception in s. 92(10)(a) even if it has its point of commencement outside the Province, so that it "extends in"; the words "extending beyond the limits of the Province" are not confined to situa­tions where an undertaking commences in the Province and "extends out". The question that arises as a result of the Radio case is whether the broad sweep of the reasons, stemming from a question that specifically referred to transmission and reception by means of Hertzian waves (but as an included means of radio communication), should be limited for the purposes of the present case because the Hertzian waves end at the antennae of the cable distribution systems and the signals carried by such waves are then converted for transmission through coaxial cables to subscribers' television sets.
Both appellants and respondent accepted the description of the technology of television and of cable distribution systems as recited by the United States Court of Appeals, Second Circuit, in United Artists Television, Inc. v. Fortnightly Corporation[9], a copyright case. Chief Judge Lum­bard, at pp. 875-6, described the operations as follows:
... Television broadcasting equipment first translates the sight and sound of the program being broadcast into two voltages, the video signal, which measures the inten­sity of light at each spot on a photosensitive screen inside the camera as it is scanned by an electron beam, and the audio signal which measures the intensity of sound. These two changing voltages are then encoded in a radio frequency carrier wave for broadcasting; the video signal is used to modify, or modulate, the ampli­tude, or maximum strength, of the carrier wave, and the audio signal is used to modulate the frequency of the carrier wave. The modulated carrier wave is then broadcast by an antenna as electromagnetic radiation. When this radiation strikes a home television antenna, it induces a voltage between the antenna terminals which reproduces the modulated carrier wave. The reproduced carrier wave is then conducted into the television set, and there demodulated to yield reproductions of the video and the audio signals. The video signal controls the intensity of a scanning electron beam, which reproduces on the electroluminescent interior of the television tube the image seen by the camera, and the audio signal controls the speaker of the set. Since the broadcast radiation propagates at the speed of light, the whole process of television broadcasting and reception consumes a fraction of a second.
The radiation broadcast by a television broadcasting station, when it strikes the corresponding antenna of one of defendant's CATV systems, induces in it a reproduction of the station's modulated radio frequency carrier wave just as it does in a home antenna. The CATV system's "head end equipment," housed in a small build­ing near the antennas, then amplifies the carrier wave, converts it if it is a high-frequency, or high-band, VHF wave (channel 7 to 13) to one of the low-band VHF channels (2 to 6) in order to reduce losses in transmis­sion through the system's coaxial cables, narrows its frequency range, and then propagates it as electromag­netic radiation through the system's cables. The radia­tion, amplified by numerous trunkline and distribution amplifiers along the cables, is transmitted at nearly the speed of light to the terminals of subscribers' television sets, in most cases through matching transformers.
Before 1958 and after 1964 the function of converting high-band to low-band VHF waves at each system's "head end" was performed by equipment which hetero­dyned an incoming wave, that is, mixed it with a locally produced wave whose frequency was chosen so that the beat wave resulting from the mixing, whose frequency was the difference between the frequencies of the two mixed waves, possessed the desired frequency. From 1958 to 1964 the same function was performed by units which demodulated the video signal of the incoming wave and used it to remodulate a locally produced wave of the desired frequency, and which heretodyned the audio component of the incoming wave. Thus broadcast television programs have never been made visible or audible within defendant's CATV systems... .
Although Fortnightly Corporation v. United Artists Television, Inc.[10] was a copyright case, I find apt, for the purposes of the present case, the following observations (at p. 399) by Stewart J. delivering the opinion of the Supreme Court of the United States:
… Essentially, a CATV system no more than enhances the viewer's capacity to receive the broadcast­er's signals; it provides a well-located antenna with an efficient connection to the viewer's television set. It is true that a CATV system plays an "active" role in making reception possible in a given area, but so do ordinary television sets and antennas. CATV equipment is powerful and sophisticated, but the basic function the equipment serves is little different from that served by the equipment generally furnished by a television viewer. If an individual erected an antenna on a hill, strung a cable to his house, and installed the necessary amplify­ing equipment, he would not be "performing" the programs he received on his television set. The result would be no different if several people combined to erect a cooperative antenna for the same purpose. The only difference in the case of CATV is that the antenna system is erected and owned not by its users but by an entrepreneur.
I am unable to accept the submission of the appellants and of the Attorneys-General support­ing them that a demarcation can be made for legislative purposes at the point where the cable distribution systems receive the Hertzian waves. The systems are clearly undertakings which reach out beyond the Province in which their physical apparatus is located; and, even more than in the Winner case, they each constitute a single undertaking which deals with the very signals which come to each of them from across the border and transmit those signals, albeit through a conversion process, through its cable system to subscribers. The common sense of which the Privy Council spoke in the Radio case seems to me even more applicable here to prevent a situation of a divided jurisdiction in respect of the same signals or programmes according to whether they reach home television sets and the ult