In Reference re Broadcasting Act, 2012 SCC 4, the Supreme Court of Canada today affirmed the Federal Court of Appeal ruling that retail Internet Service Providers (“ISPs”) do not carry on, in whole or in part, “broadcasting undertakings” subject to the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to “broadcasting” requested by end‑users.
The CRTC in a 1999 report had concluded that the term “broadcasting” in s. 2(1) of the Broadcasting Act, S.C. 1991, c. 11, included programs transmitted to end-users over the Internet. The CRTC accordingly determined that it was unnecessary to regulate broadcasting undertakings that provided broadcasting services via the Internet, exempting these “new media broadcasting undertakings” from the requirements of the Broadcasting Act. Following public hearings in 2008, the CRTC revisited this exemption and considered whether Internet service providers – ISPs – were subject to the Broadcasting Act when they provided end-users with access to broadcasting through the Internet. The CRTC referred the issue to the Federal Court of Appeal for determination on a reference (2010 FCA 178, 322 D.L.R. (4th) 339), framed as follows:
Do retail Internet service providers (“ISPs”) carry on, in whole or in part, “broadcasting undertakings” subject to the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to “broadcasting” requested by end-users?
The Court agreed with Noel, J.A.’s ruling that, based upon a contextual and purposive analysis of the Broadcasting Act, the terms “broadcasting” and “broadcasting undertaking”, did not include entities merely providing modes of transmission. The Court held:
 Section 2 of the Broadcasting Act defines “broadcasting” as “any transmission of programs … by radio waves or other means of telecommunication for reception by the public”. The Act makes it clear that “broadcasting undertakings” are assumed to have some measure of control over programming. Section 2(3) states that the Act “shall be construed and applied in a manner that is consistent with the freedom of expression and journalistic, creative and programming independence enjoyed by broadcasting undertakings”. Further, the policy objectives listed under s. 3(1) of the Act focus on content, such as the cultural enrichment of Canada, the promotion of Canadian content, establishing a high standard for original programming, and ensuring that programming is diverse.
 An ISP does not engage with these policy objectives when it is merely providing the mode of transmission. ISPs provide Internet access to end-users. When providing access to the Internet, which is the only function of ISPs placed in issue by the reference question, they take no part in the selection, origination, or packaging of content. We agree with Noël J.A. that the term “broadcasting undertaking” does not contemplate an entity with no role to play in contributing to the Broadcasting Act’s policy objectives.
The Court noted its earlier decision in Electric Despatch in Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45,  2 S.C.R. 427, a proceeding under the Copyright Act, R.S.C. 1985, c. C-42, which held ISPs merely act as a conduit for information provided by others, they could not themselves be held to communicate the information. The Court distinguished Capital Cities Communications Inc. v. Canadian Radio-Television Commission,  2 S.C.R. 141, which rejected the American broadcasters’ argument seeking a severance of reception and distribution, “stating that it was a “single system” coming under federal jurisdiction.
The Court rejected the appellant’s argument that ISPs similarly form part of a single broadcasting system that is subject to regulation under the Broadcasting Act, on the basis that cable television companies had control over content, whereas ISPs have no such ability to control the content of programming over the Internet. Finally, given that the issue was not put forth previously, the Court declined to decide the issue of whether the fact that ISPs use “routers” prevents them from being characterized as telecommunications common carriers, based upon the definition of “telecommunications common carrier” under the Telecommunications Act, S.C. 1993, c. 38.