Bell Canada Challenges Super Bowl Ad Policy

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By Peter Menyasz

Nov. 4 — Canadian telecom and broadcasting giant Bell Canada is challenging a regulatory ban on substitution of Canadian commercials during Super Bowl games Bell Canada v. Attorney General of Canada, Can. Fed. C.A., A-33-16, leave to appeal granted, 1/11/16 .

Canadian broadcasters swap in the commercials to increase their revenues on U.S. programs by replacing U.S. advertising—for which they are not paid—with Canadian commercials sold by their own ad sales organizations in what's known as simultaneous substitution.

Canada's broadcasting regulator, the Canadian Radio-television and Telecommunications Commission based its Aug. 19 decision to end simultaneous substitution during Super Bowl broadcasts on complaints from Canadians that they would prefer to see the big-budget, highly anticipated U.S. commercials aired during the game. Broadcasters and the National Football League support substitution because a separate Canadian audience provides increased advertising revenues.

The Federal Court of Appeal granted leave Nov. 1 for Bell to file an appeal of the CRTC ban of simultaneous substitution of Super Bowl commercials starting with the February 2017 broadcast.

The change drew fire from the Office of the U.S. Trade Representative, whose 2016 report on foreign trade barriers said it raised intellectual property concerns by ending the benefit to Canadian broadcasters of replacing the U.S. ads, in turn reducing the value of U.S. content broadcasting rights.

The court rejected Bell's request for a stay of the regulator's order pending conclusion of the appeal, but upheld the company's request to hold confidential some information provided by Bell to support its application, including excerpts from Bell's licensing agreement with the NFL.

Bell is happy that the appeal is moving forward, Scott Henderson, vice-president of communications at Bell Media, the company's broadcasting division, said Nov. 4, but is “disappointed the court didn't stay the CRTC's decision, considering the uncertainty it creates and its impact on viewers and advertisers in Canada for Super Bowl LI,” Henderson said.

The company doesn't know when the court will hear the appeal but it has indicated that it is ready to expedite the process, Henderson said in an e-mail to Bloomberg BNA.

Bell's next step is filing a formal notice of appeal. The company may also file a motion to expedite the appeal, Chantal Carbonneau, the Court of Appeal's executive director and general counsel, told Bloomberg BNA Nov. 4 in an email.

In September, the appellate court rejected Bell's initial application to appeal the ban, saying the case was premature because the regulator hadn't formalized the policy through a regulation or order. Bell filed the earlier appeal after the regulator launched consultations in February 2016 on how it would implement the ban.

The CRTC authorized simultaneous substitution in the early 1970s to protect the value to Canadian broadcasters of the rights they purchased to U.S. programming.

By Peter Menyasz

To contact the reporter on this story: Peter Menyasz in Ottawa at correspondents@bna.com

To contact the editor responsible for this story: Tim McElgunn at tmcelgunn@bna.com

For More Information

The Court of Appeal's case information is available at http://src.bna.com/jTp.

The CRTC's order is available at http://src.bna.com/jTm.

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