Ontario court rules in favour of Bell, bars VMedia from offering skinny basic Roku app

After only a little over two months in operation, Toronto-based VMedia’s skinny basic package Roku app has been barred by an Ontario court after a legal fight with Bell Media. In his decision, however, Justice Fred Meyers said it will ultimately be up to the Canadian Radio-television and Telecommunications Commission (CRTC) to set future policy on the matter.

“If technology has overcome the existing laws and policies, it is open to interested parties to put the issues before the CRTC to try to revise the policies and the definitions,” Justice Myers wrote in his ruling. “This decision says what the law is. It is for others to determine what the applicable law ought to be.”

Whether or not the ruling sets a precedent, it has for the time being made it illegal for VMedia to operate its Roku service. Additionally, the court awarded $150,000 in costs to Bell citing VMedia’s “very aggressive business position” and “hardball tactics.”

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At launch on September 16th, VMedia’s $17.95 CAD skinny bundle service offered access to networks like the CBC, CTV, Global, NBC and CBS through an app for the Roku, a set-top box that allows users to stream TV through an internet connection.

In early October, Bell Media sent a cease and desist letter to the startup (which tallies its customers at about 20,000), threatening to take action if the latter failed to remove Bell channels, specifically CTV and CTV 2, from its service. Bell further asserted that VMedia’s use of those channels was a “clear copyright violation.”

In retaliation, VMedia argued that cable and satellite services are generally able to retransmit over-the-air signals, however. Ultimately, the decision came down to whether or not VMedia could be considered a retransmitter — or whether the fact that it’s internet-based made it a new media transmitter, which would put the company in contradiction of the CRTC’s current broadcasting rules.

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Justice Myers found that VMedia was not in accordance with the CRTC’s determination that internet transmitters should “be subject to broadcaster’s copyrights” and have to “negotiate for licenses individually.”

VMedia told The Globe and Mail it will comply with the court’s ruling, but advisor George Burger told the publication: “It’s a disappointing decision.”

For now VMedia falls back on the rest of its internet-based services, which include voice and other IPTV options, but there may be hope for its Roku service if the startup brings its case to Canada’s telecom regulator, an action that was repeatedly suggested by Justice Myers throughout the process.

The Globe and Mail notes the Justice even went so far as to state at a hearing on November 17th, “Why are you here instead of there?”

Related: Bell aims to halt VMedia’s skinny basic package Roku app

[source]The Globe and Mail[/source]