A Quebec appeals court has ordered Bell ExpressVu LP to pay nearly $83-million to Videotron Ltd. and TVA Group Inc., hugely inflating the penalty owed in a dispute over pirated satellite television signals that has dragged on for more than a decade.
The decision by the Quebec Court of Appeal, announced late last week, revised a 2012 decision in which Bell was ordered to pay about $1-million to the two subsidiaries of Quebecor Inc. A lower court had ruled that Bell failed put in place measures to stop piracy of its satellite signals in the province, though it had the ability to do so, some 10 years earlier.
The appeal court ruled the trial judge erred in excluding certain expert evidence when calculating the award. In a statement on Monday, Quebecor said the total sum owing is now $137-million, "including interest and experts' fees." But the case, which revolves around Bell's actions between 1999 and 2005, is not over yet, with a possible Supreme Court challenge still to be decided.
"We welcome this judgment, which condemns practices by Bell that had the effect of depriving its competitors, including Videotron and TVA Group, of customers and substantial revenues over a period of more than six years," said Pierre Dion, Quebecor's president and CEO, in a written statement. He also called the ruling "a landmark decision and an historic event for the telecommunications industry."
Bell also appealed the original trial ruling from the Quebec Superior Court, but its arguments were dismissed. Now, the company intends to seek recourse with the country's highest court.
"BCE strongly disagrees with the Quebec Court of Appeal's decision and will seek leave to appeal to the Supreme Court of Canada," a Bell spokesperson said in an e-mail. (Bell is a division of BCE Inc., which also owns 15 per cent of The Globe and Mail).
In the original suit seeking more than $300-million, Videotron and TVA – Quebecor's cable television company and private TV network, respectively – argued Bell had deliberately done little to combat widespread piracy of its satellite signals in Quebec, for competitive reasons.
Quebecor first raised concerns in 2002 that consumers were using black-market smart cards or decoders to steal satellite signals from Bell. The Court of Appeal notes that, based on its 71 per cent market share at the time, Quebecor could have expected to attract an additional 43,619 customers had piracy been snuffed out.
At one point in 2003, documents show Bell ExpressVu estimated there were upwards of 150,000 black market users on its ExpressVu service, on a base of 1.3 million subscribers. Another 300,000 users may have been paying for a basic package but pirating additional channels.
The Superior Court trial judge decided that Bell had dragged its feet in replacing its smart card system to foil piracy.
"[Bell ExpressVu's] failure to act in a timely manner was not related to technological reasons but rather to purely business-oriented and strategic considerations," Justice Joel A. Silcoff wrote in 2012.
The two companies, rivals in the Quebec market, were locked in a battle for market share at the time of the satellite piracy dispute. Bell argued that pirated signals were a widespread problem for the television industry, and that Quebecor faced its own challenges on that front.
James Bradshaw