The Quebec Superior Court has ruled that the provincial rules creating a mandated ISP blocking system for unlicensed online gambling sites is unconstitutional. The provincial government introduced the rules in 2015, which create a list of unlicensed sites that ISPs must block or face financial penalties. While the government tried to frame the blocking system as a health and safety measure, it was always obvious from its own documentation that the plan was primarily focused on increasing revenues of Loto-Quebec, a provincially licensed online gambling site.
The mandated blocking scheme was legally vulnerable in several respects including the inconsistency of the rules with exclusive federal jurisdiction over telecommunications, net neutrality, and freedom of expression protections. The CRTC issued a decision in 2016 that the Quebec law encroached on its powers but it held off formally addressing the issue pending a court challenge filed by the telecom industry, which unsurprisingly focused on the constitutionality of provincial rules.
The court’s analysis delves into the creation of the rules and finds that its pith and substance was to increase provincial revenues and that it only affects health “very indirectly.” The court has little trouble concluding that the rules are unconstitutional as ultra vires the powers of the province [Google Translate version]:
The Tribunal has no hesitation in concluding that both the object and the effects of the Provincial Provision are, despite the social law in which the provincial legislature chose to insert it; a provision that operates directly in two areas of exclusive federal jurisdiction: telecommunications and the criminal law. The legal and practical effects of the Provincial Disposition are to govern gambling online through ISPs, which neither provincial jurisdiction authorizes. Its pith and substance is to prevent online gambling not set up and operated by the province from being “communicated” by ISPs and not the protection of consumers or their health. As in Johnson and Rogers cited above, the Tribunal considers that the Provincial Provision and in particular its section 260.35 must be ultra vires the powers of the province.
The Quebec government could still appeal the latest ruling, but its proposal was always on shaky legal ground.
The decision also includes a notable discussion on the CRTC’s net neutrality rules with implications for one of the arguments arising from the Bell website blocking coalition plan. The Quebec government argued that Section 36 of the Telecommunications Act permits an ISP to block illegal content. The court disagreed, citing the net neutrality rules and emphasizing that interfering with signals is limited to network threats:
In the Tribunal’s view, section 36 does not permit telecommunications companies to modify signals, whether legal or not, except in certain cases provided for in the regulatory policy such as the power to modify the signal to eliminate network threats. In fact, the CRTC left their door open as indicated by the Policy Telecom Regulatory 2009-657. The CRTC decides that the Internet traffic management practices (ITMPs) that ensure the protection or integrity of the network are not governed by this policy.
The link to network threats is important because supporters of the Bell site blocking plan (who argue that it does not implicate the net neutrality rules) cite the 2009 CRTC net neutrality decision reference to illicit materials, which they claim could include copyright infringing materials. In my discussion on the issue, I argue that the reference “clearly refers to network threats, not the content of the materials.” The court in this case agrees with the need for a link to network threats:
The CRTC refers, by way of example, to ITMPs that protect users against network threats such as the distribution of illicit material. What illegal material poses a threat to the network, the policy does not say so. The CRTC’s concern is to allow ISPs to do what is necessary to protect the security and integrity of the network. It is not immediately obvious that all types of illicit material threaten the security and integrity of the network. There is no proof that this is the case here.
The same reasoning would apply in the Bell website blocking case as the illegality of content – whether copyright infringement or online gambling – does not go directly to the security and integrity of the network. A CRTC ruling on the Bell plan is still forthcoming.