Quebecor lauds order for Bell to pay $137 million for failing to stop TV piracy

MONTREAL – The Quebec Court of Appeal has ordered Bell ExpressVu to pay $137 million, including interest, to Quebecor subsidiaries Videotron and TVA for failing to prevent the piracy of its satellite signal between 1999 and 2005.

The court determined Bell’s inadequate efforts to prevent stolen access to Express Vu’s signal cost broadcasting partners such as Videotron, Coegeco and Star Choice substantial revenues.

By gaining free access to Bell, viewers could watch Videotron programming at no cost, reducing the number of paid Videotron subscribers and royalties paid to specialty channels of the French-language TVA network that had been distributed by Bell since 1998.

The unanimous ruling by Quebec’s highest court upheld a lower court decision that said the satellite TV division of BCE’s Bell (TSX:BCE)neglected to implement appropriate security to prevent piracy of its ExpressVu service.

However, the province’s top court ordered Bell to pay a bigger penalty — $82.3 million to Videotron and $404,000 to TVA Group, plus interest and experts’ fees.

Based on its 73 per cent market share in Quebec and the three per cent rate of “acceptable” pirating, Videotron lost more customers to pirating than Quebec Superior Court Justice Joel Silcoff determined to base his $1-million award, Quebec’s appeal court ruled.

Quebecor (TSX:QBR.B) CEO Pierre Dion said the “landmark decision” sheds light on how Videotron and TVA were deprived of substantial revenue because consumers could get TV service through pirated satellite signals rather than paying for cable.

Bell said it strongly disagreed with the ruling and will seek leave to appeal to the Supreme Court of Canada.