Federal Court ruled Friday in favor of a handful of Canadian broadcasters - including Allarcom Pay Television Ltd., Family Channel, and TMN Networks Inc. - who have argued the U.S. dishes violate Canadian cultural and broadcasting laws.
The direct-to-home or DTH dishes carry up to 200 channels of TV, much of it not authorized for Canadian viewers by the federal broadcast regulator. Edmonton-based Allarcom and the other plaintiffs sued nine defendants including Norsat, a British Columbia company that owns Aurora Distributing, which has been distributing U.S. DTH satellite dishes across Canada.
There was no immediate comment from Norsat on Friday.
"This is the most important legal decision to ever come down on this issue, and from the most senior court", Allarcom executive Luther Haave said in a news release.
"Not only does it affect consumers but also Canadian broadcasters, producers, and distributors. It is now our intent to work closely with the licensed Canadian DTH services that are launching their services."
Canadian broadcasters have argued that the so-called "grey market" satellite TV is illegal because they buy the Canadian rights for various programs and have exclusive authority to sell them in Canada.
The grey market refers to Canadians who buy the dishes but are billed for programming through U.S. addresses.
Friday's ruling is the latest development in the legal tussle over the issue. Earlier this year a judge in Saskatchewan Court of Queen's Bench ruled that Los-Angeles-based DirecTV was doing nothing illegal by distributing its satellite service. Ottawa has appealed that ruling.
It was not immediately clear how the latest court decision will affect Canadians who currently watch TV through one of the U.S. DTH dishes.
"We're exploring ways in which we might help Canadian DTH viewers mitigate their inconvenience", Haave said. "We also hope that after reading the judge's decision, the satellite dealer network that has facilitated the sales of grey market subscriptions will be anxious to make things right with Canadian consumers.
"We would encourage satellite dealers to trade out their customers' equipment for units that can provide a legal Canadian DTH solution to Canadian viewers. Canadian consumers must not be left holding the bag."
Grey market subscriptions are also used by bars and other public places to illegally exhibit major pay-per-view events such as the Tyson-Holyfield fight scheduled for today.