You may not be aware of this, but there’s been a high-level dogfight going on in the courtrooms for some time now. The dogs are the broadcasters and BDUs against the feds, and what’s at stake is a juicier bone than most realize.

On its surface, this thing is the most eye-glazing of disputes. Last month, the Federal Court of Appeal overturned an earlier ruling that would have nullified a levy that the broadcasters and BDUs have been paying since 1997, and those groups are vowing to fight their fight all the way to the Supreme Court of Canada. How much dryer does it get than a courtroom quibble over licence fees collected by the CRTC?

But there’s much more to it than that. For starters, we’re talking about a lot of coin – somewhere in the ball park of $100 million per year that broadcasters and BDUs could, in their eyes, find better things to do with.

See, in exchange for the privilege of using public airwaves to generate billions of dollars per year in revenue, these guys have traditionally paid two types of licence fees, Type I and Type II. Type I finances the regulatory and administrative activities of the CRTC, while Type II, which is pegged at about 1.365% of revenue, goes into the government’s general coffers.

As revenues collected by the broadcasters and BDUs rise, the relative cost of financing their regulator goes down, since the Type I fees are periodically fixed. Not so the Type II fees, which grow in tandem with gross revenue. Between 2001 and 2006, for example, gross revenue for the sector has ballooned from $5 billion to $11 billion, and consequently, the annual stipend leapt from $66 million to $150 million. That dab of cream off the top gets bigger and more tempting all the time, especially as the profit margins, particularly for the conventional broadcasters, wane.

So, in 2003, the major broadcasters, the BDUs and their associations banded together and launched a lawsuit in the Federal Court. They claimed that charging Type II fees for the privilege of broadcasting for commercial benefit was in fact a tax. They argued that they are not getting anything over and above what they already pay for through obligations like Canadian content rules and Part I fees, and that the CRTC does not have the authority to collect taxes.

Part II fees dwarfed the Part I fees some years ago. Between 2004 and 2005 – the time during which the claims were made – the CRTC collected $182 million in Part I fees, and $680 million in Part II fees.

It’s not like the broadcasters and the BDUs were taking on the CRTC, everyone’s favorite whipping post. Because the money went into the general coffers, they were going after the top guns: Heritage, Industry, the Treasury Board and the Department of Finance. What moxy.

And in December 2006, they won, so it seemed. The Federal Court Trial Division agreed that the fees were indeed an illegal tax. The industry stood to recoup a whopping $800 million. Think of all the Corner Gases you could make with that. You can imagine that a few bottles of bubbly were consumed that day.

But alas, the Crown appealed, and the Federal court of Appeal subsequently ruled that the fees are indeed valid regulatory charges. And while the Canadian Association of Broadcasters is vowing to take this all the way to the Supreme Court of Canada, you can be sure that the government is not going to get sloppy with this one. Why? Because there’s a lot more at stake here than a piddling $100 million per year.

‘This is a bigger deal than just us, which is why the federal government is going guns a-blazing,’ says one industry insider. ‘This is a serious precedent-setting case for other industries that provide licence fees for Crown assets.’ Those include forestry, mining, telecom and the airlines.

So if you were wondering how I could call $100 million per year ‘piddling,’ remember, it’s all relative.

And valiant as their fight may be, I wouldn’t put my money on the broadcasters and the BDUs on this one. Not when they’re up against everything the government of Canada’s got.

When you get two hungry dogs after the same juicy bone, chances are, the biggest one is going to win.