The Federal Court of Appeal has rejected the notion that internet service providers are broadcasters, likely ending a plan to introduce a new levy on internet users to pay for the creation of Canadian content online.

The Canadian Radio-television and Telecommunications Commission in June asked the court to decide whether ISPs could be governed under the Broadcast Act, which would therefore require them to contribute to the creation of Canadian programming, as traditional broadcasters do.

On Wednesday, the court ruled that ISPs are not broadcasters because they only provide access to video content, which is generally supplied by third parties — such as broadcasters. As long as the ISPs remain neutral in providing that access, they should continue to be governed only by the Telecommunications Act, the court said.

"Because ISPs' sole involvement is to provide the mode of transmission, they have no control or input over the content made available to internet users by content producers and as a result, they are unable to take any steps to promote the policy described in the Broadcasting Act or its supporting provisions," said the decision. "Only those who 'transmit' the 'program' can contribute to the policy objectives."

Groups from the creative community, including the Canadian Film and Television Production Association, the Alliance of Canadian Cinema, Television and Radio Artists and the Directors Guild of Canada, had previously asked the CRTC to force ISPs to contribute 2.5 per cent of their revenue to help fund new media creation.

ISPs opposed the plan and said they were merely conduits for content, and that any new fees would be passed on to customers.

Internet providers cheered the court's decision. Michael Hennessey, head of regulatory affairs at Telus, summed up his feelings in one word on Twitter: "Awesome."

University of Ottawa internet law professor Michael Geist said the decision all but kills the plan to impose new charges on ISPs and their customers.

"The case is a huge win for the ISPs and — subject to an appeal to the Supreme Court of Canada or a legislative change — puts an end to the ISP levy proposal," he wrote on his blog.