Given the increasing proliferation of video content online, the Federal Court of Appeal is being asked to rule whether internet service providers should be considered broadcasters and, hence, be subject to Canada's Broadcast Act.

The court is hearing oral arguments on the issue in Ottawa Tuesday, with the Canadian Radio-television and Telecommunications Commission seeking clarity on its authority in regards to ISPs who provide access to broadcasting content.

This latest step was forecast a year ago, when the CRTC released its most recent report on new media.

Groups from the creative community — including TV writers, producers and directors — have argued that Canada's broadcast regulator should begin regulating ISPs, who distribute Canadian video content.

However, representatives from the cable and telecom industries say they are simply conduits for the material and have blasted the attempt to regulate ISPs as simply a ploy to extract more levies.

"As soon as you say that ISPs can be regulated as broadcasters, you're also saying they can be taxed as cable companies are today [and must] contribute toward the development of Canadian programming," Michael Hennessy, Telus senior vice-president of regulatory and government affairs, told CBC News.

The industry has said that if any new fees are imposed, they would be forced to pass those on to consumers.

"As soon as you impose a tax, you're talking about increasing the price that Canadians are paying for the internet," Hennessy said.

Greg O'Brien, editor and publisher of cable and telecom industry news website CARTT.ca, believes that regulating Canadian content online is virtually impossible.

"The only reason you'd be interested in even bothering to do this is if there's money involved at the end of the rainbow," he said. "Why else do this?"

In June 2009, the CRTC released its latest report on new media. It decided, at the time, that content like music and videos distributed online and via mobile phones would continue to be exempt from regulation. However, the report also vowed to seek clarity on regulation of ISPs from the courts.

A court decision is expected sometime this year.

With files from Margo Kelly