The reception of US satellite TV signals in Canada has been declared illegal by the Supreme Court of Canada, reversing previous lower court decisions and heralding a victory for the two licensed Canadian operators, Bell Expressvu and Star Choice Communications.

The two local operators had complained that grey and black market sales of US satellite TV services and reception/decoding hardware were eroding their businesses.

In the grey market, Canadian re-sellers market US services such as DirecTV and EchoStar to Canadian residents while providing them with hardware and a false US address as a front for bill payment. Black marketeers sell decoding hardware and the users pay no fees to receive US signals. The law, however, did not specifically disallow such behaviour.

Bell Expressvu, which initiated the court action, estimates there are between 500,000 and 700,000 Canadian households currently using grey or black market equipment. Although the decision could have an impact on DirecTV's bottom-line, the US company supported the prosecution in the case, saying its goal was enforcement of copyright laws in both countries and that it hoped the decision would quash US-based signal pirates who masquerade as Canadian dealers to avoid prosecution.

Critics of the ruling suggested that enforcement will be another issue entirely, given the number of persons who are now breaking the law.