* Says ISPs are not subject to Broadcasting Act

* Decision means ISPs will not be subject to special levy

* Bell says decision otherwise would have hurt consumers

OTTAWA, Feb 9 (Reuters) - Internet service providers are not broadcasters, and don't need to adhere to strict rules designed to boost Canadian content on domestic television and radio, the Supreme Court of Canada ruled on Thursday.

The decision is a victory for telecommunications and Internet companies, including Bell Canada, Telus , Rogers Communications, Cogeco Cable and Bell Aliant, and a loss for Canadian performers and producers.

The communications regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), had asked the court to clarify whether companies that provide access to programming via Internet should be considered as broadcasters.

That would make them subject to the Broadcasting Act, legislation that requires broadcasters to carry some Canadian programs, in an attempt to avoid complete domination by U.S. shows. Broadcasters must also pay into funds that support the creation of local content.

"ISPs provide Internet access to end-users. When providing access to the Internet ... they take no part in the selection, origination, or packaging of content," the court ruled in its unanimous decision.

Cultural and artist groups had argued that Internet service providers should pay fees to the local content funds, and the Broadcasting Act should include ISPs, given that more and more people are now watching shows online.

Mirko Bibic, senior vice-president for regulatory and government affairs at BCE's Bell Canada unit, said if the Supreme Court had decided otherwise it would have hurt users.

"It leaves no doubt that ISPs are not broadcasters just because customers access broadcast content over the Internet," he said.

"Any other decision would have allowed the CRTC to impose a levy on ISPs' Internet revenues to pay producers for new media content, something that would harm consumers and stifle innovation. Today's decision means that can't happen." The name of the case is Alliance of Canadian Cinema, Television and Radio Artists et al. v. Bell Aliant Regional Communications LP et al. (F.C.)(33884)

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