Canadian regulatory hearings are usually relatively predictable affairs with scripted presentations and well-rehearsed speaking lines to most questions. During the recent two-week Canadian Radio-television and Telecommunications Commission hearing on the future of television regulation (dubbed “TalkTV” by the CRTC), Chair Jean-Pierre Blais expressed frustration on several occasions with the unwillingness of witnesses to veer much beyond their prepared notes.
My weekly technology law column (Toronto Star version, homepage version) notes that changed on the final day of the hearing, though it was Blais that seemingly departed from the script. Netflix, the online video giant that popped up in virtually every discussion, was one of the last witnesses on the schedule. The company had submitted comments to the CRTC consultation over the summer, but had not asked for an opportunity to appear before the Commission.
After the CRTC requested that it come to Gatineau to answer questions, the company came prepared to discuss the development of its business, but chafed at the prospect of disclosing confidential information such as subscriber numbers and spending on Canadian content. Blais took great umbrage at its reluctance to disclose the information, ultimately ordering the company to comply with the information request and implying that failure to do so could result in new regulation.
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The Netflix – CRTC battle has generated considerable attention, but Netflix is not alone in contesting the CRTC’s authority to regulate Internet video services. As I suggested in a post yesterday, Google has adopted a similar position, refusing to provide the Commission with all of the information it was seeking. While the Google and Netflix submissions have oddly not yet been posted by the CRTC (all others have), the Globe obtained a copy that confirms Google’s position that it believes it also falls outside the Broadcasting Act. According to the report (also not online), Google declined to provide some requested data, noting that “Google does not publish or otherwise disclose this commercially sensitive business information.” The company adopted the position that its disclosures were voluntary and that it is not part of the Canadian broadcast system.
The Google position is notable because it is presumably not based on the question of presence within Canada, since Google maintains a significant Canadian presence. Rather, the core challenge will likely focus on whether a service such as Youtube (which once went by the slogan “Broadcast Yourself”) can properly be characterized as broadcasting for the purposes of current Canadian law.
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Last week’s very public fight between the CRTC and Netflix escalated on Monday as Netflix refused to comply with Commission’s order to supply certain confidential information including subscriber numbers and expenditures on Canadian children’s content. While the disclosure concerns revolve around the confidentiality of the data, the far bigger issue is now whether the CRTC has the legal authority to order it to do anything at all. The response from Netflix states:
The Responses are filed voluntarily by Netflix to assist the Commission in this proceeding. The Responses are based solely on a review of the video archive of Netflix’s appearance on the CPAC web site, in view of the fact that the transcript from the hearing was not available.
The filing of the Responses is not an acknowledgment of or attornment to either the jurisdiction of the Commission by Netflix, or the substantive application of Canadian law (including the provisions of the Broadcasting Act) to Netflix. The Responses are filed strictly without prejudice to any future positions that Netflix may take.
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The annual election for the Canadian Internet Registration Authority board of directors opened last week, with voting ongoing until September 24th. All CIRA members (anyone with a dot-ca domain is eligible to become a member) are entitled to vote. I am currently a member of the board having been elected in 2012. Over the past year, CIRA has made great strides in better fulfilling its public interest mandate, most notably by launching the Community Investment Program. The CIP provided grants to 29 organizations for Internet and technology related projects, allocating over $1 million in the process. I was the chair of the committee and was proud of the wide range of projects and initiatives that will benefit from CIRA funding.
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Netflix just concluded an appearance before the CRTC that resulted in a remarkably heated exchange between the regulator and the Internet video service. The discussion was very hostile with the CRTC repeatedly ordering Netflix to provide subscriber and other confidential information. Netflix expressed concern about the need to keep such information confidential, leaving CRTC Chair Jean-Pierre Blais angry that anyone would doubt the ability of the regulator to maintain the information in confidence. Netflix concern in that regard was understandable given that even confidential information submitted to the CRTC is subject to a public interest test (conversely, U.S. regulators can provide guarantees of confidentiality).
As temperatures increased, the CRTC expressed disappointment over the responses from a company that it said “that takes hundreds of millions of dollars out of Canada” and implicitly threatened to regulate the company by taking away its ability to rely on the new media exception if it did not co-operate with its orders to provide confidential information.
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