The CRTC – Netflix Battle: Could It Lead to a Challenge of the CRTC’s Right to Regulate Online Video?
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.
An Inconsistent Mess: Government Documents Reveal Ineffective and Inconsistent Policies Amid Widespread Demands for Subscriber Information
One day after NDP MP Charmaine Borg received a government response to her request for more data on subscriber requests and disclosures, Liberal MP Irwin Cotler received a response to his request for information. While there is some overlap between the documents, Cotler asked some important specific questions about the number of requests, which providers face requests, and the results of the information disclosed. Departments such as CSIS and CSEC unsurprisingly declined to provide much information, but several other departments were more forthcoming.
The results paint a disturbing picture: massive numbers of requests often with little or no record keeping, evidence to suggest that the disclosures frequently do not lead to charges, requests that extend far beyond telecom providers to include online dating and children’s gaming sites, and inconsistent application of the Supreme Court of Canada’s recent Spencer decision.
Earlier this year, reports indicated that the Canadian Border Services Agency had requested subscriber information over 18,000 times in a single year, with the vast majority of the requests and disclosures occuring without a warrant. The information came to light through NDP MP Charmaine Borg’s efforts to obtain information on government agencies requests for subscriber data. Borg followed up the initial request with a more detailed list of questions and earlier this week she receive the government’s response.
The latest response confirms the earlier numbers and sheds more light on CBSA practices. First, the CBSA confirms that requests for subscriber information are conducted without a court order by relying upon Section 43 of the Customs Act. It provides:
In August 1999, I wrote my first technology law column for the Globe and Mail. The column was titled The Gap Between Can’t and Won’t and it focused on the CRTC’s new media decision that was released earlier that year. The decision was the first major exploration into the applicability of conventional CRTC regulation to the Internet, with the Commission ruling that it had the statutory power to regulate some activities (such as streaming video), but it chose not to do so.
That column came to mind yesterday as I read through some of the CRTC’s TalkTV transcripts and listened to Jesse Brown’s Canadaland podcast on the prospect of a “Netflix tax.” It seems to me that both the discussions before the CRTC (particularly the CBC’s decision to urge the Commission to establish a fee-for-carriage model and a Netflix tax) and the Brown podcast with Steve Faguy fail to distinguish between the gap between can’t and won’t.
Five years ago, the Canadian Radio-television and Telecommunications Commission held two major hearings on new media and the Internet. The 2009 hearings, which featured contributions from the major telecom and broadcast companies in Canada, paved the way for Canadian net neutrality rules and the renewal of a regulatory exemption for new media broadcasters such as online video services.
Despite weeks of hearings, Netflix was only mentioned twice: once when it was referenced in a quote from a U.S. publication on the emergence of Internet video and a second time when a Canadian company referred to its mail-based DVD rental service.
Netflix may not have been top-of-mind in 2009, but my weekly technology law column (Toronto Star version, homepage version) notes that today it is seemingly the only thing the industry wants to talk about. New consumer choice of television channels was billed as the centerpiece of the CRTC’s future of television hearing, but witness after witness has turned it into The Netflix Show. Starting with the Ontario government, broadcasters, broadcast distributors, producers, and other creators have lined up to warn ominously about the impact of Netflix on the future of the Canadian television system.