Netflix on the use of data caps by Canadian ISPs: data caps are actually a very poor way to manage demand and limit Internet congestion. All of the costs of supplying residential broadband are for supporting the peak loads, typically Sunday nights for residential customers. Bandwidth consumed off-peak is completely […]
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The National Post’s Terence Corcoran takes on the broadcaster attempt to regulate Netflix, noting regulation supporters “want the Internet controlled through new rules and new charges that would expand their existing protection racket that now funnels billions into their hands and limits the freedom of Canadians.
The Working Group believes indeed, like the Standing Committee, that foreign over-the-top services are becoming a significant presence in the domestic market. It is now public knowledge that a foreign over-the-top service operating in Canada has commissioned new exclusive dramatic content, including for the Canadian market. It is buying exclusive rights with studios in the windows of certain linear Canadian programming services. Therefore, the Working Group submits that the Commission should initiate the public consultation recommended by the Standing Committee.
The fight against Netflix is likely to escalate as broadcasters and broadcast distributors wrap themselves up in the Canadian flag and proclaim the future of Canadian content depends on new regulation of online video providers complete with Canadian content requirements and financial contributions (these are the same broadcasters arguing for decreased Canadian content requirements on their own networks).
The battle has been brewing over the past few months (I wrote about Shaw’s about face on regulation in January) and what is particularly striking is how badly Canadian broadcasters and broadcast distributors understood the future impact of the Internet on their businesses. The prospect of the Internet becoming a substitute for conventional broadcast was not exactly a secret at the new media hearing in 2009. In fact, I wrote about the hearing and the Internet streaming of movies in back-to-back columns just before the hearing started. But consider the comments of Canada’s broadcasters and broadcast distributors then and now. Earlier this month, Shaw told the CRTC:
Netflix CEO Reed Hastings has stated that he’s worried about the download caps imposed by Canadian ISPs, acknowledging that they could be “a significant negative for Netflix.â€
Credit Suisse has conducted a study that unsurprisingly finds that Canadian ISP pricing leads to sticker shock for those subscribing to services such as Netflix. That will only continue with ISPs such as Primus and Shaw introducing new limits on their bandwidth caps.