CRTC to remove Netflix, Google input from Talk TV process

The CRTC said Monday it will remove all evidence presented by Netflix Inc. and Google Inc., including oral and written presentations, from the Let’s Talk TV process, following the companies’ refusal to provide the CRTC with information the regulator had requested. “A company’s refusal to comply with requests and orders duly made at a public hearing is a serious matter,” it said in separate letters to Netflix and Google. The action falls short of CRTC Chairman Jean-Pierre Blais' threat made during the recent television hearings to revoke Netflix’ digital-media exemption order if it did not comply with orders to produce specific information. CRTC spokeswoman Patricia Valladao did not have information Monday on whether the CRTC was contemplating further action, such as cancelling the digital-media exemption for the two companies or applying for court orders. She also could not say whether the commission would reverse course if either of the companies had a change of heart about sharing the information in question. Denis Carmel, also with the CRTC, said the action signals to Canadian companies, such as those participating in the CRTC's wholesale wireless hearing that began Monday, what could happen to their input if they do not comply with requests for information. “Parties who choose to engage in Commission proceedings, especially large important corporations such as , cannot unilaterally choose which part of the evidence-gathering proceeding they want to participate in,” Monday's letters from the CRTC said. “The Commission views such actions as a direct attempt to undermine its ability to serve Canadians, as well as impair the procedural fairness owed to all participants.” On Sept. 19, the last day of the two-week hearing, Blais repeatedly ordered the Netflix to provide information, such as its Canadian subscriber numbers and expenditures, which Corie Wright, Netflix’ director of global public policy, said the company was reluctant to give over due to confidentiality concerns. On Sept. 22, the company said it would not provide that information to the CRTC. The dispute with Netflix followed an appearance by Google in the first day of the hearing. While Blais did not order Google to provide any information, after he asked the company for more detail about the Canadian content available and uploaded to YouTube, Google Canada counsel Jason Kee responded that he would “have to have internal discussions” about providing such information. In its letter to Netflix Monday, the CRTC noted that the company had made arguments such as that Canadian content is thriving on Netflix. “Yet, by refusing to provide any supporting evidence, the Commission cannot fully test and evaluate the strengths of Netflix’s argument which, if supported by evidence, may otherwise be very compelling. The Commission cannot carry out its duties based on mere anecdotal information,” it said. It said that as a result, it would remove Netflix’ intervention, the transcript of its appearance and the documents it submitted for the public record on Thursday, adding that “the hearing panel will reach its conclusions based on the remaining evidence on the record.” “There are a variety of perspectives on the impact of Internet broadcasting in Canada, and the panel will rely on those that are on the public record to make its findings,” it said. Its response to Google was virtually the same. In the wake of the dispute between the CRTC and the companies, experts told The Wire Report last week that the CRTC must respond in some way in order to maintain its authority. David Elder, a communications lawyer at Stikeman Elliott LLP in Ottawa, said the CRTC had two options open to it. One, would be to, as Blais had threatened, revoke the digital-media exemption order under which Netflix operates, while the other would be to formally issue orders under the Broadcasting Act asking for the information it wants from Netflix, and to register those orders with the Federal Court, where “they can be enforced as if they were orders of that court.” In its letter to Netflix Monday, the CRTC noted that it has the “powers of a superior court of record to enforce its orders.” “Specifically, under section 16 of the Broadcasting Act, the Commission has the authority to request information from parties, regardless of whether they are Canadian or non-Canadian,” the letter said, though it did not specify whether or not the commission would use those powers. In response to a request for comment Monday, a Google spokesperson said in an email Monday: "We stand by the submissions we made in this process and believe we made a positive contribution to the discussion." Netflix did not immediately respond to a request for comment. In an email Monday, independent television consultant Kelly Lynne Ashton said the CRTC is in a “no win” situation. The stance they have taken “opens them to accusations of hiding their head in the sand refusing to take consideration of evidence presented,” she said, “though at the same time how can they when the evidence was unsubstantiated.” Ashton said that the CRTC’s response “could undermine their authority,” but also that “to some extent it will depend on what their decision on this hearing ends up being.” “Have they just postponed the confrontation or are they going to ignore it and actively regulate a smaller pond?” she asked. “We won’t know till the decision.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and reporting and editing by Derek Abma at dabma@thewirereport.ca

CRTC to remove Netflix, Google input from Talk TV process

Broadcast | September 29, 2014

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CRTC to remove Netflix, Google input from Talk TV process

Broadcast | September 29, 2014

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