Canada's broadcast regulator is hitting the "delete" button on Netflix and Google, telling the online video services their submissions at hearings into the future of television will be ignored.
The Canadian Radio-television and Telecommunications Commission wrote to the companies Monday, saying it will remove presentations made by the two companies from the public record.
- Netflix refuses CRTC demand to hand over subscriber data
- Netflix tells CRTC consumers should vote with their dollars
As well, any information or statements from the companies would not be considered in the CRTC's conclusions on whether television industry regulations need to be changed.
The letters were a response to the refusal of Netflix and Google to provide supporting evidence to back their claims that Canadian content is thriving online.
Effectively, it's as though the companies never offered any comments or appeared before the CRTC panel that has been looking into how Canadians receive and pay for TV programming.
The CRTC had promised both companies the same confidential treatment for their data as it gives all other sensitive information provided to it by other companies.
But Netflix in particular said it had concerns that its sensitive corporate information could eventually be made available to its competitors to exploit under a public interest test.
CRTC secretary general John Traversy said the companies' refusal to provide any supporting evidence means it cannot evaluate the strength of their arguments. And he said it undermined the authority of the regulator.
"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," Traversy said in a letter to Netflix global public policy director Corie Wright.
A Netflix spokeswoman said the company would not be commenting on the content of the letter.
'Anecdotal evidence' won't guide policy
Meanwhile, Google said it saw nothing wrong with what it provided to the CRTC.
"We stand by the submissions we made in this process and believe we made a positive contribution to the discussion," a Google spokesperson said in a statement to The Canadian Press.
During two weeks of hearings earlier this month, Google said "compelling Canadian content succeeds online — all without broadcasting regulation," and that "Canadian creators, both emerging and established are building global audiences and earning revenue without having to work through intermediaries."
But Traversy said the commission cannot carry out its duties based on "mere anecdotal evidence."
"By refusing to provide any supporting evidence, the Commission cannot fully test and evaluate the strengths of Google's argument," he said.
The regulator has powers similar to that of a superior court, granted to it under the Broadcasting Act, and could have taken both companies to court.
But the CRTC chose not to take that route to save taxpayers a lot of time and money, said spokesman Denis Carmel.
The regulator had ordered Netflix to provide confidential information related to its business operations in Canada, including the number of Canadian subscribers and how much money it spent producing Canadian video content.
It had also asked Google to spell out the amount of content uploaded by Canadian users of its service, by how much it expected its advertising to grow and what advertising revenues it generated in Canada.
Both companies had appeared voluntarily before the commission but said they had concerns about whether the information could be kept secret.
Online video not regulated
Netflix also questioned the very authority of the regulator to impose demands on it, suggesting that the video streaming service did not fall under the Broadcasting Act since it is not a conventional broadcaster.
Netflix quickly became the centre of attention at the hearings when Prime Minister Stephen Harper and his heritage minister stated they would not allow the regulator to impose levies on Internet-based video services, something Harper referred to as a "Netflix tax."
The government statement, made as the hearings were just getting underway, came after the Ontario and Quebec governments, along with the CBC and some cultural organizations, suggested that Google, Netflix, YouTube and other online video streamers be regulated to help pay for production of Canadian TV content.
Marisa Monnin, a spokesperson for Heritage Minister Shelly Glover, told CBC News late Monday that "this specific issue is between Netflix and the CRTC in the context of the Let's Talk TV process, and it is up to those two parties to settle this dispute."
Monnin said that the CRTC operates independently and at arm's length from the government, but added that the Harper government supports the regulator's position not to regulate online video services.
"We will oppose any new regulations or a Netflix tax, like those proposed by Liberals," Glover's spokesperson wrote.