Netflix refuses CRTC demand to hand over subscriber data

Netflix says it is refusing to turn over confidential subscriber information to Canada's broadcast regulator in order to safeguard private corporate information.

Video streaming company not 'in a position to produce competitively sensitive information'

With the help of unblocking services, thousands of Canadians are watching Netflix shows restricted to other countries. Is anyone in trouble? (Paul Sakuma/Associated Press)

Netflix says it won't turn over confidential subscriber information to Canada's broadcast regulator in order to safeguard private corporate information.

The video streaming company was ordered last week to give the data to the Canadian Radio-television and Telecommunications Commission by Monday, along with information related to the Canadian content it creates or provides to subscribers.

A Netflix official said Tuesday that while the company has responded to a number of CRTC requests, it is not "in a position to produce the confidential and competitively sensitive information."

But in a statement, the company said it is "always prepared to work constructively with the commission."

The comments came in the middle of the regulator's "Let's Talk TV" hearings on the future of broadcasting rules, including allowing cable customers to be able to create their own personalized cable packages. Since Netflix is not a conventional broadcaster, there's much doubt that the Broadcasting Act that the CRTC enforces even applies to the company.

What happens now is very much in the air, University of Ottawa law professor Michael Geist told the CBC in an interview Tuesday. "Netflix likely felt pushed into the corner on a bigger issue, which is the CRTC’s authority to regulate online new media," he said.

"The issue has been simmering for about a decade, but everybody took a hands-off approach," Geist said. "Once there was a threat from the CRTC on Friday, it really did force Netflix’s hand."

Thorny issue

A Netflix executive told the country's broadcast regulator on Friday before being ordered to hand over the confidential company information that regulating the internet to help boost Canadian content will only hurt consumers.

In an occasionally tense appearance before the CRTC, Corie Wright urged the broadcast regulator to let market forces dictate what consumers can watch.

Netflix was one of 13 organizations that testified on the last day of public hearings last week before the CRTC on the future of television regulation in Canada.
A viewer watches Netflix global public policy director Corie Wright testify before the CRTC on a livestreaming video in Gatineau, Que., last week. (Sean Kilpatrick/Canadian Press)

The impact of Netflix and other online video providers on the country's traditional TV broadcasting sector was central to the hearings.

Wright, Netflix Inc.'s global public policy director, told the five-member CRTC panel that regulating internet-based video services would fly in the face of competition, innovation and consumer choice.

"Netflix believes that regulatory intervention online is unnecessary and could have consequences that are inconsistent with the interests of consumers," Wright said.

She said viewers should have the ability "to vote with their dollars and eyeballs to shape the media marketplace."

Fight over confidential data

During the hearings, CRTC chairman Jean-Pierre Blais became agitated when Wright refused a direct request to provide confidential subscriber information.

Wright said Netflix was concerned that private corporate information submitted to the commission might later find its way into the public sphere, which could make the service vulnerable to exploitation by its competitors.

Blais steadfastly ordered Netflix to provide the data — along with information related to the Canadian content it creates or provides to subscribers — by the end of the day on Monday.

"Netflix's kind of late-1990s view of the internet as some unregulatable space was dragged into the 21st century and was put on notice," said Carleton University journalism professor Dwayne Winseck, who characterized Wright's appearance as "theatre."

"The CRTC has a Broadcasting Act to live up to and Netflix ... has to have a respectful conversation in that light."

For his part, Geist said the fight between the regulator and the streaming company is likely to end up in court. "My guess is they find a way to resolve this behind closed doors with Netflix voluntarily providing the info the CRTC is asking for and everybody goes back to the status quo, where there’s open questions about the CRTC’s ability to regulate here."

This third and final phase of hearings was launched with the intent of providing consumers will greater choice and helping Canada's television broadcasting sector adapt to quickly changing technologies that have TV networks, local stations and traditional third party content suppliers struggling to maintain revenues.

The hearings also heard from a wide range of stakeholders about proposals to allow Canadians to pay for only the TV channels they want, rather than being forced to subscribe to bundled channels — a so-called pick-and-pay model that has been touted by the federal Conservatives as good for consumers.

American TV network executives also appeared before the CRTC, arguing for regulations that would see stations south of the border compensated for providing "free" programming on Canadian airwaves — something Blais suggested would run counter to the regulator's mandate.

with files from The Canadian Press


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