ARCHIVED - Broadcasting Commission Letter Addressed to Corie Wright (Netflix)

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Ottawa, 29 September 2014

BY EMAIL: cwright@netflix.com

Ms. Corie Wright

Netflix

Director, Global Public Policy

Dear Ms. Wright:

This correspondence is further to your letter dated September 22, 2014, in which Netflix indicated that it is unwilling to provide certain information to the Commission as part of the Let’s Talk TV proceeding.

The Commission has requested that Netflix provide information related to activities in Canada, including its Canadian subscribers, its investments in Canadian made productions and other matters. This request was made for a very specific purpose. The hearing panel is seeking to better understand Netflix’s innovative approach in providing Canadian-made content to Canadian and non-Canadian audiences alike, through non-traditional, consumer-driven platforms. In addition, Netflix appears to be an increasingly popular service that operates in Canada.

One of the goals of the Let’s Talk TV proceeding is to give Canadians greater choice by establishing a forward-looking framework for television. A complete understanding of Netflix’s presence in Canada and its experiences in delivering content would be useful. The specific information requested by the Commission and subject to various orders would be provided in confidence and would be aggregated in order to not include any individual subscriber information.

The Commission is an independent administrative tribunal that conducts its hearings with regard to its rules of practice and procedure, and its powers, which are similar to those of a superior court. Under both the Broadcasting Act and the Telecommunications Act, the Commission holds public hearings to build a complete record, which includes the materials filed by parties. The more complete the record, the better the Commission is able to make evidenced-based decisions that serve the interests of Canadians.

The legislative framework grants the Commission 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. As was made clear at the hearing, the Commission has well-established rules that allow it to grant confidential treatment to sensitive information filed by parties. These rules have been consistently and successfully applied for decades, even through the emergence of new technologies and new operators.

A company’s refusal to comply with requests and orders duly made at a public hearing is a serious matter. Parties who choose to engage in Commission proceedings, especially large important corporations such as Netflix, cannot unilaterally choose which part of the evidence-gathering proceeding they want to participate in. 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.

Netflix has advanced arguments through its voluntary participation in the Let’s Talk TV proceeding, including its appearance at the public hearing. The Commission has questions regarding certain assertions and, as with any superior court, a public hearing is the appropriate venue to probe parties and obtain additional evidence.

For example, at the hearing, you stated that “most consumers use Netflix and other online video services to supplement their viewing of traditional broadcasting services.” You added that Canadian content is “thriving on Netflix” and that “Netflix’s commitment to Canadian content is market-oriented and driven by subscriber demand and their viewing habits.”

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.

Despite comments made by those who were not parties to the Let’s Talk TV proceeding, the information that the Commission is seeking is meant to support the conclusions that Netflix is advocating—that Internet video providers can support the policy objectives under the Broadcasting Act, as well as others relating to competition and innovation—without the need for any additional regulatory action by the Commission. As with any party before the Commission, the CRTC will ask for the probative evidence that would support a party’s position.

In light of the above, Netflix’s intervention and supporting documentation will be removed from the public record of this proceeding on October 2, 2014. These include:

Netflix’s intervention dated June 27, 2014

the Lemay-Yates Associates inc. report titled “The Evolution of TV and New Media in Canada dated June 27, 2014

your oral submission found from paragraphs 20893 to 21568 of the transcript of the hearing, and

Netflix’s response to the requests for information dated September 22, 2014.

As a result, 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.

Sincerely,

John Traversy

Secretary General