OTTAWA – The CRTC will not try to go to the courts to force compliance and instead has threatened to strip the interventions, submissions, oral presentations, research and other supporting documentation made by Netflix and Google from the public record of its recent TV Policy Review because the companies continued to refuse to provide specific information.
In a letters dated September 29 and addressed to Google’s Canadian public policy and government relations counsel Jason Kee and to Netflix’s director of global public policy Corie Wright, (pictured in a CPAC.ca screen cap, below), the Commission said the companies’ refusal to provide supporting evidence means that the Regulator “cannot fully test and evaluate the strengths” of the arguments they made “which, if supported by evidence, may otherwise be very compelling. The Commission cannot carry out its duties based on mere anecdotal evidence.”
The CRTC asked Google and Netflix to provide information related to their activities in Canada, including data on the amount of content uploaded from Canadian locations, projected growth in the advertising market, and advertising revenues derived from Canada from Google, and from Netflix, was primarily concerned with Canadian subscriber data and user patterns.
It added that the information is meant to support the conclusions the two companies are advocating, i.e. online distribution platforms for video content 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. While both companies submitted undertakings answering some of the questions posed to them during their appearances in front of the commissioners, they did not answer all questions.
“A company’s refusal to comply with requests and orders duly made at a public hearing is a serious matter”, continues the CRTC’s letters, signed by secretary general John Traversy. “Parties who choose to engage in Commission proceedings, especially large important corporations such as Google, 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,” reads the letter to Netflix.
(Ed note; It is worth noting here what neither Netflix nor Google, in their written comments to the Commission in July, asked to appear in the public hearing portion of the TV Policy Review. The CRTC requested that they appear. Our sources told us the two companies were placed on the agenda of the public hearing before either one had agreed to appearing.)
“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’,” continues the Commission’s letter to Netflix. “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’.
"The Commission cannot carry out its duties based on mere anecdotal information.” – CRTC
“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.”
The Commission said that if the ordered information is not supplied by October 2nd, it will remove Netflix’s and Google’s intervention, oral submission, and all supporting documentation from the public record of this proceeding.
“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,” the letters concluded.
This action from the CRTC should not be lost on Canadian companies who may have been wondering whether or not they, too, could get away with what Netflix and Google have – telling the CRTC "no." It's one thing to exclude evidence from American companies not subject to regulation here. It's quite another should the Commission ever take action to expunge evidence given from Canadian telecom, wireless or media companies due to a non-compliance with a Commission order.
Was this a message sent to cantankerous Canadian telecom/media companies (who also just happen to be before the Commission this week for a wireless hearing)? When you look at the confidentiality complaints referenced in this Commission letter – over a denied request to review and vary a Commission decision about the confidentiality of certain wholesale wireless agreement terms – related to this week's hearing, we'd say, definitely.
