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Net result, no regulations for Netflix The Canadian Press. All rights reserved.
In this undated file photo provided by NetFlix Inc., a representation of the Netflix one-click remote, is shown. THE CANADIAN PRESS/AP, NetFlix Inc.
Despite calls for tougher rules on online movie and TV services like Netflix, the CRTC says there's no evidence traditional Canadian broadcasters are being harmed by the new digital rivals and no new regulations are needed.
Online and mobile programming is "complementary" to TV content distributed by cable, satellite and broadcast systems, the Canadian Radio-television and Telecommunications Commission said Wednesday. "There is no clear evidence that Canadians are reducing or cancelling their television subscriptions," the broadcast regulator said in a statement.
The CRTC did not mention Netflix by name, but noted new Internet services are competing for viewers and content.
"Some online programming services have established viable business models and are competing in the marketplace for programming rights and viewers," the CRTC said. However, new media will continue to be exempt from regulations, the CRTC said, keeping a 2008 ruling in tact. But, the regulator noted, digital services have reshaped the broadcasting landscape and their financial impact is expected to grow on traditional services.
A 40-member group from the telecommunications, broadcasting, cable and satellite and production sectors, along with unions, had asked the regulator to hold public consultations on digital services like Netflix. U.S.-based Netflix has attracted more than one million Canadian subscribers since beginning to offer its online service in this country about a year ago.
Specialty media company Astral Media (TSX:ACM.A) has said that foreign Internet competitors like Netflix should face the same rules as Canadian broadcasters, such as contributing funds for local programming and paying the same taxes.
"We are surprised that the CRTC is not taking action," Astral said in a statement, but added it's pleased the CRTC will take another look at the issue in 2012.
The CRTC said the issue will be the main focus of its annual consultation with the broadcasting industry in November. The regulator will also look at the situation again next May. Netflix applauded the CRTC's hands-off decision.
"Any decision that gives consumers more choice is fine with Netflix," said Steve Swasey, spokesman for the California-based company.
Rogers (TSX:RCI.B) said it's supportive of the CRTC's decision not to impose any rules on digital content providers like Netflix, known in industry jargon as over-the-top providers. There's a been a little bit of "softening" of TV subscribers at Rogers but it's difficult to say whether it's due to the recession, other providers or over-the-top providers, said Ken Engelhart, Rogers senior vice-president of regulatory affairs.
Internet and wireless networks could have capacity constraints to support increasing consumption of media content, the CRTC added.
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