The current dispute between Netflix and the CRTC, ostensibly arising from Netflix’s refusal to provide the CRTC with confidential subscriber data, could ultimately be settled in court. The essential issue that the court would address is whether the activities of Internet broadcasters are covered by the Broadcasting Act. To date, the CRTC has chosen not to apply to Internet broadcasters the same regulations that conventional broadcast distributors must obey. The CRTC believes it has jurisdiction over the Internet and, hence, over Internet broadcasters such as Netflix.
A strong case can be made that regulation of Internet broadcasting is exactly the wrong policy for the government to pursue, although it would clearly mean a larger budget for the regulator, which creates an incentive for the regulator to expand the scope of its activities into Internet broadcasting.
The preferred policy option is to deregulate the conventional broadcasting sector. In particular, Canadian content rules should be eliminated along with requirements that cable and satellite distributors carry a preponderance of Canadian programs. Foreign ownership restrictions in broadcasting should be eliminated, which would expose existing broadcast distributors to the threat of unwanted takeovers by more efficient foreign companies. The latter initiative would further increase de facto competition in the broadcast industry.