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The Broadcast War Between Canada and Netflix Is Getting Real

And Google just joined the burgeoning war for the future of Canadian broadcasting.

The smoldering showdown between the Canadian government and Netflix just got a lot hotter: Canadian regulators have decided to eliminate the testimony of  Netflix and Google representatives from proceedings aimed at a broad restructuring of Canadian broadcast regulations.

The lack of testimony from the nation's largest streaming providers puts a damper on hopes that renewed regulations would be developed to support the ever-growing online video market.

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The decision to eliminate Netflix's statements from the public record comes after weeks of rising tensions between the American company and the Canadian Radio-television and Telecommunications Commission (CRTC).

Canada is in the process of reviewing and modernizing its broadcast regulations and Netflix's global public policy director, Corie Wright, testified in front of the "Let's Talk TV" hearings in Ottawa weeks ago regarding the future of the online streaming site within the Canadian broadcast landscape, something the CRTC is considering when it comes to new regulations. That could potentially mean new levies against the company—which would represent a major shift for the treatment of an online streaming site.

Google and Netflix will not be considered in a critical exercise determining the fate of Canadian broadcasting

CRTC Chairman Jean-Pierre Blais responded to Wright's testimony by demanding the American company fork over certain customer data. Netflix responded last week with a letter defying the chairman, and the CRTC's response, delivered yesterday, doesn't mince words.

In the letter, addressed to Wright, the Canadian regulator said it will no longer consider that testimony on behalf of the American company when it comes to formulating the future of broadcasting regulations in the country.

"Netflix's intervention and supporting documentation will be removed from the public record of this proceeding," said John Traversy, the CRTC Secretary General in the letter. "As a result, the hearing panel will reach its conclusions based on the remaining evidence on the record. "

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Those new broadcast regulations will be released in January and by the looks of the CRTC letter, it will not take into account the testimony of Canada's most popular streaming site. That's particularly troubling for the average Canadian who might be hoping the new regulations would favour cheaper, online media instead of traditional broadcasters and cable bundles.

Related: Netflix Should Subsidize Public TV, According Canadian Public TV

Netflix wasn't the only American company to receive the same harsh letter from the Canadian regulator, either: Google's testimony was also tossed from the CRTC hearings after they similarly refused to give up user data.

That means that Google (and thus YouTube) and Netflix will not be considered in a critical policy gathering exercise determining the fate of Canadian broadcasting.

The CRTC initially sought the input of online streaming providers, alongside that of traditional broadcasters, because the agency wanted a clearer picture of the broadcast market. But the CRTC said that doing so would require collecting subscriber data that neither Google nor Netflix was willing to disclose.

Traversy explained in his letters to both Google and Netflix that the federal regulator needed the data to come to more thorough conclusions about Canadians' media viewing habits.

"By refusing to provide any supporting evidence," said Traversy, "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."

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Under Netflix's current "new media" exemption from the CRTC as an online video provider, the feds were well within their right to request intel on its operations.

See, any company like Netflix designated as "new media" in Canada isn't subject to paying taxes or tolls to the feds. But it is required to provide information on its operation to the federal regulator if new regulations were being formulated.

As a result of the American companies' refusal to share subscriber data, the CRTC said it will be forced to rely on "those that are on the public record to make its findings." There's no denying the controversy could cool the CRTC to the interests of online video providers.

For its part, the US Federal Communications Commission (FCC) is examining similar changes on so-called "over-the-top providers" with online platforms broadcasting content, according to Politico. That could mean online video providers are regulated more like traditional cable companies, meaning a general disruption of the traditional cable bundle.

In Canada, the potential for new taxes on Netflix and YouTube is a question mark. Stephen Harper has even said his government would "oppose any tax on services like Netflix and YouTube" from the CRTC, but the final word rests with the federal broadcast regulator, which is held at arm's length from the prime minister's office.