The arrival of Netflix north of the American border has sparked a potential video revolution in Canada that some fear could renew “an erosion” of Canadian culture and self-identity as the streaming video service floods the country with American-made television and movies. But anxiety also prevails on the upper floors of some of Canada’s biggest telecom companies, worried their business models are about to be challenged like never before.

Two weeks ago, the country saw a remarkable Canadian Radio-television and Telecommunications Commission (CRTC) hearing featuring a Netflix executive obviously not used to being grilled by the often-curt regulators. When it was all over, Netflix refused to comply with a CRTC order for information about Netflix’s Canadian customers.

Earlier today, the CRTC’s secretary general, John Traversy, declared that because of the lack of cooperation from Netflix, all of their testimony “will be removed from the public record of this proceeding on October 2, 2014.” That includes their oral arguments.

“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,” Mr. Traversy wrote in a nod to Canada’s own telecom companies.

Not since late 1990’s Heritage Minister Sheila Copps, who defended Canadian content with her support of a law that restricted foreign magazines from infiltrating across the border, had a government official seemed willing to take matters beyond the government’s own policy.

CRTC chairman Jean-Pierre Blais threw down the gauntlet when Netflix hesitated about releasing its Canadian subscriber and Canadian content statistics to the regulator. Mr. Blais wanted to know exactly how many Canadians are Netflix subscribers and how much of what they are watching on the service originates in Canada.

With hearings underway in Ottawa, bigger questions are being raised about the CRTC’s authority in the digital age. Doug Dirks from CBC Radio’s The Homestretch talks with Michael Geist at the University of Ottawa. Sept. 19, 2014 (8:40) You must remain on this page to hear the clip, or you can download the clip and listen later.

Netflix has operated below regulatory radar since it first launched service in Canada four years ago. The CRTC left the American company with an impression it had the right to regulate Netflix, but chose not to at this time. The CRTC of 2010 was knee-deep in media consolidation issues and did not want to spend a lot of time on an American service that most Canadians watched by using proxy servers and virtual private networks to bypass geographic content restrictions. But now that an estimated 30% of English-speaking Canada subscribes to Netflix, it is threatening to turn the country’s cozy and well-consolidated media industry on its head.

Ask most of the corporate players involved and they will declare this is a fight about Canada’s identity. After all, broadcasters have been compelled for years to live under content laws that require a certain percentage of television and radio content to originate inside Canada. Without such regulations, enforced by the CRTC among others, Canada would be overwhelmed by all-things-Americans. Some believe that without protection, Canadian viewers will only watch and listen to American television and music at the cost of Canadian productions and artists.

[flv]http://www.phillipdampier.com/video/BNN Netflix vs the CRTC 9-22-14.flv[/flv]

Kevin O’Leary, Chairman, O’Leary Financial Group is furious with regulators for butting into Netflix’s online video business and threatening its presence in Canada is an effort to protect incumbent business models. From BNN-Canada. (8:45)

A viewer watches Netflix’s Corie Wright testify before the CRTC. (Image: Sean Kilpatrick, The Canadian Press)

But behind the culture war is a question of money – billions of dollars in fact. Giant media companies like Rogers, Shaw, and Bell feel threatened by the presence of Netflix, which can take away viewers and change a media landscape that has not faced the kind of wholesale deregulation that has taken place in the United States since the Reagan Administration.

Before Netflix, the big Canadian networks didn’t object too strongly to the content regulations. After all, CRTC rules helped establish the Canadian Media Fund which partly pays for domestic TV and movie productions. Canada’s telephone and satellite companies also have to contribute, and they collectively added $266 million to the pot in 2013, mostly collected from their customers in the form of higher bills. Netflix doesn’t receive money from the fund and has indicated it doesn’t need or want the government’s help to create Canadian content.

“It is not in the interest of consumers to have new media subsidize old media or to have new entrants subsidize incumbents,” added Netflix’s Corie Wright. “Netflix believes that regulatory intervention online is unnecessary and could have consequences that are inconsistent with the interests of consumers,” Wright said, adding viewers should have the ability “to vote with their dollars and eyeballs to shape the media marketplace.”

That is not exactly what the CRTC wanted to hear, and Wright was off the Christmas card list for good when she directly rebuffed Mr. Blais’ requests for Netflix’s data on its Canadian customers. Wright implied the data would somehow make its way out of the CRTC’s offices and end up in the hands of the Canadian-owned broadcast and cable competitors that know many at the CRTC on a first name basis.

Does Netflix pose a threat to Canadian culture? Matt Galloway spoke with John Doyle, the Globe & Mail’s television critic, on the Sept. 22nd edition of CBC Radio’s Metro Morning show. Sept. 22, 2014 (8:31) You must remain on this page to hear the clip, or you can download the clip and listen later.

Mr. Blais, obviously not used to requests being questioned, repeated demands for Netflix’s subscriber data to be turned over by the following Monday and if Netflix did not comply, he would revoke Netflix’s current exemption from Canadian content rules and bring down the hammer of regulation on the streaming service.

Blais

The deadline came and went and last week Netflix defiantly refused to comply with the CRTC’s order. A Netflix official said that while the company has responded to a number of CRTC requests, it was not “in a position to produce the confidential and competitively sensitive information, but added it was always prepared to work constructively with the commission.”

Now things are very much up in the air. Many Canadians question why the CRTC believes it has the right to regulate Internet content when it operates largely as a broadcast regulator. Public opinion seems to be swayed against the CRTC and towards Netflix. Canadian producers and writers are concerned their jobs are at risk, Canadian media conglomerates fear their comfortable and predictable future is threatened if consumers decide to spend more time with Netflix and less time with them. All of this debate occurring within the context of a discussion about forcing pay television companies to offer slimmed down basic cable packages and implement a-la-carte — pay only for the channels you want — is enough to give media executives heartburn.

To underscore the point much of this debate involves money, American TV network executives also turned up at the CRTC arguing for regulations that would compensate American TV stations for providing “free” programming on Canadian airwaves, cable, and satellite — retransmission consent across the border.

Netflix does not seem too worried it is in trouble in either Ottawa or in the halls of CRTC headquarters at Les Terrasses de la Chaudière in Gatineau, Québec, just across the Ottawa River. Prime Minister Stephen Harper and Heritage Minister Shelly Glover have made it clear they have zero interest in taxing or regulating Netflix. Even if they were, the Canada-U.S. free trade agreement may make regulating Netflix a practical impossibility, especially if the U.S. decides to retaliate.

[flv]http://www.phillipdampier.com/video/Canadian Press CRTC vs Netflix 9-19-14.mp4[/flv]

Dwayne Winseck, Carleton School of Journalism and Communication, defended the role the CRTC is mandated to play by Canada’s telecommunications laws. (1:41)

Just when you thought the cable television lineup could not possibly get any larger,  insiders at Comcast are anticipating one of the possible conditions that could be imposed by the Federal Communications Commission in return for approval of its merger with Time Warner Cable is an agreement to carry more independently owned cable television channels.

One of the most vocal groups of consumers opposed to the merger deal have been viewers of independent Omaha, Neb.-based RFD-TV, which has landed carriage deals with Time Warner Cable but has been largely ignored by Comcast. For most of the summer, RFD-TV encouraged viewers to pelt the FCC with complaints about the merger deal, insisting that more networks not owned or operated by the top five media conglomerates get equal treatment on the Comcast cable dial. Thousands of viewers responded.

Comcast vice president David Cohen told Congress Comcast already carries more than 170 small or independent networks, although Comcast counts international networks distributed to customers at premium rates.

“It sounds wonderful. But when you peel back the onion . . . it’s really nothing at all,” Pat Gottsch, founder of RFD-TV told the Philadelphia Inquirer. “Very few [independent] channels have full distribution, other than BBC World News and Al Jazeera.”

Independent networks have little leverage with major cable operators because they cannot tie carriage agreements to more popular mainstream cable networks. That is why little-known networks like Crime & Investigation Channel or the spinoffs of fX – fXX and fXM – have glided onto cable lineups while networks like RFD, The Tennis Channel, and BlueHighways TV have a much tougher time.

Time Warner Cable now widely carries RFD-TV, but often only on an added-cost mini-pay tier. In many Time Warner markets, RFD and Smithsonian TV replaced HDNet, also an added-cost network.

The independent networks fear they will never become viable if they cannot reach the nearly one-third of the country’s cable television subscribers a combined Comcast and Time Warner Cable would serve. Others question whether they will be given fair consideration if their networks compete with an existing Comcast or Time Warner Cable-owned channel.

The Tennis Channel and Bloomberg have both tussled repeatedly with Comcast over carriage agreements and channel placement. The Tennis Channel took Comcast all the way to a federal appeals court, but lost their case. Cable companies have won recognition of their First Amendment rights to choose the channels on their systems.

In years past, cable operators cited limited channel capacity as the most frequent reason a network could not be added to the lineup. Comcast continues to claim they have limited channel space for television channels, but that has not stopped the cable company from launching dozens of little-watched networks they receive compensation to carry (home shopping, TBN and certain other religious networks) or are contractually obligated to carry (add-on sports and entertainment networks owned by Disney, Viacom, Time Warner (Entertainment), Fox, and even Comcast itself, through its Universal division).

Comcast’s claim it already carries nearly 180 independent networks drew scrutiny when the company released the list of networks. At least half were added-cost international or pornography networks — all sold at a higher cost. More than a dozen others were independent sports channels packed into a higher-cost sports tier. Most of the rest were regional networks given very limited exposure. BlueHighways TV, which features bluegrass music, is seen in only 210,000 Comcast homes, mostly in Tennessee. That is less than 1% of Comcast’s total subscriber base.

The only prominent and truly independent networks given wide carriage on Comcast include Home Shopping Network and QVC, which pay a commission to Comcast for every sale made to a Comcast customer, BBC World News, and the Catholic EWTN network.

Mitigating the problem of independent network carriage may push the FCC to the path of least resistance – making carriage of some of these networks a requirement in return for merger approval.

It wouldn’t be the first time. Comcast agreed to launch 10 independent networks as a condition for FCC approval of its buyout of NBCUniversal. That deal is what brought BBC World News to the Comcast lineup, along with a range of little-known networks on high channel numbers: ASPiRE, BabyFirst Americas, Revolt, and El Rey. BabyFirst is targeted to babies and toddlers from 0-3 years old, but is also enjoyed by recreational drug users who find the network’s use of bright colors in their short-form videos entertaining. ASPiRE’s programming has been described by its critics as “crap.”

Independent television in Great Britain may soon be in the hands of U.S. citizen John Malone, former cable magnate and head of the giant Liberty Global cable and entertainment conglomerate that has swept across western Europe through a series of mergers and buyouts.

Deregulation has allowed the prospect of Britain’s biggest independent network, dwarfed only by the BBC, to soon be owned lock, stock, and barrel by Americans.

U.S. media conglomerates have already picked up the smaller Channel 5 network, purchased by Viacom in a surprise $757 million deal.

ITV produces an enormous number of television shows for its network of regional independent television stations across England, Scotland, Wales, and Northern Ireland. It is these productions that are attracting attention from content-hungry U.S. media companies.

John Malone’s Liberty Global is seen as a leading contender, already owning a 6.4% stake in ITV acquired from BSkyB for $824 million. Liberty Global and Discovery Networks have maintained close association and jointly bid $930 million to acquire All3Media, the production arm of reality shows like “Undercover Boss.”

ITV’s own needs for programming have increased dramatically with the introduction of digital free-to-air television across the United Kingdom. ITV’s single network, operating for decades, is today accompanied by ITV 2, 3, 4, Citv, and Encore.

Malone hopes to build a European media empire, and has amassed holdings including a takeover of Virgin Media and cable systems in Germany and the Benelux region.

Malone has wooed some of ITV’s biggest investors — all American — including Fidelity, which has a nearly an 8% stake, BlackRock, with 4.9%, and the California hedge fund manager Brandes, which has 4.8%.

Malone may face other bidders, however, notably Comcast-NBCUniversal, which has not yet publicly revealed whether it is interested or not.

Another potential benefit of the transaction would be to allow its American buyer to avoid U.S. taxes by relocating their corporate headquarters to Great Britain in a controversial practice known as tax-inversion.

Assemblyman Joe Morelle’s letter to N.Y. regulators failed this online plagiarism checker when it found the majority of the text was lifted from Comcast’s own press statements and congressional testimony, without attribution.

News that Assemblyman Joe Morelle cut and pasted the majority of his letter to New York regulators directly from a Comcast press release and executive testimony before Congress has begun to create some problems for the assemblyman and his office.

The story has been picked up by a Rochester television station, two New York newspapers and the National Journal (so far). We have now learned that Assemblyman Morelle also cashed a $1,000 campaign contribution check from Comcast earlier this year.

In response to our story, the assemblyman’s office today issued a litany of excuses about why it now fronts for Comcast, none of them particularly convincing. In fact, the damage control effort may actually be making the problems for Mr. Morelle and Comcast worse:

WROC-TV:

Sean Hart, said Comcast approached the assemblyman for his support. “They provided a draft letter of support for our consideration. We made several edits of the letter. This is common practice for any organization asking for an elected official’s support to provide a sample letter.”

Comcast is not an “organization.” It is a multi-billion dollar telecommunications and entertainment conglomerate. We are grateful to have confirmation that Comcast is sending out “templates” to elected officials with talking points already prepared and ready to go. The only issue is whether an elected official will steer clear of promoting giant corporate merger deals they don’t understand (and Mr. Morelle clearly does not have a clue.)

Did Mr. Morelle consult with his own constituents before deciding to tote water for Comcast? Not that we are aware of. Even the Public Service Commission’s own staff recognizes the overwhelming majority of New Yorkers communicating with them on this issue (nearly 3,000 and counting), are vehemently opposed to the deal. Many have past personal experiences dealing with Comcast, and they don’t have the benefit of a $1,000 check from the cable company to give them warm feelings of goodwill.

Although it may be common practice for a company to do this kind of advocacy work, it is not common for most elected officials to barely rewrite the company’s own press releases and executive testimony. Out of thousands of elected officials in New York, only a dozen or so have weighed in with the PSC on this issue.

Our favorite attempt at damage control came from Mr. Hart’s comments to The Journal News:

“It is common practice for an organization seeking support to provide a sample letter with suggested language,” Hart wrote. “I am certain if you were to review letters of support for any number of projects/causes submitted by elected officials, at every level of government, you would find that many opt to extract language from a sample letter provided to them.”

Hart rejected the suggestion that Morelle plagiarized the Comcast and Time Warner executives’ testimony, as suggested by Stop the Cap. The letter to the Public Service Commission was signed by Morelle and printed on official Assembly letterhead.

“I realize I probably do not need to point this out to a journalist, but the definition of plagiarism is ‘an act or instance of using or closely imitating the language and thoughts of another author without authorization and the representation of that author’s work as one’s own,'” Hart wrote. “Morelle has authorization from Comcast to use the language included in his letter to the NYSPSC.”

He continued: “It is one thing to disagree with the Majority Leader’s opinion. It is another to make outlandish claims that lack merit.”

Morelle

We have reviewed over 8,000 comments filed with regulators on the state and national level since 2008. We have rarely encountered a cut and paste job as obvious as Mr. Morelle’s letter. When you review as many filings as we do, when talking points are quoted word for word, it stands out because we have heard them from Comcast again and again.

Mr. Hart does not help Mr. Morelle’s cause defending the fact he had Comcast’s permission to cut and paste their press releases in comments sent on the Majority Leader’s letterhead and signed by him personally. Comcast could and should have co-signed it. The fact that it happened at all should ring alarm bells for any voter, particularly those who don’t appreciate an elected official inviting America’s most-hated cable company into New York State.

As for the matter of plagiarism, perhaps we missed the part where Mr. Morelle made sure to credit the source for his testimonial. Oh wait, we didn’t. It wasn’t in there. Would Mr. Hart’s excuses fly by your college professor after being caught cutting and pasting someone else’s words in a paper you ostensibly wrote without any attribution?

Maybe we were wrong, so we decided to run Mr. Morelle’s letter through an online plagiarism checker to see what it thought.

Uh oh: Grammarly not only fired off a warning, but a full-scale “!” plagiarism alert, even after we discounted our own (and others) coverage of the story, which also quotes from his letter.

If Mr. Hart wants to attack us for exposing the sordid affair, we’re fine with that. We’re tough and can take it. He’ll find few (unpaid) defenders of Comcast to stand with the assemblyman.

Frankly, the only “outlandish claims that lack merit” are Comcast’s promises for New York. If Mr. Morelle is that comfortable extending his own credibility to vouch for Comcast, we’ll still be around to remind his constituents the promised dreams of better days inevitably devolved into a consumer nightmare, just as it has in Comcast’s primary service areas. Voters should know Comcast has Joe Morelle’s full and unwavering support.

The best damage control? Rescind the letter. All will be forgiven. Mr. Morelle won’t be the first (or last) elected official suffering collateral damage from Comcast.