Kalen Lumsden is a JD candidate at Osgoode Hall Law School.
According to a report released last week by Sandvine, 29.7% of all downstream internet traffic during peak hours in North America is from the online video streaming service Netflix. Old-fashioned web browsing accounted for only 17% of traffic due to the high bandwidth requirements of video streaming. The growing popularity of Netflix in Canada – almost one quarter of broadband internet customers subscribe to the $7.99 a month service – intersects with two ongoing debates on regulating the internet: data caps and file-sharing.
Sandvine, a Waterloo, Ontario based broadband network solutions company, gathered the data from anonymous internet users. Sandvine has previously been associated with Comcast for providing technologies to slow down BitTorrent traffic on the Comcast broadband network.
Netflix’s popularity in Canada may lend credence to the position that file-sharing’s prevalence in Canada is due to a lack of convenient alternatives that don’t infringe copyright. It certainly demonstrates that there is an appetite and market for such a service. However, Sandvine’s statistics also show that the BitTorrent file-sharing protocol comprises 52.01% of upstream internet traffic and 10.37% downstream traffic during peak hours, an increase from last year.
Data caps and usage based billing recently made the news when the CRTC decided to uphold an earlier decision to allow internet service providers to charge internet wholesalers, who lease space on their network, according to a usage based model (previously discussed by IPOsgoode here). This would make it difficult for wholesalers to offer affordable unlimited packages. Most large networks had discarded the unlimited bandwidth options in favour of data caps, which yield additional revenue when exceeded. To protect Canadians from what many consider unfairly low caps compared to other countries, Netflix reduced the quality of the video streamed in Canada by two thirds.
As many of the large internet service providers are also cable companies and own television networks, they have no incentive to make Netflix accessible, as it conflicts with one of their revenue sources. Phil Lind, an executive vice president at Rogers Communications, welcomes more regulation of Netflix by applying Canadian content requirements.
Member of Parliament, Tony Clement, Industry Minister at the time of the CRTC decision, said that he would overrule any decision to allow usage based billing. The Conservatives have taken populist positions on usage based billing and against the “iPod Tax.” Perhaps the popular Netflix will get the same support when faced with regulatory obstacles.