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Reed Hastings, CEO of Netflix, announces Netflix's expansion to Canada in Toronto, on Wednesday, September 22, 2010.Adrien Veczan/The Canadian Press

Telecom company Shaw Communications says certain elements of the Internet should be regulated by the CRTC.

The cable carrier, broadcaster and Internet provider told a Commons heritage committee Thursday that online movie providers Netflix, Hulu and video site Google TV are undermining Canadian broadcasters' ability to pay for domestic content.

Shaw executives said the Calgary-based company, which recently bought Canwest Global, pays about $150-million a year for local content and to support Canadian producers through the Canadian Media Fund.

But Netflix, Hulu, Google TV and others can distribute similar programming without any responsibilities to generate Canadian content, or pay into the fund that supports Canadian producers, actors, writers and directors.

"Why should we be burdened with anchors and costs? The reason Netflix can offer an $8.99 service is because they have no costs other than acquiring the content," said Shaw president Peter Bissonnette.

Bissonnette said the current situation is not only unfair, but also undermines the ability of Canadian broadcasters to finance Canadian programs because the foreign competition is sapping their revenue base.

And U.S. broadcasters like Netflix are becoming real threats, he said, drawing viewers away from the regulated system to the unregulated one.

In only a few short months, downloading of Netflix movies is already consuming about five per cent of Shaw's spectrum space, Bissonnette said.

The Canadian Radio-television and Telecommunications Commission has previously told the committee it has no intention of regulating the Internet.

Even the Shaw officials admit it would be no easy task. For one thing, Google TV and Netflix are not Canadian broadcasters, so are beyond the reach of the CRTC.

But Ken Stein, Shaw's vice-president of regulatory affairs, said it could be done by focusing on the distribution channels in Canada.

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