TORONTO - Netflix says Canadian Internet providers are using data caps to inflate their profits, not provide better service.
In an interview Tuesday, CEO Reed Hastings said it's unreasonable for ISPs to be charging dollars per gigabyte for overage fees.
He says the real cost for data is closer to less than a penny per gigabyte, although ISPs have disputed that estimate.
Netflix is responding to the caps on downloading in Canada by crunching down the data used to stream video content.
Users can still watch TV shows and movies in the best available quality, which can sometimes take two gigabytes per hour to stream, but the new default setting -- at a lesser quality -- will consume only 300 megabytes an hour.
With the new setting, watching 30 hours of content a month would use about nine gigabytes, which Netflix notes would come under most caps.
Hastings says it's understandable that Internet providers would want to maximize profits but it's not in the public interest.
"It's an effective way to drive the bill up, that tends to be why caps are used," he said.
"Internet traffic is extremely cheap and the problem is there's not much competition in this market and that's why you get these big prices."
Download caps have been closely watched by Netflix since the company launched in Canada last September and it has lobbied the federal government on the issue.
"Having high speed Internet is really important to Netflix, arguably it's really important to any society also," Hastings said.
"We're involved in being a voice."
Netflix is on track to add its one-millionth customer sometime this summer and Hastings said he's extremely pleased with the business north of the border.
"The number of Canadians subscribing has been amazing to us ... it's just been a huge number of subscribers," he said.
"It's been much faster growth for Netflix in Canada."
Spokespeople for Bell and Rogers were not immediately available for comment.
