Australian Competition and Consumer Commission chairman Rod Sims: “Clearly there is a vertical integration issue where internet service providers can control what comes down their pipe and obviously if ... we see that ISPs were using that technology to influence their own content over other content then that would be of concern to us.
Photo: Sean Davey
Telstra and other internet service providers could be investigated if they slow down file-sharing programs like BitTorrent in favour of providing their own video content to customers, the Australian Competition and Consumer Commission says.
Telstra recently revealed plans to test new ways of managing its broadband network with some Victorian customers, which would lead to some high-bandwidth internet content being slowed down.
The trial sparked panic among some users who threatened to leave the telco. Industry rivals have called the move the “first shot in a battle on net neutrality”, a debate over whether ISPs should treat all online content the same.
The chairman of the ACCC, Rod Sims, told The Australian Financial Review that he would look to investigate any attempts to advantage some content over others.
“Clearly there is a vertical integration issue where internet service providers can control what comes down their pipe and obviously if, unrelated to the reports about Telstra, we see that ISPs were using that technology to influence their own content over other content then that would be of concern to us,” he said.
File-sharing programs like BitTorrent account for 35 per cent of all internet traffic in the Asia-Pacific, by some estimates.Photo: Adam Berry
The issue is becoming particularly pertinent in Australia as telecommunications players continue a transition from being dumb pipe providers to small media empires, delivering television and online content alongside internet and telephone access.
At the same time, the prevalence of file-sharing programs like BitTorrent continues to take up valuable network space, accounting for 35 per cent of all internet traffic in the Asia-Pacific region, according to United States company Sandvine.
The programs, though available for legitimate uses, are often linked to the illegal downloading of movies, music and television shows.
Industry sources say the vast majority of providers in Australia throttle some types of traffic to ensure that uses like file sharing do not impede on programs that require no disruptions, like Skype or online gaming.
Telstra sought to downplay the trials late last week as an attempt to better manage its network traffic, which it says has doubled on average every 12 months for the past four years.
It said the trial would not prioritise its own content, and that combating illegal downloading was not a part of the trial, despite mentioning online piracy in its first response earlier last week.
Telstra chief executive David Thodey also stepped in to defend the trial, calling news reports “a little over-hyped”.
“It’s absolutely standard for most ISPs, we want to be absolutely transparent on it, there’s nothing to hide,” he told media at the company’s first-half financial results briefing on Thursday.
Quickflix chairman Stephen Langsford says, “The world is moving to choice and there’s an expectation ultimately from customers that they’re able to have choice in the way that they access content without restrictions.”Photo: Erin Jonasson
“I think most operators around the world do a degree of shaping anyway, it’s always been the case.”
But it has been met with hesitation from the wider industry. John Lindsay, the chief technology officer of second-tier service provider iiNet, said that while the trial is initially limited to some of Telstra’s 2.7 million broadband customers, it could have reverberations throughout the industry.
“It feels like you’ve paid your fee to go to an all-you-can-eat buffet and the restaurant owners have put a fence up in front of it and will only let one person in at a time,” he said.
“That one person can cram all the food they want onto a plate, but if you make the plate smaller, you limit the access to the buffet.”
Mr Lindsay acknowledged iiNet used the same type of technology Telstra will use to slow down web content, but said the company did not actively throttle a specific program or content type.
iiNet, along with other ISPs, also “unmeters” some content, not counting downloads over those services to the user’s monthly quota.
Mr Lindsay compared the issue to the “net-neutrality” or “open-internet” debate in the US, which has seen most internet giants battle over whether to prioritise cable television content over others.
The US equivalent of the ACCC implemented measures in 2010 prohibiting the blocking of lawful content and “unreasonable discrimination” on broadband networks.
An agreement struck between Google and US carrier Verizon that same year was seen as backtracking for the search giant, traditionally a bastion of internet values. Online streaming and DVD rental video provider Netflix has since surpassed BitTorrent as the single biggest source of internet traffic in the US.
Telstra chief executive David Thodey says news reports of Telstra’s Victorian broadband network management trials are “a little over-hyped”.
Stephen Langsford, the chairman of Netflix’s Australian equivalent Quickflix, said he was opposed to any form of discrimination online.
“Starting to impose restrictions prematurely ahead of fully developing the opportunity would seem to be an unfortunate consequence,” he said.
“The world is moving to choice and there’s an expectation ultimately from customers that they’re able to have choice in the way that they access content without restrictions.
“Particularly with the NBN in the background. I think those sorts of restrictions seem to smack of short-termism, well and truly.”
One senior telco industry executive said the rollout of the national broadband network would require video providers like Quickflix to align themselves with ISPs in order to efficiently and cost-effectively distribute video.
However, Mr Langsford said Quickflix was “not banking on special favour from any particular player”.
This story first appeared on The Australian Financial Review.