Telstra's Foxtel bundles threaten net neutrality: ACCAN

Telstra's Foxtel bundles threaten net neutrality: ACCAN

Summary: As more content is streamed online, and Foxtel locks up exclusive rights to that content, Telstra's bundles and unmetered streaming of Foxtel represents a threat to net neutrality, according to the Australian Communications Consumer Action Network.


When net neutrality is brought up, it is usually in the context of the ongoing battle between TV and film streaming company Netflix fighting to have its network traffic delivered to customers at the same speeds as other traffic, and the company being forced to pay up to internet service providers in order to ensure Netflix streams aren't capped.

In Australia, the argument over net neutrality is relatively dormant, although evidence points to ISPs throttling some forms of traffic, such as BitTorrent, all traffic remains relatively equal on Australia's networks, due in large part to the number of ISPs Australians by and large have to choose from, compared to the US.

The Australian Communications Consumer Action Network (ACCAN) has warned of another form of traffic discrimination, however. In a submission to the federal government's competition policy review being conducted by Deloitte Access Economics director Professor Ian Harper, ACCAN said Telstra's streaming deals with the Australian Football League (AFL) and its stake in Foxtel, meant it was able to provide streaming of games and TV shows to customers on its mobile and fixed networks without counting that streaming towards the monthly data quota. This was something unavailable to rivals such as Optus or Vodafone.

"Significant net neutrality issues still arise because access is metered for non-Telstra customers. This means if customers are not with Telstra or using Wi-Fi they are likely to exceed their entire monthly mobile data allowance (about 1GB per game) before a game even ends," ACCAN said.

"This creates a large incentive for a consumer wishing to watch live sports on their phone or tablet to also purchase a Telstra mobile service."

ACCAN said that for users who increasingly stream all their TV online at home, they might be more inclined to switch to Telstra when signing up to Foxtel just to ensure it is not counted towards their monthly download limits.

"Foxtel's video on demand services uses a maximum of 1,310MB per hour. If the average viewer consumed all of their content through this service, it would equate to about 143GB per month. Given the average fixed broadband consumer currently only uses about 36GB per month, the ability to have content unmetered represents a significant market advantage for providers who can bundle their content and broadband."

ACCAN argued that this issue is worsened by Foxtel acquiring exclusive rights to content such as HBO's series Game of Thrones, meaning that customers will be forced to sign up to Foxtel's services in order to access the show in Australia, or turn to other methods that the government is currently considering cracking down on.

The attempts to compete with Foxtel on content by iiNet, Optus, and TPG cannot match Foxtel's offering, ACCAN said.

"IPTV and Fetch TV tend to offer content that is specialised and with less broad market appeal, and lacking in high-rating US content aired on cable networks such as HBO and Fox."

iiNet also offers unmetered access to a number of websites with streaming content, including the ABC's iview, and Apple's iTunes store.

ACCAN argued that bundling of telecommunications services with content services such as Foxtel and Telstra broadband might save consumers in the short term, but may lead to a lessening of competition and higher prices in the long term.

"The interplay between content and telecommunications has allowed established players to use bundling, exclusive content and protection from international competition to exercise significant market power. We would encourage the review to consider these issues in assessing the effectiveness of the current competition law and policy framework."

Attorney-General George Brandis recently praised Telstra's efforts to address the number of Australians infringing on copyright online.

"If I may say so publicly, I think Telstra's contribution to this issue, and their willingness to work to find a solution to the piracy issue — which is really unaddressed in Australia — has been very commendable," he said last month.

Topics: Mobility, Government, Government AU, Telcos, Australia


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Regulate the digital content industry.

    There needs to be regulation in the digital content industry in Australia.

    Competition needs to be encouraged by killing the ability of companies operating in Australia to buy exclusive rights for longer than a week. ie Foxtel buys exclusive rights to an episode of Game of Thrones and shows it for a week before another player is allowed to come along and purchase rights to screen the same episode.
  • Foxtel Play

    I use Foxtel Play which includes Foxtel OnDemand and if you run it in HD then its over a GB an hour but in SD its around 480MB.

    I have a Telstra connection so its good as it doesn't count as metered data - but that isn't enough of a reason to stay with Telstra when Dodo etc all offer unlimited data plans - which negates the benefit of it not being metered on Telstra.

    The only place they have an advantage is when it comes to streaming via mobile broadband - but we are getting ripped off for mobile data anyway so I'd rather the government do something about that before worrying about streaming bundles.

    Also I agree with colonel.mattyman about exclusivity of digital media here, maybe I'd suggest a bit longer than a week (otherwise its not worth the exclusivity) but there definitely should be a limit on it. It bugs me to no end that I can only get some shows via Xbox TV/Movies and others via Quickflix and yet others Foxtel - why should one have to jump between 2 or 3 providers just to get the stuff when the size of our entire market is smaller than just New York and its 5 burroughs?
    • Telstra/Foxtel has Already Killed the NBN

      And is likely to be in total control of pricing on what the net delivers thanks to Brandis & in future the likely fire sale of the remnants of the NBN's corpse.
      We need a royal commission following the next election into the collusion between Abbott & Rupert to demolish the NBN in order to enable the Telstra/Foxtel monopoly to flourish to our detriment at the public's expense.
      Why else would News Limited demand to "Kick This Mob Out" after 3 years of their anti-NBN propaganda & Tony, despite his willingness to all but sell his posterior in negotiations for his prize yet still absolutely refuse to budge on the NBN/s destruction according to Oakshott?
      Turnbull's since repaced all NBN executives with ex Telsta & News Limited staff, no doubt ready for a takeover deal following his endless staged 'reviews' & secret 'negotiations.'
      The stench of political corruption increases daily.
      • we need

        A royal commission into the original NBN - it was so poorly designed and has delayed the progression of competition between ISPs and delayed the progression to newer technologies by at least 5 years. Just behind pink batts the NBN has to be one of the worst screw ups by the screw ups to end all screw ups (the labor government).

        Also given the availability of unlimited plans and alternate plans in general and access to ISPs how exactly is it in the favor of Telstra to have the NBN canned? I mean the design from labor had the NBN using all of Telstras backhaul links anyway - so its not like Telstra was loosing out much (11 billion for the customer facing hardlines plus ongoing income from backhauls plus lower maintenance on front end infrastructure plus would have been able to compete easily based on bundling).

        In 2009 four different ISPs where already running live trials for VDSL2 - which means deployment would have been well under way by now and thus people would already be starting to get the 50-100mbs speeds now if it wasn't for the NBN, also all new buildings and estates would have been deployed with fibre over the 5 years.
        • Clueless

          aesonaus states:
          "delayed the progression to newer technologies"

          Newer than the now demolished Labor FTTH? lol
          Perhaps then you also agree with the Turnbull & Jones statement that "we don't need fibre. Wireless is the Future"

          But yes, you're correct that VDSL2 was the go back in 2009 for the owners of well maintained copper networks struggling to wring the last few bucks out of their assets before switching to fibre.

          Trouble is we don't own the copper which Turnbull hopes to gain access to & perhaps start construction by sometime in 2015 at a yet unknown cost to add to that $41B he wants to spend propping up privately owned networks for a few extra years at our expense & likely to be obsolete to meeting consumer demand by it's completion.
          But at least Abbott's sponsors will remain happy & much wealthier
          • vortex wireless

            Can't wait for that to move beyond that labs and controlled test environments. Speeds in the Terrabits/s over existing LTE infrastructure...

            But moving forwards wireless is better suited outside the capitals where there is lower population density so financially it makes more sense to use wireless. In the capitals using wireless as the primary connection method is just crazy talk unless they want to rollout APs pretty much at the end of every street to handle the number of connections.

            As for VDSL2 - it is a newer technology than what it replaces (ADSL2) so the statement holds. It is a stepping stone upgrade but one we would have already seen being rolled out, and the anti-competition structure of the NBN is still an issue that hasn't been resolved.
  • Unlimited

    I agree wuth your comments on unlimited plans but unfortunately the majority of people out there don't have access to them as unlimited plans are usually sold by providers who have installed their own hardware into telephone exchanges. If you're not connected to one of these exchanges (or you are on a Telstra RIM) you have to make do with the far more expensive with less value rebranded Telstra wholesale service.

    Theyve got the market stitched up.
    • majority?

      Given the majority of our population lives in major urban centres - I'd suggest that the majority actually does have access to the alternate ISPs and thus unlimited data plans.

      Upfront I'll say I'm not the biggest fan of Smelstra or BigSwamp but over the years I have stuck with them for mobile purely because of coverage and used their ADSL only when the alternatives where lacklustre - in saying that though, one thing that has always bugged me with Telstra is the government regulations that actually prevent them 'competing' and thus providing things like unlimited plans for ADSL. Also now I'm in a rural area - the freakin red pants Conroy and his dumb as NBN means there is already a fibre cable running past the front door (literally - walk out the door about a metre and there is a Telstra pit with fibre) running to the local school - but not only are we in an area that was never going to get the NBN but because of the NBN we are not allowed to hook up to that Telstra fibre. Also its not a capacity issue - the school has 15 kids... But I digress...

      The NBN as designed by labor was a complete screw up which has delayed the advancement of internet access in Australia by almost 6 years already. Saying that no one would be allowed to compete meant all the ISPs basically stopped rolling out their own hardware and thus extending their coverage, they also all stopped their moves to VDSL2 which would have resulted in faster speeds sooner and with increased competition, and in quite a few places the NBN prevented access to existing Fibre infrastructure because again - that would have been competition.
      • Government Regulations

        Trolling or just sucked in by LNP propaganda?
        Government Regulations
        Were the only reason that Telstra finally switched on ADSL2, or allowed ISPs to compete on their network.
        They were never prevented from offering unlimited plans. They just prefer to maximise profit for minimal outlay.

        In a rural area you're now never likely to get other than fixed wireless.
  • Whats not Neutral?

    I think there are two things going on here that may look similar, but are in fact different:

    There is the bundling of different services in a commercial deal, and, there is priorities given to one content provider over another on the internet access.

    Bundling services may raise questions of competition, but it is not a net neutrality question. We are quite used to phone lines being bundled with ADSL on the same wire. Why is that different to say Fetch TV being bundled with Internet access.

    A content provider on the Internet paying and ISP to get their content prioritise to the ISPs Internet access customers is an other matter.

    So, the question is; are Foxtel paying Telstra to deliver their content first over the internet, or, are Telstra customers buying a bundled service?

    [Some ISP's don't meter certain content that they serve from their own mirrors / proxies as it saves transit costs. Again thats part of the access service paid for by the customer]
    • Bundling services, as seen in this case, is very much a net neutrality question, however much apologists for it may try to suggest otherwise.

      Telstra has form on this extending back over many years, where they allow 'free' access to content related to their company but charge heavily for content coming from other sources. The intent seems clearly to distort access patterns in favour of themselves - which is the opposite of Net Neutrality. It should be illegal for network operators to do this, no matter how they spin it.
      • Separation?

        So, is the answer then to require ISPs to have separation in their business with separate accounting to show that its a bundle without cross subsidy.

        (We don't even have that in Telstra to ensure level playing field for ISP access to the copper or wholesale network)
  • Mainly an issue for mobile

    This is one of the reasons why Telstra has over half the market share in mobiles. If something as major as the AFL could be negotiate to have it's games unmetered on 2 or all 3 mobile carriers then I'm sure they would.

    A few perculiar differences exist with Foxtel:
    - Foxtel Go & Play are unmetered on Bigpond Mobile Broadband services
    - Foxtel Go (for phones/tablets) is not unmetered at all on Telstra mobile or Telstra mobile broadband products (except Bigpond mobile broadband plans)
    - The significantly inferior "mobile Foxtel" service has a picture that only covers 75% of the screen and sound that is horrible (mainly on account of it's maximum 384kbps bandwidth use), and is unmetered on Telstra Mobile, however that product cannot be used on wifi or on any other network except Telstra's own mobile network. So in order to watch TV at home on any other device, you need another Foxtel product.