Banning VPNs won't fix streaming video geoblock grief

The problem isn't the VPN; it's trying to maintain anti-competitive, territory-by-territory content licensing models on the global digital distribution platform.

Nick Murray is managing director of Cordell Jigsaw Zapruder (CJZ), one of Australia's leading TV production outfits, and he's got a problem with virtual private networks (VPNs). He wants the government to make using a VPN to access content platforms in another country illegal. And he wants the content platforms to enforce geographic licence restrictions.

"It should absolutely be regulated somehow to make it so people in Australia shouldn't use VPNs," Murray told marketing and entertainment news site Mumbrella.

"Normally, you sell [a TV series] territory by territory, so the geoblocker is very important... When we sell to a broadcaster in France, they can't put it on their catch-up un-geoblocked, because it defeats the fact we've only sold it to France," he said.

"It's incredibly simple to stop people from outside the country accessing a service you have to pay for... As soon as they see an Australian credit card, they know it's an Australian subscriber."

But Murray is wrong there. Vendors can't assume that the nationality of the credit card matches the physical location of the user. Australians can and do routinely get US credit cards, say, perhaps because they spend time working in the US. They can't even assume that the card holder is the end user of the service. A family member or a friend might be paying for the service as a gift.

Murray's defence of those territory-by-territory selling practices is also suspect. "That's how we get our money," he told Mumbrella. "The people who say we should get rid of the geoblocker, it's just bizarre, as that is how content is sold."

Isn't that like defending selling cigarettes to children because "that's how we get our money"? And arguing that "that is how content is sold"? In both cases, that's a logical fallacy. We have to do this because this is the way that it's done.

Territory-by-territory licensing of TV programs did make sense in pre-internet days. Broadcast TV transmissions have a limited physical range. Catch-up viewing was all about physically shipping tapes or discs, and freight networks operated on national scales, broadly speaking. The licensing model matched the scale of physical reality.

These days, though, the internet means that we have a fully operational global distribution system for digital content -- plus a global system for marketing, advertising, billing and customer service processes, too. The natural scale for any business delivering digital products and services is now global.

But Murray wants to maintain the legacy territory-by-territory industry structure that forces consumers to buy content from retailers in a specific country -- because "that's how we get our money" -- and he wants government muscle to back up this anti-competitive trade practice.

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The government disagrees with these slumlord tactics. Last year, a review of Australia's competition regulatory environment recommended the exact opposite. The bypassing of geoblocking should not only be legal, but also actively promoted to Australians. The review even considered banning geoblocking entirely.

Now, Murray is merely defending the profitability of his business, and that's perfectly understandable. But in a time of radical change that's reshaping industries of every kind, you can't legislate that things have to be done the old way. That'd be like limiting the load of railway freight cars to a weight that could be carried by a horse. Nor can you ban technologies because it's possible to use them in ways that some narrow sectoral interests might not like.

Banning VPNs is particularly problematic. A VPN is simply a data tunnel, an encrypted data pipe that allows private data to safely traverse the public internet. It's a basic network function, and the fact that data going into one end of the tunnel comes out in a different location is kinda the point. You can't ban wheels because some people might drive too fast.

If you banned only those VPNs that are being used to bypass geoblocks on video-streaming services, you would open a nasty can of worms: The privacy-rights outrage of cracking open everyone's private data pipes to see what's inside.

No, let's not go there. Let's just start setting up business structures that work in the 21st century.