New Zealand internet service providers CallPlus and developer ByPass Network Services have folded in their battle with TV networks over their controversial Global Mode content service.
The ByPass has, however, announced service roll-outs in other countries.
In a settlement of pending legal action announced today, the developer and the ISP agreed to withdraw Global Mode on 1 September.
Litigants Sky TV, Television New Zealand, Lightbox and MediaWorks in turn agreed drop their legal action saying further details of the settlement, which will be subject to a formal court order, were confidential.
Global Mode is a geo-unblocking service that partners with ISPs to enable customer access to international content services such as Netflix.
InternetNZ a pressure group and administrator of the .nz top level internet domain, said it was "deeply disappointed" at the announcement.
"Global Mode was a great example of internet-based innovation that challenged traditional content distribution models. It was by no means clear that the service was illegal, and we were keen to see the matter go before the courts to provide users and the industry with clarity." InternetNZ chief executive Jordan Carter said.
Calling for a review of copyright law, Carter said the settlement seemed the worst outcome for all concerned.
"The media companies have said that they wanted to clarify their own legal rights over content - a settlement doesn't achieve this, and leaves us all none the wiser.
"There remains a number of questions that will now go unanswered due to this withdrawal. Internet users and innovation have taken a back seat to entrenched old media interests."
In the face of local legal threats, ByPass has said it was focusing on Global Mode's export potential.
Earlier this month the company announced it was launching Global Mode for mobile in India. In April it announced a partnership with IndonesianCloud to represent the service in Indonesia while changes to European Union copyright laws have also attracted the company's attention.
CallPlus operates the Slingshot, Orcon and Flip ISP brands.