Telstra's Foxtel bundles threaten net neutrality: ACCAN

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.
Written by Josh Taylor, Contributor

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.

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