Australian agency warns service providers against Internet slowdowns

Stifling growth of online video services has officials concerned
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Australian regulators are concerned that the growth of online video services in competition with incumbent service providers could result in Internet slowdowns as the incumbents try to protect their own paid video content. As a result, the Australian Competition and Consumer Commission has warned incumbents they'll be investigated if they show signs that they are throttling competing online services.

The warning comes on the heels of news that the nation's largest carrier, Telstra (ASX: TLS.AX), is testing new ways to manage its broadband network that could lead to some high bandwidth Internet content being slowed down, an Australian Financial Review story said.

The trial elicited concern from some who suggested it was the "first shot in a battle on net neutrality" and prompted ACCC chairman Rod Sims to tell the publication that he would investigate any efforts by incumbents to give their content a speed advantage.

Those concerns are "a little over-hyped" because it is "absolutely standard" procedure for ISPs to try to better manage their networks, Telstra Chief Executive David Thodey said.

"[T]here's nothing to hide," Thodey said. "I think most operators around the world do a degree of shaping anyway; it's always been the case."

If it becomes the case that that "shaping" becomes "throttling," the ACCC would be forced to step in, Sims said.

"Clearly there is a vertical integration issue where Internet service providers can control what content 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," Sims told the publication.

In Australia, as elsewhere in the world, there is concern by incumbent telcos that their networks could be dumb pipes. That concern is exacerbated as file-sharing programs grab more network space.

For more:
- the Australian Financial Review had this story

Related articles:
Netflix CEO: Comcast flouts 'net neutrality' principles
AT&T revises throttling policy after user uproar

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