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  • News, Telecommunications - Written by on Friday, May 11, 2012 15:14 - 20 Comments

    Geo-block busting ISP not realistic, says Hackett

    news Internode managing director Simon Hackett has downplayed the potential for Internode or other Australian ISPs to follow a New Zealand ISP and offer a “Global Mode” that offers greater access to the internet by circumventing geographical restrictions placed on the certain internet services such as Hulu and Netflix.

    A long-time issue for Australian Internet users has been that a number of major Internet content companies — such as Amazon, Apple, Hulu, Netflix and others — will only stream content online to customers located in certain jurisdictions, usually the United States. Visitors with an Australian IP address are told they are not able to access the content in their jurisdiction. However, this week an ISP-based solution to the issue surfaced in New Zealand. The country’s National Business Review newspaper has an extensive article on the subject, stating:

    “FYX (“Fix”), launched on May 4 as a sub-brand of established ISP Maxnet, holds the tantalising promise that its users will be able to directly access US based-commercial download services such as Hulu and Netflix, and the likes of the BBC’s iPlayer – all of which offer a motherlode of street-legal movies and TV shows for download, but are “geo-blocked” to stop people outside their parent countries accessing them.”

    Could such a service be provided by an innovative Australian ISP? That’s the exact question which a Whirlpool user asked iiNet subsidiary Internode this week. The company’s response came quickly from the group’s outspoken managing director Simon Hackett.

    “Frankly it’s something I’ve often pondered doing,” Hackett wrote. “To the extent that from time to time we’ve done some internal design exercises to work out what it might look like … we have routers, servers, and rack space in other countries already, so operating one of several possible forms of VPN server and/or NAT based session rewrite and/or application level gateway service (e.g. a Socks proxy etc) in the USA and/or Europe… it all works in theory.”

    However, Hackett added, there turned out to be technical barriers to an ISP like Internode offering such a service in practice.

    “… it winds up being quite easy for a Netflix or Hulu to identify such proxied sources and block them, based on technical tests as simple as end to end latency (e.g. > 150 milliseconds round trip time for a connection generally implies ‘out of this country’),” the Internode MD wrote. “It can also be done based on administrative tests (“who is the owner of the IP range concerned, and is that a non-USA ISP?”).”

    Consequently, he said, customers who had signed up for such a service from Internode might end up being disappointed. “So, now let’s imagine that Internode fielded such a service, and 6 months later, having got a great name for it, and having had people sign up because of it, the service then suddenly stopped working for major content services like Netflix, as they caught up with us doing this … and they would catch up with us precisely because it got popular and hence because it got us noticed.”

    “Then, we’d wind up being crucified by, well, by you guys, as examples of customers who have signed up ‘just because of this’. Customers who would then say that we touted ourselves as being the ISP of choice because of this. Those customers would then start demanding exit from their contracts with no penalty because it no longer did what they expected (not withstanding that the underlying service itself would continue to work just fine – it’d just be Netflix etc who had blocked us) and would spend the next two years telling everyone who posts in “Choosing an ISP” not to trust Internode because they did this ‘bait and switch’ thing.”

    “Not a place we’d want to knowingly put ourselves (or our customers), really, is it?”

    “I don’t know how the NZ ISP concerned is doing it, and whether they’ve found some magic pudding we haven’t thought of,” Hackett added. “But if, in six months, you see them unexpectedly withdrawing the service in the face of customer complaints that Netflix suddenly blocked them… well, put it this way – I wouldn’t personally be all that surprised.” The more realistic way to approach the problem, Hackett said, could be for Australian customers to sign up themselves for commercial VPN services from the US.

    I highly encourage readers to check out Simon Hackett’s excellent post in this area. It goes through the technical and commercial arguments for this kind of ISP service in Australia at length, and provides a solid grounding for further discussion. As always, we are grateful to Hackett for this kind of transparency and insight into the situation; it’s a level of transparency we don’t see from any other ISP in Australia.

    My own point of view on this is that Hackett is likely right. It would be unseemly and pointless for Internode or any other Australian ISP to get into this kind of ‘arms race’ with commercial content providers in the US. Much better to solve the problem permanently (and on a more legitimate basis) through a traditional avenue: Customer demand. If a company like Netflix receives hundreds of letters demanding they launch in Australia, I’m sure that would change the conversation they have internally around such matters.

    Image credit: Netflix

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    1. Peter Kelley
      Posted 11/05/2012 at 3:38 pm | Permalink |

      “If a company like Netflix receives hundreds of letters demanding they launch in Australia, I’m sure that would change the conversation they have internally around such matters.”

      I think that a company like Netflix would be at the mercy of the agreements they have reached with the content providers. Even if they had a compelling business case telling them that such a service would be profitable they likely have clauses in their contracts with the movie studios prohibiting them from distributing content outside the United States. Certainly they could negotiate new agreements with content providers however this runs up against the problem of content providers requiring companies to negotiate agreements in each jurisdiction that they wish to operate and restricting the content available in each jurisdiction. This is a significant barrier to entry and one that only the largest companies (Apple) have found it economic to surmount.

      • Posted 11/05/2012 at 4:06 pm | Permalink |

        “I think that a company like Netflix would be at the mercy of the agreements they have reached with the content providers. ”

        Correct. These sorts of content agreements are territorially based, because content owners are still living in the dark ages where the distribution rights for media are sold on a territory-by-territory basis. Despite the fact that in most cases they could just fire up a service in the US and let anyone in the world connect to it, their goal is to sell the rights (either to separate entities, or their subsidiary companies) in specific territories, for the sole purpose of maximising their profits.

        I’m somewhat of a capitalist-type so I don’t have a real problem with that. It’s their stuff, they should do whatever they want that they think will make them the most money.

        The problem is obviously that they are basically doing nothing outside of the US, and are still – in 2012 – acting all surprised that the rest of the world is somewhat pissed about this and basically ends up pirating their stuff.

        Hackett’s technical insight is sort of interesting, but he’s completely right that if they started doing this as an official service, the big copyright holding agencies like the MPAA and the RIAA would set up to stomp it. The licensing issues are a much bigger roadblock.

        It is utterly, utterly ridiculous that we’re still in this situation. I used to be a big douche about telling people to buy their media but there’s simply no way it can be recommended any more when you consider how much of a better deal people in the US are getting (especially now while our dollar is so awesome).

        Until these companies adapt to the Internet age and open their content to the entire world market – a market, I might add, that is sitting there trying to get their content and generally happy to pay for it if they can make it easy to get, as iTunes proved beyond any reasonable doubt – I’d rather do without.

        • Posted 11/05/2012 at 6:32 pm | Permalink |

          Actually I think we will get to a point where Netflix and similar companies will have the balance of power and the content owners will need to come to them instead of the other way around.

          Look at what happened with iTunes and the music industry. A decade ago.

    2. Matt
      Posted 11/05/2012 at 4:28 pm | Permalink |

      FYX Global Mode is being shut down tonight – http://www.geekzone.co.nz/forums.asp?forumid=138&topicid=101761&page_no=10#623626

      • Posted 11/05/2012 at 4:39 pm | Permalink |

        Wow, that was quick. I wonder where the “increased pressure” was coming from.

      • Posted 11/05/2012 at 6:29 pm | Permalink |

        *sigh* can’t say it wasn’t expected.

    3. Posted 11/05/2012 at 4:28 pm | Permalink |

      And up until the problem is permanently solved, we’ll continue to use VPN.

    4. Brian
      Posted 11/05/2012 at 9:02 pm | Permalink |

      This is why Companies like StrongVPN and UnblockUS are doing a ROARING trade.

    5. Posted 12/05/2012 at 12:36 am | Permalink |

      Here is some irony in the whole geoblocking thing, currently the IIHF World Champs are on, they are available in non-geoblocked countries for free live streaming on youtube, all countries where it’s geoblocked have the games available legally via some method or another.

      In this case, Australia has the games freely streamed, but North America is geoblocked.

      This upset the Americans, who promptly used VPNs out of their country to access the free streaming, now all the games are on a 30minute delay instead of live to compensate for them.

      Ahh, good old US of A, they get just about everything they want on a silver plater, but on one of the few times they don’t they get all up in arms and upset about it.

    6. John
      Posted 12/05/2012 at 10:33 am | Permalink |

      Power to the People I say!

      Things are slowly but surely changing, the National Broadband Network hopefully gets exploited to its full potential by rights holders and hopefully they realize that a lot of Australians for $10 a month will get a service such as netflix (quickflix is too expensive, too restricted, the only good thing is that it is a step in the right direction).

      It really does seem like the big boys who are already here (foxtel, the big T, etc) are going to try and royally rip us off in terms of any content delivery over the NBN – it’ll be funny as I might endup just continuing my netflix subscription and ignore it all until it changes.

      Some very interesting comments above, i am really liking the IQ of the discussions on some of the articles on this site, I especially agree with one of the comments saying that it might endup being similar to how iTunes transformed the music industry, maybe Apple could be working on something similar?

    7. chugs
      Posted 12/05/2012 at 12:40 pm | Permalink |

      I don’t think people realise why GeoBlocking occurs? The US copyright owners sell their television shows to local broadcasters via an exclusive licenses.

      If Channel 9 pays $10m for several seasons of Top Gear they’re hardly going to be happy when a customer can access that content from another source.

      If people want to gain access to overseas content there is a very very simple, inexpensive (in fact absolutely no cost), non-technical way to get it. In fact it would only take about 3 months to achieve. You’d probably only need to use the part of the population who are tech savvy (since they’re already converted to the cause).

      Stop watching free-to-air television. Stop watching, destroy their revenue base and US content owners will be forced to sell to the only people who have the cash to buy, those being consumers via the net as opposed to australian broadcasters who no longer exist.

      • nonny-moose
        Posted 12/05/2012 at 1:39 pm | Permalink |

        OT: personally, as to my mind CH9 unzipped and pissed all over TG after acquiring it, im not unhappy at that prospect. i havent done it but i presume if you have it VPN’d from the UK you get back the several minutes of show that 9 apparently trims, and with much less of a delay from UK broadcast to local.

        i really hope it goes back to SBS after the 9 contract runs out as to me they have treated it with disdain – its purely been a money (eyeballs on advertising) and bragging rights thing, as well as plenty of repeat play fodder. they canned the local version for being too much time money and effort to do – typical. yes it probably wasnt as popular, and its abilities much more limited against what sort of cars etc are available in the UK compared to here…. but SBS to their credit changed up the presenters and tried little things over the seasons they had it to improve it, which i respect a lot more than ‘oh its too hard, bin it’.

        so CH9 can be unhappy about it all they like. if they dont want to lose views to VPNs the answer is simple. treat both the series and the viewers with a bit more respect.

        as for stop watching, i dont think thats entirely productive. i use a PVR and skip EVERY adbreak, which presumably puts a dent in any plan to profit off the advertising. even then its still a crippled product, the overlay ads are still there, but i still get most of my ‘free’ viewing – it IS ‘free to air’ after all. certainly isnt 100% satisfactory but VPN is a last gasp solution to me, i dont know why but my interest level isnt there… probably cos i watch enough of the box as it is, not interested in the effort to get more. that said i support those who want to use it as their tack against excessive media control.

    8. Stephen
      Posted 12/05/2012 at 2:25 pm | Permalink |

      Yes, he’s right. Unfortunately, market discrimination will not end until companies are forced to end it.

      It’s not Netflix that’s discriminating against Australians, it’s the content providers. It’s the software publishers who add a 120% “Antipodes tax”. It’s the Sonys and Universal Studios that dictate whether their content gets released in all markets at all times for the same price.

      How do you fix it? Ultimately, it will require a legislative solution. the World Trade Organisation should be policing price discrimination, but doesn’t really care. It should be doing something to make world markets more efficient, but this just isn’t on the agenda. The Australian government needs to act. Introduce a law that makes it illegal to offer the same product for a different price in the Australian vs. US market. Penalise delayed release of movies/CDs/DVDs from the world premiere date, with imposition of a fine per day.

      Start thinking about Australian consumers, rather than passing laws that benefit multinational companies.

      This by itself doesn’t fix the Netflix problem. What needs to be done there is an update of trade agreements that provide for the true democratisation of the Internet. No discrimination based upon the location of the purchaser.

      Unfortunately, nobody in government actually seems to care about the Australian consumer, starting with the Attorney-General’s Department and its “top-secret” talks with ISPs and content owners.

    9. Bourkie
      Posted 13/05/2012 at 11:10 pm | Permalink |

      Hi Simon,

      I understand that a 150ms round-trip is easy to detect, however why couldn’t you simply buffer the video streams on the overseas servers – i.e. the round-trip as far as the content provider sees would then suggest to them that the server was not overseas?

      So the provider would send video packets to the overseas server – the server then responds (ACKs) back directly and immediately (rather than simply forwarding on the packets). Only then does it forward on the data to the Australian recipient.

      I’m sure there is a way to do it.

      • Goku Missile Crisis
        Posted 14/05/2012 at 2:33 pm | Permalink |

        To be honest, this is the sort of battle I would rather Internode not fight. Those of us who want to be able to use geoblocked services can pay a third party ~$5/month for the privilege, and Internode can save their time and money. The worst thing would be for Internode to invest in running a service like this and get taken to task by local rights holders – not an unlikely outcome, considering the battle Optus has on its hands defending its “time shifting” service at the moment.

    10. Brad Cann
      Posted 14/05/2012 at 7:55 am | Permalink |

      why doesn’t node just register a corporate entity in the USA and route through them? DOn’t get me wrong i understand simons point, but i think it would be very easy to bypass in mere seconds if they got IP blocked.

    11. A.A.
      Posted 14/05/2012 at 5:49 pm | Permalink |

      Huku themselves don’t have streaming rights for Australia or outside the US and Japan (latter a paid, separate service) but do own Hulu.com.au and Hulu.co.nz but for the time being because of this goes to the main US site.

      They’ve said on their @hulu_support account on Twitter that streaming rights for other countries are being worked but they won’t say if Australian rights are being worked on .

      VPN services are often blocked by Hulu and have done in the past,

    12. A.A.
      Posted 14/05/2012 at 5:49 pm | Permalink |

      Huku themselves don’t have streaming rights for Australia or outside the US and Japan (latter a paid, separate service) but do own Hulu.com.au and Hulu.co.nz but for the time being because of this goes to the main US site.

      They’ve said on their hulu_support account on Twitter that streaming rights for other countries are being worked but they won’t say if Australian rights are being worked on .

      VPN services are often blocked by Hulu and have done in the past,

    13. Vladd
      Posted 14/05/2012 at 10:43 pm | Permalink |

      Personally I think the media companies should be far more concerned that bitorrent and co, are changing the way people acquire said media. If you work out how to download for free, you won’t ever go back to being a paying customer. It happened to the porn industry, with tv and movies next on the agenda.

    14. Anon
      Posted 02/12/2012 at 12:22 am | Permalink |

      Geo-blocking is racist, pure and simple. Companies that practice it deserve to have people steal their content, their significant others leave them, there pets to die in horrible ways, etc. If you want to people to pay for your content you should let them, anything else just legitimizes theft.

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