How Foxtel Killed Yournet: The ISP With Inbuilt US Netflix

It was meant to be the fix for Aussies fed up with getting a raw deal on online content — an internet service provider that let mums and dads sneak into the US Netflix library without needing to know a thing about virtual private networks or Smart DNS. But Yournet never launched — thanks to a letter from Foxtel's lawyers.

Photo: Gizmodo

Yournet's "Global Mode" internet service was scheduled to launch in August last year. For $129.95 a month, it promised unlimited data; an ADSL2+ connection built for uninterrupted, high-definition streaming; and the inbuilt ability to automatically bypass geo-blocks.

"Most customers will enjoy instant HD and be able to surf the net even at peak times," its website promised. Then came the letter from Foxtel's lawyers.

"We basically came to an agreement not to pursue the global mode," Yournet founder Raj Bhuva told Fairfax Media.

"We weren't majorly surprised .. but as we were a start-up, we didn't really have the legs to try and push our case forward."

The company is now "on hold" and "undecided" about how to move forward, according to Bhuva.

"I'm not going to say 'we're never going to launch', but probably not for a little while."

Foxtel confirmed the legal exchange. Foxtel group director of corporate affairs Bruce Meagher said Foxtel would "continue to insist that everyone, and especially commercial entities, only obtain or facilitate access to copyright material from legitimate sources and in legal ways".

There's no question a service like Yournet's proposed Global Mode — not to mention countless other services that actively facilitate bypassing geo-filters — is anathema to Foxtel's business model and the content licensing arrangements it has in place.

But Foxtel's assertion that so-called "geo-dodging" — sneaking into an overseas service to access online content not normally accessible in Australia — is illegal is a grey area at best.

In his former role as communications minister, Malcolm Turnbull said using a virtual private network — just one use of which is to trick online services into thinking a user resides in another country — was unlikely to be a breach copyright under Australian law.

Matthew Rimmer, a professor of intellectual property law at Queensland University of Technology, said the legal status of "geo-dodging" has various considerations, including consumer and copyright law; competition policy; intermediary liability; and technological protection measures (so-called "digital locks").

But ultimately, he said, "the law is unclear [on geo-dodging] — because it was developed well before these [content licensing] issues starting coming to the fore".

Until that grey area is tested in the courts, the game of cat and mouse between big content powerhouses and small service providers looking to serve a market in Australia will continue to play out.

At this juncture in the saga, it's clear where the power lies.

The anti-piracy lobby group Creative Content Australia recently hired a secret weapon in its its anti-piracy fight: it appointed Graham Burke, the Village Roadshow executive and colourful copyright campaigner, as its chairman.

Foxtel, among other industry bodies, is a financial supporter of the group.

Meanwhile, Australians continue to be hit hard by Netflix cracking down on users sneaking into its US library.

Netflix announced the crackdown in January, and some commentators expected it was merely paying lip service to rights holders.

But people using VPNs or Smart DNS services to sneak into the US Netflix are increasingly being blocked from Netflix while they have these services switched on.

The result is these service providers are being forced to greater and greater lengths to continue bypassing geo-filters and retain their customer base.

Melbourne-based Smart DNS and VPN service uFlix has implemented expensive workarounds to the Netflix crackdown, and said it was raising the subscription price of its service as a result.

uFlix Customers who want to access US Netflix on a TV or gaming console will now also need to purchase a mini-router and install custom firmware, the company said in a blog post.

"Netflix has taken extremely aggressive measures to prevent people from bypassing their region," uFlix said.

"Due to the massive amount [of] infrastructure we have had to purchase for our network we are going to need to raise the price of the subscription.

"This is unfortunate but the price of keeping the unblocking working has gone up substantially."

According to another VPN service, NordVPN, Netflix's hard line on geo-dodging is backfiring with its customer base.

Company spokesperson Jodi Myers said feedback from NordVPN customers showed many people are unsubscribing from Netflix as a result of the crackdown. Fairfax has received similar feedback from readers who have recently been booted out of the US Netflix library.

NordVPN was still working for Australians wishing to access US Netflix, Myers said.

Despite any potential backlash in Australia and other countries where users employ geo-dodging services, Netflix's subscriber numbers are expected to spike significantly in the next reporting period since the service launched in 130 new countries in January.

Netflix does not break down its subscriber numbers by country, except for the US. As at December 31 last year, it boasted 75 million subscribers worldwide.

This article originally appeared in Digital Life, The Sydney Morning Herald's home for everything technology. Follow Digital Life on Facebook and Twitter.


Comments

    How's it illegal though? How does Fuxtel have a case? The federal gov't even went as far as to recommend bypassing geoblocks. I don't understand how Fuxtel has a case at all.

      They likely don't, but foxtel can be an aggressive enemy to have with wide reaching pockets and a ruthless hunger to shutdown what they like. If they don't have enough for a case, they will somehow make one.
      Plus these people are a start up with nowhere near enough money to even attempt to go against Foxtel which makes them essentially defenseless.

      On the flip side its because of their dodgy intent to disallow media to the Aus public which has pushed a large proportion of the public to have VPNs already (evident by the amount of people who has complained at netflix for blocking VPNs, hell even people I believe don't even know how to really use a computer has a VPN setup for netflix). So at the very least for the VPN case its less needed (not so much the Netflix case).

      Its illegal because Foxtel says its illegal, OK? Thats all you need to know, stop asking silly questions...

      For me this is just one more way Foxtel is showing that its not interested in the customer, only its profit.

      And its a case, because nobody wants to test it. They dont want a blunt decision one way or the other that could impact on them, they prefer the grey area of not knowing, and using moral opinions as if they are fact.

      Geododging isnt illegal, simply because it hasnt been tested in the courts. Along with other reasons, such as the fact the consumer is generally paying for the content. At worst its distribution avoidance, and thats what Foxtel doesnt want tested. They are trying to say that avoiding their distribution model is always copyright infringement, in an effort to protect their content stream, and hence income stream.

      But thats no different to buying something online before its shown here anyway. There has been more than one movie over the years that has been available on disc in the US before its hit the cinemas here (and vice versa), so is buying that US disc copyright infringement? This is no different.

      I know a movie released here in August 2014, but not in the US until Jan 15. It was on disc before Christmas 2014, so if someone in the US bought it, is that breaching copyright? Of course not.

      Thats all geododging does. Transfers where the money goes for the content you've paid for. Foxtel wants it to be the same as piracy, when it clearly isnt.

      But nobody wants to test it.

    I wonder why they haven't gone after Smart DNS and VPN companies that offer the same service and are based in Australia?

    God I'm sick of regionalised distribution models. Just let us get our content when we want it how we want it. If we want to pay for it, and that money is going back to the content creators, why the shit should I care if it hurts Foxtels feelings because they can't charge me MORE money to give me worse content at a later date?

    So let me get this right Foxtel a commmercial entity has decided they are acting illegally and so are ready to sue them on entering the market. Um when did Foxtel become the be all end all of criminal activity do. I mean I know Malcom Turnbull was on their board of directors at one stage and I think Testra too. (would explain the why the government has given the NBN network to them and only them).

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