'Premium' for a price: Optus considers charging Netflix for its network

Optus has raised questions about Australian net neutrality after saying it's considering new business models that would charge over-the-top service providers such as Netflix for "premium" network access.

Claire Reilly Former Principal Video Producer
Claire Reilly was a video host, journalist and producer covering all things space, futurism, science and culture. Whether she's covering breaking news, explaining complex science topics or exploring the weirder sides of tech culture, Claire gets to the heart of why technology matters to everyone. She's been a regular commentator on broadcast news, and in her spare time, she's a cabaret enthusiast, Simpsons aficionado and closet country music lover. She originally hails from Sydney but now calls San Francisco home.
Expertise Space | Futurism | Robotics | Tech Culture | Science and Sci-Tech Credentials
  • Webby Award Winner (Best Video Host, 2021), Webby Nominee (Podcasts, 2021), Gold Telly (Documentary Series, 2021), Silver Telly (Video Writing, 2021), W3 Award (Best Host, 2020), Australian IT Journalism Awards (Best Journalist, Best News Journalist 2017)
Claire Reilly
3 min read

Optus has heavily promoted over-the-top services such as Netflix. Screenshot by Claire Reilly/CNET

Optus has hinted that it may begin charging over-the-top services such as Netflix and other streaming providers for "premium" access to its networks -- seemingly contradicting the telco's stated support of net neutrality -- the idea that service providers and governments should treat all data on the Internet equally.

Optus CEO Allen Lew made the comments at the CommsDay Summit in Sydney, saying that the telco needed to "be bold and be willing to experiment and to team up" in order to find "growth opportunities" in a changing market.

Recognising that revenues from traditional voice and text services had started to plateau and even decline in the youth and adolescent markets, Lew said that by "partnering with leading global brands in the digital and media apps space" could help the telco remain competitive.

But despite saying he was a supporter of net neutrality, Lew's comments about a split "premium" offering for those companies willing to pay for the privilege appears to undermine the concept of a free and accessible internet which is central to net neutrality principles.

A subject of ongoing debate in the United States, net neutrality refers to the regulation of the internet to ensure ISPs don't prioritise traffic for particular services that pay for a "fast track" to consumers, and that they don't block or slow down some services in favour of others.

As the company moves forward into a digital future, Lew said it may be necessary to make "business model changes" to ensure a good experience for customers.

"To ensure that we optimise the best customer experience for the end user we need to make sure that the OTT [over-the-top] providers, whether they're Netflix or others, understand that to preserve the network quality and give you HD video performance, they need to work collaboratively with us," said Lew.

"We will continue to preserve net neutrality, but we're talking about the possibility, for example, of a premium service that we as a network provider can ensure to an OTT provider if they pay for that premium service."

Lew also mentioned future business models that would allow OTT providers to "target a specific segment of the market" with digital advertising and "mobile targeting" thanks to "customer knowledge" provided by Optus.

It's the second time Optus has been dragged into the net neutrality debate in as many weeks after "="" its="" unmetered="" content="" deal="" with="" the="" isp"="" shortcode="link" asset-type="article" uuid="3342e95d-8e97-4b78-9d4b-8cd76d662d36" slug="netflix-says-it-should-have-avoided-unlimited-streaming-deals-with-australian-isps" link-text="Netflix admitted it should have " section="news" title="Netflix says it 'should have avoided' unmetered deals with Australian ISPs" edition="us" data-key="link_bulk_key" api="{"id":"3342e95d-8e97-4b78-9d4b-8cd76d662d36","slug":"netflix-says-it-should-have-avoided-unlimited-streaming-deals-with-australian-isps","contentType":null,"edition":"us","topic":{"slug":"digital-media"},"metaData":{"typeTitle":null,"hubTopicPathString":"Tech^Services and Software^Streaming Services^Digital Media","reviewType":null},"section":"news"}"> , in light of the streaming provider's well-publicised support for net neutrality.

Australians have largely avoided the debate around net neutrality, though the issue has been the topic of hot debate in the United States.

The US Federal Communications Commission recently voted to formalise net neutrality rules, forbidding ISPs from blocking or slowing internet applications or from creating "fast lanes" for prioritised internet traffic.

But while digital rights advocates such as the Electronic Frontiers Foundation said this decision was a "huge win for the open Internet," net neutrality has come under fire from politicians and the industry alike, with one Republican Senator calling it "Obamacare for the Internet" and ISPs such as AT&T contesting the decision in court.

Optus has been contacted for comment.