Slingshot opens access to Netflix, other geo-blocked services: a legal opinion

This time last year, Slingshot launched Global Mode — a free, one-click upgrade that made it easy for the ISP's customers to access offshore services like Netflix, that are usually geo-blocked to New Zealanders.

At the time, Slingshot was coy about the new option, saying it was a convenience for its NZ customers who happened to have an overseas staying with them who wanted to access services back home. 

Now it's dropped that Tui billboard-level legal kludge, with general manager Taryn Hamilton dropping all pretense and making it Slingshot's official policy that Global Mode is open to all customers (see press release below).

The move presents a challenge for Telecom and Sky TV, which are both about to launch Netflix-style services; Slingshot has made it a lot easier for its customers — even the non-technical ones — to access the real thing directly from the US. Mr Hamilton wouldn't get specific about the number of Slingshot customers who had enabled Global Mode, but said it was "in the thousands."

There are also some intriguing legal issues involved, and a lot of people nervous or confused about whether geoblock busting puts them on the wrong side of the law, even though they're paying Netflix' monthly fee.

I asked Taryn if Slingshot had got legal advice. He replied, "Yes we have a well considered legal position, which we are comfortable with."

Lowndes Jordan partner Rick Shera, who acts for Slingshot, told NBR, "Parallel importation of legitimately purchased content is clearly legal and specifically provided for in both our Trade Mark and Copyright Acts."

For a broader perspective, it's worth recapping a response NBR received on the issue from Chapman Trip partner Justin Graham.

NBR asked Mr Graham for his comment on Fyx, a short-lived service that let New Zealanders beat geographic restrictions on US commercial download providers such as Netflix in exactly the same manner as Slingshot's Global Mode (Fyx lasted only weeks before its parent ISP, Maxnet, was brought by Australia's Vocus, which said it wanted to refocus away from the consumer market).

Mr Graham — a specialist in intellectual property law — gave the service a green light from the standpoint of New Zealand law.

"I’d expect to see increasing activity in this kind of space. It is consistent with New Zealand’s policy on intellectual property, parallel importing and geographical restrictions, namely that geographical restrictions are not consumer-friendly and New Zealand consumers should be able to access copyright content in a competitive and cost-effective environment," he said.

It's like the online equivalent of parallel importing (a boon to NZ consumers, but also one that's under threat from the looming Trans Pacific Partnership or TPP Agreement. Although it's worth noting that although leaks indicate the US is taking a hard line on parallel importing and other measure to protect copyright — or old-world distribution monopolies, depending on your point-of-view — the Americans also seem to be quite isolated on the issue).

But although geo-block busting appears to be legal (there's never been a test case) , as with a New Zealander accessing iTunes US, you could be violating a media provider's commercial terms — giving it the option to cut off your service (should it wish to lose a paying customer).

"Whether use of 'global mode' ISPs would prompt contractual responses from content providers would be an interesting issue; a facilitative response would probably ultimately be more beneficial," Mr Graham said.

On a practical level, it's worth noting that using Slingshot's Global mode (or any of the various readily available browser plugins and other workaround for members of other ISPs) only gets you half the way to the likes of Netflix or iTunes US. You still have to use an internationally accepted credit card (like Air NZ's Airpoints Mastercard) or gift vouchers from the service's country of origin to sign up.

And lastly, it'll be interesting to see if Orcon gets a Global Mode option (Orcon has already been on the front-foot about Netflix, with its CEO Greg McAlister telling NBR he uses the service, and providing customers who want to follow in his footsteps with an easy-to-follow Q&A).

Slingshot's parent company, CallPlus, recently bought Orcon. Enlarged by Orcon's 60,000 subscribers, the combined company now has 220,000 customers.. CallPlus CEO Mark Callander told NBR that the Orcon brand would remain standalone. His logic was that CallPlus was the business brand, Slingshot mass market, Flip budget and Orcon early-adopter. But right now, Slingshot's looking more early-adopter friendly.

RAW DATA: Slingshot press release
Slingshot opens up Global Content 
Slingshot has today unshackled many of the world’s leading video streaming sites.
Services such as Netflix, Hulu, Amazon Prime and BBC iPlayer will now be able to be accessed by all Slingshot customers.
These services geographically restrict which countries can access them. But today the country’s third largest Broadband provider has turned on its Global Mode for all customers – ensuring access to the world’s best content.
Slingshot GM Taryn Hamilton says the ISP believes the time has come for New Zealanders to have the same choice of content that those in America and Europe have.
“We know Kiwis want to watch movies and TV series online – but are blocked from using the  world’s best and most popular streaming services. We are now giving Kiwis access to these sites – and an option to pay for the content they want to watch at a fair price.”
Hamilton says many Kiwis are frustrated with a poor selection of content at a significantly higher cost than those in other countries are offered, and for no good reason. 
“Either that or they are choosing to pirate the content they want to watch. So giving access to all the great streaming services will give Kiwis much greater choice and an option to pay for content they otherwise may not have been able to.
“The limited access New Zealanders have to content that is widely available overseas is an issue that needs to be addressed.
“There is no valid argument as to why New Zealanders are paying much more for the same content as others in the world. We shouldn’t tolerate it. This issue extends far beyond TV and Movies, with Kiwis paying significantly more for many technology services and products from the world’s biggest brands than in many other countries.”
Smart Kiwi consumers have already turned to online shopping in a bid to get goods at a fair  
“People know they can go online, and save $100 on a pair of Nikes. It's just smart shopping. This is the same, but for content."
Studies show that many Kiwis are pirating content. A recent survey by Horizon Research  showed that more than one fifth of the 2700 respondents had downloaded content illegally. 
“We know that people would prefer to pay a reasonable price for the content they want to watch rather than pirating it. It’s time the content providers and rights holders got their act  together and offered Kiwis the same content – for the same price – that people in other parts 
“Until they do, people will need to use a service like Global Mode to pay for top-quality online  content, or continue to steal it."
The service is included by default and for free.
Customers do not need to do anything other than type the website they want to access in  Content sites now accessible include Amazon Prime, Hulu, Netflix US and BBC iPlayer.
New Zealand based websites will not be impacted. For example content sites like TVNZ on  Demand will continue to work as normal.
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