Telstra is planning to slow the speed at which its ADSL customers download content through peer-to-peer (P2P) networks in peak periods as part of a trial.
P2P networks are commonly used to download pirated material such as movies, music and video games.
Telstra confirmed the move in a statement after a source contacted Fairfax Media, publisher of this article, to say the telco planned to introduce throttling as a "trial" that was likely to become permanent and which required users to opt out if they didn't want to take part in it.
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The trial could begin as soon as this week, the source added.
The Telstra statement said it would be conducting on a "small number" of ADSL customers in Victoria a "limited trial of a range of technical options for better managing broadband internet performance for our customers during peak periods".
One option being looked at was the shaping of specific services, including some peer-to-peer services, in certain circumstances and at certain times. The telco could shape such services using deep packet inspection (DPI) technology, which can identify the types of traffic flowing through a network and prioritise it accordingly.
"Once the trial is complete we will consider the results as part of our future network planning and product development activities," the company said.
"The trial does not involve any monitoring or tracking of the sites customers visit and the findings we gather, including their feedback, are being collected in accordance with our privacy statement," Telstra said.
The telco published a blog post explaining its trial after Fairfax Media published this story.
Critics of ISPs that interfere with P2P say it has many uses that aren't illegal, such as downloading large files, and that it shouldn't be interfered with. But most acknowledge it is primarily used for sharing pirated material.
Telstra's plan to shape peer-to-peer network traffic was first mooted by the industry publication RCR Wireless in May 2011, when Telstra executive director Michael Lawrey threatened in a speech in Dublin to cut off "downloaders of illegal content", whom he reportedly blamed for network congestion.
The RCR Wireless article no longer appears online but Mr Lawrey's quotes remain on the Australian technology news website iTnews, which repeated them.
RCR Wireless quoted Mr Lawrey as saying Telstra would also take action against customers believed to be abusing the carrier's fair-use policies.
"We probably haven't even used our fair use small print yet. But we will," Mr Lawrey reportedly said.
He was also reported to have said that if the carrier's proposed system "cut out 80 per cent of the non-value adding traffic – good".
According to the RCR Wireless article, about 80 per cent of Telstra's data was chewed up by high bandwidth users.
"I'd rather not have those 80 per cent as customers. I'd rather someone else had them as customers," Mr Lawrey reportedly said.
He did not say whether he was talking about fixed-line, smartphone customers or both.
Exetel, a smaller ISP than Telstra, used to throttle, or "deprioritise", peer-to-peer traffic during peak periods. Its terms and conditions say it can still do so but a staff member last year said on its forum that it did not shape "any type of traffic".
Illegal downloading via BitTorrent networks has been in slight decline for some time, though reports suggest there was a small rise in 2012. In part that would be fuelled by faster internet services worldwide and a migration away from traditional television in which some consumers now exclusively watch TV content via the internet.