Australia's second largest telco Optus has opened up the issue of net neutrality in Australia by suggesting over-the-top content players like Netflix pay a fee to ensure quality of service.

Speaking at the CommsDay conference in Sydney today, Optus chief Allan Lew floated the possibility of a premium service provided to streaming services like Netflix.

To ensure end-users got the best customer experience, Lew said Optus needed to make sure over-the-top providers "understand they need to work collaboratively with Optus to preserve network quality".

He said charging a fee would be one way to ensure quality of service.

Netflix is an advocate of net neutrality - the concept that internet traffic should be treated equally - amidst a similar debate in the US.

Net neutrality aims to ensure that those who don't pay telcos for premium services are not put at a disadvantage.

Netflix raised tensions last week by saying it would not enter into future unmetered data arrangements with Australian ISPs over fears they violated net neutrality principles.

Strain on iiNet's network ISP's own fault: Turnbull

Netflix launched in Australia last month, an arrival that intensified scrutiny on the quality of the country’s broadband services.

iiNet gave its customers unmetered access to the streaming service, but many of its customers complained that the network was struggling to keep up with the surge in demand, slowing broadband speeds.

iiNet chief executive David Buckingham pointed the blame at Telstra, claiming the issues were caused by copper service disruptions.

But Communications Minister Malcolm Turnbull today defended Telstra and reiterated comments by the carrier’s networks chief Mike Wright that it was up to iiNet to adequately provision its network with capacity carry over-the-top services.

Contention ratios chosen by ISPs were also likely to be behind any issues experienced by Netflix users that had NBN connectivity, Turnbull said.

“One of the consequences of the NBN is going to be to demonstrate to consumers that iron-clad guarantees about performance cannot be made on any access technology given the way factors such as CVC pricing and backhaul contention choices play into the end user experience,” he said.

'Get real'

iiNet chief technology officer Mark Dioguardi said iiNet’s infrastructure was capable of keeping up with expected explosive growth in streaming services, but said NBN Co needed to “get real” when it came to CVC pricing.

NBN Co urgently needed to introduce dimension-based pricing for virtual circuits in such a way that capacity costs for ISPs – which would be passed on to consumers – fell more rapidly, Dioguardi warned.

He revealed that Netflix had grown from 15 percent of traffic to 25 percent in 15 days.

“When we say we rolled out the red carpet, well we rolled out it and people just stormed down it,” Dioguardi said.