Nascent New Zealand service provider Fyx has withdrawn a controversial, week-old service that allowed users to circumvent geographic restrictions on video streaming services.
Parent company Maxnet told users that it would halt the service from midnight tonight, New Zealand time, pending further legal advice on the viability of the service under New Zealand legislation.
The service had fallen into a legal grey area on launch this month, offering New Zealanders the ability to view streaming services including Hulu and Netflix, which would otherwise be unavailable due to US content licensing and geographic restrictions.
Maxnet's internet services and marketing lead, Andrew Schick, had claimed earlier this week that legal opinion provided to the company protected its service so long as it provided access to the greater internet.
Legal experts said it was untested legal area while concerns were also raised as to whether those using the service would breach the terms of conditions of individual streaming services, which often disallow use of proxy servers
A spokesman for Maxnet did not reveal how many customers the service's stoppage would affect at time of writing.
"While legal opinions have supported FYX's global mode under New Zealand law, there are matters that require further consideration before continuing the service," Schick said on Friday afternoon.
The service provider, which claimed to assume the higher cost of hauling international video to New Zealand users, said it would reduce the price of services to NZ$30.30 (AU$23.64) per month base fee with no quota, with 30 New Zealand cents per gigabyte used.
A spokeswoman for Maxnet would not reveal how many customers had taken up the service, claiming it was commercially sensitive.
She would not provide more information on the service's suspension "until these matters are discussed and resolved".