ISP Dodo played a role in causing the outage that affected millions of fixed-line and mobile internet connections across the country this afternoon, Dodo's chief executive has confirmed.

Larry Kestelman told tech blog Gizmodo this afternoon that an issue with one of its network routers "was causing an issue between ourselves and Telstra".

He said the issue "had larger ramifications than it should have" with other internet service providers. 

"Even though everything is up and running now, the two companies are still investigating the root cause of the problem," he said.

Know more? bgrubb@smh.com.au

Speculation the outage was caused by Dodo first appeared on the Australian Network Operators Group electronic mailing list - a list many Australian network administrators subscribe to - and spread to broadband forum Whirlpool shortly after.

"Rayle", a user of the Whirlpool broadband forum, quipped that Dodo's marketing slogan "Dodo, Dodo, internet that flies!" should instead be "Dodo, Dodo, internet that dies!"

The outage began about 1.40pm AEDT after Telstra lost connectivity to its international data network, a Telstra spokeswoman said in an email. "Customers who couldn't access international sites were then overloading domestic sites causing major issues in accessing Australian sites as well."

The spokeswoman said the "vast majority" of customers had been progressively coming back online since 2.25pm AEDT this afternoon. "Telstra's engineers are continuing to monitor the network and identify the cause."

The telco was experiencing "a high volume of calls" to its customer service centres, which meant some customers may have difficulties getting through, the spokeswoman added.

"Customers accessing our online services may also be experiencing difficulties."

Customers of ISP iiNet were also affected by the outage, the Peth-based ISP said on its website. But the ISP's chief regulatory officer, Steve Dalby, said the ISP was able to "route around" the issue.

The CommBank website and NetBank were also affected by the Telstra outage but were now back online, a Commonwealth Bank spokesman said. A number of other Australian organisations that rely on the internet to do business were also affected.

The network problems lasted about 40 minutes, a Telstra spokesman said.

He said he believed all of Telstra’s customers across the country could have been affected.

"We've been receiving calls across the country. We suspect that all of our customers have been affected at this point," he said.

Internet users said on Whirlpool that their connections were out in Sydney, Brisbane, Melbourne, Adelaide, Townsville, Tasmania, Canberra, the Gold Coast and Perth.

"Work internet is down, and I work for a telco... Ummm hmmm...," tweeted @skkng from Sydney.

"Okay, who broke the internet? @iiNet and @Telstra both down. My trusty @Optus prepaid mobile broadband to the rescue!" tweeted another, @KimSkildumReid, also in Sydney.