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Australia’s net neutrality lesson for the US

Verizon, Comcast and other providers have been fighting against net neutrality rules since 2005, when the Federal Communication Commission first introduced such measures. Steve Rhodes

Australia’s net neutrality lesson for the US

A US court ruling meaning broadband internet service providers will no longer have to follow principles of network neutrality has sparked predictions the internet will end as we know it.

Some predict it will be controlled by a few rich corporations who will charge content providers on a pay-to-play model.

Others have predicted increased government control or suggested that people in developing nations will be forced into servitude to Facebook.

But Australia hasn’t ever had net neutrality, with domestic internet service providers shaping and restricting traffic, and often allowing “unmetered” access to certain websites for their own reasons. And it hasn’t been a disaster.

Are some more equal than others?

Net neutrality means an internet connection is free from filtering, prioritisation, censorship, or favour based on the provider of the content which is being accessed.

That is, all content must be treated equally so that some parts of the internet are not priviledged over others.

Internet service providers can – and often do – manage their networks to ensure that bandwidth sensitive applications like Skype and video streaming operate smoothly.

Internet service providers who manage their networks in this way do so to maximise the capacity of expensive infrastructure, while ensuring that data intensive peer to peer applications like Bittorrent used by some don’t affect others.

One of the creators of the modern internet, Vint Cerf, has already said that traffic management is not a net neutrality issue, so long as providers are consistent in their treatment of like services.

So what’s the problem?

The problem arises when a provider is no longer even-handed in its network management, and one supplier of content is prioritised over another.

Doing so adds a distinct anti-competitive flavour to internet access.

For example, if the provider was partnered with Google, it could then provide users with free access to one gigabyte of Google content each month.

Such a partnership gives Google an advantage over its competitors by making competing services comparatively expensive. Under such a deal, internet users will likely favour Google over Bing, and Google+ over Facebook.

And while users could choose between competing content giants, minnow sized startups are unlikely to ever make similar deals. Innovation is stifled, and new competitors are effectively locked out.

The Open Internet Rules, which were set aside by the court, applied mainly to fixed-line broadband services, but exempted mobile broadband services like smartphones.

The Commission’s reasoning was sound – fixed-line broadband providers are monopolies in many parts of the USA, but a customer can usually choose between a number of mobile providers and therefore switch if one provider is restricting content.

The court’s reasoning for setting aside the Commission’s Open Internet Rules centred on a previous decision to classify internet service providers as “information services” rather than “common carriers”.

The court ruled that enforcement of the Open Internet Rules was imposing carrier obligations and so was tantamount to treating the internet service providers as “common carriers”. As there is no legal basis for “information services” to be regulated in this way, the court set aside the rules.

The saving grace of the ruling is the retention of the disclosure rules. These rules oblige internet service providers to publicly disclose network management practices, so consumers know what they’re buying.

What about Australia?

The possibility of true net neutrality in Australia has been lost a long time ago.

Historical wholesale pricing practices means that many providers provide their customers with “Freezone” areas which provide unmetered access to popular content. These arrangements reflect the lower cost for the provider in delivering locally hosted content to their users.

Arrangements to offer unmetered access to various websites have meant net neutrality hasn’t really existed in Australia for some time, but the effects have been minimal. Bigpond

Most internet-using Australians are familiar with ABC iView being unmetered when accessed via selected providers. While the ABC hasn’t paid providers for this feature, it has invested heavily in content distribution networks to deliver their data cheaply to them.

This is one reason why ABC iView attracts significantly more viewers than similar online offerings from SBS and the commercial networks.

Despite Australian net neutrality being a long lost ideal, two things remain in Australia’s favour:

  1. Solid competition across most of Australia: Thanks to Telstra’s ADSL network being open to use by competitors, most Australians have a choice of which broadband provider they use, and so can switch providers if their provider restricts part of their internet service. This follows through to the National Broadband Network. Once a house is connected to the NBN householders can choose from a number of competing providers.

  2. Strong consumer protection laws: Australian consumer law – usually enforced by the Australian Competition and Consumer Commission – is a world leader in protecting consumers. Any attempt by a large carrier to engage in anti-competitive conduct such as blocking or limiting access to a competitor’s service will invite long and costly action by the ACCC.

Net neutrality is an honourable aspiration, but the Australian internet service provider market has thrived and innovated without it. Discriminatory pricing in the form of unmetered content is more a consumer bonus than an imposition of someone else’s choice.

Now that the United States has ditched the rules of net neutrality, we can only hope they follow Australia’s example.