Net Neutrality laws in Australia

To adopt, or not to adopt…that is the question.

Protesters march past the FCC headquarter on May, 15, 2014 in Washington, DC. Bill O'Leary. Some rights reserved.

If you surf the net and watch the news often, then I am quite certain that you would’ve come across the term ‘net neutrality’ at some point over the past decade. It has been an ongoing Internet policy concern situated prominently in the public consciousness, particularly in the US and Europe.

Net neutrality is a complex concept but the following clip unpacks it all in 1 minute.

Australia currently has no specific laws ensuring net neutrality and I strongly believe that it should remain the way it is now.

There are certainly various incentives for individuals, communities and companies to support net neutrality. Advocates suggest that the non-discriminatory framework can:

  • Enforce Freedom of Speech rights
  • Promise equality on individual citizens’ access to internet
  • Prohibit private power in telecommunications

However, I’d like to take a closer look at the arguments that lie on the opposite spectrum of the debate; there are apparent benefits in a non-neutral regulatory framework as well especially when the engineering constraints, cultural, political and economic aspects are taken into consideration:

  • Cellular providers, telecommunication companies and cable companies are the obvious opponents of net neutrality regulations, as they use methods such as traffic discrimination as a mean of revenue preservation and innovation.
  • Subscription-based consumers in particular are benefited by this traffic-shaping model as it serves to mitigate network congestion and performance degradation.

With reference to De Nardis’ dissertation (2014) and drawing specifically on James Endres’ argument, I will suggest that the combination of a ‘strong competition in broadband internet access, adoption of volumetric pricing by ISPs and the existence of a well-established regulatory framework for dealing with discriminatory behaviour’ negates the need for net neutrality regulations in Australia (2009).

 

 What is net neutrality?

Net neutrality law was initially imposed to address the prominent issue in the U.S and in Europe later on, where it was illegal for large network operators such as Comcast, AT&T and Verizon to ‘prioritize or block the delivery of certain types of traffic relative to other traffic on its network’ (2014). The U.S law also defined internet service providers (ISPs) as ‘common carriers’ where they must transport content equally from a content provider to a customer regardless of their nature or their source (Frost, 2015).

The law gave rise to four Open Internet Principles in which the U.S Federal Communications Commission initially adopted in 2005. It was then replaced by the Open Internet Order in 2010, where it was adopted to formally prohibit blocking and unreasonable discrimination.

 

Web Inventor Tim Berners-Lee along with many advocates for net neutrality laws, believe that the law protects freedom of speech online, helps entrepreneurs, enhances democracy and should thus be kept in place.

 

This particular internet law continues to be highly contested as there remains to be scattered global cases and campaigns created in attempt to repeal the law. The raging debate led to FCC decision in abandoning net neutrality rules in 2017, claiming that the law ‘restricted competition, innovation and slowed the growth of broadband services’ (Glaser, 2017).

 


Timeline showing the back-and-forth struggle for the control of the Internet over the past decade. WIRED. All rights reserved.

Different nations have taken different approaches to net neutrality as it is essentially a ‘local’ issue.

Unlike the U.S, Australia is currently regulated by a powerful competition regulator, the Australian Competition and Consumer Commission (ACCC), where it oversees and intervenes any attempts to advantage certain content over others. In addition, the various market and structural differences that Australia have as compared to the U.S are important factors to be considered when deciding whether net neutrality is relevant in this context at all (Frost, 2015).

 

Why are some people getting slower internet than others?   

 With the advancement of technology, it is now possible for network operators to inspect contents of data packets and potentially discriminate against certain types of traffic, applications, protocols, users or content in the absence of net neutrality laws (DeNardis, 2014). ‘Discrimination’ in the case of internet access is defined as ‘blocking or throttling back some traffic over other traffic’ (DeNardis, 2014).

 

System architecture that depict the information flow from content service providers to end-users. The University of NSW. All rights reserved.

 

Many network operators in the U.S like T-Mobile has blocked access to Skype voice calls when used on phones transmitted over its own carrier service as a mean to preserve its own network performances and most importantly, its long-standing business model. There have been similar cases in Australia as well, where Telstra for example announced its plans on shaping Internet traffic during peak periods in 2013.

 

Advocates for net neutrality laws argue that such actions clearly violate the basic human rights and pursuit of the freedom of speech. However, a non-discriminatory framework would thus ensure that users’ access to the public sphere is not controlled or intervened by ISPs or network operators.

 

 ‘Free’ services and monopoly ISPs

 Australia has 419 ISPs operating across the nation, 9 of which had more than 100,000 subscribers (ACMA, 2012). To gain competitive advantage in the market, several Australian ISPs started to adopt a ‘zero rating’ practice where they offer their customers ‘unmetered’ access to certain services.

Examples include:

  • Optus customers can enjoy Netflix without impacting their data cap
  • Telstra customers can access Foxtel on-demand content through their Bigpond account
  • Foxtel and Telstra customers can access Presto as unmetered content

 

Optus advertisement for its broadband plans where customers stream Netflix data-free. Image from Optus. All rights reserved.

 

Quota-conscious customers therefore have more incentive to favour these ‘free’ services over access to the rest of the internet.

Australian Broadband strategy manager Matthew Kusi-Appauh predicts that if these bigger providers continue to bundle their services with entertainment packages, it would leave smaller players with no chance to compete in the market at all.

A net neutrality law must then be enforced in order to prevent the formation of a monopoly and its exploitation in market power at the detriment of Australian consumers.

 

 

Healthy competition isn’t always a bad thing   

With net neutrality laws enforced, telecommunications would be forced to compete in a free market. This means that network operators will eventually stop differentiating their services by offering high performances for new bandwidth-intensive applications (DeNardis, 2014).

Marc Andreessen told The Washington Post that net neutrality would be much less of an issue if there’s more competition in the market as he says that:

‘If one of your providers started to screw with you, you’d just switch to another one of your providers’

Andreessen further suggests that such a competitive market alongside the implementation of universal service obligations would lead to lower prices for consumers.

The absence of a net neutrality law should not be problematic in Australia where competition laws are already enforced by a strong regulator, the ACCC. The ACCC has played an important role in investigating and preventing any attempt by large carriers in engaging in anti-competitive conducts such as blocking or limiting access to a competitor’s service.

 

 Not everyone needs fast internet

Since the launch of video streaming services like Netflix and Presto, there has been a significant increase in broadband network traffic in Australia (Gharakhili, 2015). Considering the engineering constraints and the fact that 85% of Australian households have access to the internet, it seems to be impossible to provide high quality content with minimal transmission delays to every customer (ABS, 2017).

Critics suggest that as more households switch over to the National Broadband Network in Australia, competition in the retail market will increase as tiered services are offered to consumers. Customers can therefore have either a fast or slow lane to access internet depending on the different speed/data plans they select (Frost, 2015).

 

NBN plans from TPG differing in data quota, speeds and call options. Image from TPG. All rights reserved.

 

What does this mean to Australian consumers? 

 Australians have understood and accepted the user-pay model as their broadband solutions; This means that customers are already familiar with the idea that in order to access premium content or use more data, they must sign up for a subscription or purchase a more expensive data plan via their network provider.

Therefore, a non-neutral regulatory framework will continue to drive competition and innovation in which benefits us as Australian consumers as we will have more options to choose from at lower costs.

 

Conclusion

 

GIF: via GIPHY

By comparing arguments from both sides of the debate, it is clear that net neutrality is not necessary in the Australian context. The Australian market has thrived and innovated without such laws with its powerful anti-competitor laws enforced by the ACCC and adoption of a volumetric pricing model by ISPs.

With NBN becoming the prominent medium for content distribution in Australia within the next decade, the new optical access network will ensure that customers are provided with ‘content from any legal source utilising traffic class management and quality of service suitable for the content format’ in which negates the need for a neutral law to be enforced.

 

Reference:

ACMA. (2012).  Communications Report 2012-2013. From https://www.acma.gov.au/-/media/Research-and-Analysis/Publication/Comms-Report-2012-13/PDF/ACMA-Communications-report-201213_WEB-pdf.pdf

Australian Competition and Consumer Commission. (2018). About the ACCC. From https://www.accc.gov.au/about-us/australian-competition-consumer-commission/about-the-accc

Australian Bureau of Statistics. (2017). Household use of Information Technology, Australia, 2016-2017. From http://www.abs.gov.au/ausstats/abs@.nsf/mf/8146.0

BEREC. (2015). What is zero-rating? From https://berec.europa.eu/eng/netneutrality/zero_rating/

Duxfield, F. (2017). Net neutrality: US ruling could affect internet access in Australia, groups warn. From http://www.abc.net.au/news/2017-12-16/net-neutrality-us-decision-could-affect-australians/9265056

Denardis, L. (2014) Internet Access and Net Neutrality. In ‘The Global War for Internet Governance’, New Haven: Yale University Press, pp.131-152

Endres, J. (2009). Net Neutrality – How relevant is it to Australia? In ‘Telecommunications Journal of Australia’, volume 59. Monash University Press. Pp21 – 25.

Federal Communications Commission. (2005). FCC Adopts a Policy Statement regarding network neutrality. From http://www.techlawjournal.com/topstories/2005/20050805.asp

Frost, B. (2015). Net Neutrality – Overseas Experiences and Australia. Communications Law Bulletin. From http://www.austlii.edu.au/au/journals/CommsLawB/2015/7.pdf

Fung, B. (2014). Marc Andreessen: In 20 years, we’ll talk about Bitcoin like we talk about the Internet today. From https://www.washingtonpost.com/news/the-switch/wp/2014/05/21/marc-andreessen-in-20-years-well-talk-about-bitcoin-like-we-talk-about-the-internet-today/?noredirect=on&utm_term=.67fb8c2a1fb4

Gharakhili, H. (2015). Perspectives on Net Neutrality and Internet Fast-Lanes. From http://www2.eet.unsw.edu.au/~vijay/pubs/jrnl/16ccr.pdf

Gregory, M. (2014). NBN and Net Neutrality: What it means for Australian consumers. From https://www.theaustralian.com.au/business/business-spectator/news-story/nbn-and-net-neutrality-what-it-means-for-australian-consumers/72e5652967149efe325e2261279beb0b

Glaser, A. (2017). Net Neutrality is over. Now what? From http://www.slate.com/blogs/future_tense/2017/12/14/the_fcc_has_officially_voted_to_kill_net_neutrality_now_what.html

Glance, D. (2013). Is Telstra trial to slow down peer-to-peer downloaders likely to succeed? From https://theconversation.com/is-telstra-trial-to-slow-down-peer-to-peer-downloaders-likely-to-succeed-12016

Norwegian Communication Authority. (2015). A comparison between European and US approaches to net neutrality. From https://eng.nkom.no/topical-issues/news/a-comparison-between-european-and-us-approaches-to-net-neutrality

NuSound. (2013). Mobile carriers seek to block Skype on iPhone, BlackBerry – A legal stoush is brewing between carriers and consumers regarding the use of VoIP over 3G mobile phones. From https://www.nusound.com/pdf/news/indnews/mobile.pdf

Pressman, A. (2017). Eliminating Net Neutrality Rules will favour carriers over internet content providers. Fortune. From http://fortune.com/2017/11/21/net-neutrality-fcc-winners-losers/

Telstra Corporation Limited. (2018). What is the NBN network? From https://www.telstra.com.au/broadband/nbn/what-is-the-nbn

About Karen Chen 2 Articles
4th year Media & Communications student at USYD

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