Net Neutrality: History and Potential Application in Australia

NYC Rolling Rebellion Advocates for Net Neutrality and Takes on TPP & Fast Track. Image: Backbone Campaign, some rights reserved.

The topic of Network Neutrality has been subject to much debate in recent years; however, the discourse surrounding the topic has been so far extremely America-centric, with little discussion of its potential application in the Australian context. To fully understand Net Neutrality’s relevance to Australia one must not only understand its history in the United States but also the current law surrounding Internet use in Australia order to comprehend its potential application and resulting impact upon Australian Internet culture.

While there are several somewhat valid arguments opposing Net Neutrality, such as the possibility its introduction will deter competition within the market, and the claim that it is unnecessary in Australia due to preexisting law protecting consumers; however, the hypothetical costs are outweighed by the potential benefits, as its introduction would not only lead to greater consumer protection but may in fact stimulate competition and innovation within the market, leading to a superior product to be enjoyed by the consumer. In consideration of the current Australian context, the introduction of Network Neutrality, while not without possible drawbacks, would be a welcome change.

FCC Commissioner Ajit Pai. Gage Skidmore, some rights reserved.

Net Neutrality was conceptualized in a 2002 paper written by Tim Wu as an extension of the pre-existing “common carrier” concept that had referred to telephone systems. The internet had originally been developed for “end-to-end connectivity” in which the network itself did not interfere with packets of information passing through it- however, this soon changed due to technological developments allowing Internet service providers (ISPs) to facilitate deep packet inspection, monitoring the information being transmitted. The first notable legal development towards the notion of Net Neutrality came in 2005 as the Federal Communications Commission (FCC) adopted a policy statement decreeing that ISPs could not block legal content or prohibit users from accessing the internet. It was under this policy statement that in 2008 the FCC ordered Comcast to cease blocking its users from accessing BitTorrent by throttling their connections; however, Comcast denied this and successfully sued the FCC in response, the court ruling that the FCC had no authority to enforce its policy statement.

While the FCC adapted their policy in 2010 in order to increase their legitimacy, they were sued again in 2014, this time by Verizon. In 2015, the FCC was able to put through a Net Neutrality proposal that was deemed legal by “reclassifying Broadband providers as Title II carriers” (Finley, 2018).  However, following the appointment of commissioner Ajit Pai in 2017, the 2015 order was reversed, with the only limitations placed upon Internet providers being that they must be transparent about their management practices, ending Net Neutrality in the United States despite several protests from citizens opposing the repeal, as can be seen in the video below.

In Australia, the internet is distributed by users paying for access at a certain speed and quota for downloads. When this quota is exceeded, users must then pay for more or have their internet speed slowed until the month’s end. The Internet service market in Australia is dominated by Telstra (Daly 2016, p. 146); however, there is currently a Government-owned National Broadband Network (NBN) being implemented. Currently, the only law in place that addresses the Net Neutrality concern is the Competition & Consumer Act, which prohibits the misuse of marketing power, i.e abuse of a dominant position (section 46), and addresses anti-competitive behaviour within telecommunications companies (Daly 2016, p. 147). However, the act is currently under governmental review in relation to the introduction of the NBN. This lack of regulation indicates a serious gap in legislation that must be addressed, as in the interim it leaves space for exploitation of customers by ISPs due to this potential blind spot in the law, meaning that the possibility of Net Neutrality in Australia must be examined with a critical eye, weighing both positives and negatives in order to gauge if its implementation would be beneficial within the Australian context.

An NBN cable is installed in Australia. Image: Bidgee, some rights reserved.

There have been a variety of arguments made opposing Net Neutrality. One that is particularly relevant to the Australian context is that the introduction of Net Neutrality will deter market competition and allow larger ISPs to hold a monopoly over Internet provision. FCC Commissioner Ajit Pai has argued that the introduction of Network Neutrality would lead to smaller ISPs being unable to support themselves due to an inability to generate revenue through monetizing content, leading to larger telecommunications companies with greater funds monopolizing the entire Internet provision market. This concern is especially pertinent in Australia, as the ISP industry is already dominated by Telstra, with its only main opponent being Optus. The argument against this that the problem lies with the Government stifling competition and not telecommunications companies only leads to more concern within the Australian context due to the introduction of the NBN which, if it becomes the dominating force of Internet provision, could lead to a Governmental monopoly on access to the internet within Australia. The introduction off Net Neutrality within Australia may allow Telstra to dominate the market even further as smaller companies become unable to support themselves, and, if the NBN is ever actually introduced nationally in spite of many delays, the Australian public, while attempting to reach greater freedom of Internet use, may find themselves ultimately left with a Government-controlled product.

The argument that current Australian law offers sufficient protection for the consumer, and that the introduction of Net Neutrality is therefore unnecessary is one that has been put forward often in the current discourse surrounding Net Neutrality. Many prominent figures in the current debate such as Telstra’s James Endres claim that current legislation offers enough protection for the rights of consumers to avoid exploitation of internet users by ISPs while still allowing for a competitive Internet provision market, and that the introduction of Net Neutrality would offer no further rights to Australian consumers while shifting the balance of the market considerably. Endres argues that Australia’s current thriving Internet provision market is galvanized by it’s general model of volumetric pricing, leading ISPs to compete with one another to offer better services and prices for the Australian consumer, and if Network Neutrality was introduced this model would no longer be operational and lead to the market’s collapse. He also claims that current regulations prohibiting ISPs to misuse their power and force consumers to pay excessive amounts for internet access is sufficient in protecting consumers, as it is “well placed to deal with” (Endres 2009, p. 229) any issues of discriminatory practices that may arise from the volumetric pricing model. It is, therefore, perhaps unnecessary to introduce Network Neutrality to Australia, as it may upset the preexisting business and legal model that allows the market to operate competitively while continuing to protect the rights of the consumer.

Protect Net Neutrality rally, San Francisco. Image: Credo Action, some rights reserved.

However, there is also evidence that the introduction of Net Neutrality in Australia could in fact lead to more competition within the Internet provision market and not less, as has been claimed by representatives of ISPs such as James Endres. As stated by Tim Wu, rather than forcing smaller telecommunications companies out of the market the introduction of Net Neutrality may remove the possibility of larger companies being given an advantage due to their size due to being unable to form a monopoly over the distribution of online services by monetizing access to certain sites, an action that may be undertaken on a non-neutral Internet. By limiting the power of ISPs Net Neutrality allows for greater personal choice by consumers, and, therefore, encourages greater competition and innovation between telecommunications companies in order to deliver the best possible product, rather than being able to make money simply by acting as gatekeepers to the online realm. The introduction of Net Neutrality could therefore be beneficial to the Internet provision market in Australia, providing an effective end to the current Telstra monopoly and stimulating development within the industry.

Net Neutrality may also provide a positive impact by allowing greater freedom and equality for internet users. While current law offers some protection for consumers, there are still many gaps in legislation that allow ISPs to manipulate  Internet users that can be addressed by the introduction of Net Neutrality. While ISPs are technically unable to perform any activity that abuses their power over the consumer, the definition of what constitutes an abuse of power is unclear, and telecommunications companies in Australia have in the past undertaken actions that may be seen as unfair for the consumer. Telstra currently owns the broadcast rights to several major Australian sporting events, and therefore it is in its interest to throttle the speed of those attempting to access online streaming platforms to view the matches taking place- and there is no legislation in place to stop them from doing so. Several ISPs throughout Australia own the rights to certain streaming services, and therefore a conflict of interest is present where they are legally able to slow traffic to other services in order to promote their own. The introduction of Net Neutrality to Australia may mean setting concrete boundaries as to what ISPs are and are not allowed to do, as opposed to the current more abstract definitions put in place, offerring greater protection for the Australian consumer than what is currently offered and ensure that no manipulation may occur.

Save The Internet.Image: Free Press/ Free Press Action Fund, some rights reserved.

The issue of Net Neutrality in Australia is one that has risen to prominence in recent years due to the current debate in America. While opponents of Net Neutrality claim that Internet users are sufficiently protected under Australian law and that its introduction will lead to a lack of competition amongst ISPs, it is clear that within the Australian context Net Neutrality can lead to innovation within the Internet provision field whilst offering further protections to consumers.

 

References

Daly, A. (2016). Net Neutrality in Australia: the debate continues, but no policy in sight. Net Neutrality Compendium, pages 145-151. Springer.

Denardis, L. (2014). The global war for internet governance. Yale University Press. DOI: 10.12987/yale/9780300181357.001.0001.

Endres, J. (2009). Net Neutrality- How relevant is it to Australia? Telecommunications Journal of Australia, Volume 59, Number 2, pages 221-231. Monash University Press.

Finley, K. (2018). The Wired Guide to Net Neutrality. Wired. Published online. Available at https://www.wired.com/story/guide-net-neutrality/?mbid=amp-story.

Manwaring, K. (2010). Network neutrality: Issues for Australia. Computer Law & Security Review, Volume 26, Issue 6, pages 630-639. Elsevier.

Stover, C. (2010). Network Neutrality: A Thematic Analysis of Policy Perspectives Across the Globe. Global Media Journal- Canadian Edition, Volume 3, Issue 1, pages 75-86. University of Ottowa Press.

The Federal Communications Commission (2005). Policy Statement. Washington DC: FCC.

The Federal Communications Commission (2010). Open Internet Order. Washington DC: FCC.

The Federal Communications Commission (2011). In the Matter of Applications of Comcast.

United States Court of Appeals (2010). On Petition for Review of an Order of the Federal Communications Commission. Washington DC: United States Court of Appeals.

Weiss, A. (2006). Net neutrality?: there’s nothing neutral about it. netWorker – Will network operators divide the web?, Volume 10, Issue 2, pages 18-25. ACM.

Wu, T. (2002). A Proposal for Network Neutrality. Published online. Available at http://www.timwu.org/OriginalNNProposal.pdf.

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I'm a Psychology and Digital Cultures major.

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