Net Neutrality: Does Australia really need it?

Introduction

Network neutrality can be defined as a concept suggesting that “internet providers should not give preferential treatment to the transmission of certain inherent traffic over other traffic” (Denardis, 2014). The issue of net neutrality has pervaded international debate, particularly in recent years following the United States’ adoption and later abandonment of net neutrality rules.

This essay will analyse the arguments for and against the establishment of net neutrality principles in Australia. Whilst supporters believe that net neutrality safeguards users against anti-competitive practices of ISPs and promotes innovation amongst content-providers, it can be determined that Australia’s competitive telecommunications structure and necessity for beneficial content-type prioritisation proves that net neutrality is not required in Australia, but rather greater transparency of ISPs.

Net neutrality protesters following the FCCs repeal of ruling. ABC News.

 

What is net neutrality?

Net neutrality advocates for the non-discriminatory treatment of all internet traffic, allowing all internet users to freely choose online content, applications and services. This means that information, regardless of its content, origin or destination, is to be treated in the same way by internet provider (Denardis, 2014). Belli purports that net neutrality proves critical to preserving the fundamental rights of users, allowing the Internet to remain global, user-controlled, decentralised, and open and competitive (Belli, 2016). Such discriminatory treatment by internet service providers (ISPs) may include:

  • Blocking certain internet traffic from being sent or received
  • Speeding up or slowing down certain traffic passing over the network

 

A brief history of net neutrality

Net neutrality is a contested issue, as commentators and stakeholders question the responsibilities of governments in regulating the power of ISPs to prohibit the prioritisation or blocking of certain types of traffic, including specific protocols, websites and applications (Denardis, 2014). The net neutrality debate has pervaded public consciousness, primarily in the United States for many years. Coming to prominence in 2005, the FCC developed four internet principles, with the intention of promoting open and accessible broadband access (Denardis, 2014). This was furthered in 2010 when it was codified in the US through the Open Internet Order, encompassing the following rules:

  • Transparency of network management practices of fixed and mobile broadband providers
  • No blocking of lawful content, applications, services and non-harmful devices that compete with their services
  • No unreasonable discrimination in transmitting lawful network traffic (Hanna, 2018)

However, the rapid technological advancements of the past decade have resulted in revisiting these rules. As ISPs employed deep packet inspection practices, the discrimination of online traffic became a growing concern, prompting the FCC to pass the Net Neutrality Rules in 2015.These rules reclassified ISPs as “common carriers” under Title II of the Communications Act 1934, meaning that they were subject to regulations as a public telecommunication good (Hanna, 2018).

As a common carrier, ISPs must adhere to the following rules:

  • No blocking – ISPs must not block access to certain types of lawful content
  • No throttling – ISPs must not degrade the delivery of lawful Internet traffic
  • No paid prioritisation – ISPs must not charge users’ for favourable lawful traffic

However, under the Trump Administration of 2017, the FCC repealed the net neutrality rule, reverting ISPs to ‘information services’ rather than ‘common carriers’.

 

Net neutrality in Australia

The prominence of the net neutrality debate in the US has resulted in Australian stakeholders voicing their concerns. Currently, Australia has no regulatory framework addressing net neutrality. Instead, the general competition regime administered by the Australian Competition and Consumer Commission (ACCC) accounts for regulatory framework, prohibiting collusive conduct, the misuse of market power and exclusive dealings (Daly, 2016). With the introduction of the 2009 National Broadband Network (NBN) reform in Australia, net neutrality concerns were once against raised.

 

Arguments in support of net neutrality regulations in Australia

In support of net neutrality, content providers prove to be in favour, citing various political and economic stakes as important in protecting consumers rights and eliminating unjust competitive advantages for ISPs.

Supporters of net neutrality argue that such principles safeguard individual rights, allowing internet users to freely choose how to utilise their Internet connection, without undue interference from public and private entities (De Filippi, 2016). The Internet’s original open-end infrastructure facilitated this, allowing end users to engage in freedom of expression and innovation. Echoing the Universal Declaration of Human Rights, “everyone has the right to freedom of opinion and expression; this right includes the freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers”. Thus, it can be suggested that non-neutral practices are infringing upon users’ fundamental human rights.

Moreover, DeNardis argues that whilst ‘beneficial discrimination’ proves necessary in the maintenance of network efficiency, this proves problematic when this power is utilised to prevent competition, restrict content, or uphold the business model of the ISP. As such, Manwaring suggests that without net neutrality regulations, telecommunications companies, particularly those with vertically integrated business models into areas of content provision, will abuse their control over ‘last mile infrastructure’ to engage in anti-competitive practices. This may include the blocking or delaying of internet traffic from direct competitors, or the charging of pricing premiums for priority services. For example, what if your mobile carrier such as Telstra could stop you from using Microsoft’s Skype instead of their own calling minutes by causing delays with Skype usage?

Moreover, as explained in the video above, the absence of net neutrality rules severely impacts private companies, particularly small businesses and start-ups. If ISPs were to charge premiums for content providers looking for a “fast lane”, or paid prioritisation, smaller companies are inherently disadvantaged and unable to compete, relegating them to a “slow lane” of internet traffic.

 

Net neutrality explained. WCCF Tech.

This in turn has severe implications on the capacity of smaller content providers to engage in future innovation, as they lack the resources to compete (Finley, 2017).This is important, as innovation over the past few years under net neutrality regulations in the United States has pivotally shaped our media landscape today. For example, video streaming giant Netflix came into inception in the mid-2000s. If ISPs were able to engage in discriminatory and anti-competitive blocking of video streaming competitors, Netflix would not have seen the growth it did?

 

Arguments against net neutrality regulations in Australia

Alternatively, ISPs argue in opposition of net neutrality regulations, claiming these restrictions to be a “solution in search of a problem” (Manwaring, 2010). Opponents argue that restrictions on the blocking or delaying of online traffic limits the ability of ISPs to engage in beneficial traffic management practices. ISPs argue for the necessity of ‘beneficial discrimination’ on the basis of improving customer service, rather than protect revenues or reducing competition (Manwaring, 2010).

 “…some traffic discrimination is necessary as a routine part of network management.” – Denardis

For example, best packet delivery protocols can be employed to resolve issues such as network congestion. This involves the use of traffic shaping technologies that allow the prioritisation of certain applications over others to allow for more efficient online traffic. For example, delivery protocols can benefit users by allowing packets containing voice or video priority over data-only packets, as such data applications can manage delay without interference to quality. Specifically, to maintain the quality of a video call, the person next to you may experience a delayed email download (Butt, 2006). Whilst a non-neutral action to prioritise certain traffic, this proves essential in giving customers what they want (Butt, 2006).

As such, ISPs argue that without the ability to employ these management patterns, they will be unable to attract customers, thus inhibiting the funding of new networks and innovations (Manwaring, 2010). This discrimination occurs purely based on data type, rather than the content, sender or receiver of the data. Could it then be argued that discrimination occurs on the basis of network management doesn’t impinge Internet users’ rights?

 

Implications of ordinary internet users

Overall, I would suggest that due to Australia’s competitive telecommunications landscape, the adoption of net neutrality policies are unnecessary. To date, Australia has encountered few incidents of ISPs abusing their market power to discriminate against Internet users. It is argued by Endres that the Australian telecommunications market is competitive, unlike the United States, inherently discouraging anti-competitive behaviour (Daly, 2016). With over 419 ISPS operating in Australia in June 2013, Australia uses a volumetric pricing model for broadband services, including maximum download quotas and pre-determined speeds (Daly, 2016).

However, recently privatised national network Telstra still remains the largest ISP, providing not only Internet access but also the fixed line telecommunications infrastructure. Telstra similarly owns a 50% interest in Foxtel (a content provider), giving rise to potential discriminatory practices (Daly, 2016). This proves problematic due to the vertical integration of ISPs and content providers, however, can be addressed through increased transparency of traffic management practices and information on arrangements with vertically integrated players (Daly, 2016).

Moreover, as mentioned earlier the ACCC provides a strong regulatory body in monitoring the misuse of market power and anti-competitive throughout Australia. Specifically, the ACCC prohibits collusive conduct and exclusive dealings, with special provisions relating to the telecommunication industry contained in the Competition and Consumer Act. Moreover, Australia’s largest ISP Telstra has a Universal Service Obligation, “to ensure standard telephone services and payphones are reasonably accessible to all people in Australia on an equitable basis, whether they work or live” (Telstra, 2019).

Thus, it can be determined that the absence of net neutrality has not and is unlikely to have negative implications for Internet end-users in Australia. Due to the enforcement of regulations by the ACCC and Australia’s competitive telecommunications industry there is little evidence of ISPs engaging in discriminatory conduct against end-users or content providers. Whilst net neutrality rules will allow for greater transparency of vertically integrated ISPs into areas of content provision, it can be established that discrimination and prioritisation of packets on the basis of content type can be beneficial to control lagging of video and voice content. Hence, I believe that an approach that involves greater transparency of ISPs is required, however, this may not manifest through net neutrality.

 

Note for marker
Simple extension granted, new submission deadline 15/10/19 23:59
Email proof attached in Turnitin submission (SID: 470414936)

 

Bibliography

  1. Belli, L. (2016). End-to-End, Net Neutrality and Human Rights. In D. F. Belli L., Net Neutrality Compendium (pp. 13-39). Cham Springer.
  2. Butt, D. (2006, August 1). Net Neutrality: No Easy Answers. Media International Australia Incorporating Culture and Policy, 120(1), 14-17.
  3. Daly, A. (2016). Net Neutrality in Australia: The Debate Continues, But No Policy in Sight. In D. F. Belli L., Net Neutrality Compendium (pp. 141-155). Springer, Cham.
  4. De Filippi, P. (2016). General Introduction: Towards a Multistakeholder Approach to Network Neutrality. In L. Belli, & P. De Filippi, Net Neutrality Compendium (pp. 1-7). Springer, Cham.
  5. Denardis, L. (2014). Internet Access and Net Neutrality. In L. Denardi, The Global War for Internet Governance (pp. 131-152). New Haven: Yale University Press.
  6. Finley, K. (2017, June 22). Why Net Neutrality Matters Even in the Age of Oligopoly. Retrieved from Wired: https://www.wired.com/story/why-net-neutrality-matters-even-in-the-age-of-oligopoly/
  7. Hanna, M. J. (2018, April). Net Neutrality: A Brief Overview of the Policy and the FCC’s Ruling to Upend It. Computer, 151(4), 78-81.
  8. Manwaring, K. (2010, November). Network neutrality: Issues for Australia. Computer Law & Security Review, 26(6), 630-639.
  9. Telstra. (2019). Universal Service Obligation. Retrieved from Telstra: https://www.telstra.com.au/consumer-advice/customer-service/universal-service-obligation

 

 

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