Net Neutrality: Why it matters

a stick figure of ‘save the net’
a stick figure of ‘save the net’, Flicker, all rights reserved

With the development of the Internet, net neutrality has become a vital issue in internet regulation. Net neutrality plays an essential role in protecting consumers and promoting the development of the Internet industry. The rapid change in the Internet industry makes the market structure blurred, causing the contradiction of resource and profit distribution (Johannes & Jonathan, 2014). Unlike the United States and the European countries, Australia does not have regulations related to net neutrality. In the debate of net neutrality, there have generated polarizing opinions over its advantages and shortcomings. Gans (2015), noted that signing net neutrality into law would protect internet users’ freedom of speech and improve the competitive environment in the internet industry. But on the other hand, the equal allocation of network capacity will also affect the network investment, which is unfavorable for upgrading the Internet. Most importantly, because Australia’s Internet industry structure is very different from that of the United States or the European countries, a strict net neutrality regulation might not work well in Australia.

The history

Although the concept similar to net neutrality was introduced in the US Telecommunications Act of 1934, the idea of formally establishing the term ‘net neutrality’ and connecting it with the Internet was first proposed by Professor Tim Wu in 2002 (Corn-Revere, 2009). Net neutrality represents a fundamental principle in the Internet world that ISP (Internet Service Provider) needs to equally transmit data from different platforms and websites. Regardless of user’s different content and diversity, they should not deliberately slow down or speed up the loading speed. In other words, net neutrality stands for ‘non-discriminatory connectivity’. The concept of net neutrality emerged because as technology companies grew and took up more and more bandwidth resources, ISP charged them extra fees to maintain transmission speed. For example, Netflix paid a high connection fee to an American ISP to exchange a high- speed channel for its data (Gans, 2015). In order to balance the profit conflict between ISP and ICP (Internet Content Provider), the concept of net neutrality had been given attention and caused a global impact.

Here is a video about explaining net neutrality

Maintain the development of Internet

As for charging Internet content providers (ICP) on tiered pricing, Internet Service Providers (ISP) explained that less than 5% of ICP occupied more than 90% of the internet’s bandwidth, it is reasonable to charge an extra fee during rush hours to maintain ‘highway’ transmission speeds. However, as defined by Marsden (2017), this kind of behavior can lead to an exploitative business model in the internet industry. Internet Service Providers exploit Internet Content Providers, who then exploit users for making their profit. When Internet Service Providers have the right to control the bandwidth speed and traffic, they are more likely to provide the ‘highway’ for data transmission to large technology companies with sufficient capital to afford the extra fee. Conversely, smaller tech companies will be restricted because ISP can receive less revenue (Pickard & Berman, 2019). Over time, the Internet’s market structure of will be solidified, striking a lethal blow to the development and innovation of the entire industry. For instance, Madison River was warned by the FCC that it had entrenched its monopoly by blocking its rivals’ VoIP services (Gans, 2015). In Australia, similar problems happened too. Telstra only offers its users unlimited internet service to watch sports competitions while restricting access to rivals’ users because Telstra is the only company that can broadcast the Australian sports competitions (Daly, 2014). The introduction of net neutrality regulation could improve Australia’s Internet competitive environment.

Protect the interests of users

Johannes and Jonathan (2014) emphasize that net neutrality is significant because the Internet provides an unlimited platform for communication. Good Internet regulation cannot be separated from safeguarding users’ freedom of speech and freedom of choice. The protection of freedom of speech is based on the concept of net neutrality. Without net-neutral regulation, Internet Service Providers are more likely to restrict or promote certain content, which would negatively impact to the content diversity of Internet platforms. As Hanna (2018) points out, the Internet is a public space for all users, blocking and restricting certain content is a violation of free speech.

Net neutrality protest,
Net neutrality protest, Brian J. Matins, all rights reserved

In addition, both platforms and mediums should be open to the market and consumer choice. Thus, when Internet Service Providers become the price setters to label the price according to different platforms, users have lost their equal right to make choice. Because in the case of market monopoly, there is no competition, Internet Service Providers will not lose consumers, supply and demand relationship cannot restrict the market (Hanna, 2018). Although Australia has a Competition and Consumer Act 2010 for market competition regulation, Because of the Australian Internet pricing model, which is set a price for a certain download amount, users need to pay additional fees to maintain the bandwidth speed for the excess (Daly, 2014). The freedom of choice of Australian users is still limited. The introduction of net neutrality regulation could have a positive effect on protecting internet users’ rights.

 

The two-sided of Net neutrality

Opposing views to net neutrality focus on maintaining efficiency and attracting internet investment. In the early 1990s, the Internet suffered from network bottlenecks. The over-saturated internet market reduced the transmission efficiency until the introduction of tiered pricing for Internet Content Providers, internet resumed functioning (Johannes & Jonathan, 2014). Therefore, although net neutrality improves the competitive environment, its long-term implementation may affect the efficiency of the entire Internet industry because of the equal allocation of internet capacity. Without net neutrality regulation, Internet Service Providers would be able to allocate bandwidth more efficiently and offer Internet Content Providers who have high visit traffic to cut costs. Moreover, according to Johannes and Jonathan (2014)’s research, strict net neutrality regulation will also discourage Internet Service Providers from upgrading their networks. Strict net neutrality rules always exclude the ‘zero rating’. As in Norway, ‘zero rating’ has been considered as a violation of the net neutrality because ‘zero rating’ does not allow Internet Service Providers to set up the limit of data and charge extra fees (Layton & Calderwood, 2015). This rule greatly influences the Internet Service Providers’ primary source of profits and makes them reluctant to pay to upgrade their networks.

Here is a video debate of net neutrality

 

The difference between Australia’s Internet market and The United States’ internet market is the main reason why Australia has not legislated net neutrality. First of all, compared with The United States, where the average household uses two different Internet Service Providers, Australia uses more ISPs and changes them frequently (Frost, 2015). This illustrates that Australia’s Internet market is not monopolized and still competitive. As a result, introducing net neutrality regulation may be difficult to work. In addition, Australian users have become accustomed to the model provide by the Internet Service Provider, that there is a set-up of data limitation and charging of maintaining the bandwidth speed for the excess, and compare the different packets of data to choose Internet Service Provider (Layton & Calderwood, 2015). For example, Optus launched the ‘network priority’ service, which allows users who purchased the packet of data to access the internet at peak times without being slowed down, even though this packet of data would violate net neutrality, the ACCC did not raise any objections or warnings (Jones, 2019).

Conclusion

Net neutrality is considered to be one of the basic principles of the Internet industry. In order to balance the profit conflict between Internet Service Providers and Internet Content Providers, it requires ISPs to treat data from all ICPs equally. Net neutrality has played a vital role in safeguarding the development of the Internet and users’ interests. If the net neutrality regulation implements in Australia, not only Australia’s competitive internet environment can be improved, but also protecting the users’ freedom of speech and choice. Meanwhile, there are also some opposing views to net neutrality. While the equal allocation of internet capacity gives all ICPs the same opportunities to compete, the internet industry may become saturated and inefficient. Besides, in Australia, introducing net neutrality can be difficult because of the different structure of the Internet industry. Overall, signing net neutrality into Australia’s law has more positive effects, but the concrete regulatory solutions need to modify and make them suitable for Australia’s national conditions.

 

 

 

Reference List

Corn-Revere, R. (2009). The First Amendment, the Internet & Net Neutrality: Be Careful What You Wish For. The progress & freedom foundation, 16(28), 1-10.

Daly, A. (2014). Net neutrality in Australia: an emerging debate. In Belli, L & Filippi, D. P (Eds.), Report of the UN IGF Dynamic Coalition on Network Neutrality (pp. 141-156). New York: Springer.

Frost, B. (2015). Net Neutrality – Overseas Experiences and Australia. Communications Law Bulletin, 34(2), 5-15.

Gans, J.S. (2015). Weak versus strong net neutrality. J Regul Econ, 4(7), 183–200. Doi: 10.1007/11149.014.9266.7

Hanna, J. M. (2018). Net Neutrality: A Brief Overview of the Policy and the FCC’s Ruling to Upend It. Computer Cybercurity, 51, 78-81.
Doi: 10.1109/MC.2018.2141045

Johannes M. B. & Jonathan A. O. (2014). Reconciling Political and Economic Goals in the Net Neutrality Debate. The Information Society, 30(1), 1-19.
Doi: 10.1080/01972243.2013.856362

Jones, T. (2019, November 26). Optus Puts Net Neutrality Up for Sale. Gizmodo Australia. Retrieved from: https://www.gizmodo.com.au/2019/11/optus-one-plan-net- neutrality/

Layton, a & Calderwood, E. S. (2015). Zero Rating: Do Hard Rules Protect or Harm Consumers and Competition? Evidence from Chile, Netherlands and Slovenia. Copenhagen, Denmark: Aalborg University.

Marsden T. C. (2017). A brief history of net neutrality law. Network neutrality, 30(5), 27-48.
Doi: 10.7765/9781526105479.00021

Pickard, V., & Berman, D. (2019). After Net Neutrality A New Deal for the Digital Age. Yale University Press.

Multimedia Reference List

Flicker. (2018). Net Neutrality Graphics [cartoon].
Retrieved from: https://www.flickr.com/photos/freepress/42599341871/

Matins, B. J. (2017). Net neutrality protest [photo].
Retrieved from: https://www.flickr.com/photos/brianjmatis/38015043645/

The Federalist Society. (2016, November 13). Is net neutrality good policy? Retrieved from: https://www.youtube.com/watch?v=jOHfJhpuJ1E

Wall Street Journal. (2015, February 2). Net neutrality explained. Retrieved from: https://www.youtube.com/watch?v=p90McT24Z6w

 

 

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About Vicky Chen 4 Articles
Hi, my name is Vicky and I major in digital culture and gender studies! I love sweets and violin :)