Net Neutrality or Nationalisation: What Makes Sense for Australia?

"Internet cats unite for Net Neutrality" by Free Press Pics is licensed under CC BY-NC-SA 2.0

The argument in favour of net neutrality – indeed, the very definition of that term – is enshrined within a specifically American context. When applying this argument to the Australian context, we must be sure to account for the unique history of our own telecommunications industry. Before continuing, a brief explainer as to what we mean by net neutrality is required:

Net neutrality cannot be understood without reference to the America, insofar as that is the national context in which the debate first emerged. Unlike the telecommunications industry in Australia of the early 20th century, which was largely run by state-owned enterprises, the American telecoms industry at the same time was left to the free market. It didn’t take long for a monopoly to emerge in the name of The Bell Telephone Company (now AT&T). Following the crisis of laissez faire capitalism that was the Great Depression, the federal government at the time introduced regulations aimed at breaking up monopolies in the name of reinstating a competitive economy. The Communications Act of 1934 went after Bell Monopoly, redefining the nature of their then privately-owned telephone cables by invoking common carrier law, which previously had been applied to transportation industries. Simply put, common carrier law required that companies responsible for transportation had to treat the objects they were asked to transport equally: railroad companies could not charge different ticket prices for white and black people, and trucking companies could not set different prices to transport 1kg of potatoes and 1kg of corn. Just as trains and trucks transport cargo, telephone lines transport data, and now they would be legally required to transport that data equally. Additionally, as a common carrier, Bell would now have to provide ‘universal service’ (upon request) to all customers and regions, including rural areas that would previously have not been serviced because they weren’t financially attractive enough. The decision to classify telephone cables as common carrier essentially provides the historical precedent for net neutrality. Indeed, in the first days of the modern internet (early 90s), insofar as access was only achievable through a dial-up connection over telephone lines, users were guaranteed that their data was being treated the same as everyone else. So how did this early form of net neutrality disappear?

Before I answer this, I will briefly switch tracks to narrate the parallel development of the telecoms industry in Australia. Whilst Bell’s invention in 1887 had catapulted his company to unobstructed market dominance in America, telephony was quickly seized upon by colonial powers in Australia and nationalised, much to the chagrin of the local business community. After federation, the governance of Australian telephone service was delegated to the federal office of the Post Master General (PMG). Whilst early development was impressive, a lack of funding during WWII left Australia with an outdated infrastructure. Concurrently, the massive influx of post-war immigrants revealed the inadequate scope of this service, especially in rural areas. The growing political pressure for an overhaul culminated in the division of the PMG’s authority in 1975: the PMG would be left to manage the postal service, whilst the newly minted state-owned enterprise Telecom Australia would take care of the telephone service. From 1975 on, Telecom Australia set about pursuing a policy of universal service, modernising their infrastructure and extending their coverage into the most remote communities in Australia, all the while charging a nationally equal price. This equal service was also extended into the early days of dial-up internet, meaning that something like ‘net neutrality’ was practiced. Here we return to the question I ended the last paragraph with: where did this prototype of net neutrality go?

Despite the distinct histories of Australian and American telecommunications, the divergence from the seemingly guaranteed trajectory of net neutrality (as suggested by the equal access precedent of telephony) in both countries can be traced to a common cause: the neoliberal turn. Put simply, neoliberalism is the dominant economic and political order of the last 30 years that Naomi Klein defines as consisting of three essential pillars: corporate deregulation, privatisation of the public sphere, and drastically reduced corporate and income tax rates (p.72). In the American Telecommunications Act of 1996, a distinction was put into law that differentiated between common carrier networks (telephones) and the new services being provided on them (websites): Telephone networks would retain their common carrier status, but websites would be classified as ‘Information Services’. This seems like an innocuous distinction, but its latent meaning would only come into focus in light of an FCC ruling in 2002, which ruled that Internet cable wires were an information service, therefore exempting it from the non-discriminatory requirements attendant to common carrier law (Endres 2009, p.22.1). It is precisely this legislative exemption that allowed telecommunication companies to variegate their prices as they wished and throttle broadband speeds at their whim. The distinction between common carrier law and the unregulated category of ‘information services’ represents the demarcation between the regulatory ethic of mid-20th century embedded liberalism and the neoliberal pursuit of radical deregulation and mass privatisation, as originated by Reagan in the 1980s (Newman 2016, p.5974). The neoliberal consensus wasn’t isolated to America however, spreading to the UK under the auspice of Margaret Thatcher, and then to Australia under the Hawke and Keating governments, who slashed taxes, rolled back union protections, and floated the dollar. That is to say, when we recognise that Telecom Australia was privatised just one year after the Telecommunications Act of 1996, we should not pass it off as a coincidence: they both constitute the neoliberal conquest of the telecommunications sector. Unsurprisingly, the ratification of deregulation in America and privatisation in Australia opened a floodgate for discriminatory practices in both nations – from the outright blocking of ‘disagreeable’ websites, to user surveillance through deep-packet inspection, to covert corporate consolidation through zero-rating, and much more. It is the undemocratic consequences of these neoliberal policies which have necessitated the rise of the net neutrality movement.

Here, I return to the argument for net neutrality in order to evaluate its relevance in the Australian context. Firstly, once we have understood the history of telecommunications in America, it becomes clear that the very concept of net neutrality is little more than a reworded invocation of the principle of common carrier law; that is to say, it has historical precedent within American. The same is not true for Australia however. Although Telecom Australia may have been operated with a “so-called common-carrier approach”, because it was already within the purview of government, there was no real need to strictly enshrine this classification within law. On top of that, pre-existing common carrier laws in Australia are “not contained in any statute” but only exist within the narrow scope of Australian Consumer Law, making it relatively unenforceable. Indeed, the curious absence/weakness of common carrier legislation is not an isolated problem but is consistent with Australia’s unique legislative history. Indeed, Australia is unusual in that it has neither a Constitutional Charter nor a Bill of Rights. Instead, there is only a patchwork of specific rights whose limited scope makes them easy to circumvent. This has repercussions for net neutrality debates specifically, as the lack of any constitutionally enshrined right to general privacy, for example, means that Australian ISPs are generally outside the scope of the law in that respect, allowing them freer rein to monitor users’ data (Daly 2014, p.14). Furthermore, the currently existing patchwork of pro-competition laws is an insufficient safeguard of equal access rights to the internet, as evinced by the telecom companies’ use loopholes to consolidate their profits – most prominently through the practice of zerorating. Despite claims that zero-rating is a form of purely beneficial “positive discrimination” (Musiani, Schafer & Le Crosnier, 2012, p.55), studies have shown that when a country legally permits zero-rating, as Australia has, “wireless carriers [have] increased wireless data charges compared to those [countries] without zero rating”. This is due to the fact that wireless carriers can raise prices knowing that their customers will stay with them because of the superficial appeal of a ‘free Netflix’ package, for example. All of this simply goes to show that, despite claims to the contrary, Australia does not currently guarantee net neutrality. What is there to do then?

Whilst many argue that Australia should pursue legislation that deals with net neutrality specifically, I disagree. There are two key inadequacies with net neutrality legislation on its own. Firstly, as we have mentioned, the case for specific net neutrality legislation is inherently native to America, insofar as it depends on the historical precedent of common carrier law. Considering that Australia does not share this precedent – our common carrier laws are flimsy in most areas and non-existent in regard to telecoms – we cannot merely transplant the case for net neutrality into the Australian context and expect it to succeed as it has in. Secondly, we must recognise that we cannot critique corporate control of the internet without confronting the neoliberal policies of deregulation and privatisation that facilitated such a massive consolidation of power. In fact, there is a degree of complicity with neoliberalism that is most visible in the fact that some of the largest and most successful campaigns have been underwritten by corporate interests, such as in 2013 when Netflix, looking to maintain their ability to compete, took a stand with net neutrality protesters (Pickard & Berman 2019, p.85). This participation only extended to the limits of their self-interest however, as once they had ascended to a position of corporate dominance in 2017, they rescinded their support of the movement. This demonstrates that net neutrality legislation on its own does little to push back against this politically maintained hegemony (Newman 2016, p.5976).

What can Australians do then? Luckily, there is a solution that addresses both of these problems: If we as Australians wish to challenge the neoliberal status quo of corporate dominance (and the power they exercise over our data), we should do so by drawing on our own historical precedent and nationalise the telecommunications sector. It is the only case for equal access rights to the internet that makes sense within the Australian context.



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Tom Gojak
About Tom Gojak 4 Articles
3rd year English Major. Earnestly interested in the organic outcroppings of internet culture.