The Federal Communications Commission (FCC) voted overnight NZT to roll back Obama-era regulations that safeguard net neutrality.
That could be a boon for telecommunications company profits, and slower, more expensive internet for US consumers and businesses.
The Consumer's Union in the US called it "chilling." Senate minority leader Charles Schumer called it a "flat-out mistake."
And InternetNZ chief executive Jordan Carter warns it could mean slower access to some sites and services for Kiwis, too, since so many websites and cloud-based software is hosted in the US.
Net neutrality is the concept that all internet data should be treated equally by broadband providers as opposed to, say, ISPs or telcos charging some service providers more so their customers can see their site or service at the same speed as others (or, to put it in more cynical terms, shake them down for cash to not throttle it).
President Barak Obama’s move to secure net neutrality was proceeded by a spat between giant US internet provider Comcast and Netflix. Customers on Comcast broadband suddenly found Netflix was a lot slower and buffering a lot. The reason was Comcast was trying to shake down Netflix and make the streaming video giant pay special fees to prioritise its data – or at least get it flowing normally again.
A move against net neutrality has been widely expected since the Trump administration appointed Ajit Pai as the new FCC chairman, giving Republicans a 2:1 majority on its board.
As a lawyer for a big telecommunications company (Verizon), Mr Pai lobbied hard to scrap net neutrality. Now he can set policy from the inside. And has.
The FCC chairman doesn't seem keen on public discussion. In keeping with the tone of discourse in Trump's America, a journalist who reportedly asked a question in a non-threatening manner was shoved against a wall by two security guards then asked to leave the building)
The net neutrality spat reflects the changes wrenching through media. Once upon a time being able to deliver TV or radio meant bidding for scarce bandwidth on satellites or terrestrial towers or HFC cables. Now, it’s relatively cheap and easy to stream TV, radio and music over the internet – and some ISPs and telcos think content providers (and service providers like Apple, Google, Spotify and Skype-owner Microsoft) are freeloading on their networks, which constantly have to be upgraded at great expense to accommodate the streaming boom.
An end to net neutrality will allow network providers to end this “freeloading” by applying special charges to content and service providers, which would, in turn, push up prices for consumers (the counter to the “freeloading” argument is that the likes of Netflix and cloud computing, have led to consumers spending more per month with their ISP on plans that offer more data).
What's happening here?
Net neutrality is on the agenda for the government’s sweeping review of the Telecommunications Act, although early indications from discussion papers indicate our laws will maintain their lean in support of the principle and indeed, there has been no lobbying by big network operators here to undermine net neutrality.
A crucial difference is New Zealand's main network provider, Chorus, was structurally separated from the now retail-focused Spark, which offers video-streaming via Lightbox and music streaming via its partnership with Spotify – and it would not want either service molested or priced-up by Chorus.
“US decisions like this matter because the US is so influential in how the internet works and in how innovation in new internet services can be encouraged,” says InternetNZ boss Mr Carter (InternetNZ administers the .nz domain).
“Without an open internet, which the US network neutrality rules help guarantee, it's harder for new services to get a look in and build market share,” he says.
“Instead, they'd face an uphill fight, since potential customers would have a better service with the existing providers. The level playing field of the open internet gets distorted by carriers who can give favours to their own preferred content providers.”
US changes could affect services for New Zealanders
Although there seems no immediate threat to net neutrality in this neck of the woods, the InternetNZ boss adds, “That doesn't mean we don't need to be vigilant. The proposed merger between Vodafone and Sky would, if approved, create a company that offered both internet services and content services with a big market share in both. That could give rise to neutrality concerns here.”
He also warns that “While any changes to the US rules won't have any direct effect in New Zealand but might mean innovation in new services slows down in the US. Since we often use US services in New Zealand, that could make things worse here too.”
Mr Carter sums up, “In the end, this is a fight between two sets of American corporate giants: content companies that rely on an open internet, and network companies that also own content businesses. It will be interesting to see how the fight plays out.”
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