Trump appointee drives vote to end net neutrality — what it means for New Zealand

InternetNZ chief executive Jordan Carter warns it could mean slower access to some sites and services for Kiwis

RELATED AUDIO: Jordan Carter says the Trump administration's move against net neutrality will hit NZ, too. (Jan 28)

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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)

"Freeloaders"
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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Shows what a complete idiot Trump is and also lines up our own" shining star" Chris Liddell to start looking very silly after backing Trump to get elected and now on his A team

Isn't it funny what a huge ego allows one to do and not think of the consequences. Liddell risks ruining his whole career on the Trump camp

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What nonsense!

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I am a supporter of "net neutrality" but I do get annoyed by almost all commentators showing a one-sided view of it.

Contrary to popular opinion, this is not about altruistic noble content providers fighting evil money-grubbing telcos.

The Telco argument is that Netflix doubled internet traffic, driving up their investment costs with no revenue. Why shouldn't the person using the capacity pay for it?

Yes, this is flawed argument. But so is the 'content providers' want net neutrality to allow small companies to compete with them. This is really a debate over who pays for bandwidth growth in the network, and should it be shared cost with both parties making money over it.

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Yes, very one sided reporting. Who would thing NBR columnist would be in favour of Obama-era regulatory overreach? The US Democrats are all against the change because they fundamentally like the concept of freeloaders. The FCC's new Trump-era Chairman, Ajit Pai (who is decried for being an ex-telco boss) has said the goal of this jettisoning of the Obama-era laws is "to return to the light-touch regulatory framework that had allowed the Internet to flourish.” Need any more be said.?

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Ridiculous example of regulatory capture in the USA, with donations having far too great an influence on lawmakers who are supposed to represent the people not just the donors.

And with taxpayers having footed some or much of the bill of putting in place original infrastructure, it's crazy that they stand a good chance of being shafted by the companies now in charge of that infrastructure.

Really highlights how good NZ's direction on internet access has been so far.

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Netflix has been one of the companies to have benefited the most from the fibre instal in to NZ. Yet they did not contribute a cent to the cost of it. All Netflix income goes straight overseas.

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Consumers have benefited from Netflix (and local efforts Lightbox and Neon) providing alternative viewing options and more competition. 

ISPs have benefitted from people upgrading to higher data cap/more expensive plans to accommodate their Netflix viewing.

The government (after a tax tweak late last year) earns GST on every Netflix subscription paid per month.

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Lots of companies benefit from NZ having decent roads, ports and the like too. However, we take a neutral approach to the use of these roads: user charges are applied without prejudice or favour.

How would it benefit NZ consumers to have all roads owned privately and road owners charging some producers more per kilometre than others?

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Some interesting examples of why Net Neutrality is important, based on providers' history of tactics that deliver no benefit to consumers:

2005 - Madison River Communications was blocking VOIP services. The FCC put a stop to it.
2005 - Comcast was denying access to p2p services without notifying customers.
2007-2009 - AT&T was having Skype and other VOIPs blocked because they didn't like there was competition for their cellphones.
2011 - MetroPCS tried to block all streaming except YouTube. (They actually sued the FCC over this)
2011-2013, AT&T, Sprint, and Verizon were blocking access to Google Wallet because it competed with their own attempts at payment platforms. This one happened literally months after the trio were busted collaborating with Google to block apps from the android marketplace.
2012 - Verizon was demanding Google block tethering apps on android because it let owners avoid their $20 tethering fee. This was despite guaranteeing they wouldn't do that as part of a winning bid on an airwaves auction. (They were fined $1.25 million over this.)
2012 - AT&T - tried to block access to FaceTime unless customers paid more money.
2013 - Verizon literally stated that the only thing stopping them from favoring some content providers over other providers were the net neutrality rules in place.

All this when the bulk of infrastructure has been funded in great part by taxpayers.

Allowing ISPs to have at it won't deliver benefits for consumers.

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