The Moxie Sessions: iPhone fought the law (and the law didn’t win)

OPINION: Global services such as Facebook's Aquila drones all point towards a use-by date for local regulations about connecting to international networks. 

Laws, huh? They’re what separates humankind from the animals, order from anarchy and, of course, one country from another. The right to self-govern is fundamental to nationhood but it’s a right increasingly threatened by that series of cat-filled tubes we call the Internet.

It’s a vexed issue. On the one hand, we want to be part of a global online community, and for that community to behave in accordance with a consistent set of moral and legal standards. On the other, we want people and companies (especially) we deal with online from our Onehunga bedroom to have the same obligations under New Zealand law as we do.

This is no ordinary challenge, but extraordinary challenges are what The Moxie Sessions like even more than our customary free beer and sushi. So one night recently around the impressively large GridAKL table we sat down to chew over both.

Leading the discussion were Internet NZ’s James Ting-Edwards, and Telecommunications Commissioner Stephen Gale.

Dr Gale pointed out that it’s not just geography that the law struggles with, it’s time. Laws created when every one of us relied on a copper telephone (and so-called “internet”) connection to our homes, and required the incumbent telco to provide it, are less relevant now that voice is just another flavour of data, and we can get that data through fibre and thin air, as well as the good old copper line.

That’s not to say that the “last mile” isn’t important today to both users and regulators. Whether it’s copper or fibre, says Dr Gale, the last mile monopoly needs regulation (that is, supporting investment but limiting prices) now, largely because video traffic is so high. But mobile/wireless technology is advancing rapidly, not least because of its potential for developing countries, and in future may compete strongly enough with fixed networks to remove the need for fixed line price controls.

Global services such as Google’s proposed Loon network of internet-beaming balloons, Facebook’s Aquila drones and Rocket Lab’s Peter Beck’s vision of porn-streaming micro-satellites (OK I made the porn part up), all point toward a use-by date for local regulations about connecting to international networks. 

But regulating difficult things is sometimes a fight worth having, and two recent examples prove that New Zealand can and will apply local law to the world wide web.

The first area is taxation. While untaxed e-commerce is attractive to the both the seller and the shopper, it’s not so flash when it starts taking serious bites out of our tax base.

While taxing the companies that happily serve ads, songs and movies to our devices sits in the too-hard basket, taxing us for consuming them has somehow proved easier to implement, with the so-called Netflix Tax kicking in the other weekend. It’s not exhaustive, and for practical reasons excludes retailers selling us less than $60,000 worth of online stuff per year. It also excludes physical purchases – that particular can of worms (lowering the collection threshold) remains on the shelf for the moment. But it’s a start, and shows that we’re taking the challenge of regulating and taxing the internet economy seriously.

A more powerful example of New Zealand going its own way has been our Harmful Digital Communications Act. Unlike almost all comparable overseas legislation, the act can find showing or telling the truth online an offence, if serious emotional harm is caused. While the enforcement mechanism is still under construction, the act has been law since 2015 and the first prosecutions have been brought successfully.

As Mr Ting-Edwards points out, the online community has gone from a small informed crowd with a known etiquette to a mass market of newbies still developing its communication norms. So what would be merely impolite behaviour in a small group, becomes malign at scale, with thousands of strangers able to criticise people they have never met for some imagined slight to their interests. And when groups grow too big to self-regulate, it’s time for the law to step in.

Like the Netflix tax, the HDCA won’t catch ‘em all, and may struggle when the offender is outside New Zealand. But it’s a start. Even in a connected global world, we’re obliged to protect our citizens and make sure enough tax comes in to pay for our roads, schools and hospitals. If that means the world wide web has to stretch a little to accommodate the way we do things down here, then that’s just fine with me. And if we could stretch it far enough to get Facebook, Google and Apple paying as much tax as my local dairy, then that would be a fine thing indeed.