I must acknowledge the assistance I have received from an excellent unpublished dissertation by Reuel Baptista whose insights into and examinations of potential regulatory outcomes for Net Neutrality are worthy of consideration.
Net Neutrality is an emotive subject for many who are involved in the workings of the Internet and the provision of Internet services and access. It essentially asserts that the transport layer of the Internet – the means by which data moves across the Internet – should be non-discriminatory as to content and treat all data packets equally regardless of nature or origin.
It is a concept that has been developed primarily by Internet engineers but since the Internet went public in the 1990’s it is a concept that has been the subject of challenge, primarily from commercial entities. There are examples, particularly from the US, of data discrimination and preferential treatment of data in certain circumstances.
The location of the concept of Net Neutrality in Internet legal theory has been generally considered as a governance issue and so it is. Yet despite opportunities to review or address issues of Net neutrality, in the Government’s recent consultation paper on the shape of the delivery of Telecommunications services post 2019 no mention was made of Net Neutrality.
This state of affairs was also referred to by the Commerce Commission in its determination of the application for merger between Sky and Vodafone where it said at para 90:
Unlike in a number of other jurisdictions, New Zealand does not have any specific laws requiring TSPs to treat all internet traffic equally (known as ‘net neutrality’). This means that TSPs can discriminate between different types of traffic,either by:
90.1 not carrying certain types of content; or
90.2 limiting the speed at which certain content is carried (known as ‘throttling’), which impacts the quality of the content.
Despite this for New Zealand providers Net Neutrality is not really as issue – at least not yet. This doesn’t mean that it won’t become an issue some way down the track and the concern must be, when ISPs start discriminating between content and allocating preferential bandwidth, that by then it will be too late to do anything about it.
But the reality is that there is more to Net Neutrality than treating data equally. It helps address the negative effects of discriminatory practices such as blocking, paid prioritization and zero rating. Competition within the fixed line broadband and content markets, recognition of human rights and a country’s standing in the online economy are all affected by network neutrality. The tension is that there is a need to prevent big or monolithic ISPs from abusing their power but allow them to optimise the Internet for subsequent waves of innovation and efficiency. Other counties have had this debate and have introduced network neutrality into their telecommunications regulatory framework.
It is therefore interesting to read Juha Saarinen’s piece in this morning’s Herald where he suggests that net neutrality no longer matters. He locates his discussion against a background of developing content delivery systems which use geography to enhance speedy delivery. He points out that big services providers can afford to put data centres near customers and cache content there. Others use content delivery networks such as Akamai, Amazon Web Service, and Cloudflare that sit between the customer and the service provider. This, he says, violates Net Neutrality as it makes some sites seem to perform better than others.
With respect, I disagree. That argument is not based on the non-discriminatory treatment of data packets across the Internet but rather is based upon geography and location of data.
Saarinen goes on to dismiss Net Neutrality as an important idea a few years ago but today “we’re probably better off expending our energy elsewhere, like how to keep a diverse and competitive internet provider and Telco market alive in New Zealand.”
So does Saarinen suggest that we kick Net Neutrality to the kerb?
The reality is that in fact, as I have already suggested, it is an essential part of the regulatory and governance processes necessary to ensure a competitive internet provider and Telco market. Net neutrality is an integral part of that activity.
With the Telecommunications Act review in progress, this is the right time for New Zealand to formally adopt network neutrality as part of our telecommunications regulatory framework. Susan Chalmers said in 2015 at a Law Conference
“The thicket of commercial agreements between content and applications providers and ISPs must not be allowed to develop to such an extent that there will be no political will left to clear a path for [network] neutrality.”
The rapid pace of change in the online world means there may not be another opportunity to discuss network neutrality regulation for some time.