The US government has announced its plans to repeal the net neutrality laws put in place by Barak Obama in 2015. The announcement, which was made by the US Federal Communications Commission (FCC) Chairman, Ajit Pai, caused an eruption of protest across social media, which has continued to build momentum since it began in the early morning on 22 November 2017 (Sydney time).
Wide-spread public appeals to US representatives by way of phone and email have broadly been met with responses in support of the FCC’s proposal to repeal the net neutrality laws. However, there is little doubt that in the weeks leading up to the final FCC vote on 14 December 2017, protests against the proposal will find their way onto US streets and into the mainstream media news.
The commotion caused by the FCC’s announcement will surely have many Australians asking three main questions:
- “What is net neutrality?”;
- “What will happen if the vote to repeal net neutrality in the US is successful?”; and
- “How will it affect us in Australia?”.
The good news is that as far as Australian internet regulation goes, the US vote is unlikely to have much of an impact. However, we may see some shift in online competition in the US which could impact the services that are delivered to Australia from the US, and the ability of Australian online businesses to gain traction in the US.
What is net neutrality?
Net neutrality is the concept that content on the internet must be treated equally by Internet Service Providers (ISP
s). This means that ISPs must allow their customers to access all content on the internet at the same speed, and without unequal restrictions (subject to any legal requirements to block unlawful content).
The result of net neutrality is that ISPs cannot limit the speed of delivery, or access of online content, regardless of the source. Many view this as the reason for the continued ‘golden age’ of the internet that we currently live in. With net neutrality in the US, an 18 year-old vlogger could potentially have greater reach and influence than a major news organisation, if the vlogger managed to drum up that level of interest. Equally, the cost of accessing content created by the vlogger cannot be different from the cost of accessing content created by the major news organisation. The two must be treated the same by the ISPs.
Prior to 2015, net neutrality was an unwritten rule in the US. However, since it was enacted as a law by the Obama administration, proposals to repeal and re-write the laws regarding the regulation of content on the internet have been pushed by the major US ISPs, and now by the FCC.
What will happen if the vote to repeal net neutrality is successful?
The FCC’s proposal is stated to be aimed at increasing variety and competition in relation to the offerings of ISPs. Repealing net neutrality will give ISPs the option of creating plans that may limit access to some content, but may also reduce access costs for consumers who do not need access to the entire internet. The FCC’s proposal asks ISPs to promote their access plans with transparency as to the level of service that consumers can expect for a given cost.
The double-edged sword of removing net neutrality is that the evaluation of what content to include in an internet plan is left entirely to the ISPs. In the absence of net neutrality, an ISP could choose to limit the access of their customers to our vlogger’s content if, for example, the vlogger was creating content that went against the commercial interests of the ISP. Similarly, someone who may not be able to afford an all-access plan might not have access to their favourite online news source.
Because of the natural monopoly of ISPs in the US many consumers will not have a choice of ISP, and if their current ISP does not offer a plan that is suitable for their needs, or does not meet their needs at a reasonable cost, those consumers may have to go without access to content that they require or desire.
How will it affect us in Australia?
Unlike the US, Australia has never had net neutrality codified in law, and in fact, most Australians are already subscribed to a service that does not adhere to the requirements of the US net neutrality laws (for example, you might have unmetered access to Facebook on your mobile data plan). However, if your ISP tried to limit your access to content in a manner that created a competition or consumer law issue, the ACCC would step in and take action to protect your consumer rights. Also, most of Australia has an abundance of ISPs ready to provide services, which detracts from the temptation of ISPs to limit the access of their customers to parts of the internet so that their service is less functional than that of their competitors. Consequently, any changes to the US net neutrality laws are unlikely to have much of an impact on ordinary Australian consumers.
However, there is the potential for US ISPs to attempt to protect the interests of paying partners to the detriment of commercial entities that are do not pay for increased accessibility. Australian businesses that trade in the US using a website may run into problems if their products are in competition with the products of a partner of a US ISP. At this stage, we can only speculate as to how international online trade will be regulated if the vote to repeal net neutrality in the US moves ahead, but we expect (and hope) that a consumer watchdog like the ACCC will be put in charge of protecting US consumer interests (and by extension, Australian online businesses).
We will continue to watch this space to see what happens in the lead-up to the vote on 14 December 2017.
For more information on how the US net neutrality vote may impact on your business, contact one of our commercial law specialists on 1300 565 846.