Most consumers think that their electronic bits sent across the internet are just that - bits of information that are simply routed to their intended destination. However, telecommunication companies have a different view - many treat or want to treat the data differently depending on what’s inside those packets. ISPs and operators of the infrastructure often want to discriminate against certain types of traffic, such as VoIP, Skype or BitTorrent. This form of discrimination might be the bandwidth available to the type of traffic, or the location or user, and there are other types of net discrimination. This is a battle that has gone on for years, and it’s called “net neutrality.” Some time ago the USA Federal Communications Commission issued a ruling that telecommunication companies must treat all types of traffic equally. However, after a challenge by Verizon the US Court of Appeals DC Circuit held on 14 January 2014 that the FCC does not have the power to make such an order.
Why would a telecom coy want to discriminate? If your ISP is also a phone provider, it might not want to offer great service for cheap VoIP or Skype calls. ISPs with poor infrastructure that can only handle web browsing and email might want to throttle file downloads over ftp or BitTorrent. An ISP who also sells cable tv may want to offer a lousy YouTube or other IP video experience. These reasons are often clouded in arguments that the throttled services are damaging quality of service to other customers or are somehow unfair, but it usually comes down to protecting business opportunities.
In the world of free markets an ISP who applies net discrimination would only survive if it either offered other great services, or it was a monopoly or duopoly. You can see where this argument is going in relation to Australia, because in many Australian towns even a duopoly would be an improvement. Despite this, we have been fortunate to date.
Why is net neutrality important? It is mostly because it lets the consumer decide what is important. An immobile person might find it fantastic to have the array of YouTube videos on offer, whereas I rarely watch it. On the other hand, I often download gigabytes of software from my Microsoft TechNet subscription at 20 Mb/sec that dwarfs any YouTube watching. Teenagers will play online for hours and only use 50 MB/hour. An immigrant in a low paying job will want to call home frequently, and can do it cheaply with VoIP. Whose use is “better” or more deserving?
Net discrimination has been lurking in the wings in Australia for a while, but it hasn’t drawn too many complaints. We’ve always had access to the maximum speed possible for our location, but what about the NBN? Does it discriminate by user? Under Labor and Coalition governments it has never treated consumers equally on price. Many/most consumers think they are going to get a 100 Mb connection - but they’re not unless they pay for it. The NBN is intentionally speed throttled depending on how much you pay, which is very different to consumer experience to date. Apart from some cable users, until the NBN ISPs have offered same speed to all customers on a plan, and the only difference was the amount downloadable during the month. With the NBN both speed and downloads are in play; the entry speed is 12 Mb/s on Tier 1 (as opposed to, say, my Optus cable of 20 Mb/s), and the widely advertised 100 Mb is only available on Tier 5. By way of example, as I write, Optus is offering an NBN bundle of unlimited calls and 200 GB of download, but it’s only on Tier 1. I’m currently on Optus cable at nearly twice the speed, more than double the download, unlimited calls, and I pay $15/month more...