The American Federal Communications Commission (FCC) has voted 3-2 to repeal net neutrality rules – a 2015 Obama administration policy which prevented American ISPs from slowing or blocking websites.

Critics argue the decision opens the way for ISPs to create a ‘pecking order’ for websites and corporations. Certain websites and content could be accessed faster at the discretion of ISPs, creating a tiered system of internet. That means users or websites would have to pay more to speed up their access and distribution.

The system is often equated to the priority boarding lines at airports, where customers can pay more to board earlier than other. Net neutrality laws had previously required ISPs to treat all content equally.

In January this year, Donald Trump appointed Republican commissioner Ajit Pai, a vocal critic of net neutrality to the position of FCC chairman.

What it means for Australia

The decision raises questions over possible implications for Australia which does not have net neutrality protections. Instead Australia relies on consumer law and strong competition among ISPs.

While impacts are unlikely to be felt here in the short term, it is possible increased costs for content providers in the US could be passed on to global customers.

A spokesperson for Minister for the Department of Communications and the Arts, Mitch Fifield, told Which-50 the government strongly supports the lawful, open and unrestricted use of the internet but doesn’t see the need for any additional regulation.

“Australia’s market structure fosters strong retail competition and provides significant consumer choice. This allows consumers who are dissatisfied with their provider to take their business elsewhere. This has meant net neutrality concerns have not been an issue in Australia. Australia’s general competition and consumer laws would be applicable were any concerns to arise regarding net neutrality.”

“Pre-emptively imposing specific regulation could have the effect of restricting legitimate competitive activity and inhibit commercial flexibility and innovation in the industry,” the government spokesperson said.

A spokesman for Shadow Minister for Communications, Michelle Rowland, told Which-50 they are continuing to monitor developments in the US and elsewhere “to ensure Australian policy settings promote the interests of citizens and consumers as technology evolves.”

“Equity and inclusion remain steadfast principles for Labor in guiding Australian communications policy,” the statement said.

Tech companies disappointed by decision

The FCC decision has promoted angry reactions from several tech companies and US politicians, who claim repealing net neutrality will stifle innovation and is an attack on freedom of expression. Netflix said they were disappointed with the “misguided FCC order” and are concerned the decision could harm innovation and civic engagement.

Amazon CTO Werner Vogels said he was “extremely disappointed” in the decision and committed to working with partners to “find ways to ensure an open and fair internet that can continue to drive massive innovation”.

Despite the decision, Google said they “remain committed to the net neutrality policies that enjoy overwhelming public support” and that net neutrality had been successful for “every part of the internet economy”, according to Bloomberg’s Mark Bergen

Facebook chief operating officer, Sheryl Sandberg, described the decision as “disappointing and harmful”. “An open internet is critical for new ideas and economic opportunity – and internet providers shouldn’t be able to decide what people can see online or charge more for certain websites,” she said in a Facebook post.

Microsoft chief legal officer, Brad Smith said the decision jeopardised the current “open internet [which] benefits consumers, business & the entire economy”.

Twitter described the decision to “gut net neutrality rules” as a blow to innovation and freedom of expression, and vowed to continue the fight to protect open internet.

In a company blog post, Mozilla said they were “increadibly disappointed with the decision, made “along partisan lines”.

“This is the result of broken processes, broken politics, and broken policies. As we have said over and over, we’ll keep fighting for the open internet, and hope that politicians decide to protect their constituents rather than increase the power of ISPs,” the author said.

Democrat Senator Bernie Sanders said the decision was an “egregious attack on our democracy” which effectively means the internet will be “for sale to the highest bidder”.

ISP Response

American ISPs, whose actions wil be watched closely following the decision, defended the FCC ruling, arguing it wouldn’t jeopardise an open internet.

An AT&T statement said the company will continue to “provide broadband service in an open and transparent way” and “the internet will continue to work tomorrow just as it always has”.

“We do not block websites, nor censor online content, nor throttle or degrade traffic based on the content, nor unfairly discriminate in our treatment of internet traffic,” the company statement said.

Verizon said it “fully supports the open Internet, and we will continue to do so… our customers demand it and our business depends on it,” according to CNN.

The US Telecom and Broadband Association – the trade association representing broadband service providers including AT&T and Verizon, said it was “a great day for consumers and our innovation economy”.

“America’s broadband providers – who have long supported net neutrality protections and have committed to continuing to do so – will have renewed confidence to make the investments required to strengthen the nation’s networks and close the digital divide, especially in rural communities,” they wrote.

Previous post

Criteo's problems mount as share price falls off a cliff. Apple's privacy stance is biting

Next post

Half of marketers are just guessing when it comes to revenue impact: Study

Join the digital transformation discussion and sign up for the Which-50 Irregular Insights newsletter.