Forcing companies like Netflix to pay up for better bandwidth over broadband services is a more overt form of net discrimination that the US government is likely to want to crack down on, but there are many subtle forms of net discrimination that fly under the radar.
US President Barack Obama's statement on net neutrality is a good start on ensuring that all traffic is treated equally on the internet, and his statement outlines specific areas of focus, including:
- No blocking of legal content online
- No throttling of speeds to access certain sites
- Not allowing ISPs to prioritise traffic of some companies for a fee
- Allowing the Federal Communications Commission (FCC) to apply net neutrality rules for traffic beyond the last mile from the point of interconnect to the end user out to the rest of the internet.
In Obama's statement, he said that telcos shouldn't be picking "winners and losers in the online marketplace for services and ideas". While it is a good, sound concept, in practice, the telcos are already picking what they perceive to be the winners; they just aren't discriminating against the "losers". Yet.
To look at the Australian perspective, for example, Telstra already offers free data for customers to access the Australian Football League and National Rugby League streams of the live matches. This is not something that is available to the other telcos, nor is it available for other sports. The company also offers similar data-free access to its Mobile Foxtel product that allows Telstra customers to stream Telstra's Foxtel service on the mobile network.
This isn't available to Foxtel's competitors, such as Quickflix, Tenplay, or any of the other growing streaming-video services in Australia. Those companies already face an uphill battle in competing to win content from the Foxtel behemoth, and that is without even considering whether customers are more likely to sign up to a service that also costs them more to stream on the Telstra network.
Telstra is also trialling an advance in 4G that it is calling "LANES", which prioritises segments of its commercial 4G network for emergency services at the G20 Leaders Summit in Brisbane this week. Although the trial is solely for emergency services, Telstra has indicated in the past that traffic prioritisation could be a potential business product for the company.
Vodafone last week announced that it would include the cost of a Spotify subscription in its monthly Red plans. Although Vodafone, at this point, isn't offering free data for Spotify services, the free access to Spotify puts the music service ahead of its competitors, such as Rdio.
On Telstra, customers are offered free data to stream music through the mostly defunct Mog brand, which became Beats Music in the US.
iTunes downloads and some ABC iView access don't count towards a user's download quota for iiNet customers, either.
We're moving to an era where the internet access service and pricing are not enough of a point of difference to compete on, and ISPs will need to look to what content or other over-the-top services they can bundle in with a basic internet or mobile service in order to win customers.
Governments should have a role in ensuring that customers are able to choose to use the services they want without being discriminated against, while also ensuring that the dominant market players such as Foxtel do not crowd out the smaller players. But at the same time, telcos should be able to partner with content and service providers to be able to offer something valuable to customers.
Last week, former Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel was asked about the issue of net neutrality, and he said that telcos should be able to discriminate on traffic use.
"I don't know where [the ACCC] stands today ... but back when I was there with the ACCC, I used to liken net neutrality to the use of our highways. You have a multi-lane highway, and you've got big, massive trucks chewing up the bitumen. Those that chew it up the most, those that are using up the infrastructure and causing a limited ability of others to use the same infrastructure, ought to pay more for it," he said.
"I think that runs contrary to the whole view of net neutrality."
But that is a bit of an oversimplification. One way or another, some traffic is going to be more equal than other traffic; it's just a case of making sure competition is preserved, and it is something that consumers ultimately benefit from.