Net Neutrality, Netflix and New Zealand

You don’t know what you’ve got till it’s gone, according to Joni Mitchell’s great song and also according to everybody fighting the good fight to retain Net Neutrality. But like everything that matters about ensuring the Internet remains free and not captured by monopolists and dictators, you have to look to the United States. Right now rules put in place by the previous administration may be under threat by the head of the Federal Communications Commission (FCC), who was appointed by President Donald Trump.

The new FCC boss, Ajit Pai, has publicly stated he wants to take a “weed whacker” to current laws enshrining New Neutrality. Let’s auction off the data to the highest bidder. Let’s not, please. That way leads to stifling innovation and restricting the ability for everyone to have a fair chance of being downloaded.

And that is pretty much what Reed Hasting, CEO of Netflix, said in 2012, when he went into bat for Net Neutrality. That was less than a year after his company came up with an incredibly innovative business model. A model that enabled customers to download any and all of Netflix’s content, any and all of the time, for less than $10 a month. And so you might think Hastings would hate the new threat to Net Neutrality but, according to news reports, he is “not too worried”.

So should New Zealand be worried by threats to Net Neutrality? It’s a question that has three answers – no, possibly, definitely.

First the “no”: NZ’s fixed-line telco infrastructure is structurally separated so that the companies that own the lines (Chorus, Ultra Fast Fibre, Enable Networks and Northpower) are not allowed to be retail providers. If you don’t own the value chain end-to-end there is no incentive, or at least it is extremely difficult, to favour the traffic on your network.

Then there is the “possibly”: Owning most of the value chain could be just as good as owning all of it – which may explain why Vodafone and SkyTV are heading to court to challenge the recent Commerce Commission decision blocking the merger of the two companies. Strategically deploying SkyTV’s exclusive premier sport content could potentially enable Vodafone to capture a massive subscriber base at that unique point in time when users switch from copper to fibre.

Finally the “definitely”: Compared to fixed line broadband (especially fibre- based connectivity), 4G is a distant second. But mobile technology advances in leaps and bounds and 5G has a lot of promise. The two major mobile network owners in NZ – Spark and Vodafone – own their networks end-to-end. As tech commentator Bill Bennett puts it: “The recent change in the US climate might embolden companies here to follow suit.”

Hope not.

This topic was discussed during my regular tech commentary spot on Radio NZ here.

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