24. May 2008 · Comments Off on US net neutrality and have your say on future of broadband in Australia · Categories: Broadband, Issues, My personal learning journey, Research, Technologies

This is my longest blog post ever, but the way I see it – the future of the internet is at stake here, so I wanted to gather my thoughts and resources in one spot and ensure I understood what was going on.

First up, it’s all fang’s fault for pointing me towards this “open source documentary” on net neutrality  that links to the Save the Internet site: http://www.savetheinternet.com/

Net neutrality might seem like a US issue, but bear with me here.

Understanding Net Neutrality

Although the documentary and the web site did a reasonable job of explaining the issues, I felt I didn’t get the level of background detail I wanted. I also wanted to educate myself as to what is going on in Australia. So I started digging.

I started off by wanting to get to the background on Net Neutrality that was — well, neutral.  I found a May 2006 report by the (US) Congressional Research Service .

Here’s a summary as I understand it (please jump in and correct me if I need it):

A 2005 decision by the (US) Supreme Court upheld an earlier FCC ruling on the classification of cable and DSL broadband services as information services distinct from telecommunications services.

This ruling meant that neither telephone companies nor cable companies providing broadband services have to adhere to the more rigorous regulations for telecommunications services that impose anti-discrimination, interconnection and access requirements.

Although the FCC adopted a policy statement saying to “encourage broadband deployment and preserve and promote the open and interconnected nature of [the] public Internet” this policy statement has no legal force and there was no call at the time to consider introducing it into law.

Because they are freed from those regulations, service providers feel they should be able to introduce a tiered delivery and payment system for network traffic. Basically – the more you pay, the faster your service gets to the end consumers.

There are two schools of thought — 1) current anti-trust and competition laws should protect from abuse and 2) unless Internet Neutrality is written into law, these organisations can and probably will get their way eventually and the Read Write web will be dead – because the larger, traditional media will get the fast lanes on the information highway and the citizen journo and grassroots video people will be on the dirt roads.

Why should Australians care?

Precedent and mind set.

The people who own the pipes in the US reportedly claim they should get a return on their investment, with the CEO of one company saying that competitors shouldn’t be able to “use (my) pipes for free” http://www.businessweek.com/magazine/content/05_45/b3958092.htm

What’s going on with the pipe ownership in Australia?

In a March 2008 speech at the 2008 Economic and Social Outlook Conference hosted by the Melbourne Institute and the Australian, Australian Competition and Consumer Commission Chairman Graeme Samuel explains that the current copper infrastructure is unbundled, so where this makes economic sense, competitors can attach their own equipment to the exchange to provide different service offerings than those offered by Telstra. Samuel says this competition is “one of the principal forces driving incumbent operators towards continued evolution of networks…”

In March 2008, Telstra lost a case mounted against the Commonwealth, the ACCC and 11 other ISPs fighting the access to its unbundled copper, reportedly saying that this practice “had seen its shareholders’ property taken over without fair compensation.”

Now we get to the future of broadband in Australia: the National Broadband Network (NBN) plan.

This so-called next generation broadband involves a huge roll out of fibre-based networks across Australia.

Telstra plans to tender for this work. A group of Telstra’s competitors, calling themselves the G9 and led by Optus plans to mount their own proposal .

On their website, the G9 consortium (now a new entity calling itself Terria (who’d better get on the stick and register their domain name) claims that due to the nature of the Fibre to the Node structure of the fibre networks, rolling out parallel networks would not make business sense for those who are not awarded the contract.

They propose “structural separation”, which they define as “the entity which owns the network must be different from the entities which sell services delivered over the network in the retail market”.

Apparently, the state and territory Ministers on the Online and Communications Council agree with the G9, as the 15th Communique from the council states “The state and territory Ministers expressed their strong preference for a solution to be operated by a genuine wholesale provider that is separate from any retail service provider.” http://www.occ.gov.au/releases/fifteenth_online_and_communications_council_communique

When this was raised back in October 2007, Telstra reportedly warned that any move to force structural separation on them would “spark class actions from shareholders”, warning “This would mean the government of the day would not be laying fibre, but would instead be bogged down in court.”

This was foreshadowed months earlier. In an August 2007 speech by Phil Burgess, Telstra Group Managing Director, Public Policy & Communications, members of the Rotary Club of Melbourne were reminded “…we estimate that about $800m a year is taken from Telstra shareholders and given to subsidise other competitors in this marketplace because of the low cost pricing. Another problem we have is with the idea that Telstra’s community property. That everybody should kind of have a say in what Telstra does, forgetting that the Government sold Telstra to 1.6 million mums and dads in this country for $65 billion.” (Note, should I sue because obviously childless people such as myself were obviously not given the chance to buy shares?)

It would be premature of the Minister for Broadband, Communications and the Digital Economy Senator Stephen Conroy to say whether he agrees or not, but he says the RFP released on 11 April 2008 calls for an NBN that will:

  • deliver minimum download speeds of 12 megabits per second to 98 per cent of Australian homes and businesses;
  • have the network rolled out and made operational progressively over five years using fibre-to-the-node or fibre-to-the-premises technology;
  • support high quality voice, data and video services including symmetric applications such as high-definition video-conferencing;
  • earn the Commonwealth a return on its investment;
  • facilitate competition in the telecommunications sector through open access arrangements that allow all service providers access to the network on equivalent terms; and
  • enable uniform and affordable retail prices to consumers, no matter where they live.

However, don’t count those lightning quick movie downloads before they hatch (in 2014 give or take a few years if Telstra wins and has to fight structural separation)…

Freelance journalist Stilgherrian comments http://stilgherrian.com/politics/rudd-government-delivers-yesterdays-broadband/ that the 12Mb per second network we’ll eventually be getting will be long out of date before the first fibre is rolled out – especially considering that a company in the UK is currently rolling out (minimum or so it’s claimed)100 Mb per second fibre connections. Of course, it took them 6 years to negotiate with the water companies for access to the sewers and it’s not a national program by any stretch, but at least their **** connection will only be that in literal terms.

Industry and private interest groups are invited to provide submissions on regulatory issues associated with the National Broadband Network — so if you want to have your say, get your submission in by 3.00pm AEST 25 June 2008. All submissions are to be provided to regulatory@dbcde.gov.au

Enquiries about the call for submissions on regulatory issues should be directed to regulatory@dbcde.gov.au.


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