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NBN boss unleashes Australian Net Neutrality debate

Grab some popcorn and watch Netflix justify its data deluge

Network neutrality has never been the flame-bait topic in Australia that it is in America, but that could be about to change, courtesy of the “Netflix effect”.

That's the message delivered yesterday by nbnTM chair Ziggy Switkowski at a Sydney conference yesterday.

Telco newsletter and conference co-organiser Communications Day reported from the NBN Forum conference that Switkowski said: “Net neutrality is a discussion we need to have a very sophisticated debate around in this country. Are all packets of data equal and is this a sustainable concept over the next few years?”

His point is that the arrival of Netflix and its smaller, more local competitors has changed how people use the Internet: already, nbnTM retail service providers (RSPs) are reporting residential monthly downloads around 200 GB; and by 2020, Switkowski believes, 80 per cent of NBN traffic will be streaming video.

The starting point for the debate, at least from the network operators and retailers, will be that streaming represents a shift in a commercial model: traditional broadcast video consumption will be largely replaced by content delivered over broadband networks.

As Switkowski told the conference, both network operators like nbnTM and RSPs need to pour money into their networks to keep the bits flowing. That investment has to be recovered from someone, and – echoing arguments familiar from America's neutrality debate – he seems to be suggesting that some of that should come from the source of the traffic. Which means Netflix and pals.

A decade of retail competition has taught consumers to expect more for less: ten years ago, a typical high-end Internet plan in Australia offered 40 GB of downloads (half of that in off-peak times) for AU$99 per month; today, a 100 GB/month plan at iiNet (for example) costs $29.95 and includes unlimited Netflix usage.

On the other hand, the bundling of zero-rated Netflix is, on its own, a counter-argument in the neutrality debate. It's a simple competitive decision that all retailers are making: the over-the-top services that keeps network engineers awake at night are also a fine way to attract and retain customers.

It's also worth noting that the content distribution networks (CDNs) that stage all that video, getting it closer to customers and reducing the load on Australia's relatively slim links to the global Internet, are a cost to content owners like Netflix.

So in debating whether a network operator or a retailer should be able to apply differential policies to traffic sources like Netflix, we need to remember that they already contribute to funding network infrastructure.

There's also the chicken-and-egg-and-chicken (not a misprint) debate about whether usage shapes network architecture, or vice-versa. Do we download more because that's how Internet plans are structured, are plans structured to reflect our behaviour, or – the third factor – is asymmetry imposed on us by simple physics?

Zwitkowski told the conference uploads remain at between 15 and 17 GB per month, per user, and this seems to be steady in spite of the massive growth in downloads – so they're a falling proportion of total traffic.

Does the “Internet as home entertainment pipe” view trivialise the Internet? Perhaps, up to a point: but it's what has happened. While greybeards like myself debate whether Symmetrical Network Services Will Change the World, most people have voted with their URLs and apps.

That does not, however, provide a definitive end of the neutrality debate. Consumer advocates in Australia will still argue that “I've paid for a connection, and I shouldn't have to pay extra to use the connection”, and they'll be just as right in 2020 as they are today.

It's also fair to ask why Switkowski has chosen to set the hounds running on this particular chase.

Although the NBN's tariffs are structured around usage, user downloads are relatively peripheral to its economics, mostly dictating the scale of its backbone infrastructure.

The costs fall more heavily on the retailers, who still have to negotiate with a relatively small pool of Internet transit providers to buy their precious gateways to the rest of the world. ®

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