Net neutrality – the debate rages on

In the eyes of net neutrality advocates, all data was created equal. They maintain that Internet Service Providers (ISPs) shouldn’t differentiate between the sources of data and that when you type in a website address it should be delivered at the same speed no matter where, or who, the content comes from.

Our priority as Australia’s number two ISP is to provide awesome customer service and ensure our customers enjoy a seamless experience online whatever it is they need from an Internet connection.

In the US, the topic has been hotly debated for years. There, it is more common for consumers to sign up to packages offering truly ‘unlimited’ downloads and the network owners are fighting for the right to prioritise content delivered on their network, whether that’s prioritising their own content or charging users a premium for faster delivery of certain content, such as videos, news or entertainment.

This, in effect, creates a two-tier system on the Internet, long regarded by many as the last neutral media territory.

Despite the introduction of net neutrality rules by the Federal Communications Commission (FCC) in December 2010 offering a compromise, differentiating between fixed-line providers and the wireless Internet, the issue is still a contentious one in the US.

Earlier this month, carriers Verizon Communications and Metro PCS filed a court brief in the US arguing that broadband providers should have “editorial discretion” to prioritise their own web content, much like a newspaper has the right to decide where and when it publishes content. They argue that the FCC’s net neutrality rules from 2010 limit their right to free speech, an argument which many legal experts feel holds no weight.

One thing is for sure, this will remain a hot potato in the US and for ISPs around the globe who watch with interest as the legal fight unfolds.

The Australian view

Service providers in favour of a two-speed Internet argue that there is limited capacity on the internet and that those using the most bandwidth by delivering rich content or transferring large files should pay more.

In Australia, we have a different business model for the Internet. ISPs operate on a pay-as-you-go model, which also shapes the consumer market. Here, consumers can choose a plan with upload and download quotas to fit their usage and pay according to their needs – the more you use, the more you pay.

This is the best model for the Australian market where the majority of our traffic is from overseas, and is also the best model for all but a handful of heavy Internet users.

Consider these figures – if Australia was to switch to an unlimited model and offer users unlimited downloads, just 3% of users would account for 50% of all downloads. Quotas are designed to be an effective pay-as-you-go system to ensure users only pay for what they use and for most Australian consumers, this is the best business model for the Internet.

Real net neutrality

Operating a quota based business model ensures we’re not responsible for policing activity online – our customers pay a fair price for the services they receive and we can focus on more important issues than where their traffic is coming from.

While US providers argue about a two-tier system, our priority is to provide awesome customer service and ensure our customers enjoy a seamless experience online, whatever it is their Internet connection means to them.


  1. Toby says:

    How do you relate QoS provisioning for say providing optimised packet delivery for RTP traffic with Net neutrality? That is, do you see this as going against a net neutrality point of view?

    • John Lindsay says:

      @Toby, you can run QoS in your network to optimise customer experience or you can use it to shake down content owners by pessimising performance of their traffic unless they pay you. One of those would be in line with iiNet’s values and the other would not.


  2. Lachlan Hunt says:

    This is nonsense. Australia’s model of capped usage limits with higher prices for higher caps, and of ISPs including yourself offering free zones where such data doesn’t count towards the monthly quota is exactly the problem that net neutrality advocates aim to deal with. It treats data from companies who choose to partner with you to get their content in the free zone as priviliged compared with everyone else, and similarly with other ISPs.

    When I was an iiNet customer, the caps were ridiculously low and the prices were too high for me to afford the next tier. Since I worked in the web development industry, I worked from home and depended on having reliable internet access. It sucked that even after just 2 or 3 weeks of careful usage, I got very close to the limit and often exceeded it and finding myself capped to unworkable speeds. I understand that the situation has improved slightly since then with higher usage caps, but still not ideal.

    I’ve since moved over to Europe where the fees are based on the chosen speed with no usage caps. (This the reason I’m personally no longer a customer, but my parents still are.)

    I’m really hoping that you will eventually wake up and realise that usage caps go together with non-neutral internet, and with the introduction of the NBN, which brings both higher speeds and capacities, you should be able to lower prices, abolish usage caps and offer a fair model with pricing tiers based on the chosen speeds.

  3. John Lindsay says:

    @Lachlan Hunt, the NBN has a $22 per megabit “CVC” access cost that adds about $10 per 100 gigabytes to retail ISP costs. Tiered usage pricing is almost guaranteed by the NBN’s cost model.

    Fixed prices per speed is what caused this problem in the first place. When average use rises faster than unit costs fall you have a squeeze. You either raise your prices, lower your costs or go out of business.


  4. Nat says:

    Yeah Yeah Yeah… another ‘beautiful’ excuse for iiNet to earn more money.

    If most developed cities/countries in the world can do it, as well as TPG, and Dodo can do it in Australia, why can’t iiNet? In this globalization era, are Aussie really that much different from the rest of the world?

    STOP hiding the fact that iiNet is trying to earn as much money as possible.

    • John Lindsay says:

      @Nat, you may notice that iiNet, Westnet and Internode hold the three highest rankings for customer satisfaction across residential and business customers in various surveys. Quality comes at a cost.


  5. Being in the United States, I can say with a qualified voice Mr. Lindsay is fixing the facts around his argument.

    The Net Neutrality debate here in the States has nothing to do with a “capacity crisis” or exaflood of data usage by a handful of customers.

    This is about providers seeking a redundant income stream from content producers who either agree to pay more for content distribution on an ISP’s network, become a “preferred content partner” with the ISP, or face the prospect of having their traffic de-prioritized in favor of the first two.

    There is zero evidence that ISPs need to have additional revenue to handle traffic, because their costs have been dropping for years and their networks have increasingly been paid off. We do read those financial reports!

    In fact, customers already compensate ISPs to manage that traffic as part of their monthly broadband bill. Some ISPs want to be paid twice.

    We have learned dealing with this issue for several years that ISPs are terrified of their own argument if carried to its fullest extension. If iiNet wants customers to fairly pay for only what they use, they should be billing them on exactly that basis. A flat charge per gigabyte — no allowances/quotas, no penalty overage fees or speed throttles, no wasted unused quota at the end of the month.

    But they don’t dare. If you charged $1/GB (still a crime-gouge compared to the wholesale price), those customers currently paying $30 for up to 20GB service might suddenly be paying $5-15 instead.

    Hey, that is fair, right? But that isn’t what iiNet has on offer and this isn’t what this debate is *really* all about.

    Don’t use the United States’ Net Neutrality debate as a scapegoat to scare customers into accepting the Internet Overcharging schemes currently in place as the lesser of two evils.

    If you asked your customers whether they prefer unlimited service or your current cap system, most will clamor for unlimited, even if it costs them a bit more, just for the peace of mind of never facing overage charges or speed throttles.

    This argument has never been about capacity. It’s about what it always is: money.

    Phillip M. Dampier
    Editor, Stop the Cap!

    • John Lindsay says:

      @Phillip Dampier, being in Australia I can say that Americans have never understood how expensive it is for service providers to connect to the global internet from Australia. American networks contribute NOTHING to these costs yet enjoy the benefits of access to Australian internet users.

      American service providers got the formula wrong. They went for all you can eat and ended up with a salad bar not a restaurant.

      We would love to remove quotas because they are expensive to enforce but without them most of our subscribers would have to pay more for their internet service or see their online performance drop sharply.


      • Ricky says:

        @John Lindsay, Your last sentence doesn’t even make sense. Quota is expensive to enforce so if you don’t enforce it, wouldn’t it lower the cost hence subscriber can pay less for their internet service?

        Nonetheless, people would rather pay slightly more for unlimited.

  6. jason says:

    the way I look at it is this we need the backbone in capacity now not, with gige becoming more practical in the requirement 10gb backhaul will soon be needed as to have 20 or more devices online at once is going to be common when you look at family being connected to the net, within 10 years schools from year 1 to year 12 will be computer driven and we need to look at what we run as a complete network solution..

    though at the momment we seem to treat fibre as we do copper in of cost and deployed solutions, reality in 10-15 we will not be tb plans will be talking 100-1000tb and beyond, a 2 tier speed systen is a retarded joke and should never be put into action because we need proper bandwidth and not the chump change we’re reciving..

    my i pay for 2 top adsl2/ndsl plans iinet provides me yet I don’t see the speeds i pay for and haven’t seen for over 2 years…

    so the plan to introduce a 2 or more tier system is just going to botleneck the connection, lets face it fibre runs rings around copper it’s pointless trying to sell outdated copper basd dsl plan methods when everyone well know 1gb plans are noththing but chickens feed on fibre given the fibre could likely do 100+tb of speed so reality co’s offering internet connections should start looking at migration higher gb plans and be done rubbernecking knowing this onlt stalling for offering low quota plans…..