What is net neutrality and how does it affect Australians?

Will changes to Internet regulations mean slower speeds? Here's what you need to know.


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What you need to know

  • Net neutrality protects against Internet providers charging higher rates for specific types of Internet content.
  • Without net neutrality, Internet providers could prioritise traffic to websites or services they have a financial stake in.
  • While net neutrality was rooted in US law, its repeal could set precedent for Australian companies or businesses with operations in America.

Net neutrality's short-lived reign is over. Its time waiting on the chopping block and its eventual death in 2018 rocked the boat a little in the US and around the rest of the world, but what is net neutrality and how does its demise in the US affect Australians?

What is net neutrality?

In short, net neutrality is the principle that all data on the Internet must be treated equally by Internet service providers (ISPs), so long as it's lawful. This means that everything from Reddit to YouTube to the New York Times is sent at the same speed, without an extra fee required.

In 2015, the Federal Communications Commission in the US reclassified ISPs as Title II "common carriers" under the Communications Act of 1934, allowing the regulatory agency to regulate ISPs as utilities and ushering in the age of net neutrality.

The Title II classification prohibited these providers from blocking access to lawful content, slowing down (throttling) users' connection to content online or speeding up particular traffic for a fee. For instance, a provider couldn't stream videos from its own service faster than those from rivals.

Net neutrality was repealed by the FCC in December 2017 when the decision was made to reverse Title II classification, and the "Open Internet rules" expired on 11 June 2018.

Why was it repealed?

The Federal Communications Commission's new chairman, Ajit Pai, voted against the Open Internet Order back in 2015, arguing that it "imposes intrusive government regulations that won't work".

Pai expressed his concern that the provisions in Title II hurt small ISPs and stated that some experienced issues with their "ability to obtain financing" following the reclassification, though other small ISPs, in a letter sent to the chairman, urged the FCC to retain the Title II classification, collectively stating that they "have encountered no new additional barriers to investment".

Additionally, Pai argued that over-regulation and "basic economics" are a contributing factor to the demise of net neutrality rules, stating: "The more heavily you regulate something, the less of it you're likely to get."

Who was opposed to the repeal?

There was opposition against the move from both sides of politics. 76% of Americans support net neutrality principles, according to a Mozilla/Ipsos poll.

Many made the case that repealing the Title II classification would allow for telcos to charge extra for certain websites in bundles, similar to how pay TV works. Others argued that it would allow big US ISPs like AT&T, Comcast and Verizon to prioritise network traffic for sites they owned.

For example, Netflix competitor Hulu is partially owned by both AT&T and Comcast, so, without net neutrality, they could boost speeds to their own site and throttle users on competing services.

US states, the District of Columbia (DC) and "Internet companies" were among the many groups that opposed the action, too. Mozilla, the developers of the popular web browser Firefox, Vimeo and 23 Attorneys General launched legal action against the FCC to challenge the legality of the decision and for the "wholesale abdication" of its responsibilities.

Some states, such as Washington, enacted their own net neutrality legislation in response, barring ISPs from blocking or slowing web traffic.

What replaces net neutrality?

The Open Internet Order was replaced by the "Restoring Internet Freedom Order", which the FCC claims will promote investment in broadband infrastructure and prioritise consumer protection and transparency.

How does its death affect Australians?

Changes to net neutrality regulations in the US won't directly affect how Australians connect online, but it could present challenges to those trying to conduct business in the country and may see consumers footing the bill for increased operating costs for services operating in the US.

A lack of explicit protections could be bad news for big, data-hungry businesses like Netflix, as ISPs could force them to cough up for prioritised traffic and/or for users to freely access their services on certain plans. Increased costs thousands of kilometres away could lead to an increase in the price of our favourite digital services at home.

The practice of blocking or prioritising certain data presents a huge problem for small businesses and the startup sector, as the previously prohibited division between a "fast lane" for companies and individuals who pay a premium, and a "slow lane" for everyone else would give those already established an unfair advantage. Locally owned and operated businesses selling on to customers in the US would have to be wary of this potential roadblock to growth, too.

Looking for a fast internet plan? Check out some options on our Internet Plans Finder to see what's available at your address.

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