Most countries, including Australia, don’t have to fear internet quality problems in the same way as might be the case in the USA.
The US competition watchdog has little power to hold telcos accountable for the nature of their broadband services.
Back in 1996 broadband was classified as a content service and not a telecom service.
So, for example, if a telco wants to provide preferred access to Google, it can sell them a superior broadband service, which could create a two-speed internet service – one for those who are able to pay the premium (their services will get priority and higher speed), and the other for all the other content providers who are not able to pay those premiums, and these content providers could be relegated to the slow speed internet lane. This offcourse facilitates the most powerful content providers who can now together with the telcos discriminate without any intervention from the regulator.
Because of the lack of regulatory protection in relation to broadband the United States – under President Obama and the FCC Chief Tom Wheeler – created a bandage solution in the form of net neutrality, aimed at protecting consumers against telcos exploiting this ‘content’ situation. These protections have now been removed.
The incumbents were opposed to net neutrality, as it would stop them from exploiting the generous content status that they have, which allows them to prevent any serious retail broadband competition since they don’t have to make broadband capacity available on a wholesale basis.
The situation in all of the other developed economies is totally different. Broadband is part of the telecoms regulatory regime and this has created a well-functioning competitive retail market in Australia, with over 50 providers.
Competition, not bandage solutions such as net neutrality, is the solution to the American problem. If there is sufficient competition the incumbents can’t abuse their dominant position that has the potential to create a two tier broadband system. Furthermore, net neutrality is a rather blunt tool; one would like to allow providers to create the best possible broadband configuration for the services that they want to develop and net neutrality rules would make that more difficult.
Even if, in more competitive markets, incumbents were be able to create a two-tiered access system, if such a service is deemed to be anti-competitive the regulator can step in and stop them.
As broadband is now again outside the protection of the US regulator (FCC), the big telcos can exploit the fast lane/slow lane internet system if they want to.
It is clear that under President Trump there is little interest in providing the regulator with the powers to intervene in such situations.
For many years there has been a serious ‘conflict of interest’ within US politics, whereby the three mayor incumbent telcos (who call themselves ISPs) are giving senators and congressmen an incentive to protect their interests. Over $100 million is spent annually on lobbying. The politicians are given this money for community projects etc, and voting against the interest of the incumbents will see an end to such handouts.
It is important for all countries to keep a close eye on anti-competitive behaviour, but, because of much better-functioning competitive markets, it is highly unlikely that such misuse of market power is possible anywhere outside America (in developed economies).
One of the reasons incumbents give to get rid of regulation is that it hampers competition. Being one of the least regulated telecoms market in the world, the country has dropped on the international broadband ladder. Twenty years ago it was in the top 3 or 5 but it now resides at around position 15 (depending on what is measured, and by whom), so that argument doesn’t cut it. On the other hand, at least 15 of the countries in which broadband is treated as telecoms are providing a better broadband service than the one available in the USA.
The financial market in the USA has had a subdued reaction to the announcement. Because telecoms regulations is such a hot political potato they don’t see the current ruling as a final solution. It is very likely that under the next Administration new regulations will be introduced, and this uncertainty is not stimulating the investments that are needed in the American telecoms market.