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Personally, I think zero rating is a good thing, especially as it operates in the Australian environment (or, at least, how it has operated previously). It has

Personally, I think zero rating is a good thing, especially as it operates in the Australian environment (or, at least, how it has operated previously). It has largely been consumer positive, allowing premium tier ISPs to differentiate themselves by making the effort to peer with service providers, and consumers benefit from the free quota. There are some distasteful uses though - where there are exclusive peering agreements, particularly around sporting events. All in all, I think the CRTC has taken a pretty good approach. Perhaps the third-party only rule should be extended to refusing exclusivity arrangements, but a complete ban is over the top in my opinion - it discourages passing on savings made by peering with companies to consumers.

amazon_not 12y ago
> Personally, I think zero rating is a good thing, especially as it operates in the Australian environment (or, at least, how it has operated previously). It only feel like a good thing because Australia has an abnormal telecom market which includes such strangeness as quotas even on fixed broadband. Without quotas zero rating is a non-issue.
sbarre 12y ago
The article makes the correct point that even if the upside is access to more services for now, zero-rating effectively favours big companies and big services, (who have the money and time to negotiate these deals with carriers and ISPs) and removes the "level playing field" which most people believe is at the core of the Internet and fuels innovation and allows startup services to thrive and grow.
- IBM 12y ago
  There's no level playing field in business as it is. Incumbents have the advantage of having more resources than start-ups, that's what makes disruption hard. Saying zero rating shouldn't be allowed is worse for me as a consumer, I'd definitely like it if music streaming apps I use made deals with my wireless carrier so I could stream as much as I wanted. You (and startups) are basically asking for a subsidy that doesn't exist for anyone else. No one is giving Jolla a hand in taking on Samsung or Apple in the phone business.
  - Nullabillity 12y ago
    Well, either caps serve a point or they don't. If they do (by incentivizing people to conserve bandwidth on, say, mobile connections) then they need to be consistently enforced, with no exceptions. If they don't serve a purpose for consumers then they should be abolished anyway. If Spotify and WIMP use equal amounts of data then they should cost you, the consumer, the same in transfer costs. Anything else just ends up with all consumers subsidizing the incumbents no matter what vendors they choose (like the often criticized "Microsoft tax"), unless they only go with startups that do not have these agreements in place (yet). > You (and startups) are basically asking for a subsidy that doesn't exist for anyone else. No one is giving Jolla a hand in taking on Samsung or Apple in the phone business. Oh yeah, let's never try to improve things in new markets that work differently.
  - golemotron 12y ago
    You should just say that you don't buy the argument of net neutrality. The intent is that network access is non-discriminatory. ISPs will not be allowed to offer special deals that benefit one service provider over another. It's not a subsidy, it's treating bandwidth as a regulated utility. You can choose to imagine cellphone hardware as a utility but clearly it is not.
    - JoshTriplett 12y ago
      So, an ISP that makes a deal with a content provider to host a server caching the content provider's data on their network, specifically to improve bandwidth and reduce transit costs, should not be allowed to pass on that savings to the customer, and should instead be forced to pocket it all themselves?
      - wtallis 12y ago
        They shouldn't pass on the savings to just some of the customers; there's no reason they can't pass on the savings to all of their customers. After all, everyone benefits: those using the service with the CDN node get a faster path to that content, and everyone else gets a less congested path to the rest of the internet.
vidarh 12y ago
Without zero-rating, ISPs still have a strong incentive to make the effort to peer with service providers because it cuts their transit costs. The article points out the big downside: Zero rating takes away a strong incentive to raise bandwidth caps, as low bandwidth caps makes it more attractive for content providers to negotiate zero-rating deals. The net result is a market heavily distorted in favour of a small set of major content providers. > it discourages passing on savings made by peering with companies to consumers. Cellphone data costs rarely have much relation to transit cost. Ex. my provider in the UK offers 2GB at 20 pounds a month. The actual data cost from a really expensive transit provider in a non-carrier neutral data centre for 2GB is about 7p. 0.07 pounds.... With some peering, decent volume, and sourcing bandwidth in a carrier neutral location where there's decent competition would bring that down to a tiny fraction.
mcbridematt 12y ago
To give some context, zero rating in Australia came about as a response by smaller ISPs to the 'Gang of Four' 'cartel' of large telcos, who have settlement-free domestic peering between themselves[1], and until ~2009-2010, had a monopoly over international transit (via ownership of submarine cables to the US) Australia is a country which imports the majority of its content (submarine cables are not cheap), so smaller ISPs have an incentive to direct eyeballs to 'friendly' content sources - those who peer at major peering exchanges locally, or directly. At least with the independent providers, this has been used for good - unmetered Linux mirrors, Steam, Netflix - as these providers do not have any content of their own, unlike Telstra (who holds 50% of Foxtel, alongside Newscorp). [1] this 'cartel' was created under pressure of the competition regulator/ACCC in the late '90s, ironically. The criteria isn't based on any merit, just the largest market share holders at the time.
- marcosscriven 12y ago
  I lived and worked in Sydney for a year or so, and used iiNet while I was there. They had a mirror of free software, and also zero-rated most iTunes content. With most ISPs there having caps (mine was just 100GB), it was difficult to not see this as a benefit, but overall of course it's far from ideal. The other problem was just terrible speeds; best I could get in a central district was ADSL2+, with about 16/0.8 mbit d/u, and that's not including the terrible latency issue you had to deal with for a whole host of US and EU based websites and services. Then again, I'm back in London now with a 150/15 mbit d/u connection for under £30, no caps in sight.
netcan 12y ago
These sorts of conventions are rarely good for consumers in the mid-long term. They're like dealer financing, free device contracts, introductory rate loans. They shift price around in a way that creates a local maxima or suboptimal equilibrium.
fweespeech 12y ago
> Personally, I think zero rating is a good thing, especially as it operates in the Australian environment (or, at least, how it has operated previously). > "Zero rating isn't great for consumers, as it has the potential to distort consumer choice in favour of choices selected by an ISP," Netflix spokesman Cliff Edwards says. "We'll push back against such efforts, but we won't put our service or our members at a disadvantage." I think you just don't see the problems it creates. > It has largely been consumer positive, allowing premium tier ISPs to differentiate themselves by making the effort to peer with service providers, and consumers benefit from the free quota. They already have the incentive of the fact if they don't peer with service providers, they won't actually be able to connect you to the rest of the internet at a reasonable speed. Australia's market for the internet is worse than the US because of things like this distorting it + the distance from the rest of the world. I would never setup a server in Australia because of the ISPs. I would stand them up on the west coast of the US instead precisely because of their behavior. I think you don't really understand how much the ISPs of Australia have made the entire Australian market completely uncompetitive with the rest of the world. Here is a random example of a company that operates in Australia and abroad. https://www.vultr.com/pricing/ https://www.vultr.com/pricing/ > Bandwidth quotas listed are for North American and European locations. Overage is priced at $0.02/GB in North America, $0.02/GB in Europe, $0.05/GB in Tokyo and $0.10/GB in Australia. Full plan details are listed on the customer portal. Why do you think Australia costs $.10/GB while the rest of the world [outside of Tokyo] costs $.02/GB? > All in all, I think the CRTC has taken a pretty good approach. Perhaps the third-party only rule should be extended to refusing exclusivity arrangements, but a complete ban is over the top in my opinion - it discourages passing on savings made by peering with companies to consumers. It has the opposite effect. It makes things more expensive. The only reason it appears "cheaper" in the Australian market is because they decided to screw not-consumers in the Australian market even harder.
patcon 12y ago
I have to disagree. It limits new entrants, as new entrants can't get into the large agreements easy enough to have a fighting chance. You mention sports, but that's a total anomaly, because upstart sports franchises are not common and they tend to be big entrenched players anyhow, due to the massive physical infrastructure required to run a league. Sporting events is just not a good example of why zero-rating should be any sort of norm. And I can't think of a good one.

amazon_not 12y ago

> Personally, I think zero rating is a good thing, especially as it operates in the Australian environment (or, at least, how it has operated previously). It only feel like a good thing because Australia has an abnormal telecom market which includes such strangeness as quotas even on fixed broadband. Without quotas zero rating is a non-issue.

sbarre 12y ago

The article makes the correct point that even if the upside is access to more services for now, zero-rating effectively favours big companies and big services, (who have the money and time to negotiate these deals with carriers and ISPs) and removes the "level playing field" which most people believe is at the core of the Internet and fuels innovation and allows startup services to thrive and grow.

IBM 12y ago
There's no level playing field in business as it is. Incumbents have the advantage of having more resources than start-ups, that's what makes disruption hard. Saying zero rating shouldn't be allowed is worse for me as a consumer, I'd definitely like it if music streaming apps I use made deals with my wireless carrier so I could stream as much as I wanted. You (and startups) are basically asking for a subsidy that doesn't exist for anyone else. No one is giving Jolla a hand in taking on Samsung or Apple in the phone business.
- Nullabillity 12y ago
  Well, either caps serve a point or they don't. If they do (by incentivizing people to conserve bandwidth on, say, mobile connections) then they need to be consistently enforced, with no exceptions. If they don't serve a purpose for consumers then they should be abolished anyway. If Spotify and WIMP use equal amounts of data then they should cost you, the consumer, the same in transfer costs. Anything else just ends up with all consumers subsidizing the incumbents no matter what vendors they choose (like the often criticized "Microsoft tax"), unless they only go with startups that do not have these agreements in place (yet). > You (and startups) are basically asking for a subsidy that doesn't exist for anyone else. No one is giving Jolla a hand in taking on Samsung or Apple in the phone business. Oh yeah, let's never try to improve things in new markets that work differently.
- golemotron 12y ago
  You should just say that you don't buy the argument of net neutrality. The intent is that network access is non-discriminatory. ISPs will not be allowed to offer special deals that benefit one service provider over another. It's not a subsidy, it's treating bandwidth as a regulated utility. You can choose to imagine cellphone hardware as a utility but clearly it is not.
  - JoshTriplett 12y ago
    So, an ISP that makes a deal with a content provider to host a server caching the content provider's data on their network, specifically to improve bandwidth and reduce transit costs, should not be allowed to pass on that savings to the customer, and should instead be forced to pocket it all themselves?
    - wtallis 12y ago
      They shouldn't pass on the savings to just some of the customers; there's no reason they can't pass on the savings to all of their customers. After all, everyone benefits: those using the service with the CDN node get a faster path to that content, and everyone else gets a less congested path to the rest of the internet.

vidarh 12y ago

Without zero-rating, ISPs still have a strong incentive to make the effort to peer with service providers because it cuts their transit costs. The article points out the big downside: Zero rating takes away a strong incentive to raise bandwidth caps, as low bandwidth caps makes it more attractive for content providers to negotiate zero-rating deals. The net result is a market heavily distorted in favour of a small set of major content providers. > it discourages passing on savings made by peering with companies to consumers. Cellphone data costs rarely have much relation to transit cost. Ex. my provider in the UK offers 2GB at 20 pounds a month. The actual data cost from a really expensive transit provider in a non-carrier neutral data centre for 2GB is about 7p. 0.07 pounds.... With some peering, decent volume, and sourcing bandwidth in a carrier neutral location where there's decent competition would bring that down to a tiny fraction.

mcbridematt 12y ago

To give some context, zero rating in Australia came about as a response by smaller ISPs to the 'Gang of Four' 'cartel' of large telcos, who have settlement-free domestic peering between themselves[1], and until ~2009-2010, had a monopoly over international transit (via ownership of submarine cables to the US) Australia is a country which imports the majority of its content (submarine cables are not cheap), so smaller ISPs have an incentive to direct eyeballs to 'friendly' content sources - those who peer at major peering exchanges locally, or directly. At least with the independent providers, this has been used for good - unmetered Linux mirrors, Steam, Netflix - as these providers do not have any content of their own, unlike Telstra (who holds 50% of Foxtel, alongside Newscorp). [1] this 'cartel' was created under pressure of the competition regulator/ACCC in the late '90s, ironically. The criteria isn't based on any merit, just the largest market share holders at the time.

marcosscriven 12y ago
I lived and worked in Sydney for a year or so, and used iiNet while I was there. They had a mirror of free software, and also zero-rated most iTunes content. With most ISPs there having caps (mine was just 100GB), it was difficult to not see this as a benefit, but overall of course it's far from ideal. The other problem was just terrible speeds; best I could get in a central district was ADSL2+, with about 16/0.8 mbit d/u, and that's not including the terrible latency issue you had to deal with for a whole host of US and EU based websites and services. Then again, I'm back in London now with a 150/15 mbit d/u connection for under £30, no caps in sight.

netcan 12y ago

These sorts of conventions are rarely good for consumers in the mid-long term. They're like dealer financing, free device contracts, introductory rate loans. They shift price around in a way that creates a local maxima or suboptimal equilibrium.

fweespeech 12y ago

> Personally, I think zero rating is a good thing, especially as it operates in the Australian environment (or, at least, how it has operated previously). > "Zero rating isn't great for consumers, as it has the potential to distort consumer choice in favour of choices selected by an ISP," Netflix spokesman Cliff Edwards says. "We'll push back against such efforts, but we won't put our service or our members at a disadvantage." I think you just don't see the problems it creates. > It has largely been consumer positive, allowing premium tier ISPs to differentiate themselves by making the effort to peer with service providers, and consumers benefit from the free quota. They already have the incentive of the fact if they don't peer with service providers, they won't actually be able to connect you to the rest of the internet at a reasonable speed. Australia's market for the internet is worse than the US because of things like this distorting it + the distance from the rest of the world. I would never setup a server in Australia because of the ISPs. I would stand them up on the west coast of the US instead precisely because of their behavior. I think you don't really understand how much the ISPs of Australia have made the entire Australian market completely uncompetitive with the rest of the world. Here is a random example of a company that operates in Australia and abroad. https://www.vultr.com/pricing/ https://www.vultr.com/pricing/ > Bandwidth quotas listed are for North American and European locations. Overage is priced at $0.02/GB in North America, $0.02/GB in Europe, $0.05/GB in Tokyo and $0.10/GB in Australia. Full plan details are listed on the customer portal. Why do you think Australia costs $.10/GB while the rest of the world [outside of Tokyo] costs $.02/GB? > All in all, I think the CRTC has taken a pretty good approach. Perhaps the third-party only rule should be extended to refusing exclusivity arrangements, but a complete ban is over the top in my opinion - it discourages passing on savings made by peering with companies to consumers. It has the opposite effect. It makes things more expensive. The only reason it appears "cheaper" in the Australian market is because they decided to screw not-consumers in the Australian market even harder.

patcon 12y ago

I have to disagree. It limits new entrants, as new entrants can't get into the large agreements easy enough to have a fighting chance. You mention sports, but that's a total anomaly, because upstart sports franchises are not common and they tend to be big entrenched players anyhow, due to the massive physical infrastructure required to run a league. Sporting events is just not a good example of why zero-rating should be any sort of norm. And I can't think of a good one.