Interview: Mark Adair of Mason Hayes & Curran explains ‘net neutrality’

Interview: Mark Adair of Mason Hayes & Curran explains 'net neutrality'

Net neutrality has emerged as the new hot online issue. A concerted effort by Ajit Pai, the new chair of the US Federal Communications Commission, to overhaul net neutrality rules put in place by the Obama administration in 2015 has been met with anger across social media.

But what is “net neutrality”, and what might its removal in the US mean for us in Ireland?

Irish Legal News correspondent Kevin Burns met with Mark Adair, partner in the commercial law practice group at Mason Hayes & Curran, to discuss net neutrality and what changes might mean for us.

Mason Hayes & Curran is based on Barrow Street, a focal point of Dublin’s “Silicone Docks”, the hub of Ireland’s burgeoning tech industry. Google’s European HQ is just a short walk down the street. Both enjoy a spectacular view over Dublin Bay and the Grand Canal Docks.

Mark advises clients in Ireland and internationally on a broad range of complex technology matters, with a particular focus on the areas of data protection, fintech and telecommunications.

He is recognised as a thought leader in the Irish technology law sector and frequently provides expert commentary for industry publications and speaks at international events. Organisations also regularly request Mark to coach their staff on negotiating and winning better positions in their commercial contracts.

Moreover, Mark has a continuing interest on the subject of net neutrality, having tweeted extensively on the topic for years — so who better to enlighten us on the issue this side of the Atlantic?

Mark Adair
Mark Adair

First and foremost, for the lay persons reading, what is net neutrality?

In essence, it’s about offering free and open internet to all users, so that all consumers can access the internet on the same basis. With net neutrality rules in place, internet service providers (ISPs) have to treat all internet traffic equally.

What may happen if the concept of net neutrality is eroded is a two-tier internet where consumers who pay more have access to certain content or to a faster connection than other internet users.

The best services would go to those who can afford them and ISPs could end up favouring their own content by blocking or restricting access to content of their competitors.

Can you give an insight into this controversy brewing across the pond — what’s the big deal about removing net neutrality?

In my view, there’s both a political aspect and a technical aspect to that.

The political aspect is that President Trump appointed Ajit Pai as a new head of the communications regulator (the FCC). Pai is generally seen as quite ‘pro’ telecom companies. Pai has said that he intends to roll back on the net neutrality rules which were put in place by the Obama administration in 2015. So from a political perspective, Trump putting this particular person in charge has been seen by some as part of the broader attempt by the Trump administration to repeal laws and regulations passed by the Obama administration.

From a technical perspective, the controversy relates to the erosion of net neutrality and the potential impact on ISPs, content providers and consumers. Under the Obama-era rules, ISPs are treated like utilities companies, the same as gas and water companies. This, in turn, puts in place protections in the US against ISPs treating internet traffic differently. The aim is to ensure that American consumers have access to an open and free internet. Pai’s recent statements are about removing these restrictions, which will mean that American ISPs could be free to move towards this two-lane internet model.

“For us across the pond, the risk is that where America goes, Europe could follow.”

What would that mean for the stakeholders?

There are probably three different categories of stakeholders in play. So if we first look at the ISPs, or the telecommunications companies; they’re saying that they need to invest in their networks. Their argument is that they built the networks, and now because of the emergence of services like VOIP (Voice-Over IP) and online messengers, their revenues are falling. So if people are using these services instead of using the traditional telephone services they would have done in the past, the revenue base of the telecommunications companies gets eroded. The telecommunications companies argue that they need revenue to invest in order to improve the networks. So, they need this revenue, and they argue charging users or providers for certain content or for unlimited access is a way to accomplish this.

“With the erosion of net neutrality, consumers are going to see this idea of a two-lane internet coming into force, which may mean they pay more for their services.”

Then you’ve got consumers. With the erosion of net neutrality, consumers are going to see this idea of a two-lane internet coming into force, which may mean they pay more for their services. ISPs may prioritise certain data. Or the ISPs may block consumers’ access to certain services (for example, VOIP) or block certain content (for example, services that their competitors offer). And perhaps for consumers using services like Netflix, which is very data hungry, it may be that to access the service in the future, if net neutrality regulations are eroded, the consumer would have to pay a premium to access unlimited Netflix.

For us across the pond, the risk is that where America goes, Europe could follow. There are currently regulations across Europe which ComReg oversees here in Ireland. There are generally two pieces of EU legislation that help protect net neutrality. The first is what is known as the Regulation on Open Internet Access. It requires that consumers have access to content and services without discrimination or interference. It is about creating open and free access to the Internet and to stop discrimination against certain types of online traffic. It also requires transparency through the publishing of statistics by network providers. And then you’ve got the Universal Service Obligations (USOs) which, amongst other things, put in place requirements around minimum quality standards, easy switching, and transparency.

Critics of what is in place in the EU say that the Regulation on Open Internet Access is in fact only ‘semi-neutral’. The argument is that it only gets part of the way to net neutrality because of the existence of loop holes known as “public interest exemptions”. For example, if an ISP says that it needs to block certain content for security reasons, or that they need to be able to throttle certain data if there is congestion on the network, or where there’s content considered unlawful, the ISP can stop and restrict access to it.

It’s like you’ve guessed the next question. You’ve already touched on it. Are there any major differences between the EU/Irish laws on net neutrality and the current US laws on the same?

It’s important to say that the rollback of net neutrality in the USA hasn’t actually been implemented yet, and even when it is implemented, there’s still a chance it could be challenged possibly up to the level of the Supreme Court. Right now the situation is that the regulator (the FCC) has said that this is what it intends to do, but they haven’t actually done it yet. So as things stand, there is currently a form of net neutrality in both the US and the EU.

The main difference between the US and the EU is in competition. If you think about how big the US is as a country, there isn’t really a large choice of ISPs, certainly not compared to what we have in Ireland, the UK and Europe. So, in a small town in the USA there may only be one ISP that serves that community. So, because of that lack of competition, if net neutrality rules were rolled back, that ISP could conceivably charge whatever it wants. The cost to the US end-consumer would go up.

Whereas in Ireland, the UK and Europe, we have far more competition, so depending on where you’re living you might have up to five potential ISPs to choose from.So even in the absence of net neutrality there may still be a degree competition that helps regulate the market. Competitor in this scenario could be the equalizer. Perhaps that’s more of an argument for an economist than a lawyer, but it’s important to note that that sort of competition doesn’t exist in the same way in the US, which goes some way to explaining why the proponents of net neutrality in American are being so vocal in the defence of these rules, and why they are saying that it would be very bad for consumers if the planned rollback goes ahead.

The parties arguing for the repeal of net neutrality are arguing that getting rid of the regulations would actually help bring more competition into the market. Have you got a view on that statement?

It’s really hard to provide a definite answer on that; we really don’t know. Everyone who has a view on the issue is crystal-ball gazing to some degree. I guess it’s just the sort of situation where the change has to be made and then we have to wait and see what happens. But we’ve seen the effects of net neutrality in the US for a while and it has to date enjoyed bipartisan support. If you think about how quickly the internet evolved – think about how we didn’t have Facebook fifteen years ago, we didn’t have Netflix five years ago – it becomes quite hard to guess at what the situation might be like for emerging technology without these rules, and especially whether it’s likely to help or hinder competition.

Is the rest of the world likely to follow an American repeal of net neutrality?

There is a scenario in the tech sector that whatever happens in the US, the rest of the world may start to follow. The Trump administration and the FCC are positioning the repeal as beneficial for businesses as it reduces the regulatory burden and opens up the market for competition.

Whereas in Europe we traditionally have had more regulations on technology, telecommunications and data protection.It is interesting to note that net neutrality protections are already in countries like New Zealand where telecommunications companies offer consumers the opportunity to pay extra for certain benefits, such as unlimited access to social media or unlimited streaming of music from certain websites.

What might be the impact of a repeal of net neutrality for smaller Internet-based companies?

That’s a really interesting point. The larger companies, like the social media companies and the video-streaming outfits which are already house hold names, they’ve already made it, and they’re already known by most people. So if net neutrality is repealed and consumers are asked to pay extra for access to these services, the large companies are so well known that the public may be much more likely to pay that bit extra for to access them.

Interview: Mark Adair of Mason Hayes & Curran explains 'net neutrality'

“One of the benefits of net neutrality is this idea of an open and free internet. So if there was no net neutrality, there’s a potential for ISPs to favour their own content over the content of their competitors.”

The risk for small and medium sized technology companies comes where consumers aren’t as aware of their brand, and so the consumers might not be willing to pay certain fees to access that content. It may be the case that consumers are not even able to hear about their content in the first place because if the consumer is on a two-tier internet system and only has a certain amount of data to use every month, they mightn’t be able to access this new service if they use up their allocation, and if they don’t want to use up this allocation they have to pay extra to go on to the “high-speed lane”.

One of the benefits of net neutrality is this idea of an open and free internet. So if there was no net neutrality, there’s a potential for ISPs to favour their own content over the content of their competitors. In the US where you’ve got these large conglomerates with lots of different subsidiaries offering things like email, social media, etc., the parent company that runs the ISP could conceivably favourtheir own services and content at the expense of their competitors. That’s why some advocates of net neutrality are saying that it is important to preserve net neutrality in order to ensure that there’s a level playing field and fair competition for SMEs.

Should Irish tech firms be worried?

I think that for now we just have to wait and see. Because we live in a global economy, and because there are so many US tech companies operating in Europe, it would be very smart to keep abreast of the situation and to monitor what’s going on, and then decide if and how it impacts their own businesses.

In your own practice, are you likely to be dealing with any cases on net neutrality?

We are expecting a lot of queries from clients to come in; in fact we’ve already started dealing with that. It’s really been front and certain in all the business and technology newspapers. I think until a final decision is made in the US, we’re really trying to anticipate how things pan out, as well the likely impact on stakeholders. Once a final decision has been made, we’ll be in a better place to inform our clients about what they need to do.

Kevin Burns, Irish Legal News

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