InternetNZ has condemned a US move to repeal "net neutrality" rules - but says Kiwi internet users will be less exposed to the fallout.

The US Federal Communications Commission repealed the Obama-era rules, giving internet service providers like Verizon, Comcast and AT&T a free hand to slow or block websites and apps as they see fit or charge more for faster speeds.

In a straight party-line vote of 3-2, the Republican-controlled FCC junked the long-time principle that said all web traffic must be treated equally.

The move represents a radical departure from more than a decade of federal oversight.

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The big telecommunications companies had lobbied hard to overturn the rules, contending they are heavy-handed and discourage investment in broadband networks.

InternetNZ chief executive Jordan Carter said that all internet users would end up worse off as a result.

"The FCC should have left the open internet orders in place. Their decision instead damages the internet for everyone," Carter said.

"An open Internet that isn't captured by big ISPs or content companies is the platform for innovation and development New Zealand and the world need.

"The repeal of these American open internet requirements means that over time, innovation is at risk in the United States."

Dominant ISPs or content providers could do deals that made it harder for new services to emerge, he said.

"If the next Netflix or Google faces discrimination from big ISPs in trying to offer their services, then new innovation is just less likely - and so over time we are all worse off.

"Since so many of the services we use online have been developed in America, what is bad for the internet there is bad for us all."

But fortunately, Carter added, New Zealand didn't have the market problems that made network neutrality such a pressing issue in the US.

"In particular the fact Chorus, provider of most broadband internet infrastructure, does not offer retail ISP service and has no deals with content providers gives a layer of security to Kiwi Internet users.

"Until recently there haven't been close links between big ISPs and big media or content companies.

"It is fortuitous that our local market is set up in this way, and has largely avoided the worst risks to a neutral internet, but we should not take it for granted that this will always be the case without work to keep it that way.

"There's little that New Zealand can do to stem the problems arising from this American decision, but we must make sure similar problems don't develop here."