Infringing net neutrality is not the same in US or EU

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data-throttling

AT&T, one of the bigger US telcos, has been heavily fined by the FCC for alleged practices of throttling. In short, FCC found that when AT&T’s customers used up a certain amount of mobile data watching movies or browsing the Web, the ISP “throttled” their Internet speeds so that they were much slower than normal. Apparently, this slow-down practice was not properly advertised in AT&T’s contractual conditions and therefore FCC adopted the decision on the grounds of lack of transparency. AT&T will surely challenge the decision assuming that their throttling policy was properly communicated to users, here their legal position. More details about the case can be also found here.

For the US market this is a very important leading case, although one could argue that the fine is not a real deterrent, considering  the dimension of the US market and the size of a telco like AT&T. However, it is a strong signal, also in the light of the new FCC net neutrality rules recently entered in force. Such rules, by the way, do not apply to the case at stake, while the previous 2010 net neutrality rules, focusing on transparency, apply instead.

A similar case did not occur yet in the EU, where transparency rules indeed exist (art. 20 of the Universal Service Directive) but concretely never provoked relevant, controversial decisions in the area of net neutrality. More detailed transparency rules may be adopted in the frame of the current Single Telecom Market package, one chapter of it is dedicated to net neutrality indeed. However, since this legislative proposal is currently blocked in Trialogue negotiations, without clear expectations of prompt final approval, the situation is not due to change for the time being. This means that, apart from surprises, for long time European consumers will never get a proper shield against net neutrality violations.

Unlike US, in the EU the possibility to tackle net neutrality violations is currently quite problematic. As stated above, transparency rules are quite generic, while antitrust enforcement is difficult, because in oligopolies markets (such as the mobile European markets consisting of 3 or 4 operators) one should first demonstrate the existence of a joint dominance, otherwise no sanctions can be imposed. Antitrust sanctions may normally be imposed against a single dominant operator, eventually in the fixed markets then. In addition, starting antitrust proceedings for a mere net neutrality practice is quite bundersome.

As a result of the above, in the EU net neutrality sanctions are rare and not relevant, with the exception of these countries where specific national legislations have been enacted, such as Slovenia and the Netherlands (in the matter of zero-rating practices, by the way). This is the reason why, should the Single Telecom Market package fail, most European countries will likely start, in the future, autonomous initiatives in order to grant a proper protection to own citizens, following the Dutch and Slovenian examples. A nightmare for mobile and fixed incumbent in the EU.

NB: an AT&T lobbyist contacted me saying that FCC’s decision is wrong and me as well. No doubt about, however what really matters for me is the comparison between the US and EU net neutrality enforcement system, while I can’t judge what will be the final outcome of this case after the last appeal. However, I assume that when FCC adopts a so heavy pecuniary decision, they may be well convinced about the good grounds of the case. 

3 thoughts on “Infringing net neutrality is not the same in US or EU

    Adrian Raass said:
    19 June 2015 at 08:36

    This FCC decision has nothing to do with net neutrality as it concerns throttling the speed of individual Internet accesses after a certain data volume has been used. All data is therefore treated the same before and after the throttling of the Internet Access. Therefore: no net neutrality issue.

    innoword responded:
    19 June 2015 at 17:22

    I kindly disagree. Throttling and slowing down is always caught by NN legislations. The debate is whether discrimination is relevant to consider throttling to be an infringement: in other words, objective and non-discriminatory throttling could be justified. However, even non-discriminatory throttling may be in infringement of (NN) transparency rules in case it is not properly disclosed. This is how this matter would be dealt in the EU, but I recognize that Switzerland is not part of it.

    innoword responded:
    28 June 2015 at 17:58

    By the way, this US article clarify that, under US law, this is a matter of net neutrality (according to the 2010 rules): http://www.cnet.com/news/att-fcc-fine-what-it-means-to-you/

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