Lights and darknesses of the European net neutrality deal, simply explained

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Little by little, I am getting information about the reform of the net neutrality which today was agreed in principle by Council and European Parliament. It is still a political agreements, while the European Commission has been required to write down the detailed articles – therefore things may still change a little.

Let’s start with the best points:

Open Internet is safeguarded with a very wide and fundamental wording: “End-users shall have the right to access and distribute information and content, use and provide applications and services and use terminal equipment of their choice, irrespective of the end-user’s or provider’s location or the location, origin or destination of the service, information or content, via their internet access service”. There is no explicit reference to the term “net neutrality” that the European Parliament liked a lot, however this is more symbolic/political issue rather than a substantial one.

The neutrality principle is however then elaborated in a more sophisticated way: “Providers of internet access services shall treat all traffic equally, when providing internet access services, without discrimination, restriction or interference, and irrespective of the sender and receiver, the content accessed or distributed, the applications or services used or provided, or the terminal equipment used”. This should compensate the lack of the “net neutrality” wording, I believe.

Network management practices are clearly regulated: they must be reasonable, meaning that they must be transparent, non-discriminatory, proportionate, and shall not be based on commercial considerations, i.e, they should not be anticompetitive. In other words, an ISP cannot discriminate the traffic just to unbalance a competing online service (like in the case of traditional voice and sms, which may be jeopardized by VOIP and chats). In addition, ISPs shall not, in general, block, slow down, alter, restrict, interfere with, degrade or discriminate between specific content, applications or services, apart from some exceptions provided by law.

Then, we go to the grey area:

Specialized services are allowed, but on the conditions that the network capacity is sufficient to provide them in addition to any internet access services (best effort). Remarkably, in US specialized services are prohibited in principle: there they are intended as a prioritization performed for discriminatory or anticompetitive reasons. The fact that the European rule is lighter than the US one, is likely due to the fact that in the EU there is more competition in the fixed access, thanks to the wholesale regulation allowing the users to choose a plurality of fixed ISPs (while in US there is a quasi-monopoly in the access).

In any case, specialized services cannot be usable or offered as a replacement for ordinary internet access services, and shall not be to the detriment of the availability or general quality of internet access services for end-users. This means that dominant ISPs may not use specialized services to affect the nature of the Internet, since they will be obliged to first offer unrestricted best effort Internet, and then managed services. This rules should, in principle, avoid the emergence of a 2-tiered Internet, since an affordable best effort Internet must be guaranteed in nay case. However, how to apply this rule in practice may cause some controversies, since the nature of ordinary best effort Internet may vary depending on the deployment of the networks and related technology, country by country. In the mobile sector it will also depend on a variety of circumstances (spectrum availability, saturation cells ecc). Thus, it will be up to the national regulators to find a solution case by case, with the possibility to refer to the Court of Justice of the European Union to render an interpretative ruling. Berec could also be request to intervene to adopt some guidelines. To sum up, I foresee plenty of litigations.

And finally, the dark side of the net neutrality reform:

Zero-rating practices are allowed. Such clauses allow an ISP to indirectly discriminate competing or non agreed services simply by differently charging the price of the Internet connectivity used to provide them. in the reform there is a general clause whereby contractual agreements about volumes, price and speed should not affect the freedom of users to get the services they want, but this is a too vague wording to say that zero-rating practices may be challenged when they are anticompetitive. This is the most controversial part of the reform. I would expect the European Parliament to protest against.

Finally, one could wonder whether current national legislation prohibiting zero-rating practices, such the ones in the Netherlands and in Slovenia, will be considered consistent with the new regulation. There is a clear risk that they may be challenged in front of national courts for being inconsistent with EU law.

That’s all folk, for now

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