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ENDitorial:Leaked telecoms Regulation with or without net neutrality?

17 July, 2013

This article is also available in:
Deutsch: ENDitorial: Geplante Telekom-Regulierung mit oder ohne Netzneutralitä...

Last week, an internal draft of a regulation for a “telecoms single market” was leaked in Brussels. We published an initial reaction to this document. But what are the details of the text and what do they mean? The draft is a strange mix of re-packaged measures that are already in place and an odd list of disparate issues ranging from spectrum management to roaming charges.

One important point of the draft regulation, as previously announced by Neelie Kroes, Vice-President and Commissioner for the Digital Agenda, is a half-hearted legal “guarantee” of network neutrality – which simultaneously seeks to “guarantee net neutrality” and at the same time to allow the kinds of “new premium services” that would undermine net neutrality.

The positive points first:

- Harmonisation: The Commission chose to propose a Regulation as a legislative instrument which means that it would allow for greater harmonisation of the digital single market.

- No discrimination: It would guarantee net neutrality (while killing it by promoting discriminatory services). Article 20.2 aims at a prohibition of anti-competitive discrimination: “Providers should not block or throttle specific services or service classes within contractually agreed limits on data volumes and speeds”.

- Transparency: The Commission's spokesperson also explained that “our net neutrality plans include much stronger rights for consumers to transparent information and switching”. Of course, if the Commission believed that it was really guaranteeing net neutrality, consumers would not need transparent information about non-neutral behaviour and their possibilities to sign up to another access provider. Article 21 would now introduce new provisions on transparency. However, as we have highlighted previously, transparency and switching are insufficient to guarantee and open, free and neutral internet.

- Sanctions: National Regulatory Authorities (NRAs) have an essential role in securing the users' capability to exercise their freedom of communication and freedom of expression. According to recital 68, NRAs should be able to impose financial or administrative sanctions for violations of net neutrality provisions of the Regulation. Unfortunately, these sanctions are not detailed in the leaked draft and merely make reference to the already existing provisions of Article 21a of the Framework Directive (2002/21/EC). We know from the weak implementation of existing legislation in some EU Member States that strong sanctions are necessary to act as a deterrent against discriminatory practices.

Negative points:

- Discrimination: If adopted, the leaked Regulation would kill net neutrality (while ostensibly “guaranteeing” it, as described above). Article 20.1, sub-paragraph 2, foresees that “providers of content, applications and services and providers of electronic communications to the public shall be free to agree with each other on the treatment of the related data volumes or on the transmission of traffic with a defined quality of service”. The Commission would therefore allow operators to enter into agreements with content and service providers in order to deliver certain services faster than others – it would allow a non-neutral Internet, in other words.

The Commissioner's spokesperson explained on Twitter that “telcos want a free hand”. If adopted, this Regulation would be disastrous not only for innovation and competition in Europe, but would cement the economic advantage of big players who have the financial capacity to strike exclusive deals with operators – the “death sentence” for innovation described by Commissioner Kroes.

- Data caps: The leak states that “volume-based tariffs are compatible with an open internet”. While this is true, up to a point, it appears that the draft would allow discriminatory behaviour, similar to what the Deutsche Telekom proposed in Germany. A volume-restricted tariff which has no restrictions on the volume of traffic from certain sites and services can be effectively used to transparently and openly stifle competition.

- Premium services: The draft text also explains that some users should be able to keep on using high bandwidth services, such as video conferencing, internet telephony and so on – with an “enhanced quality”. This might be what Commissioner Kroes meant with “enjoy something extra” in her speech on 9 July. This approach, however, is not based on evidence but rather the assumption that current temporary and exceptional traffic management measures are insufficient to deal with congestion. The Commission draft attempts to explain that the possibility and flexibility to provide enhanced quality of service especially applies to new services such as machine-to-machine communications (recital 44, p. 12). However, the way in which the current text is drafted would permit discrimination on the public internet.

- Bundles: In recital 41, the growing importance of bundles (offers that include internet, fixed/mobile telephone and television as a single package) is highlighted, but the Commission unfortunately fails to acknowledge the particular difficulties for consumers subscribed to bundled offers to change providers.

- National laws: Where does this leave the Netherlands and Slovenia? According to the leaked internal draft, Article 20.1, sub-paragraph 3, it is likely that the Dutch provisions and the Slovenian law will have to be amended, since they restrict the “freedom” of the providers to enter into discriminatory agreements: "The exercise of these freedoms shall not be restricted by national competent authorities, or, as regards the freedom laid down for end-users, by providers of electronic communications to the public, save in accordance with the provisions of this Regulation, the Directives and other provisions of Union law."

- Timetable: The draft Regulation will probably be published in September/October, it then has to be approved by the Council and go through the legislative process in the European Parliament. Due to the upcoming elections, there is a chance that this Regulation might not be adopted before the new Parliament is in place.

Leaked consolidated version of the draft Regulation laying down measures to complete the European single market for electronic communications and to achieve a Connected Continent

Leaked Regulation: Schrödinger's net neutrality on its way in Europe (11.07.2013)

Tweets by Ryan Heath, spokesperson of the Commissioner for the Digital Agenda, on the leaked internal draft

Joint letter EDRi-BEUC to Commissioner Kroes: Over 80 European organisations demand protection for Net neutrality (17.04.2013)

European Parliament resolution on Completing the digital single market (11.12.2012)

(Contribution by Kirsten Fiedler - EDRi)



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