Professor Lorna Woods, University
of Essex
After a long legislative process,
a new EU regulation
amending the EU telecommunications package was agreed last Autumn and came into
force in April 2016. It contained rules relating to roaming and to universal
service. These latter rules are the EU’s provisions on net neutrality and they
aim ‘to establish common rules to safeguard equal and non-discriminatory
treatment of traffic in the provision of internet access services and related
end-users’ rights. The intention is ‘to protect end-users and simultaneously to
guarantee the continued functioning of the internet ecosystem as an engine of
innovation’ (point 1 in the preamble).
At the time, there was debate as
to whether these rules were good, bad or just ugly. The Commission at that stage made big claims
about the achievement. Indeed, according
to point 9 in the preamble:
[w]hen providing
internet access services, providers of those services should treat all traffic
equally, without discrimination, restriction or interference, independently of
its sender or receiver, content, application or service, or terminal equipment.
According to general principles of Union law and settled case-law, comparable
situations should not be treated differently and different situations should
not be treated in the same way unless such treatment is objectively justified.
The rights of end-users are found
in Art. 3 of the Regulation. Art. 3(1)
contains the rights of end-users to access and use the Internet. Subsequent sub-provisions deal with possible
exceptions. Due to the open-textured
nature of the drafting in the Regulation, and the inclusion of certain
exceptions to the basic principle, the level of protection to end-users as well
as the scope of providers’ activities in practice were uncertain.
BEREC, the Body of European
Regulators of Electronic Communications, was then tasked with producing
guidelines to cut down on some of these uncertainties. BEREC launched a public consultation on the Guidelines
on 6th June 2016 which will run until 18th July. In the Guidelines, as with the
Regulation, there are three problematic issues: zero-rating, traffic management
and ‘specialised services’.
Zero-rating
The Issue: Zero-rating is
the practice whereby traffic from certain sources does not count towards a
subscriber’s monthly data cap. Essentially
this allows providers to charge different rates in respect of comparable
services. Zero rating makes ‘free’ sources
more attractive to subscribers and potentially has an impact on the actual
content consumed. There are concerns
that a provider will prioritise content it, or a linked company, provides; or
provides only a ‘walled garden’. There are questions here about the impact on
diversity of platforms (particularly where we are looking at vertically
integrated conglomerates) and diversity of content, as well as the impact on
the ability of users to use strong end-to-end encryption.
The Regulation: does not
prohibit zero-rating
The Guidelines: BEREC
notes that different forms of zero rating may have different consequences. In determining the acceptability of a given
form of zero rating, it takes a case-by-case approach based on criteria
developed from the terms of the Regulation and set down in the Guidelines.
Circumvention of general aims of
Regulation (see Art. 1, Rec 7)
Market position of ISPs and content
and application providers involved (Rec 7)
Any effects on end-user rights of
consumers/businesses
Any effects on end-user rights of
content and application providers
The scale of the practice and
availability of alternative offers
Any effects on freedom of
expression and media pluralism (rec 13).
We could suggest that this is a
middle ground, allowing regulators to assess the threats to diversity in the
specific instance. There are however questions as to whether practice will
provide an adequate safeguard given that BEREC reiterates that the impact on
users must be material, and be sufficiently predictable. Predictability may be particularly problematic
for start-ups. In such a circumstance, it could be that providers would be
tempted to push the limits of the permissible, at least adversely affecting
diversity of platform and content. It should be noted that zero rating in
particular has been seen as especially problematic in competition law terms,
and has even been banned in some countries.
Traffic Management
The Issue: Historically,
transfer of data has been carried out on a ‘best efforts’ basis, with all traffic
in principle treated equally. Traffic management is the way operators
prioritise or restrict the flows of data on the network. It is envisaged as a way of dealing with
congestion, or in ensuring that time sensitive applications work (consider the differential
impact with regards an ‘Internet of Things’ (IoT) health device, the function
of which is disrupted by comparison with spam email). The problem is that
slowing down some services can make them less attractive, so a telecoms
provider might have an incentive to slow down (throttle) an OTT voice chat
service. It is difficult to assess if services have objectively different
requirements. As the Regulation noted, ‘a significant number
of end-users are affected by traffic management practices which block or slow
down specific applications or services’ (recital 3 in the preamble).
The Regulation: permits
traffic management, but subject to certain safeguards. So, the Regulation allows ‘reasonable traffic
management’ which may be used to differentiate between ‘categories of traffic’. There are three additional exceptions in Art.
3(3) which are allowed for the following reasons: a) compliance with other laws;
b) preservation of integrity and security; and c) congestion management
measures (see also Rec. 13, 14 and 15).
The Guidelines: in
principle support the idea that traffic management should be service neutral, reiterating
the Regulation on this issue. At para 74
it lists traffic management practices that (subject to Art. 3(3) of the
Regulation) are not permitted. The guidance
and limitations on reasonable traffic management focus on application-agnostic
traffic management, specifically not allowing an operator to manage specific
application traffic as part of their traffic management policies. Note, however,
that non-discrimination does not mean that the quality of service is the same,
provided application-agnostic traffic management can be shown. Following the requirements of the Regulation,
[i]n order to
be deemed to be reasonable, such measures shall be transparent,
non-discriminatory and proportionate, and shall not be based on commercial
considerations but on objectively different technical quality of service
requirements of specific categories of traffic. Such measures shall not monitor
the specific content and shall not be maintained for longer than necessary.
Nonetheless according to para 63,
operators are permitted to distinguish between different classes, even when the
network is not congested: an operator can differentiate between ‘objectively different’
categories of traffic – such as video, gaming, web browsing – as long as the
purpose is to optimize the overall quality and user experience ‘based on
technical quality of service requirements (for example, in terms of latency,
jitter, packet loss, and bandwidth) of the specific categories of traffic’. An ISP
must be able to detail the traffic management rationale when implemented to the
national regulatory authorities (NRAs), and be transparent to the end user. The
rationale seems to be to allow the network providers to optimize their
networks, thereby putting off the day when the networks need to be upgraded.
The issue of who should pay for the ultimate upgrade (or in what proportions)
is hotly debated, reflecting concerns of the broadcasting ‘must carry’ debate.
‘Specialised services’
The Issue: the term,
which is not in the Regulation, refers to those services which require special
treatment (think about some IoT health apps) as an exception to the principle
that paid prioritisation of certain content is not permissible. BEREC suggests that ‘specialised services’ is
a shorthand for the terminology in Art. 3(5) of the Regulation. In effect, ‘specialised
services’ would not fall within the net neutrality rules. The question was how
wide would this exceptional class be? In effect, would this open up the
possibility of a ‘fast lane’ for those prepared to pay the toll?
The Regulation: the
definition was open to interpretation, though there were some safeguards
provided. Specifically, the provision of
specialised services should not be detrimental to regular Internet services and
may only be offered if the provider has sufficient capacity. Essentially this requires a test of necessity
and capacity.
The Guidelines: BEREC has
opted for a narrower perspective on these services. ‘Specialised services’ have
to be new services that cannot function over the open Internet, so the extra
speed must be ‘objectively required’ thus closing down the possibility of a
two-tiered internet generally. The
Guidelines give examples: high-quality voice calling on mobile networks; live
television delivered over the internet; and remote surgery but national
regulatory authorities will be free to assess this on a case by case basis. The justification for this was the inability
to predict what new services will develop, especially in the context of the
IoT. There are some concerns.
It seems that BEREC has decided
that the provision of specialised services which will require some of the
relevant subscriber’s own bandwidth for ‘normal’ Internet use will be acceptable,
provided that there is no impact on the quality of other users’ experience
(para 118). This is the choice of the
user in BEREC’s view. Further, the
Guidelines seem to envisage that it will be the service wanting to be
designated as specialised that will ‘objectively determine’ whether the
criteria are satisfied. Does this risk undermining the safeguards? BEREC seems
to be aware of the risk: it suggests that the NRAs should monitor these
services closely to check that the reasons given are plausible and not just
about circumventing the rules.
It remains to be seen how open to
movement BEREC is in terms of changes to the draft. While the net neutrality campaigners have
expressed concern about threats to the open Internet, equally the operators have
voiced concern about the balance achieved in the draft as can be seen from
ETNO’s response. While the competition and pluralism issues are
significant, underpinning this significant divide is the issue of where we
expect the money to come from for network infrastructure and its development.
There are a number of competing sectors in the mix: infrastructure, access,
platforms/intermediaries, content providers and aggregators as well as the
end-users – but who should pay and how should that payment be assessed and
structured?
Photo credit: www.dontcomply.com
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