BEREC Guidelines on Net Neutrality – Part I

On June 6, the Body of European Regulators for Electronic Communication (BEREC) published a draft set of guidelines concerning Net Neutrality. The authority to draft them came from Regulation (EU) 2015/2120  –  the “Connected Continent Regulation” – whose Article 5(3) obliges BEREC to issue guidelines for the implementation of the Regulation by August 30, 2016, in cooperation with the Commission and after consulting the stakeholders. Since it is the national regulatory authorities (NRAs) in each Member State who are in charge of implementation, the guidelines direct NRAs on how to implement the Regualtion.This makes them rather significant in practice.

On its website, BEREC claimed that it received “almost half a million contributions” in response to its call. Considering the fact that net neutrality has been in the public eye for a while now, it is not surprising that BEREC Guidelines should attract attention, but it is curious that the number of responses (most of which were from ordinary citizens) should be demonstrated in this manner. The drafting process itself is not particularly transparent, with concerns that BEREC drafting process happens behind closed doors and under potential influence of lobbying.

The Connected Continent Regulation has as its main purpose the removal of roaming and the introduction of minimum rules on net neutrality and it is not a full revision of the 2009 EU Telecoms regime (which is promissed for December 2016). The Regulation introduces a couple of basic safeguards. First, the Regulation does not define net neutrality. The introduction of a proper definition was a hotly debated point in previous drafts with proponents of net neutrality arguing for a clear definition and the opponents against. The resulting regulation simply says, in Article 3(1) that

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 information, content, application or service, via their internet access service.

This statement, which roughly corresponds to usual definitions of net neutrality, simply means that internet traffic must be provided without discrimination based on origin or content of that traffic. At the same time, this does not affect agreements between providers and users on “price, data volumes or speed”. The main net neutrality point is then repeated in Article 3(3):

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.

The same paragraph allows “reasonable traffic management”. Reasonable are only those measures which are “transparent, non-discriminatory and proportionate” and which are not based on commercial considerations. Such measures cannot result in monitoring and must be temporary. Providers are in particular not allowed to:

block, slow down, alter, restrict, interfere with, degrade or discriminate between specific content, applications or services, or specific categories thereof

In principle, traffic management is allowed only when EU laws demand it, to preserve the integrity and security of the network or to prevent congestion.

Finally, the Regulation allows the providers to offer specialized services, which are not defined but which are “optimised for specific content, applications or services, or a combination thereof” where such optimization is necessary. Such specialised services must not be offered as a replacement for regular Internet services and must not result in the degraded quality of the former.

The draft guidelines comment on each of the articles. Some of the comments are crucial. Particularly important are those on zero rating, traffic management and specizlied services.

In response to bundling of free applications and services with the Internet access (such as, for example, offering free Spotify or HBO subscriptions), the Guidelines paragraph 33 indicates that these ought to remain legal as long as they are not priced differently than the rest of the traffic. Paragraph 35 specifically emphasizes that ISPs are not allowed to contractually ban specific content (e.g. VoIP). In response to zero-rating practices (where the provider does not count traffic associated with a particular application towards data cap, thus making them essentially free), the Guidelines differentiate between several situations. If all other services are slowed down except the zero rated ones, once the cap is reached, such practices would infringe Article 3(1) (as per paragraph 38). In respect of all other practices, the Guidelines call for a complex assessment exercise (paragraphs 43  – 45) the purpose of which is to determine to what extent the end-users’ choice if actually restricted. At present, there is little evidence that zero-rating is harmful and some evidence that it is beneficial.

In response to traffic management, BEREC simply clarifies the conditions in Article 3(3) without adding anything particularly controversial. It acknowledges, at the same time, the legality of traffic management. The guidelines do not insists on application-neutral technical measures, possibly leaving space for controversy. On the other hand, “permanent or recurring” measures may not be legal (paragraph 70) showing, at least, that traffic management measures cannot be used as a backdoor for openly violating neutrality.

In response to specialized services, BEREC emphasizes the fact that such services need to be carried at a specific level of quality and cannot be assured by standard best effort (paragraph 95). The job of verifying whether optimized delivery is objectively necessary is left to NRAs . If the level of quality can be adequately assured through a regular connection, the specialized service would be illegal. BEREC is careful to emphasize that what constitutes a specialized service today may not be so in the future. Creating black and white lists, therefore, makes little sense. As a way of example, paragraph 109 quotes Voice-over-LTE (VoLTE), linear broadcasting IPTV services and real-time health services, as those which may required specizlized access today.

There are two important points to note from the Draft Guidelines. First, they follow the spirit of the Regulation by prohibiting opportunistic discrimination. This, in itself, is not necessarily a novelty since current laws can be interpreted to give the same effect. Additionally, this intervention may be irrelevant as there is little evidence of actual net neutrality violations in Europe. Second, they are permissive and flexible towards issues that matter to the industry – traffic management and specialized services. This is a positive development, as restrictive rules can and do have a negative impac on investment which, in telecommunications industry, is highly risky.

The comments this author has seen can roughly be divided into three groups. The first are individual citizens who invoke net neutrality as a fundamental right, often with little or no understanding of what it actually implies and how problems that arise from net neutrality issues differ from those happening on the backbone. The second are proponents of net neutrality on both sides of the Atlantic, who argue for stronger rules and criticize both the Regulation and what they perceive as BEREC’s permissive position. The third are industry representative who are against strong regulation. They are against overly prescriptive ex ante regulation, they fear future litigation over ambiguities left in the Regulation and worry about a potential slow-down in investment. A manifesto co-signed by BT Group, Deutsche Telekom, Ericsson, Hutchison Whampoa Europe, Inmarsat, Nokia, Orange, Proximus, Royal KPN, SES, Tele2 AB, TIM – Telecom Italia, Telefonica, Telekom Austria Group, Telenor Group, Telia Company and Vodafone, and claiming support from Ahlers, Airbus Defence & Space, Royal Philips, Siemens and Thales Alenia Space recently warned that no invetsment in 5G networks will be forthcoming unless uncertainties introduced in the Guidelines are removed.

In the view of this author, net neutrality legislation is unnecessary, counterproductive and technically difficult to implement. The final version of Guidelines may, if drafted carefully, eliminate some of the problems. I will comment on these when they are published later this month.






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