European Parliament Gives Final Nod to Net Neutrality Rules

The European Parliament overwhelmingly approved net neutrality legislation in line with its negotiated compromise with EU governments. The original European Commission-proposed telecom single market (TSM) package was whittled down to two issues -- ending mobile roaming charges across Europe and enshrining net neutrality into EU law. Some members of the European Parliament (MEPs) offered amendments aimed at aligning the compromise text with earlier legislative language, but all were rejected and the law was adopted. Tuesday's outcome holds lessons for the U.S., said Roslyn Layton, vice president of Danish telecom consultancy Strand Consult. Digital rights and consumer groups were disappointed with the result; telecom organizations were cautious.

The TSM regulation will enshrine binding net neutrality rules in the EU for the first time, EC Vice President-Digital Single Market Andrus Ansip said during a parliamentary debate before the vote. It sets rules on nondiscriminatory traffic management and users' choice that can't be circumvented by commercial practices, he said. National telecom authorities will have to monitor market developments and assess traffic management processes and commercial agreements, he said. Many MEPs said they backed the compromise text, but others said the net neutrality provisions are ambiguous because they don't contain the term "net neutrality" or define it. Many of the amendments introduced attempted to clarify these issues.

The Parliament and Council reached provisional agreement in late June (see 1506300001). They agreed Internet access service providers will be required to treat all traffic equally, without discrimination, restriction or interference, and regardless of the sender and receiver, the content accessed or distributed, or the applications or services used, a Sept. 23 Council memo said. Providers can use reasonable traffic management measures but they must be transparent, nondiscriminatory, proportionate and not based on commercial considerations, it said. Traffic management practices can't measure specific content or be maintained longer than necessary, and blocking and throttling are barred except in limited cases. Access providers must tell end-users clearly about their traffic management practices and any services other than Internet access that might affect the quality of access. On roaming, the EU institutions agreed that all retail charges in the EU be abolished as of June 15, 2017, with a reduced rate in effect beginning next April.

Ensuring roaming was the "key goal," Layton said. While some MEPs regretted that Parliament's original text wasn't accepted and that Council didn't accept a net neutrality definition, there was a general sense that the new language and overall proposal are a step in the right direction, and a recognition that this moment wouldn't likely come again, she said. "The lesson for the US is that American government missed an opportunity when Congress was clearly willing to make net neutrality law in lieu of the FCC's overbearing regulations," Layton emailed. Europe's approach has been "pragmatic," she said: There's a quid pro quo with putting roaming and net neutrality in the same measure; MEPs know that ending roaming charges puts more money in consumers' pockets, while net neutrality is intangible. A survey by the Body of European Regulators of Electronic Communications (BEREC) showed Europeans care about net neutrality only as long as they don't have to pay for it, noted Layton.

The claim that the regulation will protect net neutrality is "sadly not true," said European Digital Rights. Parliament "has avoided making decisions on all crucial points," leaving it to national regulators to decide on abuses imposed through "zero rating" -- the practice of not charging for access to specified content -- and on rules for congestion management and specialized services, said Executive Director Joe McNamee. BEREC's negotiations must be transparent and set clear rules for net neutrality, said French citizens' advocacy group La Quadrature du Net. If regulators fail to do so, the "weak text" risks giving telcos a wide-open path to abusing their dominant position, it said.

The final deal is full of "significant loopholes and uncertainties," said the European Consumer Organisation. Among other problems, the net neutrality rules will still allow telecom providers to exempt traffic giants such as Facebook, Netflix or YouTube from data caps, meaning their content would be accessible even to consumers who have used up their data allowances, said Director General Monique Goyens. That locks innovative services out of the market, hurting consumer choice, she said.

It's "crucial to underline how network quality and diversification of services is critical to deliver growth of the digital economy, in the main interest of European consumers," said the European Telecommunications Network Operators' Association. Uniform implementation of the net neutrality rules across Europe is necessary, it said. Effective competition in providing Internet access is one of the most important safeguards of an open Internet, said the European Competitive Telecommunications Association. The upcoming telecom framework review must ensure true competition in next-generation broadband, it said. The European Broadcasting Union called the new rules a "step in the right direction" for the digital single market, adding the final compromise "offers a workable solution." The regulation will give over-the-top providers "real certainty" their services won't be blocked or hindered by underlying network operators that dislike the idea of competition to their own services, said the U.K. Internet Telephony Services Providers' Association.

The European Parliament washed its hands "like Pontius Pilate" of the issue of zero-rating, telecom consultant Innocenzo Genna blogged Monday in anticipation of the vote. The new rules will de facto permit zero-rating because they make it clear that agreements on data and speed are legitimate and may be used for such practices, but "absolutely unclear" on whether and to what extent regulators can intervene to stop such discrimination, said Genna, who advises smaller players.