EU Telecom Regulators Float Draft Net Neutrality Guidelines

Guidelines to help national regulators enforce the net neutrality provisions in the EU telecom single market regulation are "balanced and pragmatic" despite tackling several complex issues, said the chairman of the Body of European Regulators for Electronic Communications (BEREC) at a Monday media briefing. Those issues include zero rating, traffic management and specialized services, all of which continue to rankle various stakeholders, those at the briefing and others interviewed later said. Comments on the draft guidelines are due July 18.

Europe's approach to net neutrality is more robust than the U.S.' because it's based on law, not an FCC rule that could be overturned by the courts, Congress or a new administration, said BEREC Chairman Wilhelm Eschweiler, vice president of German national regulatory authority (NRA) Bundesnetzagentur.

The guidelines flesh out the regulation, which got final approval in October (see 1510270001), such as who it covers and what services are and aren't subject to the rules, said Ben Wallis, international policy manager of U.K. regulator Office of Communications. Services subject to the regulation include "sub-Internet" offerings such as VoIP or "walled-garden" offers that allow access only to predefined areas of the internet, he said. These would infringe the regulation because they're provided as substitutes for internet services, he said. Other services, such as online access provided by restaurants and cafes, aren't considered publicly available so fall outside the scope, he said. Machine-to-machine devices such as e-book readers also aren't covered, Wallis said. Internet Protocol interconnection services aren't aimed at end-users so aren't within the scope of the regulation, but NRAs can look into them if they affect end-user rights, he said.

There has been much discussion about outlawing zero rating, when an ISP applies a price of zero to data traffic associated with a particular application and the data doesn't count toward any applicable data cap, said Wallis. BEREC believes the regulation doesn't prohibit the practice per se, so it gave guidance on the types of zero rating allowed, he said. Regulators faced with questions about the validity of a zero rating service must consider several factors, such as whether it circumvents the general aims of the telecom single market regulation, its impact on end-users and business users, the scale of the practice, and any effects on free speech and media plurality, he said.

On traffic management, the guidelines say "equal treatment" doesn't necessarily imply that all end-users will experience exactly the same performance. As long as traffic management is done independently of end-users and applications, the traffic is usually considered to be treated equally, said Frode Sørensen, Norwegian Post and Telecommunication Authority senior adviser. The regulation allows "reasonable" traffic management, which may be used to differentiate among different categories, he said. Traffic management may be allowed, under stricter conditions, if it's to comply with another law, for the integrity and security of the network or for congestion management, he said.

Zero rating drew the most questions and comments at the briefing and later. It's a "tricky issue" because the regulation neither bars nor permits it, said Eschweiler. NRAs will have to analyze the practice on a case-by-case basis, he said. BEREC itself hasn't published a position on whether zero rating should be allowed, said Wallis. It said in 2015 it was too early to know what impact zero rating might have on consumer welfare and competition but had to deal with it in the guidelines because it's part of the regulation, he said.

The guidelines offer examples of specialized services, such as Voice over LTE or a live broadcast of Internet Protocol TV services with specific quality requirements, said Sørensen. But any such services must meet the requirements of specific quality and be offered only where network capacity is enough that internet access isn't degraded, he said.

"Bye bye zero-rating," telecom consultant Innocenzo Genna blogged. BEREC suggests that when a zero rating practice is aimed at privileging a single service or application to the detriment of other competing services or apps, the behavior should be deemed unlawful, he wrote. If NRAs follow that rule, "the zero-rating business is dead," he said. The sole incentive of zero rating, for dominant ISPs and over-the-top players, is to discriminate against competing services, and there's no commercial rationale for an agnostic application, said Genna, who represents smaller players.

There's no doubt tougher net neutrality rules would "serve American companies such as Google and Netflix, but they would be a disservice to some American challengers such as Facebook and HBOGo," said Roslyn Layton of Aalborg University, Denmark. Facebook, for example, is experimenting with zero rating to create competition against Google just as HBOGo is against Netflix, she emailed. It appears that BEREC, "not wanting the spectacle that overwhelmed the FCC" during its net neutrality proceeding, has capitulated to the "Save the Internet" activists and given them their requested interpretations on the rules, she said.

Telcos said an overly strict interpretation of traffic management would hamper their ability to meet network requirements in a 5G society. "Quality, latency and reliability are essential to the delivery of new services and connected products," said the European Telecommunications Network Operators Association Monday. And ETNO said the guidelines' final text "should not limit or restrict our ability to differentiate consumer offers and provide zero-rated services" because that would deprive users of advantageous prices and create legal uncertainty about how consistent the guidelines are with the telecom single market regulation.

The traffic management guidelines "leave too much wiggle room" for ISPs to carry out application-based discrimination on a day-to-day basis, European Digital Rights said in a fact sheet. Under a correct, net neutrality-respecting interpretation of the regulation, application-based management would be held to strict necessity requirements and be allowed only in exceptional cases of network congestion, it said. EDRi also criticized the guidelines for suggesting, on specialized services, that service providers could arbitrarily determine the essential quality requirements of their services, instead of being independently assessed based on the objective requirements of the application.

Asked how BEREC will avoid a patchwork of rules if NRAs decide net neutrality issues case-by-case, Eschweiler said it's a "sensitive question." Regulators think they'll wind up with a coordinated approach, not only within BEREC but among national authorities, he said. The regulation requires NRAs to report annually to the European Commission and BEREC on their implementation of the regulation in their countries, which will enable them to see if they're taking a common approach, said Sébastien Soriano, chairman of French regulator Autorité de régulation des communications électroniques et des postes.