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Net Neutrality in Europe

Speaker: Vesa Terävä - Head of Unit B2, DG INFSO SESERV Workshop 20 June 2012

The goals of today’s presentation
•  To answer questions regarding net neutrality in Europe

•  To present you the current state of play

•  To provide information on the way forward in a glance

What is net neutrality?
Absolute nondiscrimination "Network neutrality is best defined as a network design principle. The idea is that a maximally useful public information network aspires to treat all content, sites, and platforms equally.“ – Tim Wu, Columbia Law School professor Basic definition Network neutrality is the principle that all Internet traffic should be treated equally

No restrictions Network neutrality is a principle that advocates no restrictions by Internet service providers or governments on consumers' access to networks that participate in the internet. Limited discrimination without quality of service (QoS) tiering United States lawmakers have introduced bills that would allow QoS discrimination as long as no special fee is charged for higher-quality service.

Net neutrality advocates have established different definitions of network neutrality, so there is no common definition.

Limited discrimination and tiering This approach allows higher fees for QoS as long as there is no exclusivity in service contracts.

First come first served “a neutral Internet must forward packets on a firstcome, first served basis, without regard for qualityof-service considerations." Susan P. Crawford, Cardozo Law School professor

What is net neutrality in Europe?
Reference to the net neutrality principle in the Electronic Communications Framework:

« End-users should have the ability to access and distribute information or run applications and services of their choice. »

What has been done until now?
•  In 2009, the Commission set out in its Declaration on Net Neutrality its commitment to preserve the open and neutral character of the internet. •  The declaration was followed by a wide ranging public consultation in summer 2010 and a joint summit organised together with the European Parliament in Nov. 2010. •  In April 2011 the Commission published a Communication on the open internet and net neutrality in Europe. •  It said it would remain vigilant to ensure that the new EU electronic communications directives adopted in 2009 are properly transposed and implemented. •  These rules modernise the provisions regarding ease of switching, transparency and quality of service across Europe, and give National Regulatory Authorities (NRAs) the tools to deal with net neutrality issues. •  The directives had to be transposed by the Member States by 25 May 2011.

Why has the Commission waited so far?
1.  The EU's new telecoms rules contain provisions on transparency and quality of service specifically related to net neutrality. The Commission had to wait to make sure that Member States properly implement these rules into national law. 2.  Policy makers have to take into consideration the interests of all stakeholders. 3.  They have to take decisions based on facts.

1. The revised Electronic Communications Framework supports net neutrality
Net neutrality
Choice NRAs must promote the ability of endusers to access and distribute information or run services of their choice. – Art. 8 of Framework Directive (FD) Transparency NRAs can oblige service providers to publish transparent, comparable, adequate and up-to-date information– Art. 20 and 21 of Universal Service Directive (USD) Quality of service NRAs can set minimum quality of service requirements – Art.22(3) USD Switching Initial commitment period shall not exceed 24m + contract offers with max 12m duration + conditions and procedures for termination shall not disincentivise operator change - Art. 30 USD E-privacy Surveillance of communications and related traffic data, without consent of the users concerned, shall be prohibited – Art. 5 ePrivacy Directive

2. Net neutrality stakeholders have different goals that have to be considered
Content Providers want to have: •  access to end-users •  non-discrimination of their content
Not e xhau stive

Internet Service Providers want to: •  protect their investments in the network •  have high return on their investments

Transit Providers want to: •  Keep payment flows as it is

End-Users want to have: •  information on what they pay for •  affordable prices •  access to all content and applications of their choice •  good quality of the internet service •  easy switching

3. BEREC’s work in the net neutrality field supports the Commission’s activities
In April 2011 the Commission asked BEREC to undertake a fact-finding exercise on issues crucial to ensuring an open and neutral internet. Issues Barriers to changing operators Quality of service BEREC’s results In October 2010, BEREC published a report on best practices to facilitate consumer switching. Additional information on switching was provided in 2011 based on the output of the Net Neutrality and Switching Questionnaire, issued by BEREC. In December 2011 BEREC published a framework for quality of service.

Transparency Blocking or throttling of internet traffic Other

In December 2011, BEREC adopted guidelines on transparency in the context of net neutrality by identifying best practices and recommended approaches. On 29 May 2012 BEREC published the results of its traffic management investigation, which covered more than 400 fixed and mobile ISPs and gives a very good overview of traffic management practices in Europe. At the same time, BEREC launched a public consultation on three further issues related to net neutrality, namely: •  quality of service, •  differentiation practices and related competition issues, and •  IP Interconnection.

Why should the Commission take action now?
Ø  The evidence from BEREC published in May shows that there is a problem regarding net neutrality on European markets Ø  Member States started to take different approaches regarding net neutrality that would lead to a fragmentation of the Digital Single Market Ø  Investors need regulatory certainty

The facts from BEREC’s traffic management investigation
•  •  •  •  •  •  •  •  Share of users affected: P2P fixed: 21% (plus some of additional 1%) P2P mobile: 36% (plus some of additional 6%) VoIP mobile: 21% (plus some of additional 18%) Mobile restrictions on other specific traffic: 12% (plus some of additional 10%) Share of operators that apply restrictions: (X% that apply restrictions to all their subscribers plus y% that apply restrictions to some of their users) P2P fixed: 15% (plus 3%) P2P mobile: 24% (plus 11%) VoIP mobile: 3% (plus 20%) Mobile restrictions on other specific traffic: 3% (plus 5%) Countries affected by restrictions imposed on subscribers: P2P fixed: 20, thereof 18 EU MS P2P mobile: 23, thereof 22 EU MS VoIP mobile: 15, thereof 14 EU MS Mobile restrictions on other specific traffic: 9, thereof 8 EU MS

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Source: The results of BEREC’s traffic management investigation:

Member States are adopting different approaches
•  In the Netherlands, on 8 May 2012 a net neutrality law has been adopted that prevents operators from charging for internet access services on the basis of the services and applications run over the internet. •  There is also a proposal for legislation on net neutrality in Belgium. •  The French regulator ARCEP has published in September 2010 ten net neutrality principles. On April 12, 2011 the Commission for economic affairs of the French parliament approved the report on net neutrality of MP Laure de La Raudière. The report contains 9 propositions.

What does the Commission propose?
Guidance on: •  Transparency •  Some elements of traffic management •  Switching •  The responsible use of traffic management tools

The Recommendation will affect positively both consumers and the industry
Choice This guidance will boost consumer confidence and choice

Regulatory certainty Under the current economic circumstances predictability and regulatory certainty is key for telecom operators and content providers.


Innovation It will stimulate innovation by enabling new business models and by facilitating the market entry of content providers and innovative businesses.

Growth, investments It will help grow the Internet economy and the roll out of highspeed Internet.

•  Thank you •  for your attention!