The FCC's decision this week to revise its rules on Net Neutrality has garnered a lot of publicity and comment, most of it critical of the Commission for seeming to abandon the concept of neutrality, in favor of letting ISPs prioritize traffic from users willing to pay more for the privilege. To gain a different perspective on these issues, it's worth examining how these concepts are viewed in Europe, where the issues are similar but the handling of them has been quite different.
The European debate on Net Neutrality is focused on what constitutes traffic management by the telecoms and how their subscribers will be impacted by traffic management. The question European regulators pose is: Will traffic management benefit the subscriber and content providers, or the telecom company?
New Net Neutrality Rules Coming
The European Union has decided to approve new Net Neutrality rules, according to The New York Times. This, however, is not the final decision. The European Parliament, which will be elected in May, will need to give their final endorsement before Net Neutrality regulations can be enforced.
A number of last minute amendments were inserted that provide a strict definition of Net Neutrality, which prevent telecom companies from discriminating between different services that operate over their data networks. The Net Neutrality legislation is designed to create a consistent communications market throughout the E.U. countries.
For and Against
Consumer groups and Internet companies are in favor of the proposed European regulations, while telecom companies are voicing objections, as described in this account from the U.K. newspaper, The Telegraph.
The legislation comes in response to telecom companies that, like in the U.S. cases, want to charge extra to content providers like Netflix and Google, as well as smaller start-ups. There is also evidence that some services were being given preferential treatment, and without new regulations, the fear was that the preferential treatment would continue. This might retard the development of new services, especially from startups that do not have deep pockets.
The telecom companies are suggesting that without the extra revenue from preferential treatment, they would not be able to make investments in their networks over the next 10 years. On the other hand, if the telecom companies reduce their investments, might that stimulate more competition from new telecom companies? I think the investment could be slowed but not eliminated. If we look at our own telecom companies, how many times have they made the case for rule changes or merger approval that has turned out not to be true (e.g., AT&T and T-Mobile)?
The Challenges
European consumers and content providers saw several challenging issues developing that prompted the drafting of new regulations. The telecom companies were moving to a position where they could dictate who was on their networks, what they could send, and how much these users would be charged for preferential treatment.
The following issues highlight the difficulties in drafting the legislation, and the forces that are on both sides of the Net Neutrality debate.
• Traffic Management--There are good reasons that telecom companies should be able to control traffic--e.g., to prevent spam and respond to legal or legislative requirements. Traffic management is important for the delivery of real-time communications such voice and video conferencing and TV--traffic types that need a high QoS.
There is, however, a fine line between the aforementioned traffic management and restrictions on traffic that profit the telecom company. The new regulations address this issue.
• Blocking and Throttling – This is a common practice that limits VoIP and P2P traffic. It is estimated that 21% of wired and 36% of wireless Internet users experience some traffic restrictions. Evidence collected by the Body of European Regulators for Electronic Communications (BEREC) finds that telecom companies that offer voice services directly were attempting to weaken the competition from over-the-top voice services through this traffic throttling.
• Privacy Issues/Deep Packet Inspection--This focuses on the ability to read the header so that the telecom company can accelerate or slow down traffic based on the subscriber's payment structure. Deep packet inspection actually reads the content of the communications, looking for data that can be used for advertising or other purposes.
But deep packet inspection can also read personal information that the sender would not want exposed. Deep packet inspection appears to violate an E.U. Data Protection Directive. The right of confidentiality is also protected by the European Convention on Human Rights (Article 8) and the Charter of Fundamental Rights of the European Union (Articles 7 and 8).
• Impact on Innovation--This can be viewed two ways. The regulations may limit the incentives for the telecom companies to offer new services. On the other hand, better Net Neutrality regulations probably stimulate more innovative startups to enter the services business. I think that latter is more likely. Telecom companies have not been the leaders in content innovation.
What Happens Outside Europe?
A big open question is what will happen when Net Neutrality Europe connects to no Net Neutrality U.S.? Will some content providers find it more advantageous to connect directly to European networks so they can receive fairer treatment compared to U.S.-based telecom companies?
An earlier New York Times article, "European Lawmakers Prepare to Vote on 'Net Neutrality'" discusses the potential ramifications from a yes or no vote by the E.U.
No Jitter blogs of interest include Appeals Court Nixes Net Neutrality, The Telephony IP Transition: Circumventing FCC Oversight, A Partial Win for Net Neutrality, Net Neutrality Matters, and Net Neutrality Collision Course: U.S. and Europe?
