Net neutrality: a new round, new opportunities?

Since 2013 internet service providers (“ISPs”) in the Netherlands have been forbidden from treating internet data traffic in a discriminatory manner, and until recently, the Netherlands was one of the very few countries worldwide to have statutory net neutrality obligations.

This has now changed with the entry into force of EU Regulation 2015/2120 (the “Regulation”), which introduces one single net neutrality regime for the entire EU. The Regulation appears to differ from the Dutch net neutrality law in a couple of interesting ways:

Specialized services

Although the principle that data traffic should be treated equally is appropriate in most cases, the EU legislator has concluded that some content prioritisation is crucial in practice. An example is telesurgery, a technique that enables the execution of surgeries at a distance. During such operations, sudden lags due to competing heavy video streaming would be undesirable. As a result, the EU legislator has introduced the concept of “specialized services”, services which require some form of network optimization in order to function properly. Specialized services are not considered to be “internet access services” under the Regulation and therefore fall outside the scope of the prohibition of discrimination. However, several requirements must be met in order to qualify as a specialized service:

- the optimization concerned must be objectively necessary;

- the service must not aim to replace a regular internet access service;

- the ISP must hold sufficient capacity to deliver the specialized service in addition to the regular internet access service; and

- the specialized service must not have a negative impact on the general availability of the regular internet access service.

These requirements will undoubtedly lead to lively discussions in the near future. For example, should mobile stock trading applications qualify as specialized services? The importance of trade order execution without delays and the possible damages involved are not hypothetical, but does this justify a preferential treatment?

Zero-rating

Another hot potato regarding net neutrality is “zero-rating”, a process where an ISP co-delivers certain content or services with a (mobile) internet access service, in which the use of such content or services does not count as data bundle usage. Such price models are potentially lucrative, but also problematic from a competition perspective. After all, companies with deep pockets will more easily enrol in zero-rating deals with ISP's than start-ups that aim to compete with providers of such services or content. For this reason, the Dutch Minister of Economic Affairs recently prohibited zero-rating deals - an interesting move, considering that the European Commission has claimed that zero-rating deals could help innovative services reach audiences that would otherwise not be reachable.

In search of guidance

Unfortunately, the issues in need of clarification are not limited to specialized services and zero rating. To provide the necessary guidance, the Body of European Regulators of Electronic Communications (BEREC) will publish enforcement guidelines for the national supervising authorities, with the first draft expected on 8 June 2016. In the meantime, stakeholders are requested to engage in BEREC's public consultation round.

We will continue to monitor these developments and provide you with the necessary updates.

If you would like more information, please contact the authors.