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Net neutrality is an international issue

Net neutrality is currently a "hot" topic in the regulation of electronic communications. In many countries, such regulation is the subject of intense debate, both within the industry as well as among the politicians, while other countries have already implemented regulation of net neutrality. However, the regulatory model that has been chosen in different countries varies widely. This article compares some typical models that have been used in European countries.

By Frode Sørensen, Senior Advisor at the Norwegian Post and Telecommunications Authority

European status mid-2014

This summer, the European Commission published its status report on the implementation of the regulatory framework for electronic communications1. In the report, we can study the status of the regulation of net neutrality in the different member states, including discussion of the different regulatory methods varying from self-regulation to statutory regulation. It is also noted that the national processes in many countries for introducing new regulation have stopped in expectation of legislation at the European level.

BEREC's annual report on developments in the electronic communications sector2 also confirms this impression. At present, we have national legislation for net neutrality in the Netherlands and Slovenia. In Belgium and Luxembourg there has been debate concerning similar legislation, and in Germany things went as far as a proposal to enact net neutrality into law, which currently has been put on ice. In contrast, the Finnish government submitted draft legislation in January 2014 containing provisions concerning net neutrality, for which implementation is planned to occur in 2014/2015.

Regulatory approaches - in two dimensions

A few countries have introduced net neutrality into law, but are there alternative approaches to ensuring net neutrality? Several European countries have used self-regulation or co-regulation as a methodology. Self-regulation means that industry stakeholders establish a code of conduct among themselves, whereas co-regulation means that the regulator takes a more active role and leads the work towards a clearly defined goal of the guidelines that are developed.

Together with the regulatory method (self-regulation, co-regulation and traditional regulation), the choice of tangible regulatory tools is also of great significance. In many European countries, transparency has been the dominant tool, based upon the idea that well-informed end-users must be able to switch service providers if they are not satisfied with the net neutrality. At the same time, it is possible that this could contribute to ensure that providers, for fear of losing customers, would refrain from breaching net neutrality.

Self-regulation and transparency

In the European Commission's report, we can read that Denmark, Sweden and the UK have based their net neutrality activities on self-regulation. We also find elaborating descriptions in a report concerning net neutrality in the EU from the OpenForum Academy3.

In Denmark, the Net Neutrality Forum was established in May of 2011, and an industry code of conduct was launched in September of the same year. The forum is operated by industry stakeholders and consumer organisations, whereas the regulator, ERST, participates as an observer4. The Swedish regulator, PTS, was relatively early, issuing its Memorandum on Network Neutrality in 20095, and declaring that they would refrain from intervening unless it became absolutely necessary. And in 2011, PTS published a report concerning transparent Internet access6.

In the UK, the Broadband Stakeholder Group established an industry code of conduct in 2011 with a key facts indicator table7 in which the providers can declare any possible restrictions on the Internet subscription, almost like a "menu" for non-neutrality. In 2012, an attempt was made to establish a new industry code of conduct, with clearer net neutrality goals, however this has not attained any great support since many of the large providers have not decided to accept it8.

Co-regulatory approach in Norway

In Norway, the Norwegian Post and Telecommunications Authority (NPT) has chosen a co-regulatory approach to net neutrality. Norwegian guidelines for net neutrality were developed by a working group consisting of Internet service providers, content providers and consumer organisations, under the leadership of NPT. The guidelines that were launched in 2009 encompass principles that require neutral Internet access services from providers in the Norwegian market, with the exception of specific forms of reasonable traffic management9.

The rules in the Norwegian Guidelines pose tangible requirements concerning net neutrality that go further than the transparency requirement, and that can be compared in many manners with the proposed regulations that were adopted by the European Parliament in April 2014. The regulatory approach in Norway is however based upon co-regulation10. The advantage of this is that the regulations can be made more dynamic without a heavier legislative process, whereas the drawback is that the arrangement is voluntary and lacks any formal means to impose sanctions11.

During the years from 2009 up through the present, a professional environment has existed for the net neutrality debate in Norway. NPT has organised annual industry meetings where the Guidelines have been debated, however there has been unanimity on keeping them unchanged. The debate in the Norwegian media has been so lively that foreign observers have misinterpreted the situation12 as if the Guidelines were collapsing, but in reality the Norwegian Guidelines are being faithfully followed by the stakeholders of the industry.

Need for statutory regulation at the European level?

With such a "patchwork" of different regulatory approaches, which on the one hand vary in their regulatory method from self-regulation, via co-regulation, to statutory regulation, and on the other hand vary in terms of their regulatory tools from transparency to rules for reasonable traffic management, one could pose the question: Does this make for optimum regulation of net neutrality at the European level?

The European Commission has pointed out in its regulation proposal13 that a significant number of end-users are affected by traffic management that blocks or throttles specific applications, and that there is a need for clear rules at the European level. This is in order to avoid fragmentation of the market due to measures in individual countries.

Viewed from a Norwegian standpoint, the co-regulatory approach seems to have functioned well so far. None of the stakeholders in the market have expressed tangible desires for changes in the Guidelines, something which indicates that they can be regarded as stable and well-functioning. A co-regulatory approach could however be complex to implement at the European level, because the frontlines between the different stakeholders at present seem to be relatively rigid.

Global approach to net neutrality?

Occasionally, one hears the argument that the need for net neutrality regulation is an American issue, and that the competition in Europe function so well that violations of net neutrality are not a problem. Along these lines, it is interesting to read an analysis by van Schewick in The Atlantic14 earlier this year: "Unlike Internet users in Europe, many of whom are on restricted Internet service plans that ban the use of specific applications on mobile networks, U.S. users have experienced the power of an open Internet—and they are not willing to give it up." So one could ask whether it is in fact completely the opposite, and that the need is greater on our side of the Atlantic?

Simultaneously with the political process in Europe to reach agreement on new rules for regulating net neutrality, a corresponding process is taking place in the United States. In addition, a number of other countries around the world have introduced regulation of net neutrality, while at the same time there is a continuing stream of new countries looking into the matter. The Internet's global extent makes net neutrality an international issue.

References:

2014 Report on Implementation of the EU regulatory framework for electronic communications, https://ec.europa.eu/digital-agenda/en/news/2014-report-implementation-eu-regulatory-framework-electronic-communications
BEREC annual report on developments in the electronic communications sector in 2013, June 2014, http://berec.europa.eu/eng/document_register/subject_matter/berec/annual_reports/4407-berec-annual-reports-for-2013
Net Neutrality in the EU - Country Factsheets, OpenForum Academy, Ana Olmos, Jorge Castro, September 2013, http://www.openforumacademy.org/library/ofa-research/OFA%20Net%20Neutrality%20in%20the%20EU%20-%20Country%20Factsheets%2020130905.pdf
Net Neutrality in the EU - Country Factsheets, OpenForum Academy, September 2013
5 Memorandum on Network neutrality, PTS, January 2009, http://www.pts.se/upload/Rapporter/Internet/2009/natneutralitet-2009-6-eng.pdf
6 Transparenta internetaccesser, PTS, December 2011, http://www.pts.se/sv/Dokument/Rapporter/Internet/2011/Transparenta-internettaccesser---PTS-ER-201129/
7 Voluntary industry code of practice on traffic management transparency for broadband services, Broadband Stakeholder Group (BSG), March 2011, http://www.broadbanduk.org/wp-content/uploads/2013/08/Voluntary-industry-code-of-practice-on-traffic-management-transparency-on-broadband-services-updated-version-May-2013.pdf
8 2014 Report on Implementation of the EU regulatory framework for electronic communications
9 Norwegian guidelines for net neutrality, 2009, http://eng.npt.no/technical/internet/net-neutrality/net-neutrality/
10 Prospective analysis of net neutrality policy scenarios, Ana Olmos, OpenForum Academy, 2013, www.openforumacademy.org
11 Net Neutrality: Ending Network Discrimination in Europe, Raegan MacDonald, Giusy Cannella, 2014 Report of the Dynamic Coalition on Network Neutrality, http://www.networkneutrality.info/sources.html
12 Net neutrality and Quality of Service, Louis Pouzin, 2014 Report of the Dynamic Coalition on Network Neutrality, http://www.networkneutrality.info/sources.html and http://news.heartland.org/newspaper-article/norway-isp-ends-net-neutrality-support
13 Proposal for a regulation of the European Parliament and of the Council laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent, European Commission, September 2013
14 The Case for Rebooting the Network Neutrality Debate, The Atlantic, Barbara van Schewick, May 2014