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On the origin of specialised services

Specialised services are a main topic in the important debate about net neutrality in Europe. Yet how are we to understand this concept? What does it mean in practice? Which specific services does it refer to? While looking for answers to these questions, we get to the very core of the discussion: how specialised services relate to the Internet.

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

To start with the practical side of the discussion: these services already exist today. They consist of traditional services that have migrated to IP technology, such as facilities-based VoIP and IPTV. However, they can also be used to provide new services, and e-health seems to be the most prominent example that is being highlighted by stakeholders.

The actual definition of specialised services is important, as it does not include Internet-based applications that are increasingly used as a substitute for traditional services. Such Internet-based applications are often termed "over-the-top" and include such things as peer-to-peer telephony (e.g. Skype) and video streaming.

The "over-the-top" phrase indicates that there are two layers: the application layer and the network layer. The application layer is placed on top of and clearly separated from the network layer, which facilitates the development and deployment of new applications. This is the basis for the enormous innovation in content and applications on the Internet that we have witnessed in recent years.

But where does the term "specialised services" come from?

The beginning

Tim Wu introduced the "net neutrality" concept more than ten years ago, and in 2005 Federal Communications Commission (FCC) launched its open Internet principles. These two events can be seen as the very first steps in the development of a net neutrality policy, though the essence of net neutrality could already be found in the Internet's underlying functioning.

The Norwegian Communications Authority (Nkom) was the first in Europe to establish a regulatory platform for net neutrality. Nkom based its work on co-regulation, and Norwegian guidelines for net neutrality were introduced in February 2009. These guidelines implicitly discuss specialised services and state that "if the physical connection is shared with other services, it must be clear how the capacity is allocated between the Internet traffic and the other services".1

In October 2009, FCC published a Notice of Proposed Rulemaking, and in December 2009 FCC introduced rules for preserving a free and open Internet. These two documents explicitly address specialised services, but do not define the term. However, the latter document refers to "specialized services, such as existing facilities-based VoIP".2

Net neutrality was intensely debated during the political process that led to a revised European regulatory framework in December 2009. The framework aims to promote competition among service providers, and with regard to net neutrality, transparency is emphasised as a tool to enable end users to switch providers when necessary.

BEREC's definitions

In 2010, BEREC established its Net Neutrality Expert Working Group that was to study practical methods for the application of the net neutrality provisions of the European regulatory framework. Due to the emphasis placed on transparency in the framework, the first report from the group was "Guidelines on transparency in the scope of net neutrality", closely followed by "Framework for quality of service in the scope of net neutrality".

The Framework for quality of service represents BEREC's first step in the analysis of Article 22(3) of the Universal Service Directive on the prevention of service degradation. The report introduces main categories of service offers that ought to be considered by regulators when assessing the net neutrality situation in the market: Internet access services and specialised services, two services that share capacity on the end-user's broadband connection, also referred to as "the two lanes".

The Guidelines for quality of service in the scope of net neutrality3 came in 2012, and introduced definitions for the service categories. The Guidelines presented a complete service model for regulatory assessment of net neutrality. The Internet access service is defined as a service that provides connectivity to the Internet, while specialised services are provided over virtual or physical networks distinct from networks constituting the Internet, but that will typically operate over the same infrastructure.

Furthermore, as the regulatory framework from 2009 did not mandate net neutrality, two versions of the Internet access service are defined: unrestricted and restricted Internet access services. Unrestricted services provide access to all applications and all end-points on the Internet with the exception of reasonable traffic management, while restricted services may also include unreasonable traffic management (such as the blocking of individual applications).

Assessment of the net neutrality situation in the market can thus be carried out on the basis of two methods: (1) First, an assessment can be made of whether Internet access services generally are degraded, typically in comparison to specialised services. (2) Second, an assessment can be made of whether individual applications which use Internet access services are being degraded; in other words, check the penetration of restricted Internet access services.

EU legislation

When on 11 September 2013 the European Commission published its proposal for a Regulation to achieve a "Connected Continent", the regulatory goal of promoting net neutrality was proposed converted to a "freedom" for Internet users. The proposal contained net neutrality provisions acknowledging a service model consisting of the Internet access service and specialised services.

In BEREC's statement on the proposal, we read that: "BEREC welcomes the Commission’s acknowledgment of the existence of specialised services alongside and distinct from internet access services (IAS). However, BEREC believes the relevant definition does not adequately capture their provision within closed networks and so risks hindering NRAs’ capacity to apply open Internet standards to IAS and to determine the acceptable relationship between IAS and specialised services."4

After extensive discussion in the committees of the European Parliament, the vote during the plenary meeting on 3 April 2014 resulted in the adoption of several net neutrality provisions that strengthened the definitions of the two service categories. The wording of a number of articles was amended, to some extent in line with BEREC's suggestions.

BEREC expresses support for the European Parliament's work on promoting the principle of net neutrality, and clarifies in regard to the service model that "BEREC considers that specialised services should be clearly separated (physically or virtually) from internet access services at the network layer, to ensure that sufficient safeguards prevent degradation of the internet access services."5

This is where the case stands after the Parliament debated it.

Potential for improvement

The next step of the political process is the handling in the Council. As we have seen, there still appears to be a need for further improvements to the net neutrality provisions. The "specialised services" concept is now well-known among politicians, and with the help of an even better clarification of the definition, this can be made into a precise and enforceable regulatory tool.

There is also room for improvement in regard to the definition of the Internet access services. Any service offers that provide access to a part of the Internet (e.g. limited to just Facebook) will not be covered by the current definitions. Removing such loopholes in the text of the regulations can prevent regulatory uncertainty.

The service model with the two service categories has been developed to provide a balanced approach to net neutrality. The model both protects net neutrality for Internet-based applications whilst allowing alternative approaches to quality of service and business models for specialised services. As specialised services are exempted from net neutrality, it is especially important that the specialised services are clearly separated from the Internet access services, so as to ensure that Internet traffic is not degraded.

With wishes for an open Internet in a modern Europe!

  1. Norwegian guidelines for neutrality on the Internet, Nkom, 2009
  2. Report and order, Preserving the free and open Internet, FCC, 2010
  3. Guidelines for quality of service in the scope of net neutrality, BEREC, 2012
  4. Statement on the publication of a European Commission proposal for a Regulation, BEREC, 2013
  5. Views on the European Parliament first reading legislative resolution on the proposal for a Regulation, BEREC 2014