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Regulatory assessment of Telia’s zero-rating offer Music Freedom

Norwegian Communications Authority (Nkom) has conducted an analysis of Telias’s zero-rating offer Music Freedom based on the European net neutrality rules. Nkom has critical comments to several factors considered, but has concluded that it does not give ground to intervene at this point in time. Furthermore, Nkom will follow closely the development of zero-rating in the Norwegian market in the future.

Net neutrality means that the end-users shall decide themselves what they want to use their internet access service to, and that the internet service providers shall not limit the end-users’ choice of content and applications. Zero-rating means that selected content and applications does not count towards the data cap, typically in mobile subscriptions. Nkom finds that zero-rating limits the end-users' choice and increases entry barriers for content and application providers.

Telia introduced the zero-rating offer Music Freedom related to a wide selection of their mobile internet access subscriptions in June 2017. Nkom has assessed the offer based on the methodology of the European net neutrality rules, and has critical comments to several factors considered in the regulatory assessment. These are in particular the following:

  • Telia Music Freedom is offered by an internet service provider with considerable influence in the mobile internet access market. 
  • The content and application providers included in the zero-rating scheme are, in practice, relatively limited, and cover only larger well-known providers. 
  • Zero-rating limits the end-users’ choice, in particular because of the relatively small data caps in proportion to the price, that are offered compared with other countries.
  • The scale of zero-rating practices is increasing in the national market.

However, the scale of zero-rating is still limited in the mobile internet access market, and alternative offers without zero-rating are available to end-users. Therefore, based on an overall assessment, Nkom has come to the conclusion that this does not give ground to intervene at this point in time.

Nkom will follow the development of zero-rating

The scale of zero-rating has increased markedly in the national market after the European net neutrality rules replaced the Norwegian net neutrality guidelines. This increases the need for Nkom to follow-up zero-rating offers in the future, in order to initiate corrective measures whenever necessary.

Nkom’s general approach to zero-rating is that it has negative effect both on the end-users’ choice and on the competition between different applications, but also between different categories of applications. If the zero-rating practices in the market don’t function satisfactory, especially if the scale increases significantly, it is likely that Nkom would have to reassess its analysis of zero-rating in the market.

Internet service providers' zero-rated offerings and end-users' acquisition of such subscriptions are likely to develop dynamically in the market in the coming years. Nkom refers to the decision of the Norwegian parliament, Stortinget, to seek to maintain the Norwegian net neutrality policy within the framework of the European net neutrality rules. This will define the premises for Nkom's assessment of zero-rating in the market over time.