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Net Neutrality in Europe

February 2012

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Safeguarding open internet is a key policy objective

•Starting point: the Internet as a perceived fundamental right and an engine for growth

•Overall aim in the ‘net neutrality’ debate should be to ensure that consumers continue to benefit from both innovation in services and investment in networks

•Revised EU telecoms framework favours the preservation of the open and neutral character of the internet, underpinned by the following principles:

- The ability of end-users to discover and access lawful internet-based content or applications of their choice, and

- The ability of content & app providers to access end-users “without permission”

•The UK government has proposed a self-regulatory approach based on three key principles:

• No blocking of legal content• No discrimination against alternative services • Clear and transparent traffic management policies

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Why does the open internet matter?

• ‘Innovation without permission’ has allowed new entrants to scale rapidly and become today’s most well-known internet companies

The open internet has been a successful engine for innovation and growth, carrying mutual benefits for users, internet companies and network providers:

Network providers benefit from increased demand and have incentive

Wider potential audience and access to faster services stimulates innovation by

Consumers benefit from a richer range of content andservices, stimulating demand

for access and willingness to pay for enhanced networks

to invest in enhanced networks, widening and strengthening digital inclusion in the UK

content providers and encourages greater provision of content

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There are emerging risks to the open internet

• Service innovation will be hindered if network operators block access to services, or apply traffic management in a manner that discriminates against alternative services

• UK regulator (Ofcom) has said such market behaviour would be ‘highly undesirable’

• Evidence of such practices emerging across Europe but future threat perhaps more important

Between late 2009 and 2010, BBC iPlayer suffered a reduction in service bit rate and quality for many end-users. This resulted from the introduction of a BT policy in relation to video streaming that their Option 1 broadband users would be restricted to a maximum video streaming rate of 896 kbps between 5pm and midnight.

In the UK Vodafone charge a premium of £15 a month if users of mobile devices wish to use VoIP applications such as Skype.

Orange explicitly restrict the use of certain non-Orange services in their terms and conditions which state that “The Offer is not to be used for other activities such as non-Orange internet-based streaming services, voice or video over the internet, peer to peer file sharing, non-Orange internet based video.”

In the Netherlands KPN announced its intention in April 2011 to charge a premium for access to specific applications including VoIP, instant messaging and streaming video.

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The way forward

• Ongoing engagement in policy debate – BBC and other service providers recently published a major report

• A sustained demonstration of commitment to the open internet by EU institutions, national governments and regulators

• Ensuring network operators continue to respond with efforts to increase transparency on traffic management

• Supporting work in the UK on an industry code of practice to address the issues of blocking and negative discrimination

• Policy-makers should closely monitor market developments and be prepared to use their backstop powers if necessary to protect the quality of the ‘best efforts’ internet.