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Out-Law News 4 min. read

European Commission to propose net neutrality measures

Internet service providers (ISPs) will be allowed to curtail traffic over their networks but will be forced to explain any limitations in their service to consumers under new plans to be unveiled by the European Commission.

On Tuesday Neelie Kroes, the EU Commissioner responsible for the Digital Agenda, said that she would "prepare recommendations" that would allow consumers "more real choices" over what ISPs to subscribe to and which would "end the net neutrality waiting game in Europe."

Those plans will not require all ISPs to deliver "full internet", she said, although she said she would "continue to monitor the market to ensure that European consumers generally have access to competitive full Internet products, fixed and mobile."

"I do not propose to force each and every operator to provide full Internet: it is for consumers to vote with their feet," Kroes said. "If consumers want to obtain discounts because they only plan to use limited online services, why stand in their way?"

"And we don't want to create obstacles to entrepreneurs who want to provide tailored connected services or service bundles, whether it's for social networking, music, smart grids, eHealth or whatever. But I want to be sure that these consumers are aware of what they are getting, and what they are missing," she added.

To that end Kroes said that her recommendations will require ISPs to provide a greater level of transparency over any limitations that apply to their services as well as requiring more qualified claims in adverts promoting those services.

"First, consumers need clear information on actual, real-life broadband speeds," she said. "Not just the speed at 3 am, but the speed at peak times. The upload as well as the download speed. The minimum speed, if applicable. And the speed you'll get when you're also watching IPTV as part of your triple-play bundle, or downloading a video on demand via a premium "managed" service. Plus, you should know what those advertised speeds typically allow you to do online."

"Second, consumers also need clear information on the limits of what they are paying for. Clear, quantified data ceilings are much better than vague 'fair use' policies that leave too much discretion to ISPs. They allow low-volume users to look for deals that suit them. And they incentivise ISPs to price data volumes in ways that reflect costs, and so support investment in modernising networks as traditional voice revenues decline."

"Third, consumers also need to know if they are getting Champagne or lesser sparkling wine. If it is not full Internet, it shouldn't be marketed as such; perhaps it shouldn't be marketed as 'Internet' at all, at least not without any upfront qualification. Regulators should have that kind of control over how ISPs market the service," Kroes said.

New guidance will be issued so that consumers can switch providers or services more easily, whilst the Commissioner also said "clear guidance" was also needed on how to give consumers "effective and informed control" over their privacy if ISPs monitor their online activity through 'packet inspection' in order to limit internet access.

ISPs sometimes block or slow down users' access to some content during busy periods on their networks, but can also benefit from this kind of "traffic management" by charging content providers who are willing to pay for preferential access to their subscribers or by charging users more for fewer restrictions. To decide which content to "throttle" or block access to ISPs sometimes inspect personal data contained in communications.

Net neutrality is the principle that an ISP will deliver all content requested by a customer equally, not allowing content producers which pay it to have preferential access to its subscribers.

In the EU there are no explicit laws on net neutrality, but recent changes to the Framework for Electronic Communications Directive set out certain requirements for national regulators to promote the concept.

Under the Directive EU member states must ensure that national regulatory authorities "take all reasonable measures" proportionate to  "promote the interests of the citizens of the European Union by ... promoting the ability of end-users to access and distribute information or run applications and services of their choice".

Other rules set out in the Universal Services Directive require ISPs to provide consumers with "comparable, adequate and up-to-date information for end-users on the quality of their services" as well as "transparent and up-to-date" details on prices, tariffs and contractual terms and conditions. Under the Directive regulators can choose whether or not ISPs should be required to maintain a minimum quality of service, but so far in the UK telecoms regulator Ofcom has said that such a measure is not required.

The Body of European Regulators of Electronic Communications (BEREC), which is made up of representatives from each of the telecoms regulators across the EU member states, has previously said that providing consumers with transparent information about the quality and restrictiveness of their internet service is "fundamental" if net neutrality is to be achieved.

BEREC's view is that national regulators must ensure that ISPs provide consumers with accessible, understandable, meaningful, comparable and accurate information in order to allow them to make "informed choices" about services.

BEREC has now issued new draft guidelines (65-page / 1.13MB PDF) on how national regulatory authorities should assess the quality of service that ISPs are offering when determining whether or not to introduce minimum standards of service that should be adhered to.

It has also published a draft report (55-page / 1.39MB PDF) on how net neutrality is affected at "wholesale level" through the "interconnection between ISPs and other intermediaries in the Internet value chain". In addition BEREC has also published a draft report (69-page / 1.48MB PDF) on competition issues that arise when ISPs enter agreements to provide priority access to particular content over other material through "slowing, accelerating or blocking traffic."

BEREC is consulting on its guidelines and reports until 31 July 2012.

In a statement it said it had concluded that competition between ISPs "is expected" to ensure consumers have access to "the best offers", but that this is "critically" dependent on "effective transparency and the ability of end-users to easily switch service providers."

BEREC added that regulators and consumers should both be able to "monitor the performance" of internet services through the service itself. It said that regulators were "ready to act without hesitation if necessary" to use "existing regulatory tools", such as impose quality of service requirements, if competition and transparency is "inadequate or insufficient" to address concerns about net neutrality.

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