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Traffic management practices must not be anti-competitive, European Parliament says

Out-Law News | 22 Nov 2011 | 2:49 pm | 4 min. read

The European Parliament has adopted a resolution promoting the principles of an "open and neutral" internet.

The Parliament said net neutrality was a "key driver of innovation and consumer demand". It said that, whilst internet service providers (ISPs) were entitled to manage congestion on their service, those practices must not be anti-competitive.

"The European Parliament ... considers effective competition in electronic communication services, transparency in relation to traffic management and to quality of service, as well as ease of [consumer] switching, to be among the minimum necessary conditions for net neutrality, assuring end users that they can enjoy freedom of choice and requests," the resolution said.

National telecoms regulators across the EU should "ensure that traffic-management interventions do not involve anti-competitive or harmful discrimination; believes specialised (or managed) services should not be detrimental to the safeguarding of robust ‘best effort’ internet access, thus fostering innovation and freedom of expression, ensuring competition and avoiding a new digital divide," it said.

The European Commission should issue EU-wide guidelines on net neutrality to ensure that national regulators "properly and consistently" apply and enforce existing EU laws, it said.

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. ISPs engage in traffic shaping, or traffic management, to ensure that one user's heavy use of a network for downloading material does not prevent another user of that network from being able to perform basic tasks such as sending or receiving email or looking at web pages.

The net neutrality debate has been most lively in the US, where telecoms companies have said that content producers should share the cost of network building and maintenance. Opponents of that view claim that subscribers' fees to ISPs should buy them access to all information equally, not to a service in which some content is prioritised because of deals between ISPs and content producers.

Under the Treaty on the Functioning of the European Union (TFEU) "all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between member states and which have as their object or effect the prevention, restriction or distortion of competition with the internal market" are generally prohibited.

Exceptions apply if the agreements can be shown to contribute to "improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit" providing any restrictions that are imposed are "indispensable to the attainment of these objectives" and do not create the situation where competition can be eliminated "in respect of a substantial part of the products in question".

EU rules around net neutrality have not been explicitly written into EU-wide Directives, 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 force ISPs to maintain a minimum quality of service and provide transparent information to customers about the services they provide.

Regulators should "use their full power" to "impose minimum quality-of-service standards" on ISPs, the Parliament's resolution said. It also called for ISPs to be more transparent about how they manage their services.

"The European Parliament ... calls for transparency in traffic management, including better information for end users, and stresses the need to enable consumers to make informed choices and to have the effective option of switching to a new provider that can best meet their needs and preferences, including in relation to the speed and volume of downloads and services," the resolution said.

"[The Parliament also] points out, in this regard, the importance of providing consumers with clear, effective, meaningful and comparable information on all relevant commercial practices with equivalent effect, and in particular on mobile internet," it said.

Last month the Body of European Regulators of Electronic Communications (BEREC), which is made up of representatives of telecoms regulators in the 27 EU countries, said that ISPs must provide consumers with accessible, understandable, meaningful, comparable and accurate information in order to allow them to make "informed choices" about services.

BEREC has been tasked by the European Commission to investigate traffic management practices used by ISPs, and current barriers to consumers switching contracts, with a view to determining whether net neutrality needs to be further regulated.

The European Parliament said it wants the Commission to "assess ... whether further regulatory measures are needed in order to ensure freedom of expression, freedom of access to information, freedom of choice for consumers, and media pluralism, to achieve effective competition and innovation, and to facilitate wide-ranging benefits in terms of citizens‘, businesses’ and public administration uses of the internet" within six months of BEREC publishing its investigation findings.

"Any measure in the area of net neutrality should, alongside existing competition law, aim to tackle anti-competitive practices that may emerge, and should lead to investment and facilitate innovative business models for the online economy," it said.

The Commission should ensure that the existing legislative framework around net neutrality is consistently applied and enforced across the EU and that ISPs' traffic management practices are monitored, the Parliament said.

"The European Parliament ...calls on the Commission, together with BEREC in cooperation with Member States, closely to monitor the development of traffic-management practices and interconnection agreements, in particular in relation to blocking and throttling of, or excessive pricing for, VoIP and file sharing, as well as anticompetitive behaviour and excessive degradation of quality, as required by the EU ‘Telecoms’ regulatory framework," the resolution said.

"[The Parliament] calls further on the Commission to ensure that internet service providers do not block, discriminate against, impair or degrade the ability of any person to use a service to access, use, send, post, receive or offer any content, application or service of their choice, irrespective of source or target," it said.

The European Parliament said that the Commission should "publish further guidance" that informs internet users "about the right to switch operators". It also said EU member states should make sure that they consistently ban misleading claims in adverts related to "the discrepancy between advertised and actual delivery speeds from internet connections".

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