Search results for: zero-rating

This note consolidates information we have available on the current (July 2017) status of telecoms regulator’s considerations of zero-rated offers in Europe. See also our other posts on zero-rating.

Conclusion:

  • Many European regulators are yet to consider the issue of net neutrality and zero-rated services following the 2015 Regulations. For those who have reached decisions since the introduction of the 2015 Regulations, most seem to have concluded that as long as the service provider does not discriminate between zero-rated services and non-zero-rated services once a user’s data cap is reached, the service provider’s zero-rated offerings will be found to be in compliance with the 2015 Regulations. If, however, the user is permitted to continue using the zero-rated services after reaching a data cap, the BEREC guidelines (which say that allowing a zero-rated service to continue when others are blocked is an automatic per se breach) have been followed.
  • So far it appears that only Belgium has conducted a full “multi-factor analysis” as required under the 2015 Regulation.

Background

  • Regulation (EU) 2015/2120 on open internet access (“2015 Regulation”) introduced EU-wide provisions on net neutrality with application from 30 April 2016. Article 3(1) says: “End-users shall have the right to access and distribute information and content, use and provide applications and services, and use terminal equipment of their choice, irrespective of the end-user’s or provider’s location or the location, origin or destination of the information, content, application or service, via their internet access service”. More information.
  • The 2015 Regulation does not expressly prohibit “zero rating” services (ie the practice of not depleting a customer’s data bundle when they use certain services) , but Recital 7 and Article 3(2) of the 2015 Regulation state that national regulators “should be empowered to intervene against agreements or commercial practices which by reason of their scale, lead to situations where end users’ choice is materially reduced in practice”.
  • Also, Article 3(3) states that “providers of internet access services shall treat all traffic equally, when providing internet access services, without discrimination, restriction or inference, and irrespective of the sender and receiver, the content accessed or distributed, the applications or services used or provided, or the terminal equipment used”
  • The Body of European Regulators for Electronic Communication (“BEREC”) published guidelines on 30 August 2016 which state (at paragraph 46) that regulators should conduct a “comprehensive assessment ” before determining if a commercial practice limits the exercise by end users of their rights under Article 3(1). More information.
  • These guidelines also say (at paragraph 41) that if a service provider blocks all applications once a data cap is reached except for the zero-rated ones this would be a per se infringement.
  • The table below shows how the issue of zero-rating has been treated in practice, so far, in the EU.
Country (Regulator)/
Zero-Rated service		 Treatment of zero-rated service by the regulator / Outcome
Austria (RTR)

The mobile operator’s own TV streaming service (3MobileTV). The zero rating did not apply to other TV streaming services.

 · On 5 October 2016, Epicenter.works (an NGO set up with the aim of combating data retention and safeguarding human rights) filed a complaint to the RTR against mobile operator Hutchison Drei Austria GmbH (commonly known as the mobile network 3) (“3”).

· Epicenter.works complained that 3’s plans, which allowed users to access zero-rated services operated by 3 after reaching their monthly cap, violated net neutrality principles. 3 subsequently amended its offerings so that the zero-rated services cannot be used once the user has reached their monthly data cap, and as a result it appears that the RTR will not need to make a decision. We have confirmed this via contacts with 3 in Austria.

· Further information about the 3 case. / Further information about the 3 case (2).

· Epicenter.works’ complaint to the RTR (German only).

· RTR’s response acknowledging receipt and informing Epicenter.works’ that any investigation into the matter could take some time (German only).

· Outcome: Unclear, as 3 amended its offerings before the RTR began its investigation.
Belgium (BPIT)

Users choose one of Facebook, WhatsApp, Snapchat, Instagram, Twitter and Pokemon Go to be a zero-rated app.

 · On 30 January 2017, the BIPT published a report containing its “multi-factor analysis” of the zero rating offers provided by Proximus (a Belgian telecoms company) and found that Proximus’ zero rating offers comply with EU net neutrality laws. Note, Proximus do not treat access to zero-rated apps differently from general internet access once a user reaches their monthly data cap.

· The BIPT emphasised the fact that by comparison to cases in Hungary and Sweden, Proximus’ offer allows users to choose an app that will be zero-rated until the user’s monthly data cap is reached, but once the cap is reached, access to all apps is restricted. For this reason, Proximus’ offering was found not to be discriminatory with regards to its treatment of data traffic.

· BIPT’s multi-factor analysis into Proximus’ zero rating offers.

· Outcome: In this case, Proximus’ zero rating offers were deemed to be compliant with the 2015 Regulation.
Hungary
(NMHH)Magyar Telekom: OTT internet video
services (eg mobile/OTT TV Go and
HBO Go), and in particular its
‘unlimited TV and film’ monthly fee option.Telenor Hungary: social media apps, including its ‘MyChat’ IM app, its ‘MyMusic’ service and online radio stations.		 Post-2015 Regulation:

· Magyar Telekom: in December 2016, following an investigation that was concluded on 21 November 2016, NMHH ordered Magyar Telekom (Hungary’s largest telecoms company) to suspend its zero-rated offers because it found it to be discriminatory. It is unclear whether Magyar Telekom has suspended its zero-rated offers.

· Further information about NMHH’s Magyar Telekom decision. / Further information about NMHH’s Magyar Telekom decision(2).

· Telenor Hungary: in December 2016, NMHH concluded that the zero rating offer provided by Telenor Hungary (Hungary’s second largest mobile phone operator) of certain social media, music and radio apps infringes net neutrality rules. NMHH said that Telenor’s offers created a disadvantage for other competing apps because users would be encouraged to choose the zero-rated apps selected by Telenor rather than competing ones, as a supplement would be payable for competing apps once the users’ monthly data cap was exhausted. It is unclear whether Telenor Hungary has suspended its zero-rated offers.

· Further information about NMHH’s Telenor decision. / Further information about NMHH’s Telenor decision(2).

· Outcome: The zero-rated services offered by both Magyar Telekom and Telenor Hungary were found to infringe EU net neutrality principles.
Norway

(NPT) n/a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       .

 Pre-2015 Regulation:

· The NPT’s third principle in its 2009 Guidelines for Internet neutrality state that “Internet users are entitled to an Internet connection that is free of discrimination with regard to type of application, service or content orbased on sender or receiver address“, with the guidance to this principle stating that there must be no unreasonable manipulation or degradation of traffic for individual data streams. The 2009 Guidelines do not, however, directly address the issue of zero-rated services.

· In November 2014, the Norwegian Communications Authority published an article clarifying its stance to zero-rated services. The article states as follows: “The Norwegian guidelines on net neutrality state quite clearly that ‘Internet users are entitled to an Internet connection that is free of discrimination with regard to type of application, service or content or based on sender or receiver address.’ This means that in the Norwegian market zero-rating would constitute a violation of the guidelines … The Norwegian Post and Telecommunications Authority (NPT) has long been working actively for net neutrality for the benefit of Norwegian consumers, organisations and businesses. The Internet is important to economy, cultural diversity, social life and democracy, and NPT therefore works to preserve the Internet as an open platform. Internet service providers should use methods other than discrimination of content and/or applications to differentiate their products. One possibility is differentiation on the basis of speed, in line with the Norwegian guidelines on net neutrality.“This suggests that zero-rated services would be held to violate the 2015 Regulations, although it is not clear whether the NPT would find all zero-rated services to be in violation, or, for example, only those services which discriminated data traffic after a user reached their data cap.

· Outcome: no specific cases considered under the 2015 Regulation
Slovenia

(AKOS)
Telekom Slovenije: the music app Deezer.

Si.mobil: the cloud storage service Hangar Mapa.

 Pre-2015 Regulation:

· In January 2015, AKOS prohibited the zero rating offers provided by Telkom Slovenije (Slovenian telecoms company) and Si.mobil (Slovenia’s second largest mobile operator), which permitted the use of the music app Deezer and cloud storage service Hangar Mapa, respectively.
· Further information on AKOS’ Telekom Slovenije and Si.mobil decision.

Post-2015 Regulation:

· Administrative court decision: following Telkom Slovenije and Si.mobil’s appeal against AKOS’ decision of January 2015 (see above), in July 2016, the administrative court annulled AKOS’ decision and returned the matter back to them. The court held that the Slovenian Electronic Communications Act does not prohibit zero rating outright and that the regulator had not based its decision on any determination of harm to end-users, but on an incorrectly assumed legislative prohibition of positive price discrimination.

· Further information on the administrative court’s decision.

· In November 2016, AKOS reissued its decision on Telkom Slovenije and Si.mobil, deciding that offers which throttle all traffic except zero-rated traffic once users reach their monthly limit violate the provisions of Slovenian net neutrality rules.

· Further information on AKOS’ decision in respect of Telkom Slovenije (Slovenian only).

· Further information on AKOS’ decision in respect of Si.mobil (Slovenian only).

· Outcome: By contrast to the administrative court, AKOS found that the zero-rated services offered by both Telekom Slovenije and Si.mobil violated net neutrality laws.
Sweden (PTS)

Telia: ‘free surf on social media’ service and ‘free surf listening’ music service.
Hi3G: ‘free surf for music streaming’ services.

 · Telia: in January 2017, the PTS found the zero rating offers provided by Telia (a large Swedish telephone company and mobile network operator) violated the 2015 Regulation because they did not treat internet access equally and failed to comply with BEREC guidelines by blocking competing apps when the monthly cap was reached.

· Further information about the PTS’ Telia decision. / Further information about the PTS’ Telia decision (2)

· Telia court decision: on 8 March 2017, the court suspended the PTS’ decision of January 2017 (see above) on the basis that it is uncertain whether an immediate discontinuance of Telia’s services would have substantial negative effects for Telia’s end users. The court did not, however, assess the question of net neutrality and the application of the 2015 Regulation.

· Further information (from DLA Piper) about the court’s Telia decision.

· Hi3G: the PTS also opened an investigation into a zero rating offer from Hi3G (a Swedish telecoms operator) for music streaming services, which did not block the zero-rated services when the user’s data cap was reached. In December 2016, Hi3G informed the PTS that it would change its zero rating offer to comply with the 2015 Regulation. No further action appears to have been taken by the PTS in this case.

· Further information about Hi3G’s decision. / Further information about Hi3G’s decision (2)

· Outcome: The services offered by Telia was found by the PTS to infringe EU net neutrality principles but the focus appears to be on traffic management not zero-rating.
Netherlands (ACM)

Vodafone: streaming of the app HBO Go.
T-Mobile: all music streaming services (with throttling applying after the customer’s data bundle is used up).

 Pre-2015 Regulation:
· Vodafone: in January 2015, the ACM issued a fine against Vodafone, stating that its zero-rated app HBO Go infringed national laws on network neutrality.· Further information on the ACM’s Vodafone decision. / Further information on the ACM’s Vodafone decision (2).
Post-2015 Regulation:· T-Mobile: in October 2016, the ACM requested that T-Mobile stop its zero rating offer on music streaming services. This was despite the fact that T-Mobile’s zero rating offer includes any music streaming services, and is not restricted to selected apps.· Further information on the ACM’s T-Mobile decision and T-Mobile’s response to the ACM’s decision (Dutch only).· T-Mobile court decision: on 20 April 2017, the Dutch court ruled that the Netherlands law was not consistent with, and has been superseded by, the 2015 EU Regulation. This meant that the T-Mobile service can continue until such time as ACM re-opens the matter and conducts a thorough analysis of the service under the 2015 Regulation. Report of the outcome of the T-Mobile appeal.· On 23 May 2017 ACM said that it had begun a new investigation under the 2015 Regulation. This is ongoing.· Outcome: In both cases, the ACM blocked zero rating offers on the basis of a Dutch law pre-dating the 2015 Regulation. T-Mobile’s appeal makes clear that the 2015 Regulation supersedes Dutch law and so the regulator mustconduct a specific analysis before banning a service. The new ACM investigation is ongoing.
Italy (AGCOM)

Wind Tre: “Music 3” music service; and the Veon app (customer care and messaging)

 · On 15th March 2017 AGCOM launched an investigation into these 2 services offered by WIND Tre, both of which work so as to allow the zero-rated application .to continue even after a data bundle is used up.

· AGCOM decision (in Italian).

· Outcome: Zero-rated apps (which continue after data cap is used) currently appear to be considered unlawful by AGCOM. Awaiting news of Wind Tre’s next steps and possible appeal.
Germany (Bundesnetzagentur)

Deutsche Telekom: StreamOn (zero rated music and also video for some customers)

 · On 16 May 2017 the German regulator Bundesnetzagentur opened an investigation into whether this service infringes the 2015 Regulation. It applies to a wide range of music and video services.

· More information (in German).

· Outcome: pending the result of the investigation StreamOn continues and has expended (as of July 2017) to around 50 content partners.

I was on a panel session for the Total Telecom Congress in London on Wednesday and thought i would share some observations gleaned from other speakers that are relevant to the media sector and it’s intersection with telecoms:

Something like 20-30% of all mobile data traffic is advertising! This is – i think -an astonishing statistic. It also makes me think that since consumers are paying for such a large volume of data they haven’t requested it would be perfectly reasonable for a mobile operator to offer a service where consumers did not pay for the data used up by ads.

However zero-rating advertising this way is something which is currently – in most cases – banned by (new) EU rules. I have blogged about how wrong-headed this is this many times eg here:

It seems to me that the issue of consumers paying for data they haven’t requested, and in fact regulators *requiring* mobile operators to charge for this non-requested data is likely to be especially acute in emerging markets where consumers are poorer and are likely to access the internet only through a mobile device.

Ironically India is itself a “leader” (if that is the right word) in preventing zero-rating by regulation. This also, i think, explains the fact that mobile ad-blocking technology is much more prevalent in emerging markets (see here)

So the issue of data used by mobile advertising seems to me a further reason to object to any regulation which in principle prevents the practice of zero-rating.

I have already blogged a few times (eg here about perverse effects of net neutrality rules being applied always and everywhere as if there were some sort of human right to equal treatment of internet traffic. Specifically i expressed particular concern about the idea that there must be something wrong, in essence, with “zero rating” certain types of traffic.

I am very disappointed (but perhaps not all that surprised) this week, then, to read the draft new BEREC guidelines on net neutrality because they fail, in my view, to consider the essential purpose of any ex ante market intervention, which must surely be to protect consumers and facilitate competition. Blanket zero-rating rules can do exactly the opposite but yet the guidelines, without expressly banning zero-rating in all cases, certainly push national regulators in most cases to outlaw the practice.

“Zero rating” means allowing a user to use data for certain services without any charge and without depleting their data bundle allowances. It is of course of most relevance to mobile services, since fixed internet access services involve data bundles much more rarely.

I previously gave the examples of cases where zero-rating was prevented (in the EU) in the Netherlands and in Slovenia. In both of those cases the results seem entirely perverse to me. In the Netherlands Vodafone was fined for zero-rating the HBO-Go service, which competes with Netflix and in Slovenia telecoms operators have been prevented from zero-rating competitors to Spotify and to Dropbox.

In all these cases then the result of banning zero-rating has been to impede the ability of a new entrant content company (whether for video, audio or cloud storage) to compete with established incumbents. Surely this is precisely the opposite of the effect that we would wish?

As a telecoms specialist working with clients all over the world i am very proud of the EU model of telecoms regulation. It is rightly held up as the gold standard of international best practice. This is because, working from first principles, the EU model is to intervene in markets only where there is a market problem – ie only where one (or more) operators have market power, and so the ability, in the absence of regulation, to abuse their power and impede competition. If there is no market power issue there should be no intervention.

The new net neutrality rules (which are contained in the Open Internet Regulation and then interpreted by the (draft) BEREC guidelines which have prompted this post) seem to me to run entirely contrary to this basic principle. As regards zero-rating they say that the practice is likely to “undermine the essence of the end-users’ rights” and to “lead to circumstances where end-users’ choice is materially reduced in practice” (para 39). This seems to me just to be flat out wrong. In all the examples given above zero-rating could, far from reducing choice, help a new entrant enter the market.

I see no reason to have any specific rules or guidelines on zero-rating at all. EU regulators could simply apply the normal competition law principles – if (and only if) the practice amounts in practice to an abuse of a dominant position is would be outlawed (and the offender fined). Importantly there should, in my view, be no reason even to examine a zero-rating practice in the first place unless a complaint is made, and then the test the regulator should be applying is the normal competition law test, not something new around “undermining the essence of the end-users rights”.

Net neutrality rules were not handed down by God to Moses on Mount Sinai and they are not an end in themselves. There is nothing intrinsically wrong with discriminating between communications services – this is only problematic where it amounts to abuse of a dominant position. In the US, where the whole concept of net neutrality arose, there may well be a case for ex ante rules of this nature because of the lack of competition between ISPs, but in Europe (where there is much more competition) this makes no sense to me and will only serve to (continue to) make it more difficult for new Over The Top services to become established.

As an afterthought i would add in the context of the ongoing Brexit referendum that even if you agree with me that these regulations are entirely misconceived it does not follow that the UK would be better off leaving the EU. If we wish, following a Brexit, to continue to be part of the single market we would still have to comply with the EU telecoms rules, and if we leave then we lose our ability to influence these.

The issue of net neutrality is certainly the current hot topic in the world of telecoms regulation. I thought I would just add a few (personal) thoughts on the matter following this week’s (in my view) shocking news from the Netherlands and Slovenia

First Principles

To take an approach from first principles my view is that regulators ought not to intervene and impose ex ante regulations (such as a net neutrality requirement) on market players unless there one (or more) of the participants has market power – and then they should only do so to the extent necessary to counteract that market power. This, of course, is exactly the approach taken by the EU in respect of most telecoms matters (leaving aside roaming but that’s another story) – regulations cannot be imposed in this way before the national regulator has conducted a review of the relevant market, and then only if they find that an operator has “significant market power” (SMP).

In the absence of specific regulation, then, ISPs are free to offer services in any way they choose. However if it later turns out that there has been any anti-competitive conduct (in this context meaning an abuse of a dominant position by an ISP or telecoms operator) then it would be appropriate to address this by the normal principles of competition law – ie an investigation leading to possible criminal sanctions and fines.

This consistent and logical system is designed to minimise the need for interference in the market, reserving regulatory intervention only where specifically justified.

In the context of net neutrality, then, this approach would tend to suggest that regulators should prevent behaviour by ISPs only if those ISPs have been found to have market power, or else only where it amounts to an abuse of a dominant position.

Today’s news

I was shocked to read news yesterday that the regulator in the Netherlands has fined Vodafone €200,000 for “zero-rating” the HBO-Go service – meaning not charging customers for the data use involved in using the service. KPN was also fined for blocking (not zero-rating) a particular VoIP service.

Similarly, also this week, it was announced that Slovenian operators Telekom Slovenije and Si.mobil have been fined for, respectively, zero-rating the Deezer music service and the “Hangar mapa” cloud storage service

In none of these cases has the “first principles” approach been applied. Instead there are specific regulations in place in both countries which appear to have the effect of allowing the regulator to issue fines and to interfere in the market without having previously made a determination that the operator concerned has SMP and without having to determine that there is an abuse of a dominant position.

The “zero-rating” examples are good case studies. The effect of this interpretation of the net neutrality rules is that customers in the Netherlands and in Slovenia have been denied the opportunity to access innovative services which challenge more established players in their particular market. It, will, now, be harder for HBO to challenge Netflix, harder for Deezer to challenge Spotify and harder for Hangar Mapa to challenge Dropbox, Google Drive and others.

This seems a very perverse outcome for regulations which ostensibly exist to foster innovation and encourage the startups to compete against the bigger more established players. It seems they are having quite the opposite effect. We will see whether any final regulation from the European Commission on net neutrality would also bite on zero-rating.

As a postscript I’d just add a few words on the KPN issue (where it was fined for blocking a VoIP service on free wif‑fi hotspots). Whilst it may  be right that this type of behaviour should not be permitted I would still maintain that the best way to deal with it under the European legal system would be to look into whether blocking VoIP services constitutes an abuse by (in this case) KPN of their dominant position in a relevant market. This will of course involve an analysis of what the “relevant market” is – not a simple exercise – but if the blocking only applied to the use of a free wi-fi service, it’s not obvious that this is in fact an abuse – and the effect of the fine may be to discourage KPN and others from offering free wif-fi at all.

On 21 October, Ofcom announced that it was revising its guidance on net neutrality. Otherwise referred to as ‘open internet’ net neutrality is the principle that users of the internet should be in control of what they see and do online – rather than the providers. Rules on net neutrality enshrine this principle by ensuring traffic carried across networks (both broadband and mobile) is treated equally, and that content and services are not prioritised, slowed, or favoured over others.

The current rules on net neutrality are derived from the EU’s Open Internet Regulation (the “Regulation”). In 2019 Ofcom supplemented the Regulation with their own approach to assessing compliance from a UK perspective, which included items such as review of data and traffic management measures.

In 2021, Ofcom, as part of its role as regulator of UK networks commenced a review of the framework to allow internet service providers (“ISP”) to develop and innovate their services while ensuring those living in the UK are face no restrictions in the content they seek to access.

In this latest part of their review, Ofcom sets out its initial assessment of several issues that have been raised with the current environment and propose a revised and more liberal set of guidance on how the rules surrounding net neutrality should be applied.

This article summarises the primary take aways of the consultation and how feedback on the published guidance can be provided.

The proposals

In their proposals, Ofcom recognises that it remains of significant importance that consumer choice is supported, and therefore propose their new guidance on the following:

Offering premium quality retail packages

At present, the position on whether premium quality retail packages can be offered may be subject to interpretation. Ofcom seeks to clarify this in their new guidance by stating that, subject to certain restrictions (including transparency and minimum service provision) ISPs do have the flexibility to offer different levels of quality packages to consumers.

Where this is done, the ISP would be expected to routinely collect and store information demonstrating:

  • that the different levels of service apply independently of the content and services accessed;
  • compliance with the requirements concerning transparency and quality of service; and
  • details on any traffic management applied.

Where ISPs need to apply traffic management to their network to do so, this is also permitted to the extent it does not breach the wider guidance provided by Ofcom.

Developing specialised services

Specialised services are those optimised for specific content, applications, or services to which the main provisions of net neutrality do not generally apply (permitted by Article 3(5) of the Regulation).

These typically include services where:

  • optimisation is necessary to meet required quality levels;
  • the services are not usable or offered as a replacement for internet access services;
  • network capacity is sufficient to provide these services in addition to any internet access service offered; and
  • they are not detrimental to the availability or general quality of internet access services for end users.[1]

In their latest approach, Ofcom acknowledges a lack of flexibility in the current understanding of these rules. They therefore propose to clarify their position on what is deemed a specialised service and adopt a more flexible approach that allows networks to use resources more efficiently. In particular, the guidance sets out:

  • how services will be assessed against the revised optimisation criteria;
  • how services will be assessed against the impact they have on the availability and quality of internet access; and
  • guidance on definitions to make it easier for ISPs to determine whether their services will be subject to any specialised service rules or require application of the wider regime.

Using traffic management measures to manage networks

In Ofcom’s latest guidance, the rules on traffic management continue to be an important safeguard of an open web, given the “gatekeeper position” ISPs hold in their roles as providers of the service.

The current rules permit ISPs to apply certain measures above and beyond “reasonable traffic management” where circumstances require, such as during times of heavy congestion. These will allow ISPs to continue to monitor and regulate their network, and address any instances where congestion risks potential disruption to service. While Ofcom concedes that this may impact the customer experience at times, they express a hope that this will create a better and more cost-effective network in the long run.

Zero-rating offerings

”Zero-rating” describes a retail offer where data used by select websites or services is not counted towards a customer’s data allowance. It is of little surprise that this activity falls within the remit of net neutrality as it is, in effect, giving customers more favourable access to certain content by not reducing their overall allowance through its use. DLA Piper has blogged about zero-rating offerings many times before – the EU rules are, in our view, perverse in the way their effects impact organisations within the telecoms industry. A list of some of our blog posts on the topic can be accessed here.

The current approach, on paper, is to review each instance of zero-rating on a case-by-case basis, taking into account whether the offer:

  • has the potential to limit/exclude end-user access to certain content;
  • appears to have the ability to influence end-users; and
  • could potentially materially restrict or adversely affect end-user choices in practice.

EU countries have used these rules to prevent services which might otherwise have, in our view, improved competition (see our blog piece about instances in the Netherlands and in Slovenia here) Ofcom seeks to replace these rules with new guidance, clearly distinguishing the factors they will consider on a case-by-case basis and clarifying that concern is only raised under limited circumstances.

To aid in this clarification, three types of zero-rate offerings are to be created:

  • Type One – those where ISPs zero-rate access to information and services from public sector bodies (e.g. the NHS) that provide a public benefit and are not in competition with other suppliers. This type of offer is beneficial to consumers and is unlikely to have a detrimental impact on other content and application providers (“CAPs”).
  • Type Two – those genuinely open to all CAPs of a particular class (e.g. an offer to zero-rate all music streaming services rather than one in particular). They are unlikely to reduce the choice of CAPs available to consumers, as any equivalent CAPs will be able to join should they wish.
  • Type Three – all other offers that do not fit Type One or Two. These will be monitored to determine whether they warrant a formal investigation as to whether net neutrality may be breached.

Freedom of choice of equipment

Under the current rules on net neutrality, it is prohibited to restrict devices used to access the internet. Ofcom considers that ISPs have substantial flexibility to specify the technical characteristics of their services to suit device requirements and therefore there is little commercial benefit in permitting these restrictions, particularly when compared against the “erosion of consumers’ freedom to access the internet”.

Ofcom therefore proposes that consumers should be able to use technical equipment of their choice and that ISPs should treat all traffic equally, irrespective of device used.

Charging content and application providers

Under the current regulatory framework, there are no rules that expressly prohibit ISPs from charging CAPs for carrying traffic as part of an internet access service. However, in practice such charges do not usually apply because of the competitive position of CAPs and ISPs in the UK.

While there may be benefits of changing this position, such as creating greater incentive for CAPs to deliver traffic more efficiently or even prioritise certain traffic, Ofcom have noted that there is yet to be sufficient evidence to suggest that: i) such incentives are needed, and ii) that the wider benefits would outweigh the unseen risks to consumers this may have.

As Ofcom highlights, the introduction of a new ability to charge CAPs in this manner would also likely be in contravention of the Regulation and rules on net neutrality within the UK. Any attempt to amend these rules would therefore require new legislation to be enacted to repeal or amend these provisions as deemed appropriate.

Enforcement

An interesting aspect of this latest issued guidance is Ofcom’s recognition of the need for flexibility with respect to enforcement of the rules should circumstance dictate. This is particularly so with respect to enforcement where a clear public benefit is present.

For example, the guidance offers several proposals of how ISPs could prioritise and limit their access for the benefit of its users.

These include:

  • Prioritisation and zero-rating for all communications with emergency services;
  • Effective traffic management of internet services provided by transport, such as trains and aeroplanes;
  • The use of parental controls and content filters to block certain media or traffic; and
  • Specific blocking of access to undesirable content, such as those associated with fraudulent activity or scam sites.

How to get involved

Consultation responses will be accepted by Ofcom until 13 January 2023.

Feedback should be shared using the provided form and sent to: netneutrality2021@ofcom.org.uk.

Final procedures and guidance are expected to be published in Autumn 2023.

DLA Piper continues to monitor updates and developments to Ofcom’s work on net neutrality and the wider telecoms sector. For further information or if you have any questions please contact the authors or your usual DLA Piper contact.

[1] Ofcom. Net Neutrality Review: Consultation. 2022. 96.

My colleague Emil Odling, lead partner for IP and Technology in Stockholm, has written the piece below discussing a decision this week of the Swedish courts which suspends the decision of the Swedish regulator which would have required Telia to stop some practices on the basis that they infringe the net neutrality rules. Note that although the offers concerned are zero-rated it appears that the PTA’s (now suspended) decision looked at traffic management more generally and did not consider zero-rating specifically.

>>>>

On 8th of March 2017, the Swedish Administrative Court of Appeal ruled to inhibit the Swedish Post and Telecom Authority’s (“PTA”) decision to prohibit partially state-owned telecom and mobile network operator Telia Company AB’s (“Telia”) distribution of two services which according to the PTA constituted a breach of the so called Open Internet Regulation.

Continue Reading Net Neutrality in Sweden – PTA decision suspended

I have expressed some strong views on the (lack of) merits of a specific net neutrality rule in the EU before (here and here).

It was with interest then that I read the language of the “final compromise test” of the proposed new regulation on the Connected Continent from the EC. This cover two things principally – (1) it tries to abolish roaming in the EC; and (2) it contains a net-neutrality-like “open internet” obligation. This blog post will discuss only the latter.

Whilst advocates of net neutrality have criticised the regulation for allowing too many get-outs (in respect of “specialised services” I am much more concerned about the potential downsides in terms of restricting competition and the launch of new services. As explained below however there is also one, little commented-upon, aspect of the new regulation which will, I think, be beneficial and should be much-welcomed by  consumer advocates.

Continue Reading Net Neutrality, the EU “open internet” right and the new rule on internet access speeds