European Commission Pledges to Stiffen ISP Net Neutrality Rules

The European Commission (EC) has responded to BEREC’s final report into Net Neutrality (the principal of treating all internet traffic as equal), which criticised fixed line broadband ISPs and Mobile Broadband operators over a lack of transparency, by proposing to stiffen industry guidelines through “strong and targeted action” and deliver more “effective consumer choice“.

The Body of European Regulators of Electronic Communications (BEREC), which is composed of the heads from 27 national regulators (e.g. Ofcom), has discovered that there were enough problems to warrant action. Unfortunately those hoping for radical change will be displeased as the new proposals looks set to reinforce Europe’s existing and somewhat hand-offs policy towards regulatory intervention.

According to BEREC, at least 20% (rising to almost 50% for EU Mobile Broadband customers) of internet consumers have contracts that allow their ISP to restrict services like VoIP (e.g. Skype) or peer-to-peer (P2P) file sharing. But the study also found that 85% of all fixed ISPs and 76% of all mobile broadband providers delivered at least one unrestricted offer, which suggests that there is still choice; albeit not as much in some countries as in others.

At present Europe’s official approach to Net Neutrality, which we covered during November 2010 (here), merely recommends “preserving the open and neutral character of the internet“. It also calls upon ISPs to adopt “industry-wide standards on transparency to enable consumers to make informed choices” (e.g. explaining P2P restrictions). The UK government has an almost identical approach (here). Both policies originally referenced a lack of evidence to support tougher regulation, so has anything changed?

Neelie Kroes, Vice-President of the EC, said:

“But are customers really empowered to choose well? Do they realise what they are signing up for? I didn’t read all the pages in my mobile contract and I bet you didn’t either! I believe we all need more transparent information.

Given that BEREC’s findings highlight a problem of effective consumer choice, I will prepare recommendations to generate more real choices and end the net neutrality waiting game in Europe.

First, consumers need clear information on actual, real-life broadband speeds. 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 Internet Service Providers (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 warned that consumers would ultimately still need to “vote with their feet” and switch provider if they don’t like the service because the EC would not impose regulation that could “force each and every operator to provide full Internet“. Kroes added that she would work to make switching providers even easier, which is something that Ofcom are already working on for the UK (here).

Finally Kroes also intends to produce “clear guidance on responsible behaviour by ISPs” in order to prevent providers from abusing personal privacy via the monitoring of online traffic (i.e. Deep Packet Inspect). At this point we should mention that Deep Packet Inspection (DPI) is also used as a part of normal Traffic Management systems (i.e. they’re not all designed to invade user privacy).

In short it looks like Europe intends to stiffen up the existing guidelines but it will not act to physically prevent excessive access restrictions from happening. That’s not surprising as the modern internet will increasingly require complicated content deals (e.g. movie channels for IPTV services), which could all too easily be damaged by an overly aggressive policy.

It’s also easy to imagine the kind of uproar that would occur if an ISP suddenly clamped down too hard on content from YouTube, Facebook or Google. But in reality most ISPs aren’t so short-sighted as to shoot themselves in the foot by damaging access to vital content and unless that happens then the EU aren’t likely to budge. A few blocks and heavy limits against P2P or Skype don’t seem to be enough, yet.

BEREC will continue to consult on their Net Neutrality review until 31st July 2012, after which the EC are likely to set out their position in more detail.