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EU Court Ruling Challenges Mobile Operators Zero Rating Plans UPDATE

Tuesday, September 15th, 2020 (10:07 am) - Score 3,698

A new ruling by Court of Justice of the European Union (CJEU) has today, for the first time, interpreted the EU regulation enshrining “internet neutrality” (this was also adopted in the UK), which appears to restrict mobile and broadband operators when offering zero rating plans (i.e. unlimited data on certain services).

The original EU regulation was designed to protect the open internet from abuse (here), which essentially means that fixed broadband ISPs and Mobile operators cannot impose excessive restrictions against internet traffic. Naturally there are some exceptions to this, such as for general Traffic Management and security reasons etc.

In the United Kingdom these rules are applied via a soft self-regulatory approach (i.e. it may be better to think of them more as guidelines), which is governed by the Broadband Stakeholder Group and their 2016 Open Internet Code. This code commits signatory ISPs to neutrality and transparency in traffic management on their networks (details).

The Open Internet Code’s 3 Principles:

* Users should be able to access all legal content.

* There should be no discrimination against content providers on the basis of commercial rivalry.

* Traffic management policies should be clear and transparent.

Until now Ofcom has taken a fairly flexible approach to mobile plans that adopt a zero rating plan, such as those that give you unlimited data (mobile broadband) but only to certain specific video streaming services and not others (e.g. VOXI’s latest Endless Video plans and similar plans from EE, Vodafone etc.).

However, the latest CJEU rulingprecludes an internet access provider from favouring certain applications and services by means of packages enabling those applications and services to benefit from a ‘zero tariff’ and making the use of the other applications and services subject to measures blocking or slowing down traffic.

CJEU Ruling in Telenor Case

“The Court found that the conclusion of agreements, by which given customers subscribe to a package combining a ‘zero tariff’ and measures blocking or slowing down the traffic linked to the use of ‘non-zero tariff’ services and applications, is liable to limit the exercise of end users’ rights, within the meaning of Article 3(2) of Regulation 2015/2120, on a significant part of the market.

Such packages are liable to increase the use of the favoured applications and services and, accordingly, to reduce the use of the other applications and services available, having regard to the measures by which the provider of the internet access services makes that use technically more difficult, if not impossible.

Furthermore, the greater the number of customers concluding such agreements, the more likely it is that, given its scale, the cumulative effect of those agreements will result in a significant limitation of the exercise of end users’ rights, or even undermine the very essence of those rights.

In the second place, as regards the interpretation of Article 3(3) of Regulation 2015/2120, the Court found that, in order to make a finding of incompatibility with that provision, no assessment of the effect of measures blocking or slowing down traffic on the exercise of end users’ rights is required. Article 3(3) does not lay down such a requirement in order to assess whether the general obligation of equal and non-discriminatory treatment of traffic in that provision has been complied with.

In addition, the Court held that, where measures blocking or slowing down traffic are based not on objectively different technical quality of service requirements for specific categories of traffic, but on commercial considerations, those measures must in themselves be regarded as incompatible with Article 3(3).

At the time of writing we have yet to see the detail of the judgement and that could be key, although at first glance it does seem to make it more difficult for operators to offer a zero rating style plan, particularly since “no assessment of the effect of measures blocking or slowing down traffic on the exercise of end users’ rights is required” in order to find such plans as being incompatible with the law.

Quite how this will impact the UK is currently unclear, particularly since we’ll have fully left the EU by the end of 2020 and the current self-regulatory approach gives Ofcom plenty of freedom to continue their existing approach. We have asked the regulator to comment and will report back.

UPDATE 16th Sept 2020

A spokesperson for Ofcom told ISPreview.co.uk: “We welcome the clarity the CJEU ruling brings. We’ve reviewed a number of providers’ ‘zero-rating’ offers in recent years. And while none of them have featured the type of traffic differentiation seen in this case, we would maintain that such a practice would likely constitute a breach of the Open Internet Regulations.”

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
18 Responses
  1. Mike says:

    Just another reason why the UK is leaving.

    1. Yatta! says:

      We’ve already left Mike. (-‸ლ)

    2. Random Precision says:

      Yes Mike, the nasty nasty EU forcing the mobile operators to give us free roaming. What’s the world coming to

    3. 125us says:

      We’re leaving because the EU want to prevent monopolies forming and have laws to stop anti-competitive practices?

  2. Iain says:

    I said this the other day, in the article about the Voxi announcement:

    You can’t zero rate some streaming video services but not others.

    1. James™ says:

      I know with Three’s Go Binge is open for any service to join it.

  3. G Cot says:

    I guess VM’s you can Tweet for free and it doesn’t come out of your data allowance, would also be included….

  4. New_Londoner says:

    The effect of this appears to be limited to “packages combining a ‘zero tariff’ and measures blocking or slowing down the traffic linked to the use of ‘non-zero tariff’ services and applications”.

    It does not apply to zero rating certain types of traffic as long as this isn’t combined with the blocking or slowing down of other traffic. So free Netflix is okay but free Netflix plus slow YouTube is not. That seems fair enough.

    1. Mark Jackson says:

      There’s a grey area around the assessment of that last part though (last two of the quoted paragraphs in the article), which makes it a bit less clear cut than you might think at first glance. Hence why I’m waiting on Ofcom’s opinion, once they’ve had a chance to study it.

    2. Iain says:

      New_Londoner, Mark,

      Yeah, we shouldn’t misunderstand what they mean by ‘blocked’. They don’t just mean “is YouTube *always* blocked?”.

      The first paragraph of the press release is talking about what happens when you use up your purchased data volume. For example, suppose you purchase 5GB data with endless social media. When you use up those 5GB, YouTube is now blocked or throttled. That is normal. But because of zero rating, some social media websites wouldn’t be.

      The problem arises, then, if you purchase endless video streaming, but your video streaming site is not zero rated by your carrier. Then, for example, after using 5GB, Netflix wouldn’t be blocked but iPlayer would be.

  5. Michael V says:

    I don’t think there’s much of an issue. Have video streaming apps that don’t use data, as long as you have some data allowance left.
    If one doesn’t have any regular data allowance left then the free app can’t be used. That’s the current rule. That’s how Three regulate it anyway.

    If one Operator doesn’t offer the Zero Rated Data on say… YouTube or TVplayer, it may not be their fault. There’s agreements between these companies. But do correct me if I’m wrong on that part.

    1. Michael V says:

      Also, didn’t Vodafone & Three make it clear they don’t throttle/slowdown data traffic.
      All four Operators have traffic management on busy cells & at times of the day. That’s different.

    2. 125us says:

      It’s a big issue if you want to try and compete with Netflix and your end customers have to use their data allowance for your service but not for Netflix. The telco will have raised a barrier to entry which is anti-competitive – hence the need for net neutrality rules.

  6. Buggerlugz says:

    Three don’t have to throttle/slow down traffic, they’re overselling of services and under investment in their shonky network does it for them.

    1. Michael V says:

      LoL Buggerlug…. There’s nothing wrong with Three’s network. It’s got plenty of speed. Definitely faster than O2!

    2. Connor says:

      @Micheal V, there is plenty wrong with Three’s network. The only areas near me that work well at all are ones where they’ve finally put effort in and fixed their backhaul via CityFibre and put more than just band 3 on their masts.

      Three are happily now investing which took a mast that could barely handle the demand of the area to one that was happily giving EE a run for their money. But sadly there’s areas that still don’t get the investment.

    3. Michael V says:

      @Connor. I can’t speak for Three over all but where I live and travel it’s fine. Yes there’s places that need work but the other Operators of course have their weak areas. No they are not the fastest, but I don’t care, not everyone needs the fastest. I see signal everywhere & it’s really good quality.
      I’ve seen improvements in Cardiff & around South Wales & South West Wales.

  7. Leex says:

    Guess they should look at virgin media, as they traffic shape streaming/high volume dsat services to 3700kbs (been more then a year so might have been 3500 or 3900kbs)

    I actually ended my Contract early because of that hidden speed cap to streaming places (was getting old me having to fire up the vpn to Bypass the traffic shaping based on ip address)

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