Slovenia reinforces net neutrality principles

Net Neutrality

By innoword on 3 January 2013 • ( 9 Comments )

The Slovenian Parliament has approved an innovative legislative framework on net neutrality which is going to shake the debate in Europe. The Slovenian law, adopted on December 20 and published in the Official Journal on December 31, confirms the open and neutral character of the Internet and prohibits discrimination of Internet traffic on the basis of the services provided through it. The concrete impact of the new rules, which in some parts appear a bit vague, will strongly depend on the implementation by the local regulator APEK. In any case, the first-sight impression is that the Slovenian Parliament is gone further than the corresponding provisions of the European Regulatory Framework (such as article 8(4)g of Directive 2002/21, for instance). The key-norm seems to be article 203 of the Slovenian law, pursuant to which (to my understanding) ISPs will be prevented from restricting, delaying or slowing Internet traffic except in the case they have to solve congestions, preserve security or address spam. In other words, differentiation of quality of Internet traffic should be prohibit if it is an instrument to discriminate Internet services for pure commercial reasons.

Most importantly, pursuant to article 203(5) of the new rules, ISPs should be prevented from charging subscribers with different connectivity prices varying on the basis on the services provided over the Internet. Remarkably, the text of the provision is not completely univoque and will need to be clarified by APEK or by courts. However, if my interpretation is confirmed, this measure may have a strong impact on mobile operators offering Internet access under “data caps” conditions, where traffic usage is priced or exempted depending whether or not the customers use services recommended by the ISP. To make an example, in Germany customers of T-Mobile do not have to pay the connectivity for listening to Spotify, while they have to pay it for competing streaming services. This pricing discrimination allows the mobile ISP to strongly influence the choices of users as to which Internet services to use. Such kind of deals risk to be prohibited in Slovenia from now.

A similar legislation on net neutrality was passed in the Netherlands (while in Belgium the debate goes ahead). Now, with Slovenia joining the club, it is possible that also other EU Members States may think to do the same. Former monopolist telcos (incumbents  operators such as Orange, Deutsch Telekom ecc) and their association ETNO are expected to complain about it. Such operators are strongly lobbying in order to charge Internet service providers such as Google, Facebook ecc. with special connectivity fees (in addition to what the latter pay when peering in the Internet). Commercial negotiations did not give any outcome until now, because it is also in the telco’s interest that their users may have access to popular websites and Internet services. Therefore, telcos have been considering to charge directly the users (like for Skype or VOIP services) or to exempt them  (like for Spotify), with the result to strongly impair the neutrality of the net. The rules passed in Slovenia and the Netherlands will strongly affect such an ambition.

The reason for the former monopolist telcos the make this fight is about the “control” of the value chain in Internet, i.e. how to extract more money from the digital services. However, such economical strategy may have fundamental impact also on competition, innovation and civil rights in general. If telcos were allowed to discriminate technical and economical parameters of the Internet access in order to influence the choices of customers (as to which Internet service to select), then the Net would change radically. Telcos will become “king” in deciding which Internet service will prevail and develop in the web. To make an example, if in 2005 telcos would have decided (by imposing additional charges or making technical discriminations) whether services like Facebook or Skype could go ahead, such services would never be born.

The European Commission seems to be neutral to this respect, however such neutrality hides various floating views on this matter. While in the past there were rumours that commissioner Neelie Kroes would have taken actions against the Dutch legislation on net neutrality, nothing happened in the reality. In her recentest speeches in January 2013, however, she confirmed that the Commission will adopt a recommendation in mid-2013, focussing mainly on transparency and switching, and considering to address fragmentation within the EU. However, it is doubtful whether this approach may bring the European Commissioner for the Digital Agenda to take action against Member states legislating about net neutrality. Kroes prefers to be prudent on a matter which is politically very sensitive, and she does not want to appear unpopular. She already has enough problems with her reform of the network regulation, in relation to which she was accused to favour incumbent operators to the detriment of competition.

Categories: Net Neutrality