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A victory for the little guy or unnecessary meddling that actually takes choice away from consumers?
BEREC this week released its final guidelines for how Europe’s telco regulators should uphold the EU’s net neutrality law, eliciting cheers from open Internet and consumer advocates, and jeers among those who make their money from deploying and operating networks.
"Europe is now a global standard-setter in the defence of the open, competitive and neutral Internet. We congratulate BEREC on its diligent work, its expertise and its refusal to bend to the unreasonable pressure placed on it by the big telecoms lobby," said Joe McNamee, executive director of European Digital Rights (EDRi), earlier this week.
In contrast, Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation (ITIF), said that although it is good news that BEREC stopped short of an outright ban on reasonable traffic management, zero-rating, and specialised services, "beyond that, the guidelines are unnecessarily prescriptive, setting detailed restrictions on each of these practices that will likely diminish pro-competitive, pro-consumer broadband-based offerings."
Indeed, in particular, partnerships with content owners are one of the few remaining, truly eye-catching points of differentiation at a mobile operator’s disposal. Now operators will have to tread carefully to ensure they play by the rules when they attempt to compete on content.
In the U.K., BT-owned EE recently launched an offer that covers the £9.99 monthly subscription fee, if not the data cost, of Apple Music for six months. Vodafone offers to bundle a choice of Spotify, Sky Sports, or Now TV with its Red contracts.
Elsewhere in Europe, Deutsche Telekom is reportedly planning to launch an Apple Music offer similar to EE’s, while in Sweden, 3 provides zero-rated access to a raft of music streaming services, as does incumbent Telia.
These are just some recent examples of operators bundling content with Internet access. There are countless more where they came from.
Subsidising the subscription fee for a streaming service might be technically permissible under the law, but it does run counter to the legislation’s stated aim of preventing ISPs from picking winners and losers in the OTT market by incentivising customers to pick one service over another.
As for those aforementioned zero-rated tariffs, they will, under BEREC’s guidelines, be judged on a case-by-case basis to ensure that competition and choice in online services is not hampered.
It will be interesting to see how this works in practice. The first time this principle is put to the test could set an onerous precedent for any telco hoping to get one over its rivals by bundling some free access to content.
What does that mean for end users? Is it plausible to suggest that Internet packages, particularly mobile Internet packages, will become a lot less interesting?
Will an operator shy away from bundling zero-rated access to a video-streaming service because it is no longer worth the extra cost and complexity that comes with complying with the law?
Today, I can sign up with an operator that’s expensive but includes free access to a particular music streaming service, or, I can pick a cheaper operator and pay separately to access the same streaming service. The point is, I have a choice, and no harm has been meted out that requires legal redress. Under the new rules, will this choice be taken away because one of them involves navigating a legal minefield?
Another question worth bearing in mind is, where was net neutrality legislation in the era of walled gardens?
There was a time when mobile operators explicitly chose the online services that their customers could access on their data networks, claiming it was necessary to ensure a good mobile Internet experience for the majority of their customers at a time when capacity was scarce, and the use case for the mobile Internet was not well established.
These walled gardens came tumbling down, not because of any EU-wide legal intervention, but because of healthy competition, improvements in network capacity, and consumer sentiment. Why are those same forces now not capable on their own of preserving an open Internet?
"We should be able to rely on the operation of market forces to address the issues of blocking and discrimination. There are several examples in recent history of Internet service providers providing access to a restricted set of services within a ‘walled garden’, but business models of this kind have not proven to be sustainable in the face of competition from more open forms of Internet access," said Ofcom, in 2011.
What changed in five years?
For its part, BEREC said that throughout the public consultation period that led to the release of its final guidelines, some stakeholders alleged that they didn’t go far enough in some areas, while others said BEREC was being too prescriptive.
The European regulatory body said this signalled that its approach had "struck an appropriate balance."
Time will tell whether this appropriate balance truly benefits end users.
