A brief history of net neutrality law

in Network neutrality

US regulation of network neutrality has a history dating back to 1999, and was introduced via merger conditions placed on major Internet Access Providers (IAPs). One of the several principles of network neutrality promulgated by both the Federal Communications Commission (FCC) and European Commission in 2009/10 is that only 'reasonable network management' is permitted, and that the end user be informed of this reasonableness via clear information. This chapter explores European legislative and regulatory responses to net neutrality in more detail. The European law proposed in 2013 was being rapidly overtaken by events in the Netherlands, France, Slovenia and Finland. The chapter explains that at European Member State level, only Netherlands, Finland and Slovenia had passed laws by the end of 2014. It summarises the outcome of 2014/15 legal manoeuvres in both the United States and European Union. In 2016 zero rating was becoming a common practice in the US.

There have been suggestions that we don’t need legislation because we haven’t had it. These are nonsense, because in fact we have had net neutrality in the past – it is only recently that real explicit threats have occurred.

Sir Tim Berners-Lee1

We must begin with a quick note on terminology: we are concerned with access to the last mile, not generic services on the Internet. The network access providers are Internet Access Providers (IAPs), not Internet Service Providers (ISPs). Open Internet protection affects IAPs, not generic ISPs (though IAPs offer services too, and are thus both IAPs and ISPs). In this book I will refer specifically to IAPs (and much less often generic ISPs), though when I quote regulators such as CRTC (Canadian Radio-television and Telecommunications Commission), BEREC (Body of European Regulators of Electronic Communications) and Ofcom (Office of Communications Regulation), I will not correct their use of the more generic term ‘ISP’ even though they are specifically referring to IAPs. So why do they use this term ‘ISP’?

The term ‘ISP’ has different meanings in different contexts, though it is used much more often than are more legally specific terms. In Europe, a provider of Internet access is an Electronic Communications Network Provider (ECNP), whereas a provider of content and services is termed an Information Society Service Provider (ISSP)2 or an Audiovisual Media Services (AVMS) provider where it is the editorial controller of video.3 Under European law:

‘electronic communications service’ means a service normally provided for remuneration which consists wholly or mainly in the conveyance of signals on electronic communications networks, including telecommunications services and transmission services in networks used for broadcasting, but exclude services providing, or exercising editorial control over, content transmitted using electronic communications networks and services.4

The definition explicitly excludes ISSPs ‘which do not consist wholly or mainly in the conveyance of signals on electronic communications networks’. In the US, the access provider is an Internet Access Provider (IAP), and the service provider an Online Service Provider (OSP) under the Digital Millennium Copyright Act 1998 (DMCA),5 though a further distinction lies between access providers classified under Title I and Title II of the Telecommunications Act 1934.6 In Section 512 an OSP is defined as ‘an entity offering transmission, routing, or providing connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received’ or ‘a provider of online services or network access, or the operator of facilities thereof’.7 This broad definition includes network services companies such as access providers, search engines, bulletin board system operators and even auction websites. It should be noted that most (if not all) access providers are also service providers, and in fact the largest IAPs are also amongst the largest service providers.

Net neutrality was regulated narrowly in the United States, Canada and Europe in 2009 (the latter via a Declaration and amendments to the 2002 Electronic Communications Package). My 2010 book analysed developments to that 2009 settlement, and detailed US regulation by the FCC (though not its eventual but predictable demise in the 2014 District of Columbia Appeals Court decision in Verizon v. FCC). I also critically assessed the 2009 European amendments, and gave (accurate) predictions for their failure in practice. I summarise that long development in the first part of this chapter. Development of European legal implementation of the network neutrality principles has been slow.8 I explain in the second part of this chapter that, at European Member State level, only Netherlands, Finland and Slovenia had passed laws by the end of 2014. I summarise the outcome of 2014/15 legal manoeuvres in both the United States and European Union. Chapter 3 considers Specialised Services in both areas, and then Chapter 4 examines European law in minute detail. Note that as this book is written with Europe as the focus, US regulation is described more briefly.

The development of net neutrality regulation

US regulation of network neutrality has a history dating back to 1999, and was introduced via merger conditions placed on major IAPs. The debate began when academics feared that cable TV’s closed business model would overtake the Open Internet in 1999.9 While issues about potential discrimination by IAPs have been current since at least 1999, the term ‘network (net) neutrality’ was coined in 2003.10 The pre-history of United States regulation prior to the 2015 Open Internet Order is well-documented,11 with the 2010 Order12 being highly controversial in its exclusion of mobile (‘wireless’), resulting in several data caps being imposed, notably by AT&T in 2011,13 zero-rating plans being adopted and the Order itself becoming incapable of effective enforcement following a litigation which ended in 2014.14 Only lawyers may take joy that the FCC has spent a decade trying to enforce net neutrality since its original regulatory declaration.15

Data caps have been controversial throughout the consumer Internet’s history, especially in the United States where dial-up Internet was virtually free to the end user (simply the cost of a local telephone call). The FCC Open Internet Advisory Committee in 2013 noted the move towards capping data especially for mobile users and worried ‘whether caps or thresholds that are set too low could lead to a world where the average user carefully monitors her bandwidth use’ given uncertainty over data caps as a ‘transitory or permanent concern’, which appears to be the case in developing (and many developed) nations’ mobile data access.16 While data caps apply in many nations and are applied by many IAPs, the user often has little or no idea that they are approaching their monthly limit until informed by the IAP, and such warnings are often inaccurate. It is at best a blunt weapon for handling congestion, though there is little argument that data caps per se do not infringe net neutrality, as long as the cap gradually increases over time. The OECD states: ‘zero rating can clearly be pro-competitive … [and] becomes less of an issue with … higher or unlimited data allowances. Regulators need to be vigilant.’17

Competition in the US is ‘inter-modal’ between cable and telecoms, not ‘intra-modal’ between different telecoms companies using the incumbents’ exchanges to access the ‘Last Mile’.18 Instead of regulated access to telecoms networks, the US has less regulated broadband ‘information’, not ‘telecommunications’ services.19 In 2004 deregulatory FCC Chair Michael Powell declared:

I challenge the broadband network industry to preserve the following Internet Freedoms: Freedom to Access Content; Freedom to Use Applications; Freedom to Attach Personal Devices; Freedom to Obtain Service Plan Information.20

The ‘Four Freedoms’ were formalised as regulatory policy in the FCC Internet Policy Statement of August 2005.21

In Madison River,22 the FCC enforced these policy principles. Madison River is a small consumer IAP and telephone company, not a large national carrier, which was ordered by the FCC to stop blocking rival VoIP services. Madison River’s abuse of its access monopoly was incontrovertible; the vertical integration of the IAP with its voice telephone service meant it had obvious incentives to block its competitor VoIP services, and the practice was intended to degrade its customers’ Internet access. It was an example of negative network neutrality: customers signed up for broadband service with the IAP, but it chose to degrade that service in the interest of preserving its monopoly in telephone service.

The 2007 merger of AT&T and BellSouth involved both parties assuaging net neutrality concerns by various commitments not to block other companies’ applications directed to their users.23 The FCC then made a major intervention with its 2008 Order against Comcast, a major cable broadband IAP.24 Comcast’s deposition to the FCC stated that it began throttling P2P file-sharing application BitTorrent from May 2005 until 2007, using Sandvine DPI technology. The FCC ruling against Comcast’s attempts to stop P2P by sending phantom reset packets to customers reflects another ‘easy’ case of abuse of customers, like the VoIP blocking in Madison River in 2005.25 Table 2 shows the most important regulatory developments since 2005 in three overlapping phases: 2005–10; 2009–14 and 2014–16.

Phase of RegulationPhase 1: Policy 2005–10Phase 2: Open Internet under Title I, 2010–14Phase 3: Title II Open Internet, 2014–
Challenge to Existing RegulationInternet Policy Statement 2005 following ‘Four Freedoms’ speech 2004Open Internet OrderResponse to Verizon v. FCC (2014)
Commission ProceedingComcast investigation 2007–08bPreserving the Open Internet (2009)c Protecting and Promoting Open Internet 2014d

aAn excellent narrative account of the policy and judicial history can be found in Feld (2015).

bFCC, Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading Peer-to-Peer Applications, 2008.

cFCC, Report and Order, In the Matter of Preserving the Open Internet; Broadband Industry Practices, 2009.

dFCC, Notice of proposed rulemaking, 2014.

Net neutrality regulation was supplemented by legislation after the election of Barack Obama as president in 2009. The infrastructure spending stimulus law titled the American Recovery and Reinvestment Act 2009 included a broadband open access stimulus.26 This extended broadband into under-served areas via federal grants, with open access and net neutrality provisions built into the grants.27 The FCC then consulted through 2009–10 on its Net Neutrality Order ruling of 23 December 2010,28 which was challenged before the courts in 2012–14. The FCC refused several times to intervene in interconnection and peering disputes that were claimed by CDNs to unreasonably impair traffic, contrary to the controversial net neutrality rules in that 2012–14 period.29

In 2014 the FCC revisited network neutrality in view of the loss of the court case over the 2010 Open Internet Order,30 resulting in an inevitable further legal challenge in 2016. It appears unlikely that general net neutrality (as opposed to specific merger) conditions can be made that can survive court challenge before the end of the Obama presidency in 2017.

Reasonable network management and regulatory consultation

The phrase ‘reasonable’ in connection with IAP traffic management was first included in footnote 15 to the 2005 Internet Policy Statement. It was designed to ensure that an IAP must demonstrate both that its management purpose is reasonable and that it has used a minimally invasive means of so doing, in language borrowed from the US courts’ approach to regulation of speech. It was thus a tough two-part test that the IAP ‘practice should further a critically important interest and be narrowly tailored to serve that interest’.31 The FCC expanded on this principle to explain exceptions in 2009. IAPs:

may employ generally accepted technical measures to provide acceptable service levels to all customers, such as caching and application-neutral bandwidth allocation, as well as measures to address spam, denial of service attacks, illegal content, and other harmful activities.32

This means IAPs can deploy to prevent behavioural advertising by third parties, but not to enhance that advertising in a discriminatory fashion themselves, which we examine in Chapter 5 in the European case, and which is the subject of regulatory proceedings to apply s.222 Telecommunications Act 1934 in the United States. Denial of Service (DoS) is a technique for damaging websites via a flood of traffic that causes congestion. The FCC made clear that it is intended to prohibit all non-critical traffic management, though noting that technologies will differ in criticality as between co-axial cable, copper telecoms, fibre broadband and wireless systems: ‘We believe that a bright-line rule against discrimination, subject to reasonable network management and enumerated exceptions, may better fit the unique characteristics of the Internet [than a less clear rule].’33 It was, however, less tightly drawn than the 2005 Order’s language of ‘narrowly drawn’ and ‘critically important’, which in 2009 it described as ‘unnecessarily restrictive’.

The question is what ‘harmful activities’ involves, in relation to what is not ‘generally accepted technical measures’. This must be subject to change over time, such that industry can agree on particular measures that are commonly used. The definition of harmful measures will depend on both the network’s robustness and the particular measure, with DoS an obvious example of harmful activity. It will thus be legal for an IAP to intervene to stop a flood of DoS traffic (though such activities will change over time: a million simultaneous requests in 2003 on dial-up would cripple an IAP; in 2013 on broadband that is less likely). FCC Commissioner Copps stated that:

What constitutes reasonable network management in a 768 Kbps world will likely be different from reasonable network management in a 50 or 100 Mbps world.34

Implementation of the technical means for measuring reasonable traffic management had been tested in a self-regulatory forum established after the 2010 Order, the Broadband Internet Technical Advisory Group (BITAG). Its specific duties include offering ‘safe harbor’ opinions on traffic management practices of parties making formal reference for an advisory technical opinion.35

The 26 February 2015 Open Internet Order applied from 12 June 2015 and promised to enforce net neutrality.36 The FCC claimed that the Order offered three ‘Bright Line Rules’, as already discussed in the Introduction.

Zero rating controversy

In 2016 zero rating was becoming a common practice in the US. It appeared to reflect paid prioritisation (though details are limited by commercial confidentiality), the final FCC ‘bright line’, and where it also involves degrading non-zero-rated content, also the second line on throttling. T-Mobile offered 33 zero-rated music services in its Music Freedom Plan since 2014,37 which avoided any negative regulatory scrutiny in part due to the facts: its offer is non-exclusive, relates to music rather than heavily congesting and expensive video, and T-Mobile itself is the smallest of the national mobile IAPs. Goldstein argues:

Music Freedom plan is inclusive and supports numerous streaming music services, and since T-Mobile does not receive compensation from any company for not counting music streaming traffic against customers’ data limits, such a plan is likely going to be fine by the FCC, since it benefits consumers. However, if a zero-rating plan were exclusive to one company that offers a particular type of service, that likely would draw more scrutiny from the FCC.38

The decision by T-Mobile to introduce its BingeOn video service in autumn 2015, following the success of its music service, caused huge controversy, in part because BingeOn not only offered a wide range of video services without affecting the user’s data cap, but also automatically throttled (i.e. degraded) video service from all providers down to DVD quality (below HD), whether within the free data offer or not. All T-Mobile users with a monthly 3GB or greater data cap were enrolled, and had to specifically delist in order to view HD video from providers such as Amazon or YouTube. Ammori wrote that:

Degrading video quality this way violates the FCC’s no-throttling part of the net neutrality rule, which forbids reducing the quality of an application or an entire class of applications … As a purely legal matter, T-Mobile cannot easily defend its actions by arguing that this discrimination is good for its users. The FCC has already rejected that argument in advance by adopting a ‘bright-line’ rule for all technical forms of discrimination absent some special technical justification … The FCC made it clear that throttling was ‘inherently … unjust and unreasonable’, so it ‘bann[ed] conduct that … inhibits the delivery of … particular classes of content, applications, or services’. Said another way, and said again by the FCC, ‘if a broadband provider degraded the delivery of a particular application … or class of application … it would violate the bright-line no-throttling rule.’39

The FCC announced that it would be asking companies to respond by 15 January 2016 to such complaints, including not just those about T-Mobile and AT&T’s free mobile data, but others, such as Comcast, who claimed their Stream TV video offer was a Specialised Service, with an expectation that an investigation would be opened in February.40 Such services are considered in Chapter 3.

The US Federal Appeals Court heard the oral pleadings about the legitimacy of 2015 Open Internet Order on 4 December 2015, and was expected to deliver judgment in spring 2016. Frieden, the foremost academic chronicler and analyst of FCC Open Internet policy, analysed the 2016 litigation possibilities:

FCC has acted in a manner predicted by Justice Scalia in 2002.41 The Commission succeed in convincing a majority that it needed to ignore the telecommunications component to support a deregulatory regime. Now the Commission needs to convince an appellate court that the telecommunications component has become so important that it must be pulled from the deregulated safe harbor the FCC previously created. The Commission may not have sufficient persuasive power to finesse a changed regulatory classification based on a collection of conflicting factual and legal rationales.42

US regulation of net neutrality remained in a legal no man’s land in 2016.

European Union law 2009–12

This section explores European legislative and regulatory responses to net neutrality in more detail. US net neutrality reforms were to be followed slowly in Europe, in reform of its ‘Telecoms Package’ completed in 2009 and implemented from 2011.43 This difference led many political scientists to investigate the dynamics of the debate in both the US and Europe.44 European law upheld transparency on a mandatory basis, and minimum QoS on a voluntary basis, under provisions in the 2009 framework. In its initial 2006 explanation of its reasons to review the 2002 Directives, the Commission noted the US net neutrality debate but did no more than discuss the theoretical problem.45 Over 200708, the volume of regulatory reform proposals in the US, Japan, Canada and Norway had grown, along with consumer outrage at IAP malpractice and misleading advertising, notably over notorious fixed and mobile advertisements which presented theoretical laboratory maximum speeds on a dedicated connection subject to ‘reasonable terms of usage’ – which meant capacity constraints on a monthly basis, some of these on mobile as low as 100MB monthly download totals.46

Net neutrality became a significant issue, together with graduated response to copyright infringement (notoriously giving rise to the HADOPI law in France), in the European Parliament vote to reject the reforms at the First Reading in May 2009, prior to elections in June 2009. Amendments on consumer transparency and network openness were then offered to the European Parliament in the conciliation process. The new rules in two Directives were published in the Official Journal on 18 December and gave Member States 18 months to implement them (by 18 June 2011).47 The Commission ‘Declaration on Net Neutrality’ called for reporting by end-2010:

The Commission attaches high importance to preserving the open and neutral character of the Internet, taking full account of the will of the co-legislators now to enshrine net neutrality as a policy objective and regulatory principle to be promoted by national regulatory authorities(1) alongside the strengthening of related transparency requirements(2) and the creation of safeguard powers for national regulatory authorities to prevent the degradation of services and the hindering or slowing down of traffic over public networks.(3) The Commission will monitor closely the implementation of these provisions in the Member States, introducing a particular focus on how the ‘net freedoms’ of European citizens are being safeguarded in its annual Progress Report to the European Parliament and the Council. In the meantime, the Commission will monitor the impact of market and technological developments on ‘net freedoms’ reporting to the European Parliament and Council before the end of 2010 on whether additional guidance is required, and will invoke its existing competition law powers to deal with any anti-competitive practices that may emerge.

(1) Article 8(4)(g) Framework Directive.

(2) Articles 20(1)(b) and 21(3)(c) and (d) of the Universal Service Directive.

(3) Article 22(3) of the Universal Service Directive.48

What was intended with regard to EU net neutrality was actually a very ‘lite’ approach, ensuring services are not blocked and/or degraded beyond usefulness:

(34) A competitive market should ensure that end-users enjoy the QoS they require, but in particular cases it may be necessary to ensure that public communications networks attain minimum quality levels so as to prevent degradation of service, the blocking of access and the slowing of traffic over networks.

In order to meet QoS requirements, operators may use procedures to measure and shape traffic on a network link so as to avoid filling the link to capacity or overfilling the link, which would result in network congestion and poor performance.

Those procedures should be subject to scrutiny by NRAs [National Regulatory Authorities] … in particular by addressing discriminatory behaviour, in order to ensure that they do not restrict competition.

If appropriate, NRAs may also impose minimum QoS requirements on undertakings to ensure that services and applications dependent on the network are delivered at a minimum quality standard, subject to examination by the Commission.

NRAs should be empowered to take action to address degradation of service, including the hindering or slowing down of traffic, to the detriment of consumers.

However, since inconsistent remedies can impair the functioning of the internal market, the Commission should assess any requirements intended to be set by NRAs for possible regulatory intervention across the Community and, if necessary, issue comments or recommendations in order to achieve consistent application.49

The net neutrality provisions were transparency in new Article 20, and Article 22 (showing that if NRAs did anything, it should be subject to an effecttive veto by the Commission):

  1. Member States shall ensure that NRAs are, after taking account of the views of interested parties, able to require networks and/or services to publish comparable, adequate and up-to-date information for end-users on the quality of their services … That information shall, on request, be supplied to the NRA in advance of its publication.
  2. NRAs may specify, inter alia, the quality of service parameters to be measured and the content, form and manner of the information to be published, including possible quality certification mechanisms, in order to ensure that end-users … have access to comprehensive, comparable, reliable and user-friendly information.
  3. In order to prevent the degradation of service and the hindering or slowing down of traffic over networks, Member States shall ensure that NRAs are able to set minimum quality of service requirements on an undertaking or undertakings providing public communications networks.
    NRAs shall provide the Commission … with a summary of the grounds for action, the envisaged requirements and the proposed course of action. This information shall also be made available to [BEREC]. The Commission may … make comments or recommendations … NRAs shall take the utmost account of the Commission’s comments or recommendations when deciding on the requirements.

The 15th (and final) Implementation Report on the telecoms single market in May 2010 stated that VoIP blocking is the single biggest issue, and that the Commission will report by end-2010:

In Italy, consumers are now able to withdraw from their contracts in case of divergence with the declared connection speed. The Slovenian NRA issued a recommendation on the provision of broadband speeds, and the Portuguese NRA published a report on the quality of service for access to internet services, highlighting the upload speeds and network latency as the main differences between fixed and mobile networks. The United Kingdom NRA carried out a broadband speeds survey comparing the service provision of the largest internet service providers. In Hungary, several operators were subject to fines for a failure to provide correct information.50

It also suggested that Member States should consult by end-2010 on national plans for net neutrality, with the result that BEREC,51 Sweden,52 UK,53 France54 and others did so,55 with Italy following in 2011.56 Non-members Canada,57 Norway58 and the United States59 had already done so. The European Commission rather lamely concluded in November, from 318 responses, that everyone agreed the Open Internet was important, and presumably also that the Pope was Catholic.60

The Declaration, and the more legally relevant Directive clauses, rely heavily on implementation at national level and proactive monitoring by the Commission itself, together with national courts, and privacy regulators where content discrimination contains traffic management practices which collate personal subscriber data.61 The Commission promised ‘a particular focus on how the “net freedoms” of European citizens are being safeguarded in its annual Progress Report to the European Parliament and the Council’.62 By the deadline for implementation of 18 June 2011, 20 NRAs had not implemented any part of the 2009 Directives, and the Commission opened infringement proceeedings (this is quite normal in the European Union).63

The European Commission consulted on implementation of its 2009 network neutrality laws in September 2010. It referred much of the detailed work to the new BEREC, which has developed an extensive work programme on net neutrality since 2010.64 BEREC’s 2010 response to the EC Consultation65 concluded that mobile should be subject to the net neutrality provisions, although ‘mobile network access may need the ability to limit the overall capacity consumption per user in certain circumstances (more than fixed network access with high bandwidth resources) and as this does not involve selective treatment of content it does not, in principle, raise network neutrality concerns’.66 BEREC explained some breaches of neutrality: ‘blocking of VoIP in mobile networks occurred in Austria, Croatia, Germany, Italy, the Netherlands, Portugal, Romania and Switzerland.’67 They explain that though mobile will always need greater traffic management than fixed (‘traffic management for mobile accesses is more challenging’), symmetrical regulation must be maintained to ensure technological neutrality: ‘there are not enough arguments to support having a different approach on network neutrality in the fixed and mobile networks. And especially future-oriented approach for network neutrality should not include differentiation between different types of the networks.’68

In December 2011 BEREC published to member NRAs its detailed guidelines on transparency and QoS,69 including for instance Network Performance (what IAP monitoring is required for effective detection of discrimination).70 NRAs have to implement net neutrality in 2014 with such detailed guidance. However, on transparency, ‘BEREC states that probably no single method will be sufficient’71 and points out the limited role of NRAs. Governments’ consumer and information commission bodies are also likely to play a key role.

BEREC note that legal provisions in the Directives permit greater ‘symmetric’ regulation of all operators, not simply dominant actors, but ask for clarification on these measures:

Access Directive, Art 5(1) now explicitly mentions that NRAs are able to impose obligations on undertakings that control access to end-users to make their services interoperable.72

The 2002 framework did not permit formal complaints to be made by content providers regarding treatment by IAPs, which meant no ‘formal complaints’ could be made to NRAs about content blocking until 2011. BEREC analysed how to define ‘reasonable’ and concluded it is:

more reasonable to simply throttle P2P applications in times of congestion to the benefit of, for example, time-sensitive applications … Those practices would be considered more reasonable than totally blocking special applications because they induce fewer side effects.73

Furthermore, the new wider scope for solving interoperability disputes could be used in France, which is explored in the following section.

National law and regulation since 2012

One of the several principles of network neutrality promulgated by both the FCC and European Commission in 2009/10 is that only ‘reasonable network management’ is permitted, and that the end user be informed of this reasonableness via clear information. Both the FCC in the US and the European Commission have relied on non-binding declarations to make clear their intention to regulate the ‘reasonableness’ of traffic management practices. Little was done to define reasonableness and transparency by the European Commission prior to the implementation deadline. This has led to extensive and prolonged criticism by the European consumers’ organisation, and a substantial package of measurement, consumer empowerment and regulation for greater transparency and consumer rights in the proposed reforms (discussed below).

The 28 Member States, the European Economic Area members and the 47 members of the Council of Europe (CoE) must also conform to the human rights law of the European Convention on Human Rights and Fundamental Freedoms 1950 (ECHR).74 This is supplemented in the European Union by legal instruments on data protection which are implemented using both the decisions of national and European courts,75 and taking account of the advice of the group of European Union privacy commissioners. In 2011 the European Data Protection Supervisor (EDPS) expressed his concern that traffic management would result in exposure of users’ personal data including IP addresses, repeating these concerns in November 2013.76 The CoE also issues various soft law instruments to guide member states in observance of citizens’ rights to privacy and free expression.77 In 2016, conveniently just after the publication of the European Union Regulation on the Open Internet, the Committee of Ministers of the 47 CoE Member States issued their own Declaration,78 a soft law instrument which Member States are expected to follow but which has no binding force. It appeared equally as full of exceptions as Regulation 2015/2120, at the time of writing. Telecommunications regulators are aware that net neutrality is a more important issue than they are equipped to explore, as the technologies at stake are technologies of censorship. Private Internet censorship, consistent with Article 10(2) ECHR, may only be acceptable in limited circumstances. Note that the introduction of network neutrality rules into European law was under the rubric of consumer information safeguards and privacy regulation, not competition policy.

Norway

Norway put in place co-regulation for net neutrality in 2009,79 which had been in negotiation since 2008.80 The need for net neutrality resulted from an IAP choosing not to carry the video traffic of the state broadcaster, resulting in strong political pressure for neutrality. Sørensen for the regulator explains that: ‘In 2009 the Norwegian guidelines for net neutrality were launched and there have since been annual stakeholder meetings to monitor the status of net neutrality in Norway.’81 A short description of the co-regulatory approach has been published on the regulatory website82 and it has been extensively described by Sørensen. The Norwegian Electronic Communications Act 2013 did not introduce any (hard) law for net neutrality, but the corresponding Communication (Proposition) to the Norwegian Parliament (Stortinget)83 confirmed the running soft law approach of Nkom (NPT at the time):

in the proposals for amendments to the Electronic Communications Act the Norwegian Post and Telecommunications Authority and the ministry are following developments and will if necessary consider regulatory measures if it proves that a voluntary arrangement is insufficient to ensure good development in line with the overall goals.84

Sørensen states that ‘market players that have not formally endorsed the guidelines follow the guidelines in practice’. He explains that:

CDN servers that are connected to dedicated transmission lines or that use a higher priority level than ‘best effort’ will not be considered net neutral. IPTV provided on a closed network (i.e. not over the Internet) can, in principle, be considered a modern form of cable TV. These types of services are often referred to as ‘specialised services’ and as long as these are not provided at the expense of the Internet service, net neutrality will not apply for them.’85

Neutrality was defined as excluding zero rating in 2014, in order to ensure that IAPs did not attempt to introduce such a practice: ‘zero-rating lead to selected traffic from the Internet service provider itself or affiliated providers being favoured above other traffic. And this is exactly the kind of situation net neutrality aims to avoid.’86 Norway is unique in that its co-regulatory net neutrality approach was agreed prior to other European nations, yet remains in place unchallenged by affected companies (although Telenor actively zero rates in Asian nations such as Myanmar and Bangladesh). It may therefore prove an exception to the general rule of litigious companies and captured regulators. Note that Norway practises an advanced form of Scandinavian social democracy, supported by strong and independent bureaucracy and government, a social compact between companies and society, and economic growth fuelled by North Sea oil wealth. It is an atypical example.

Netherlands and Slovenia 2012

In mid-June 2011 the Netherlands moved to implement the powers to require Quality of Service guarantees without discrimination.87 Netherlands network neutrality regulation was voted on by its Senate on 6 March 2012,88 which made it the first European nation to formally introduce mandated network neutrality. Implementation of the law was delayed until spring 2013 by the need for secondary legislation from the ministry mandating the regulator to implement the law, and the regulator was merged into the competition authority in April 2013, delaying implementation by over two years.89 By late 2014 it was issuing regulatory decisions to enforce net neutrality and prevent discrimination.

Slovenia also passed a law mandating net neutrality, on 28 December 2012, which is on its face more restrictive than the Netherlands law.90 This was also implemented in 2013. Field research reveals the effectiveness of such laws and their operator and consumer effects.91 The new 2012 Netherlands and Slovenian laws prohibit traffic management that discriminates, with few exceptions. In the Netherlands, these exceptions are:

  1. ‌ to minimize the effects of congestion, whereby equal types of traffic should be treated equally;
  2. ‌ to preserve the integrity and security of the network and service of the provider in question or the terminal of the end-user
    plus to stop spam and enforce legal requirements.92

In Slovenia they are:

  1. applying necessary technical measures in order to ensure a smooth use of the Internet network (e.g. to avoid traffic congestion),
  2. applying necessary precautions to preserve the integrity and security of networks
  3. plus spam/legal requirements.93

Slovenia’s law makes clear that these must be temporary fixes: ‘proportionate, non-discriminatory and time limited and applied only to the extent necessary’. They both prohibit ‘limited Internet offers’ which block certain traffic, for instance zero rating by mobile providers, as the Netherlands law commands IAPs: ‘do not make the price of the rates for Internet access services dependent on the services and applications which are offered or used via these services.’ The 2015 European Regulation adopts less clear language on what is ‘reasonable’, as we will see in Chapter 4.

The practice of zero rating was outlawed by the Netherlands in its 2015 Guidelines clarifying application of its 2012 net neutrality law.94 The four issues dealt with by the Netherlands regulator once its net neutrality law came into effect in 2013 have caused van Eijk to caution that ‘hard cases make bad laws’, including for zero rating: ‘the new net neutrality rules … led to a new subscription structure, with a substantially increased emphasis on data traffic. Data bundles are priced more specifically, and existing packages with unlimited data access have been replaced by packages with a specific size (data caps) and specific speeds.’95 He cautions that ‘it is too early to tell whether net neutrality has had an effect on the overall costs for mobile broadband’. The new Netherlands rules in practice only affect mobile IAPs: ‘The new neutrality rules had no effect on the fixed market.’ He explains: ‘In two cases, the Authority investigated the bundling of data packages with free services (i.e. a mobile subscription with ‘free’ access to Spotify). To deal with these cases, a new guideline has been drafted by the ministry involved.’96 This clarifies that zero rating is illegal in the Netherlands, though it may not be a ruling that is compatible with the new European law.

Slovenian regulation 2015

Due to language barriers, limited regulator size and the rather obscure position of Slovenia as a small Member State of the EU (population 2 million), Slovenia’s very strict net neutrality law has been analysed very little by non-Slovenes. The net neutrality law is Article 203 of the wider Electronic Communications Law 2012 (ZEKOM), drafted as an innovation measure in response to hostility from the dominant IAP and trades unions towards competition in Internet supply. The regulator is the Communications Networks and Services Agency of the Republic of Slovenia (AKOS). The law’s author, Professor Ziga Turk, when Minister for Communications, examined its genesis and implementation in a publication for the European Commission.97 His main conclusion was that implementing net neutrality in a nation with such a weak regulator would prove very difficult. Caf agreed with this analysis, arguing that AKOS ‘led by a former industry executive, has not been an advocate of net neutrality. Instead, it has taken a pro-industry stance on net neutrality and has not opposed attempts to weaken or even remove net neutrality provisions from the law.’98

While the ZEKOM law dates to the start of 2013, its regulation by AKOS was slow to arrive, with the main four rulings – those of 24 January and 20 February 2015 – against zero rating. AKOS confounded its critics with a strong zero-rating decision when forced to investigate by the Electronic Communications Council (SEK), which filed a complaint in July 2014 alleging Telekom Slovenije violated net neutrality with zero-rated products. From 2013 Telekom Slovenije provided free data for video channel HBO and UEFA Champions League football, then later the music streaming service Deezer. AKOS also found against Si.mobil (the largest mobile IAP) for zero rating cloud storage service Hanger Mapa. Telekom Slovenije and Si.mobil were instructed to stop zero rating. In the second pair of cases, bans were imposed against a zero-rated mobile TV service and web portal provided by AMIS (Mobia TV) and Tušmobil (Tuškamra), respectively. These were the only rulings against all major IAPs in Slovenia, all of whom had zero-rated affiliated content, and were given 60 days to comply. The issue was fought for by AKOS against substantial industry lobbying and the huge asymmetry in personnel between the IAPs and the very small regulator.

A remaining issue is that football and cloud storage on Telecom Slovenije remains zero rated, though this practice was stopped with HBO, whereas AMIS and Si.mobil were banned from video and cloud zero rating. The importance of Champions League football to many users means it may be politically impossible to deprive viewers of that stream by capping downloads in Slovenia. As a result of these bans, ‘Telekom Slovenije and Si.mobile have both come up with special offers and packages with larger data caps or inexpensive data cap options’99 to expand the cap, presumably to try to include their formerly zero-rated services.

Just as in the US, Slovenian operators and the regulator are highly litigious and all cases were on appeal at the time of writing.100

French principles 2010/14

In 2010 French regulator ARCEP released a ‘10 point’ set of principles for net neutrality,101 having consulted extensively over an entire year on how to implement the 2009 framework on net neutrality.102 ARCEP updated their ‘10 points’ in a report to the French parliament in September 2012, which concluded that competition and transparency was insufficient to deal with potential long-term detriments to consumers from anti-neutrality behaviours.103 It concluded that further legislation of the type passed in the Netherlands and Slovenia would be required in order to stop blocking and throttling, especially of VoIP over mobile networks, but that this was of course within parliament’s competence.

ARCEP decided that Specialised Services would be permitted to be offered alongside Open Internet access, ‘provided that the managed service does not degrade the quality of Internet access below a certain satisfactory level, and that vendors act in accordance with existing competition laws and sector-specific regulation’ (Principle 4 of 2010). It confirmed this stance in permitting an agreement for preferential access to France Telecom/Orange and Free’s services by Google’s YouTube CDN in early 2013.104 It is important to note that this is a non-neutral provision for a higher speed ‘managed service’ (Specialised Services), to which we return in Chapter 3. Furthermore, in September 2012 the competition authority demanded that France Telecom clarify the relationship between its wholesale and retail operations in order to ensure it did not cross-subsidise and margin-squeeze competitors, notably Cogent Communications.105 This has been noted with approval by expert telecoms analysts, with Robinson stating ‘ARCEP is therefore calling for the elimination of the blocking of VoIP and P2P traffic. The regulator concludes that QoS is a crucial long-term issue that must be monitored in order to “strengthen competitive emulation”.’106

Through its decision dated 10 July 2013,107 the Conseil d’Etat denied the appeal of US IAPs Verizon and AT&T and their French subsidiaries, thus confirming ARCEP’s decision of 29 March 2012 on gathering information on the technical and pricing conditions governing interconnection and data routing.108 This decision was itself challenged by US operators active in the French market, who did not wish to reveal their traffic data. ARCEP explains: ‘The information gathering system that ARCEP introduced concerns the interconnection and data routing markets. These markets are home to complex and potentially strained relationships between internet service providers (ISP), providers of public online communication services (PPOCS) and technical intermediaries such as transit operators and content delivery networks (CDN).’ ARCEP considered that ‘regular, twice-yearly information gathering campaigns were vital to the regulator’s ability to ensure that these markets run smoothly over time from a technical and economic perspective, particularly in relation to ARCEP’s ability to settle any possible disputes that might arise between ISPs and providers of public online communication services’.109

The decision to uphold the information-gathering demands of ARCEP means that the French regulator was able to gather more information on the traffic management practices of Tier 1 IAPs and CDNs such as Google than any other national regulator, including those outside the European Union.110 Arguably, it also means that ARCEP will be placed in the best position in Europe to assess the state of competition in the backbone IP interconnect market.

Conclusion

While both European and United States legislation and regulation affecting network neutrality were in peril of failing in 2014, the adoption of regulation and legislation in both regions in 2015 suggested that net neutrality was a permanent feature of the Internet law landscape. The European law proposed in 2013 was being rapidly overtaken by events in the Netherlands, France, Slovenia and Finland (see Introduction).

Net neutrality discourse has seen a sea-change in terminology since 2010, with governments keen to term the debate as being about ‘the Open Internet’, while telecoms companies and the European Commissioner,111 who were firmly opposed to net neutrality in 2010, claimed in a Janus-faced manner to favour that term, as redefined and watered down to allow Specialised Service loopholes. These will be explored in Chapter 3, but first we turn to the reasons why competition is not the solution to net neutrality in Chapter 2.

1 Berners-Lee (2006).
2 Directive 2000/31/EC, Art. 2(a), reiterating Art. 1(2) of Directive 98/34/EC, as amended by Art. 1(2)(a) and Annex V of Directive 98/48/EC.
3 See Directive 2010/13/EU, Art. 1(a)(i) and Art. 2.
4 Directive 2002/21/EC (Framework Directive), Art. 2(c).
5 Online Copyright Infringement Liability Limitation Act (OCILLA) 1998, which amended the 1976 Copyright Act, passed as a part of the 1998 Digital Millennium Copyright Act (DMCA) and referred to as the ‘Safe Harbor’ provision because it added Section 512 to Title 17 of the United States Code.
6 47 USC §201(a) and (b). See Chapter 5.
7 DMCA 1998, s.512(k)(1)(A–B).
8 Cave (2011).
9 Lemley and Lessig (2000). In Europe, see Marsden (1999) at Section 5.1.
10 Wu (2003b).
11 Marsden (2013a).
12 FCC, Report and Order Preserving the Open Internet, 2010.
13 See Kang and Tsukayama (2011).
14 Verizon v. Federal Communications Commission 740 F.3d 623 (D.C. Cir. 2014); 11–1355.
15 FCC, Internet Policy Statement 05–151, 2005; FCC, Madison River Communications, LLC, Order, DA 05–543, 2005.
16 Open Internet Advisory Committee (2013a), p. 13.
17 OECD (2015).
18 Communications Act of 1934 as amended by Communications (Deregulatory) Act of 1996, 47 USC.
19 Candeub and McCartney (2012).
20 Powell (2004).
21 FCC, Internet Policy Statement 05–151, 2005.
22 FCC, Madison River Communications, LLC, Order, DA 05–543, 2005.
23 FCC, In AT&T Inc and BellSouth Corp, 2007.
24 FCC, In AT&T Inc and BellSouth Corp, 2007. FCC, In AT&T Inc and BellSouth Corp, 2008.
25 See Karpinski (2009).
26 American Recovery and Reinvestment Act 2009.
27 FCC, Report and Order, In the Matter of Preserving the Open Internet, 2009, especially footnotes 6263.
28 FCC, Report and Order Preserving the Open Internet, 2010.
29 Frieden (2012).
30 Verizon v. Federal Communications Commission 740 F.3d 623 (D.C. Cir. 2014); 11–1355, 14 January.
31 Karpinski (2009), p. 47.
32 Broadband Initiatives Program (2009).
33 FCC, Report and Order, In the Matter of Preserving the Open Internet; Broadband Industry Practices, 2009.
34 Copps, M., quoted in FCC, Report and Order, In the Matter of Preserving the Open Internet; Broadband Industry Practices, 2009 at 94–5.
35 Broadband Internet Technical Advisory Group (2011).
36 FCC, Open Internet Order, 2015.
37 Northrup (2015).
38 Goldstein (2015).
39 Ammori (2015).
40 Shepardson (2015).
41 National Cable & Telecommunications Association et al. v. Brand X Internet Services et al. (2005) 545 U.S. at 1013–1014; see also Frieden (2006).
42 Frieden (2015a, 2015b).
43 Marsden (2012a).
44 Cooper and Powell (2011).
45 COM(2006) 334.
46 Leading to a significant emphasis in EC SEC(2007) 1472, pp. 90–102.
47 Directive 2009/136/EC (Citizens’ Rights Directive) and Directive 2009/140/EC (Better Regulation Directive).
48 Directive 2009/140/EC (Better Regulation Diective).
49 Directive 2009/136/EC (Citizens’ Rights Directive), Recital 34.
50 COM(2010) 253, p. 56.
51 BEREC, BoR (10) 42.
52 Swedish Post and Telecom Agency (2009).
53 Ofcom, Traffic Management and net neutrality, 2010.
54 ARCEP (2010b).
55 IP/10/860.
56 AGCOM (2011).
57 Privacy Commissioner of Canada (2009).
58 See Norwegian Communications Authority, Net neutrality guidelines, 2013.
59 FCC, Report and Order, In the Matter of Preserving the Open Internet; Broadband Industry Practices, 2009.
60 IP/10/1482.
61 See Directive 95/46/EC, Directive 2002/58/EC (E-Privacy Directive), Directive 2006/24/EC (Data Retention Directive).
62 Directive 2009/140/EC (Better Regulation Directive).
63 IP/11/905.
65 BEREC, BoR (10) 42.
66 Ibid., p. 11.
67 Ibid., p. 3.
68 Ibid.
69 BEREC, BoR (11) 53 and BoR (11) 67.
70 See BEREC, BoR 53 (11), p. 3.
71 See BEREC, BoR 67 (11), p. 5.
72 BEREC, BoR (11) 53.
73 BEREC, BoR (12) 132, p. 56, para. 265.
74 See Koops and Sluijs (2012); Sluijs (2012).
75 See Case C-461/10 Bonnier Audio AB and others v. Perfect Communication Sweden AB.
76 EDPS, Opinion on net neutrality, 2011; EDPS, Opinion on the Proposal for a Regulation to achive a Connected Continent, 2013.
77 See Council of Europe (2010) Declaration of the Committee of Ministers on network neutrality adopted 29/9/2010: 1094th meeting of the Ministers’ Deputies.
78 Council of Europe (2016).
79 The Norwegian guidelines are available publicly, unchanged since 2009 (Norwegian Communications Authority, Net neutrality guidelines, 2013).
80 In addition to semi-regular (annual) meetings with the regulator in Oslo, Dublin, Edinburgh, Brussels and Barcelona, I am grateful to representatives of the Norwegian consumer council, Opera software and Telenor for their comments. In Oslo, I thank in particular Professor Lee Bygrave of the University of Oslo for hosting the various meetings of the iGov and iGov2 projects, to which he invited me to meet regulators and ministry officials.
81 Sørensen (2013).
82 Ibid.
83 Email to author from Frode Sørensen, 23 April 2015, on file with the author.
84 See Sørensen (2014a).
85 Sørensen (2013).
86 Sørensen (2014b).
87 Bits of Freedom (2015).
88 Article 7.4a (3) of the Netherlands Telecommunications Act 2012.
89 From 1 April 2013, OPTA (Onafhankelijke Post en Telecommunicatie Autoriteit/Independent Post and Telecommunications Authority) merged with the Competition and Consumer Authorities into the ACM (Autoriteit Consument en Markten/Authority for Consumers and Markets). In 2012–14 I conducted interviews in the Netherlands with Robert Stil and Mark de Hek of ACM, Professor Nico van Eijk and Mariejte Schaake MEP, and had many conversations with researchers at IVIR, Amsterdam, Bits of Freedom and Oxford researcher Ben Zevenbergen. My former co-blogger Dr Jasper Sluijs was also a source of informed comment.
90 Slovenia, Law on Electronic Communications, No. 003-02-10/2012-32, 20 December 2012, Article 203(4). A helpful translation of key aspects is available at https://wlan-si.net/en/blog/2013/06/16/net-neutrality-in-slovenia/ (Accessed 24 September 2016).
91 The author has conducted personal interviews with the relevant national experts in April 2013 (Netherlands) and June 2013 (Slovenia), as well as the Minister responsible in Slovenia (August 2013) and consumer representatives (June 2013). More such research with operators and consumer groups is needed.
92 Netherlands Telecommunications Act 2012, official translation by the Dutch government. Netherlands regulators were not required to implement net neutrality until summer 2013, a deadline delayed by the need for the Ministry to issue secondary legislation and guidance to the regulator on the form that such implementation should take. It is therefore too soon to draw firm conclusions about the efficacy of the Netherlands law.
93 Slovenian Law on Electronic Communications, No. 003-02-10/2012-32, 20 December 2012, Article 203(4).
94 Netherlands Department of Economic Affairs, Net Neutrality Guidelines, 2015 (official translation). In summary: ‘Pursuant to the Act, providers of Internet access services may not block or obstruct services and applications on the Internet (with limited strict exceptions). Furthermore, providers may not differentiate between tariffs for Internet access services, and services and applications provided or used through these services.’
95 van Eijk (2014).
96 Ibid. The other two cases in 2013/14 concerned public Wifi and mobile ISP throttling. See van Eijk (2014): ‘The regulator in charge – the Authority for Consumers and Markets – took a first decision on applying the new rules in a case where Internet access in trains was blocked for congestion reasons. In another case, a service similar to WhatsApp was inaccessible via wireless networks.’
97 Turk (2015). I declare an interest as co-author.
98 Caf (2014).
99 Caf (2015).
100 Ibid.
101 ARCEP (2010a).
102 See further Curien and Maxwell (2010) and Sieradzki and Maxwell (2008).
103 ARCEP (2012a).
104 DSL Prime (2012).
105 Autorité de la concurrence (2012).
106 Robinson (2012).
107 France, Conseil d’Etat, Decision No. 360397/360398 of 10 July 2013.
108 ARCEP (2012b).
109 ARCEP (2012b).
110 See ARCEP (2013). The Conseil d’Etat backs up ARCEP’s powers in interconnection and data routing markets, and confirms its ability to query all of the players in theses markets, including those located outside the European Union, stating ‘The Conseil d’Etat thereby also upheld ARCEP’s power to query all market undertakings, including those located outside the European Union whose business and/or activity could have a significant impact on internet users in France … ARCEP’s information-gathering campaigns were necessary and proportionate.’
111 See my comments at 31:00 on Commissioner Kroes in Marsden, Chris (2013b).

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