The European Parliament recently adopted a new regulation on mobile roaming and the open internet (the Regulation) which comes into effect on 30 April 2016.   The Regulation brings into effect two important changes. Firstly, it will prohibit roaming charges within the EU within the next two years. Secondly,  it crystallises the concept of net neutrality, which we discuss below.

What is net neutrality?

Net neutrality is the principle that Internet Service Providers (ISPs) should enable access to all content and applications regardless of the source, and without favouring or blocking particular products or websites . Put another way, ISPs cannot pick winners or losers on the internet, or decide which content and services are available.

Net neutrality is a contentious area, particularly since ISPs have developed technological means of managing data and traffic on their networks. Proponents of net neutrality argue that such practices need to be carefully regulated and any discrimination that cannot be justified on objective grounds should be prohibited. By contrast, ISPs and some content owners argue that such discrimination is necessary to ensure the efficient use of the limited bandwidth available in view of increasing consumption of data hungry services such as video downloads/online streaming. 

The global picture

The EU is far from the only territory where the above debate has been raging. For example, in 2011, Chile took the bold step of being the first country to introduce net neutrality regulation. Across the pond in the US, the Federal Communications Commission agreed new “Open Internet rules” in February 2015. Those rules now apply to both ISPs and mobile operators, who are expected to refrain from enabling paid prioritisation, blocking (controlling access to content) and throttling (slowing down internet traffic).
 
Until the passing of the Regulation, the picture in the EU was mixed on net neutrality regulation. Whereas the Netherlands adopted net neutrality legislation in 2012, Member States have generally relied on a self-regulatory approach until now. This includes the UK, where the Broadband Stakeholders group (BSG) comprising most of the major ISPs signed up to an Open Internet Code of Practice (theCode) which was launched in the UK in 2012. This has generally been considered to be successful in promoting increased transparency for consumers and preventing content providers from discriminatory practices, albeit the Code is entirely voluntary.  The BSG recently announced that it was commissioning an independent study into the effectiveness of the Code and its future once the new Regulation comes into force.

The Regulation

In broad terms, the main effect of the Regulation is that net neutrality will be enshrined in EU law. The starting point under the Regulation is that blocking and throttling are illegal so as to permit equal access to content for all EU internet users. This raises questions as to whether, and if so how, ISPs will be able to continue to use traffic management tools in order to give consumers faster access to the content they want to view/download.

This is where things become more uncertain. The general prohibition against discriminatory traffic management is subject to some exceptions, notably:

  • where any measures taken fall within certain defined “public interest” exceptions, notably (i) to comply with legislation relating to the legality of content or court/public authority decisions blocking content, (ii)  to deal with network misuse and/or combat viruses or malware, (iii) to provide filters for spam or content which certain users do not want to receive (e.g. adult content for children);
  • the provision of "specialised services" i.e. services that require a particular quality of access (over and above the general internet access) to guarantee their delivery of certain technical services. Examples given by the European Commission in its guidance notes include services which are widely used already (eg IPTV), but also those likely to increase in their importance such as telemedicine and automated driving. The Regulation sets out a series of conditions for the provision of such services and safeguards to ensure open access to the Internet is not negatively affected. For example, there is a requirement that optimisation is objectively necessary to ensure these services can be provided at reasonable service levels.; 
  • zero rating (or sponsored connectivity) whereby the data volume of particular content is not counted against the user's limited data volume, provided this practice does not circumvent the right of all consumers to access internet content of their choice.

Wherever an ISP intends using one of the exceptions, they will have to demonstrate that they are doing so on a transparent and proportionate basis. Nevertheless, the pro-net neutrality lobby has argued that these exceptions create potential loopholes which can be exploited by those controlling the networks. Doubts have already been expressed, for example, as to whether the permitted exception for specialised services will, in reality, lead to the introduction of “internet fast lanes” for certain favoured content providers.

Under the Regulation, BEREC (the EU-wide body of national telecoms regulators) has been tasked with providing guidelines for the application of the Net Neutrality rules at a national level. Yesterday it announced a series of stakeholder meetings which will, in particular focus on the role and nature of specialised services and how they may relate to the new rules on net neutrality. The final guidelines, when they are published next year, will therefore be of particular importance.

When will the new Regulation take effect?

The Regulation will become a reality for the 28 Member States on 30 April 2016, when the EU will have the most comprehensive approach to open internet in the world. Significantly, as this concept has been enshrined via a regulation, the rules will be immediately directly applicable to all Member States. Unlike a directive, national authorities will not need to do anything further in order to implement the new rules.

What now?

The passing of the Regulation marks the end of a long journey for advocates of net neutrality legislation in the EU. The European Commission strongly believes that these rules will encourage growth and development of the internet industry and improve opportunities to conduct business in the EU. Unrestricted internet access across the EU is a major positive step. It remains to be seen how the rules will operate in practice and, also, how authorities and government agencies in other (non-EU) territories will now react to these growing trends.