Concerns About Article 20, 21 and Recital 26 of the Telecoms Package

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Summary: Amendments to the Universal Service directive pushed by American Telco AT&T currently allow operators to implement anti-Net neutrality measures. These provisions:

  • are mainly targeted to allow a Net discrimination
  • are harmful for the growth and innovation models of the Internet,
  • are a clear disincentive to the model based on cost-efficient bandwidth-based investments,
  • are against the benefit of consumers,
  • raise concerns about the protection of fundamental rights and freedom of European citizens.

Article 20.1.b.2

The contract shall specify in a clear, comprehensive and easily accessible form at least] the services provided, including in particular, information on any other conditions limiting access to and/or use of services and applications, where such conditions are allowed under national law in accordance with Community law.

Article 21.3.b

Member States shall ensure that national regulatory authorities are able to oblige undertakings providing public electronic communications network and/or publicly available electronic communications services to (…) inform subscribers of any change to conditions limiting access to and/or use of services and applications, where such conditions are allowed under national law in accordance with Community law.

Recital (26)

A competitive market should ensure that users enjoy the quality of service 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 quality of service 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. These procedures are subject to scrutiny by the national regulatory authority acting in accordance with the provisions of the Framework Directive and the Specific Directives to ensure they do not restrict competition, in particular by addressing discriminatory behavior. If appropriate, national regulatory authorities may also impose minimum quality of service requirements on undertakings providing public communications networks to ensure that services and applications dependent on the network are delivered to a minimum quality standard, subject to examination by the Commission. National regulatory authorities are 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 achievement of the internal market, the Commission should assess any requirements intended to be set by national regulatory authorities for possible regulatory intervention across the Community and, if necessary, issue comments or recommendations in order to achieve consistent application.

Information on any other conditions limiting access to and/or use of services and applications

This phrasing suggests that anti-Net neutrality practices could be adopted by operators as long as they are clearly notified to Internet subscribers. One might note that it is quite regrettable that the directive aimed at protecting consumers was in fact used by some operators to actually introduce dispositions that harm consumers’ rights by giving assent to Net neutrality measures.

More importantly, it should be noted that, by default, Internet access service allows, with due respect to national laws, access to any content and service, and use of any application or hardware of user’s choice. Here, it is agreed that “use of” or “access to services and applications” could be limited by operators. This is in total contradiction with the essence of Internet, where the operators do not regulate or influence their customers’ uses. It leaves the doors open for a “sub-internet” access, where Voice over IP, Peer-to-peer, and even video and audio streaming could be restricted, in order to unduly favor the operators’ own services or those of their affiliates. Access in such conditions is anti-competitive and cannot technically be called “Internet”. It neither benefits users nor the growth of Internet.

where such conditions are allowed under national law in accordance with Community law.

The fact is that today, no regulation exists regarding Net neutrality. The ambiguous language adopted by the Parliament in articles 20 and 21 leaves room for interpretation infringing on Net neutrality, thereby putting at risk all the benefits brought about by the Internet.
It is of the utmost importance for European lawmakers to unequivocally repeal these sentences in order to give regulators adequate tools to protect individual freedoms as well as innovation in the internal market.

Recital (26) states that:

National regulatory authorities are empowered to take action to address degradation of service, including the hindering or slowing down of traffic, to the detriment of consumers.

However, this is a recital and not an enforceable article. Its normative force is thus subject to debate and cannot represent a satisfactory guarantee regarding Net neutrality. Moreover, it could be interpreted as allowing national regulators to protect Net neutrality but by no means will force them do so.
Also, it is worth noting that the smooth functioning of the internal market requires that this fundamental principle be applied in the whole European Union. Lawmakers must avoid regulatory fragmentation and seize the opportunity of the conciliation procedure to unambiguously impose Net neutrality in the whole European Union.

The model of development of the Internet has always been based on addressing capacity constraints by investing on bandwidth. This investment model allows for new resources added by the operators to be used for the benefit of all users, thus enabling the growth of the network and its usages. This crucial parameter enables the bottom-up model of innovation, where people and companies located on the edge (often on the “bleeding” edge) of the network can reach their customers without discrimination, with the same chance as the dominant players. Going against this investment model would allow operators, in order to gain more control over their part of the network, to dissociate it in practice from the interconnected network, leading to anti-competitive barriers.
Network management measures should only be used to temporarily address network congestion and capacity constraints, when they are due to an attack or any kind of unexpected and unusual event. If the problem persists, the only sustainable solution, for the benefit of all, is to buy more bandwidth. This is the investment model that should be incentivized.

… which would result in network congestion and poor performance.

The issue here is whether it is about legitimate network congestion or about discriminating against content, services or applications. In reality, we know that operators are tempted to use ‘traffic management’ equipment to ‘control peer-to-peer’ traffic. In the US, the FCC declared that such behavior was not a legitimate practice in its order to the network operator Comcast1.
Network congestion typically occurs at specific points in the network, creating choke points or bottlenecks, and can be dealt without discriminating against specific services or protocols. Many providers experience congestion in the part of the network that carries the user’s data back from the point of access to the network core (the “backhaul”). Investment in more network facilities and bandwidth is an appropriate way to deal with this problem. This principle applies to mobile and fixed networks alike.
While operators may claim to be dealing with congestion, there are also experts who believe that by increasing the complexity of the network, traffic management technology could slow down traffic and cause of quality of service issues. With respect to traffic management systems, there are different effects depending on whether the equipment is placed in the core of the network or towards the edge. For example, there is a case being examined in Canada2, where a network provider slowed down P2P traffic in the core of the network, which impacted users of the downstream networks that were operated by different companies.
AT&T argues that competition law takes care of disputes, but in fact, many of the issues are not related to competition law and would normally fall under the duties of the regulator, as indeed the American FCC did in the Comcast case.

How To Mandate Net Neutrality in the Telecoms Package

The public interest agenda in telecoms regulation is to codify clear limits for these practices for the protection of network neutrality. The provisions of the Telecoms Package as they stand suggest otherwise: they can be read as authorizing operators to abandon network neutrality for the sake of business models or the protection of private interests. These provisions must be amended or they must be placed under the umbrella of an overarching principle that clarifies that they can not lead to any form of network discrimination against contents, sources, destinations, media, applications, services or protocols running over the Internet Protocol.

As the conciliation committee negotiates the final text of the Telecoms package directives, European lawmakers must protect the value of the Internet for enhanced citizenship and more innovative markets  :

by getting rid of the anti-Net neutrality phrasing of Article 20 and 21 of the Universal Service Directive
and by amending the Framework Directive, to clearly make Net neutrality a fundamental regulatory principle in the European telecommunications market.