Written by Ezra Steinhardt and Colin Warriner

On 12 September, 2013, the European Commission formally adopted a proposal for a new Telecommunications Regulation (the “Regulation”).  The Regulation would, if enacted, reform the European Union’s telecommunication rules, including in areas such as net neutrality, spectrum allocation, roaming charges, and consumer rights in mobile and telecoms contracts.  The proposal is now being considered by the European Parliament and Council. 

 This post, on reforms proposed for “net neutrality” within the EU, is the first part of a series on key aspects of the proposed Regulation.  

“Net neutrality” remains a controversial topic in the European Union, leading Member States to adopt different approaches and attitudes towards “net neutrality” legislation.  Some Member States have now begun to legislate on the issue.  For example, the Netherlands and Slovenia have passed laws to empower local regulators to ensure net neutrality by preventing the slowing or blocking of certain services and Internet traffic by Internet Service Providers (ISPs).  However, other Member States haven’t yet followed suit, so these laws have threatened to create a confusing “patchwork” of laws that vary from Member State to Member State.

The European Commission’s new proposed Regulation aims to pre-empt the emergence of this confusing patchwork by fixing a single standard for net neutrality at the European level.  Overall, these proposals represent a determined – if not unqualified – step towards harmonised rules at the European level for net neutrality.  Article 23 of the Regulation would ensure that customers would be “free to access and distribute information and content, run applications and use services of their choice via their Internet access service.”  The Commission has argued that such a guarantee will generate benefits for consumers by spurring content providers and entrepreneurs to make greater investments in areas such as communications and e-health.

However, some advocates of net neutrality may decide the Regulation doesn’t go far enough, as the proposal won’t require ISPs to relinquish all control.  The Regulation would still permit “reasonable” traffic management, provided that the management was “transparent, proportionate and non-discriminatory.”  The proposal allows management of traffic, for instance, to prevent serious crime and for temporary relief of service congestion.

More controversially, the Regulation would also permit ISPs to charge content providers a higher price for providing “specialised services” with higher speeds or dedicated capacity.  The Commission argues that this freedom for ISPs is important for applications that require an “assured” service quality, such as videoconferencing, broadcasting via Internet Protocol (“IP-TV”) and online health applications.

However, such arrangements are subject to limits in the proposed Regulation.  Specifically, the Regulation would prohibit “specialised service” arrangements if they would “impair” the open Internet’s quality.  Interestingly, an earlier draft version of the Regulation that was leaked during the summer had approached this issue differently, by prohibiting “specialised service” arrangements only if they would “substantially” impair the open Internet’s quality, and not merely if they “impaired” it.  This means the new Regulation marks a tightening of language by the Commission, in order to prohibits such arrangements even if impairment to the open Internet’s quality is not substantial.  This change was likely introduced to allay fears that such arrangements would lead to the development of a “two-tiered Internet”.

However, as in the older draft, an impairment would still need to be “recurring or continuous” to breach the Regulation, which suggests that sporadic or occasional impairment may be allowed.  It remains to be seen whether net neutrality advocates and NGOs think the protection goes far enough.  A further safeguard requires national regulators to monitor the effects of specialised service arrangements on cultural diversity and innovation.