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FAQ: Open Internet provisions in the Telecoms Single Market Regulation

Pilar del CASTILLO VERA
18.03.2014 - 16:30
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The principle of 'net neutrality' is now enshrined in an EU Regulation and given a proper definition: that “traffic should be treated equally, without discrimination, restriction or interference, independent of the sender, receiver, type, content, device, service or application”. This approach, supported by the EPP, ALDE and ECR Groups in the European Parliament, as well as the Internal Market Committee, found a fair balance between ensuring “open internet access”, where transparency and non-discrimination principles are safeguarded, and allowing the market to continue the development of new innovative products, such as “specialized services”, meeting existing demand and anticipating future ones.

On one side, consumers are free to access and distribute information and content of their choice, no matter the applications, services or terminal used and the location, origin and destination. On the other side, operators are free to offer specialised services where there is sufficient network capacity, they are not detrimental to the availability/quality of internet access services and they don't discriminate against competing services.

The S&D and Green Groups do not share the same fair approach, and tried without success in the Industry, Research and Energy Committee to introduce further restrictive conditions making the provision of “specialized services” almost impossible.

What is the open internet-net neutrality debate about?

The main issue is to ensure that the internet remains open. In other words that users have the “ability to access and distribute information or run applications of their choice” (recital 45 and article 23.1). This is clearly guaranteed through the compromise amendment 4 to the Telecoms Single Market Regulation.

In addition, compromise amendment 4, for the first time in a European regulation, includes a definition of the net neutrality principle that states that “net neutrality in the open internet means that traffic should be treated equally” (recital 45). It is important to underline that, although the alternative text of compromise amendment 4 has a very similar definition, it excludes the terms “in the open internet” and consequently contradicts the specialised service provisions that follow.

What are the specialised services proposed by the European Commission?

They are services that ensure an enhanced level of technical characteristics. They are provided through special end-to-end connections between users and providers that are logically distinct from other connections. Although enshrining the concept in a regulation is new, specialised services are not, and are currently being offered throughout Europe. Examples might be High Definition IPTV (there are already 27.2 million customers with IPTV services in the EU), videoconferencing, data-intensive cloud computing or healthcare services like telemedicine (for example by connecting a rural clinic to a large urban hospital, that may require an extremely high-capacity, guaranteed quality of service and secure protection of sensitive data).

Will the current proposal on specialised services be the end of the open internet as we know it?

No, on the contrary. Specialised services already exist; what the provisions in the draft regulation do is to add safeguards (more than the Commission proposal) to the current situation.

As an example, the current compromise proposal 4 introduces guarantees that specialised services will not in any way harm the open internet, such as:

  • Specialised services must be clearly identified: they cannot be marketed or widely used as a substitute for public internet access (article 2);
  • They are not allowed if they slow down or interfere with the internet of other users (article 23.2);
  • A detailed and rigorous procedure for supervising, monitoring and enforcing user rights is introduced (article 30a).

These are important new safeguards that show that specialised services should not be seen to be in opposition to open/public internet services, as they provide a valuable offering to consumers, they are innovative and consequently foster network investment. 

Is there a risk that Internet Service Providers decide that video sites or social networks that today are accessible through the open internet, become specialised services and make end users pay for them?

No, the proposed regulation does not allow any possibility for providers of internet access to disguise internet access as specialised services (article 2).

The proposed regulation only permits specialised services to exist if there is also enough capacity for high-quality open internet access and, in addition, internet access providers cannot degrade quality to push citizens or content providers to buy specialised services or to discriminate amongst such services.

National authorities will have the power and obligation to enforce this, and to set minimum quality standards for internet access services if necessary. In addition an important role has been given to the Body of European regulators in Electronic Communications (BEREC) to set a coordinated approach for all national regulators across the entire Union.

Would the possibility of internet service providers negotiating with content providers and offering specialised services with enhanced quality at premium prices not create a two-tier internet?

No, it creates more options for consumers, just as today. Now consumers and businesses alike can choose from a range of deals that provide different speeds, data volumes, coverage and prices. This does not mean that there is a 'two-tier' internet today: indeed, consumers will be able to benefit from extra competition and choice. No one would be obliged to buy specialised services which they do not need or want, nor can they be an alternative to the public internet.

In order to foster a strong, truly competitive economy, businesses should be free to develop their own business models; providers of content and services should not be an exception. Why should there be concern if we introduce strong safeguards that guarantee that everyone can have access to the open internet without being blocked or throttled?

Can internet service providers manage internet traffic? If so, under what circumstances?

Yes, but only in a limited number of cases. Not only are internet service providers able to manage internet traffic in some situations, such as addressing traffic congestion, they must do so in order to ultimately avoid gridlock and total failure should the operator not have planned for such overloads and not manage the traffic according to technical principles. Consequently, in some cases, network management is a way to avoid congestion and the failure of best effort Internet, allowing for all users to obtain a fair and efficient share of common network resources.

Nevertheless, and in order to guarantee that there are no restrictions on internet traffic, the draft compromise amendment 4A prohibits any kind of restriction on internet traffic by internet service providers and allows traffic management in three defined scenarios (and only if reasonable, transparent, non-discriminatory, proportionate, necessary, and only in place as long as it is strictly necessary). These scenarios are the following:

1) to implement a court order;

2) to preserve the integrity and security of the network - in other words to prevent misuse of a network and combat viruses, malware or denial of service attacks, and to avoid the malfunctioning or disruption of internet access;

3) to prevent and mitigate network congestion - but only if congestion occurs temporarily or in exceptional circumstances.

What is the main difference between compromise amendment 4A and 4B of the Telecoms Single Market Regulation?

The main difference between the two alternative compromise amendments lies in the definition of specialised services and, more specifically, on the addition to 4B of the text “its application layer is not functionally identical to services and applications available over the public internet access service”, which adds new very stringent restrictions to the possibility of offering specialised services.

More specifically, the above-mentioned proposed addition to the definition of specialised services would add a rule that prevents specialised services being used where the content in question could be transmitted without a specialised service. Consequently compromise amendment 4B would only permit specialised services in cases where it was impossible to deliver content without a specialised service, but not where a content provider chooses to purchase guaranteed technical characteristics of transmission.

Furthermore, from a technical perspective, the proposed addition of compromise amendment 4B appears to be intended to restrict the optimisation that can be provided by a specialised service to the application layer, not taking into account that, in reality, specialised services tend to be differentiated from other services at the network layer. In addition to introducing an inappropriate level of technical complexity into this Regulation, this would constitute an unwarranted limitation on the future development of services on the internet, undermining the very innovation that has characterised the internet to date.

The adoption of the definition of specialised services as stated in compromise amendment 4B could therefore lead to very undesirable consequences. In this regard many questions would arise such as: shouldn’t cable TV networks stop offering TV channels through a decoder, in other words outside the open internet, because they are “functionally identical” to services already provided over the internet? Would it be impossible to implement VOLTE (which is the agreed interoperable, compliant with security obligations, standard for voice over LTE) on 4G networks, should we dial the 112 emergency number through Skype?

At the end of the day, specialised services should not be seen to be in opposition to open internet services, as they provide a valuable offering to consumers. In this regard, regulations and definitions should not distort or disallow innovative services that are beneficial for society. Introducing extremely stringent limitations in definitions is an unnecessary limitation to innovation in the provision of services and new business models that may make much sense for users. There is no reason to totally close these innovation paths if strong safeguards and monitoring procedures are in place.

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