EC Telecom Review To Take Up but Not Impose Net Neutrality
The net neutrality debate hasn’t hit the fever pitch in Europe it has in the U.S., but it’s only a matter of time, officials said. Industry players and analysts “know that it will become an important issue over the next 6-12 months” as most telcos roll out Internet Protocol TV (IPTV) and many invest in content, said analyst Martin Olausson of Strategy Analytics. The EC, which says it doesn’t intend to regulate in this area, will nevertheless will discuss it in a June 28 communique on its review of the e-communications regulatory framework, sources close to the Commission said Thurs.
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Until recently, net neutrality was deemed largely an American issue. The “regulatory environment in the U.S. is very different to the situation in the EU where local loop unbundling (LLU) markets and other wholesale broadband products are regulated to underpin the prospect of sustainable competition in broadband markets,” U.K. Office of Communications Chief Policy Partner Kip Meek told us. The EU regulatory framework “provides a degree of [preemptive] regulatory intervention in infrastructure markets from the beginning,” he said. Regulators have the power to handle competition problems in unregulated markets, and are committed to a “level playing field in infrastructure,” he said.
LLU lets any company offer DSL over an incumbent’s network, Olausson said in May. That opens the field for competitors to run new services atop the network, he said. Net neutrality is more important in the U.S., where cable operators and telcos wage facilities-based competition and companies such as Google have no guaranteed network access to offer unbundled services.
Net neutrality arguments in Europe concern only next- generation networks (NGNs) such as Deutsche Telekom’s (DT) VDSL fiber system, Olausson said. The question is “who will be able to use the infrastructure,” something not at issue in the U.S., he said.
As yet there’s no “hot news,” but net neutrality shows up increasingly in discussions with industry, Olausson said more recently. Once telcos offer IPTV and content, “it will be very tempting for them to try to keep users in their ‘walled garden’ to protect their investment,” he said. If Apple, say, offers a service competing with British Telecom (BT) IPTV service, “BT will have an incentive to try to limit the effects of such a competitor by either blocking it or making sure it gets a piece of the revenue,” he said.
In April, DT and Telecom Italia were reported to be lobbying the EC for the right to charge Google and others for carrying their content. “Some telecom operators have indeed mentioned this issue to the Commission in bilateral meetings,” Information Society & Media Comr. Viviane Reding’s spokesman told us then. But, he said, the EC had made not concrete request for regulatory intervention.
BT said then it was satisfied with current regulations, admitting its position could change. “Genuinely competitive markets like the one in the U.K. address many of the issues that the neutrality debate is throwing up,” a BT spokesman said at the time. BT services are designed around what all customers -- consumers and other service providers -- want. Nevertheless, he said, the issue is “gathering momentum” and, if the regulatory regime were to change, BT’s stance might as well.
The EC communique is expected to say a key aim is to ensure that the Internet stays open to new service offerings and to consumers wanting to access, create and distribute the services of their choice, said sources close to the EC.
The EC is expected to say that operators can offer different services to different customer groups but dominant players may not discriminate between customers in similar circumstances. But due to a risk that in some cases quality of service could degrade unacceptably, the EC will propose giving national regulatory authorities (NRAs) the power to set minimum quality levels for network transmission services on NGNs based on technical standards set at EU level.
The EC line likely will be that NRAs already have power to impose antitrust rules on operators with significant market power and to address access and interconnection issues, officials said. That power could be used to prevent blocking of information society services or degradation in the quality of e-communications services for 3rd parties, as well as to require interoperability, they said.
The communique likely will say the 4 FCC “net freedoms"- - users’ rights to access and distribute lawful content, run applications and connect devices of their choice -- are “equally applicable in Europe,” the sources said. But the EC seems to maintain that those freedoms are “best regarded as general guidelines” for regulators and policy-makers, not laws.