Net Neutrality heats up on both sides of the Atlantic

Separate fights are brewing on both sides of the Atlantic on a topic that produces a lot of heat with little understanding: net neutrality. It’s an issue that can affect any business accessing or exploiting the Internet.

What’s it about? Simply put, it holds that companies providing access to the Internet (cable companies and internet service providers or “ISPs”) should treat all sources of data equally. At the core of the issue is whether ISPs should be prevented from blocking or giving certain traffic priority based on the content or application being carried or on the sender’s willingness to pay, and whether they should be permitted to withhold technical information about their services from application developers and end users.

The goal is to promote fairness, openness and innovation, but for whom ? The term itself is ambiguous, because it can be read to favour either side of the debate. Neutrality is very appealing: electricity providers, for instance, are neutral: they don’t care whether you use your electricity to power a toaster or a water purification plant. But in the Internet context, does that mean that the end user should have equal access to speed and content, or rather that governments should stay out of the fight: that is, they should remain “neutral” (no interference, no censorship, and let the market sort everything out).

The top regulators in both the EU and the US certainly don’t want to stay out of the fight. In a speech in Paris in April, for instance, Neelie Kroes, Vice President of the European Commission, Commissioner for the Digital Agenda, declared her support for five of six principles of “neutrality” voiced previously by the top US regulatory body, the Federal Communication Commission (FCC). According to those five points, governments should require that consumers should have the rights:

  • to access lawful internet content of their choice,
  • to run applications and services of their choice,
  • to connect devices of their choice,
  • to have competition, and
  • to have access to service on a transparent basis.

Ms. Kroes acknowledged that the US regulators were further along in refining their approach to this issue than was the EU. Nevertheless, she is as yet reluctant to accept a sixth principle that the FCC is enthusiastically pursuing: namely, that cable and Internet service providers should be prevented from discriminating among the content providers when they provide Internet access. Ms. Kroes wants more study.

Yet, on this point of non-discrimination, the FCC has so far not had much luck. Last month, a US federal appeals court knocked down the FCC when it tried to prevent a cable provider from blocking or slowing certain sites down or charging content providers like YouTube to deliver content faster to users. But this month, the FCC has bounced back with a proposal for a new set of rules . In effect, the FCC says it may not be able to control content or price, but it can control transmission, just as it already controls the transmission of telecommunication providers. Walking that tightrope, it declares that it can prevent ISPs from discriminating against certain applications, Internet sites or users after all.

But is that indeed what we need? It seems to me that some discrimination might be indispensable. For instance, if, through the increase of streaming media, the networks become clogged and traffic moves slower, shouldn’t ISPs be permitted to give preference to services (such as for hospitals), that cannot afford to be degraded?

On the other hand, if a cable provider with market power decides to favour its own telecommunications traffic over, say, Voice over IP, then “neutrality” collides with “fair competition”. In that collision, I’ve no doubt that Ms. Kroes and the EU national regulators will ensure that “fair competition” comes out on top.

This will all be coming to a head in the course of this year. Late last year, the EU passed into law a new regulatory framework governing the Internet, scheduled for adoption in the Member States by 2011. Among other things, it requires National Regulatory Authorities to promote “the ability of end-users to access and distribute information or run applications and services of their choice” and to set minimum quality of service requirements.

Ms. Kroes plans to launch public consultations with stakeholders before this summer on this topic. And by the end of this year, the Commission will report on the impact on market and technological developments on net neutrality to the Council and the EU Parliament.

In short: the debate is just getting under way; as Al Jolson once famously said, “You ain’t heard nothin’ yet”.

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