Open Internet Goes to Europe

Like most jurisdictions, the European Union believes it may need some additional regulations on Internet Service Providers now that the FCC has spoken. The traditional view of net neutrality in Europe follows the “third way” model: ISPs are free to offer customized services to third parties and leading edge applications as long as the common service is good enough to support the common applications, web surfing and video streaming. Net neutrality has less significance in the EU than it does in the US because Europe is mostly a DSL continent, and by law Europe’s DSL is “open access”. The competition for retail Internet service enabled by open access should allow competition to discipline the market; if it doesn’t do this effectively and heavy handed net neutrality is still needed, there would be reason to question the value of open access.

It turns out that a number of people are questioning open access these days because it demonstrably depresses investment, which accounts in large part for the lower average broadband speeds in Europe than in the US as well as the lower overall rate of fiber installation. This is just to say that to the extent that open access is one way to discipline the ISP market and net neutrality is another, the combination of the two is “belt-and-suspenders”, not a path that makes much sense. But everybody’s doing net neutrality these days and the European Parliament doesn’t want to be left out.

So the Members of the European Parliament (MEPs) passed a measure enshrining today’s version of net neutrality (Europe uses the FCC’s “open Internet” moniker instead of Tim Wu’s term): a transparency rule, bright line bans on site blocking, throttling, and “paid prioritization”, and exceptions for reasonable network management and non-Internet services, also known as “specialized services”. The non-Internet exception appears to be written quite clearly:

(16) There is demand on the part of providers of content, applications and services to be able to provide electronic communication services other than internet access services, for which specific levels of quality, that are not assured by internet access services, are necessary. Such specific levels of quality are, for instance, required by some services responding to a public interest or by some new machine-to-machine communications services. Providers of electronic communications to the public, including providers of internet access services, and providers of content, applications and services should therefore be free to offer services which are not internet access services and which are optimised for specific content, applications or services, or a combination thereof, where the optimisation is necessary in order to meet the requirements of the content, applications or services for a specific level of quality. National regulatory authorities should verify whether and to what extent such optimisation is objectively necessary to ensure one or more specific and key features of the content, applications or services and to enable a corresponding quality assurance to be given to end-users, rather than simply granting general priority over comparable content, applications or services available via the internet access service and thereby circumventing the provisions regarding traffic management measures applicable to the internet access services.

The text is a bit long, but at the end the reader understands that the exception relates to the portion I’ve highlighted. It’s worthwhile to compare this to the FCC’s version, the “Non BIAS Data Service” exception. The FCC doesn’t actually state a rule, it mainly offers examples of services that would be encompassed by it:

208. We provide the following examples of services and characteristics of those services that, at this time, likely fit within the category of services that are not subject to our conduct-based rules. As indicated in the 2010 Open Internet Order, some broadband providers’ existing facilities-based VoIP and Internet Protocol-video offerings would be considered non-BIAS data services under our rules. Further, the 2010 Open Internet Order also noted that connectivity bundled with e-readers, heart monitors, or energy consumption sensors would also be considered other data services to the extent these services are provided by broadband providers over last-mile capacity shared with broadband Internet access service. Additional examples of non-BIAS data services may include limited-purpose devices such as automobile telematics, and services that provide schools with curriculum-approved applications and content.

The FCC order then goes on to make a terse general statement extracting the principle:

209. These services may generally share the following characteristics identified by the Open Internet Advisory Committee. First, these services are not used to reach large parts of the Internet. Second, these services are not a generic platform—but rather a specific “application level” service. And third, these services use some form of network management to isolate the capacity used by these services from that used by broadband Internet access services.

The common factor is “not an Internet service”, but critics don’t seem to find this assertion important. My reading of the loophole is that it protects services such as IPTV from being regulated the same way as garden-variety Internet use. Special treatment for IPTV isn’t just for fun, it’s essential to making it work when ISP-provided IPTV runs on the same DSL link as Internet service.

The opposition to Europe’s net neutrality regulations appears to have been organized by the same US firms that lobbied for the FCC’s Title II rules: the Internet Association’s lead members, Twitter, Google, Facebook, Netflix, Mozilla, Etsy, Reddit, and Yelp. Their interests were represented by US advocates such as Ben Scott and Barbara van Schewick.

Van Schewick wrote a very long plea for four amendments to the rules that was rejected by the MEPs. Van Schewick’s blog post crystalizes the key misunderstandings about how the Internet works that have animated the drive to adopt strict rules, so I’m going to walk through it step by step in my next post. Stay tuned.