from the net-neutrality-redux dept
A few weeks ago, the largest telecom ISPs issued a 5G Manifesto in which they threatened not to invest in 5G wireless networks unless BEREC waters down its guidelines for enforcement of open Internet access.
Fortunately for American consumers, startup entrepreneurs and small businesses, the FCC was not swayed by similar ISP threats about how common carrier law would kill network investment here. And so even with U.S. open Internet law now firmly in place after a recent court decision, Verizon has announced significant continued investment in 5G networks and field testing in multiple locations.
But carriers in Europe, that don’t face competition from cable broadband providers like American phone company ISPs do, enjoy even stronger market dominance that allows them to intimidate regulators attempting to defend end user rights. The current generation of online startups needs to be able to count on the same open Internet connectivity that the most popular global platforms enjoyed in their infancy a decade or two ago. Only now it’s a battle against corporate lobbyists to get it.
In recognition of this opposition, over one hundred founders of European tech companies and startups along with their international investors and trade groups signed an open letter to underscore the critical importance of BEREC’s upcoming action to innovation and job-creating growth in the digital economy. They made it clear that if telecom ISPs are able to manipulate and subsidize data plan costs for users of established big name platforms, they will put up new barriers to online market entry. Earlier up front capital will be required in a “pay to play” environment, and those entrepreneurs who can’t pay up will find it much harder to be discovered online, scale up and compete for business. No such price of admission ever held back American tech startups, although many of their investors had grown very uneasy prior to the FCC’s decisive action in early 2015.
While BEREC has displayed a comprehensive understanding of real new threats to open Internet access, several loopholes in the draft guidelines must be closed if Europeans expect effective safeguards to protect their Internet access service from commercial interference. Specifically ISPs should not be allowed to use the “specialized services” exception to circumvent the ban on charging online content and application providers for priority transmission on the public Internet.
Secondly, given provisions in the Regulation prohibiting discriminatory commercial practices, BEREC should ban zero rating schemes that favor certain online platforms by exempting them from data caps. Zero rating is as harmful to startups and other competing platforms as technical network discrimination. Zero rating of an ISP’s own content is particularly anticompetitive. Finally network traffic management should be application-agnostic whenever possible. ISPs should not favor some classes of traffic and delay others, such as encrypted content, except under unusual circumstances.
Open Internet access law supports a digital innovation economy in which all online content is equally accessible regardless of the identity of one’s ISP or its business deals with online platforms. In the US, all zero rating is not banned, but the FCC is actively investigating sponsored data and zero rating plans for compliance with its open Internet order. In response to the EU Regulation, the Netherlands already has banned zero rating.
All ISPs have a natural economic incentive to partner with or acquire popular content providers in order to maximize monetization of their network facilities. As a practical matter, only the big ones like Comcast (NBC, Netflix) and Verizon (Aol, Yahoo!) can pull it off, but they can really change the game for others.
Sweden uniquely is less concerned about commercial interference with Internet access because the Swedish government itself built and owns the enviable universal fiber optic Internet access network there. Use of that infrastructure is licensed to dozens of competing IT providers, and Stockholm is beginning to resemble a Scandinavian Silicon Valley.
Elsewhere in Europe though, ISPs are in business to provide sufficient capacity to transmit the data traffic of all their customers without “fast lanes” for some and interruptions and buffering for everybody else. Startups in Amsterdam, Berlin, Barcelona, Bratislava, Cyprus, Dublin, Lisbon, Ljubljana, Paris, Riga and Vienna are among their customers. So far the Dutch are in the lead in terms of proactively implementing the Regulation’s open Internet access provisions, which took effect this past spring.
While BEREC properly focuses on shielding consumers from the downsides of ISP commercial discrimination, it should also tailor its guidelines for the sake of Europe’s tech startups looking to attract investment funding and access global markets online. Other policymakers around the world will be watching whatever the EU decides at the end of August about enforcement of Internet access rights.
Cathy Sloan is a telecom and Internet industry lawyer and consultant