Earlier this summer, the Body of European Regulators of Electronic
Communications (BEREC) took in around a half million public comments on its
draft guidelines for member states on implementing end user protections for fixed
and mobile Internet connections. The largest telecoms in Europe are lobbying
hard for weakened interpretations of the so-called “net neutrality” Regulation
passed late last year, which also covers data roaming and the EU Digital Single
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
significant continued investment in 5G networks and field testing in
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