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The EU's new net neutrality rules

What the new regulation and regulator guidelines tell us about the balance of power online

27 April 2017

On 30 April 2016, new net neutrality rules became effective in the European Union under Regulation No. 2015/2120. These rules aim to safeguard equal and non-discriminatory treatment of traffic in the provision of internet access services.

Although net neutrality Guidelines were issued in August 2016 by the Body of European Regulators for Electronic Communications (BEREC) in order to contribute to a common application of the net neutrality provisions, important elements of the Regulation remain subject to interpretation, providing Member States considerable leeway in their application of the Regulation. 

Access and non-discrimination

Article 3 of the Regulation sets forth the principal net neutrality rules, and formulates:

  • a right for end-users to access and distribute information and content, use and provide applications and services, and use terminal equipment of their choice via their internet access service, irrespective of location, content, applications or services concerned; and
  • an obligation for internet access service providers (ISPs) to treat all traffic equally, without discrimination, restriction or interference.
Traffic management

Internet access rights do not apply without limitation. The Regulation allows ISPs to implement reasonable traffic management measures (ie, transparent, non-discriminatory, proportionate measures, not based on commercial considerations but on different technical quality of service requirements of specific categories of traffic) to enable an efficient use of network resources and the optimization of overall transmission quality. 

Traffic management measures which go beyond what is considered 'reasonable' are only permitted insofar as necessary:

  • to comply with other laws and measures implementing such legislation;
  • to preserve the integrity and security of networks, services provided over those networks and of end-users' terminal equipment; or
  • to prevent impending network congestion and mitigate effects of exceptional or temporary network congestion. 
Spam and parental controls

Notably, a fourth exception originally included in the draft Regulation, which allowed ISPs to block unsolicited commercial communications (spam) and to implement parental controls at the explicit prior request or with the explicit prior consent of end-users, was stricken during European Council negotiations. Given the limited scope of exceptions to traffic management measures involving the blocking of traffic and the fact that these exceptions are presented as an exhaustive list, it would appear that network-embedded filtering of online content by an ISP is not permitted. 

Arguably, however, the implementation of traffic filtering measures by an ISP on the basis of the informed, explicit, voluntary and revocable request of an end-user does not appear to be fundamentally different from the situation in which an end-user purchases and uses its own filtering software, a right which is not affected by the Regulation. 

Commercial considerations

The net neutrality rules permit ISPs to enter into agreements with end-users and engage in other commercial practices in which commercial and technical conditions in respect of internet access services are differentiated as regards price, data volumes or speed, provided this does not undermine "the essence of the end-users' rights", in the sense that such agreements and commercial practices would "by reason of their scale, lead to situations where end-users' choice is materially reduced in practice" (Recital 7 of the Regulation). 

In the Guidelines, BEREC generally considers that application-agnostic offerings, in which certain speed and data volume conditions are applied equally to all applications, should not affect end-users’ rights (eg, an offer where end-users get uncapped access to the internet for all applications during weekends or at night). An offer in which ISPs bundle the provision of their services with an application, for instance by offering a temporary free subscription to a music application to all new subscribers, is also deemed permissible by BEREC. Internet access services which technically restrict access to services or applications (eg, banning the use of VoIP or video streaming) or which enable access to only a pre-defined part of the internet (eg, access only to particular websites) – so-called "sub-internet services" – are deemed a violation of the net neutrality rules.

As regards zero-rating, where ISPs charge no costs for data traffic associated with a particular application or category of applications (or, alternatively, the data does not count towards any data cap applied), the Guidelines support a case-by-case approach. BEREC's position is that zero-rating measures which are applied to an entire category of applications (eg, all video or music streaming applications), rather than certain applications within a category (eg, the ISPs own services, one specific social media application, the most popular video or music applications), are less likely to “undermine the essence of the end-users’ rights” or lead to circumstances where “end-users’ choice is materially reduced in practice”.

In any event, BEREC does not provide a comprehensive list of permitted commercial practices and agreements, recognizing that the admissibility of particular practices and agreements will have to be assessed by the national regulatory authorities against a number of criteria set out in the Guidelines, including the respective market positions of the ISPs and of the providers of content, applications and services involved. 

Specialised services

Providers of public electronic communication services are free to offer services other than internet access services which are optimized to meet requirements for a specific level of quality.

Examples of specialised services include Voice-over-LTE (high-quality voice calling on mobile networks) and linear (live) broadcasting IPTV services with specific quality requirements, as well as high-definition videoconferencing or real-time healthcare services like remote surgery, all of which use the internet protocol and the same access network but require a significant quality enhancement or technical guarantees that cannot be ensured in a best-effort open internet offering.

Specialised services may only be offered if the network capacity is sufficient such that the (regular) internet access service is not degraded. Moreover, they may not be usable or offered as a replacement for internet access services, and may not be offered to the detriment of the availability or general quality of internet access services for end-users.

Transparency

The net neutrality rules are flanked by extensive transparency obligations, pursuant to which ISPs must publish and include in each internet access contract clear and comprehensible information on different aspects of their service, including speeds, data caps, information on specialised services which they offer or traffic management measures applied to their service. Moreover, they must include the remedies available to consumers in the event of continuous or recurring discrepancy between the actual performance of their internet access service and that indicated in the points above.

Conclusion

The net neutrality rules certainly go some way in protecting an open internet and are a positive reinforcement of end-users' fundamental freedoms in relation to the internet. That said, key elements of the rules remain subject to interpretation. Whilst the Guidelines are useful and provide some orientation, they do not answer all questions raised by the Regulation. National regulatory authorities still have much to say about important aspects such as the legality of applying network-embedded, end-user requested filtering solutions (to counter spam, enable parental controls, block ads, etc.), and the admissibility of commercial practices and incentives or specialized services. 

Time will tell whether Member States will seek to interpret such elements of the Regulation in different ways, according to their own political agendas. This might have important consequences, as a diverging application of the net neutrality rules in the various EU Member States can easily lead to a distortion of competition among network operators and providers of online content, applications and services.

Further details of the net neutrality rules are discussed in our earlier client briefing of June 2016.