EU Continues Move toward Stricter Network Neutrality Obligations
These new policies build on the existing electronic communications framework, which imposed transparency obligations, granted national regulators the ability to fix minimum quality standards and arbitrate disputes among content and service providers, and established the principle that national regulatory authorities must “promote the ability of end-users to access and distribute information or run applications and services of their choice.” Among the proposed reforms are mandates that ban discriminatory blocking and throttling, set rules for traffic management, and expressly authorize paid prioritization and specialized services. The new rules cover much of the same ground as the FCC’s 2012 Open Internet Order. A few key similarities and differences are highlighted below:
(1) Blocking: The EC and FCC rules provide similar prohibitions on blocking content for fixed broadband providers but treat mobile providers differently. While fixed broadband providers are prohibited from blocking any lawful content under the FCC’s rules (subject to reasonable traffic management), mobile broadband services need only refrain from blocking “lawful websites, or applications that compete with their voice or video telephony services.” The new EC proposal expressly “goes wider” than U.S. law, preventing “blocking or throttling of services such as VoIP on mobile.” This rule departs from earlier language suggesting that EU providers were permitted to block certain content as long as they disclosed the limitation to consumers in advance.
(2) Reasonable Network Management: The FCC rules allow reasonable network management that is “appropriate and tailored to achieving a legitimate network management purpose, taking into account the [service’s] particular network architecture and technology.” Under the more detailed EC proposal, reasonable traffic management must be transparent, non-discriminatory, proportionate and necessary to: (a) stop or prevent a serious crime; (b) implement a court order or legislative provision; (c) preserve the integrity and security of the network; (d) prevent spam if requested by the end-user; or (e) minimize temporary or exception network congestion. Management to combat congestion must treat equivalent types of traffic equally.
(3) Paid Prioritization and Specialized Services: Under the FCC rules, assuming they survive Verizon’s challenge currently before the D.C. Circuit, fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. This rule effectively prevents upstream companies from paying Internet Service Providers (ISPs) for their content to reach consumers faster than competitors’. No similar prohibition applies to mobile broadband services. The FCC makes clear that providers can offer specialized services, while seeking to limit their use as a substitute for regulated consumer broadband service. The FCC’s vague definition continues to lack a consensus understanding, however, leading to uncertainty and possibly constraining specialized service offerings in the United States.
The EC proposal, on the other hand, expressly authorizes ISPs to contract with content providers to guarantee a certain quality of service. Advocates of this rule argue that these relationships will allow ISPs to develop new revenue streams, which will lead to investments in upgrading and expanding the network. The EC also expressly authorizes the provision of specialized services, defined as those “that provide the capability to access specific content, applications or services, or a combination thereof, and whose technical characteristics are controlled from end-to-end or provides the capability to send or receive data to or from a determined number of parties or endpoints; and that is not marketed or widely used as a substitute for internet access services.” These services must not impair the quality of best-efforts Internet access in a “recurring or continuous manner,” and national regulators must report annually on the effects of specialized services on the broader Internet, cultural diversity, and innovation. The EC regulation also lays out procedures under which national regulators may impose minimum quality of service standards.
The Connected Continent proposal now faces a potentially lengthy process of approval by the European Parliament and the EU’s member states before it can go into effect. Hogan Lovells attorneys in the United States and Europe can provide more guidance about the impact of the FCC and new EC rules upon request.