Comcast Decision Highlights European Regulatory Limits, Uncertainties Over Net Neutrality

The Comcast decision on net neutrality resonates in Europe, several sources said Wednesday. The ruling (CD April 7 p1) is a “nice reminder” that there’s a limit to what regulators can do, even in Europe, said Hogan & Hartson (Paris) telecom attorney Winston Maxwell. It could spark confusion over the connection between broadband and net neutrality regulation, said Innocenzo Genna, a Brussels telecom consultant. The issue of net neutrality is proving so important that French telecom regulator ARCEP plans a day-long conference on it this month. Among key topics is how to define it.

The Comcast decision emphasizes the fact that broadband is deregulated in the U.S. and that, therefore, the FCC shouldn’t intervene in net neutrality issues without explicit legal authority, Genna said. This is a “strong area of difference from Europe and it could create confusion,” he said. Applying the same reasoning to Europe, one could conclude that net neutrality must be regulated because wholesale broadband is, he said. But the comparison is “misleading": The existence of wholesale broadband rules, and the resulting market competition, are the main reasons there’s no urgent need for net neutrality regulation, he said.

The lesson that the FCC overstepped its jurisdiction applies in Europe as well, said Maxwell, who’s part of a group appointed by France’s digital minister to advise on net neutrality issues. Many countries are thinking about whether to regulate net neutrality but the revised electronic communications rules are clear only that national authorities can make rules on retail-focused, consumer-protection issues such as transparency of broadband and network management practices and minimum quality of service, he said.

What’s less obvious is whether the laws address wholesale deals between ISPs and upstream network providers, Maxwell said. Here, regulators could run into a March 5 European Commission veto of a plan by Poland’s telecom authority to regulate the market for traffic exchange services used by ISPs to connect customers to the Internet, he said. The EC found enough competition among data traffic exchange services providers to make regulation unnecessary. Any attempt to regulate the wholesale relationship between an ISP and network operators could get the same response from the EC, Maxwell said.

The question of whether a telecom provider could make a special deal with, say, Google to provide superior quality of service is one of the issues in Europe’s net neutrality debate, Maxwell said. If the matter isn’t governed by competition law, regulators must look closely not only at the EC decision but at the Comcast ruling, he said. Comcast is a reminder that every regulator and government has limits defined by law, he said. Genna, however, said the Polish case doesn’t concern net neutrality but whether economic regulation can be imposed on Internet Protocol traffic arrangements.

There’s no clear distinction in Europe between the different definitions of network neutrality, Genna said. The debate sometimes appears disorganized because there are different ideas about the concept, he said. Lack of knowledge about how the Internet functions, and, in some cases, myths about network neutrality, stymie constructive dialogue, he said.

The debate should start with an analysis of network management practices and their effects, which will lead to the conclusion that net neutrality, meaning hypothetical equal treatment of Internet traffic, doesn’t exist and never will, Genna said. Instead, the goal should be to maintain the Internet as an open environment that users, operators and service providers can access freely and without discrimination. That should be compatible with the existence of network management, with any differences in services and content driven by users and based on adequate information and openness, he said.

Consumer and network management issues merge, said European Digital Rights Advocacy Coordinator Joe McNamee. A government introduces blocking to fight “child abuse.” Blocking is then extended to gambling, intellectual property rights and “other random issues depending on the headline of the day.” The gambling and IPR lobbies complain that domain name system blocking isn’t adequate, leading to more intrusive technologies.

After being forced to pay for more sophisticated blocking technologies, ISPs can then use them to grant or refuse access to their consumer base to upstream operators, McNamee said. The “punchline” is that all the activities that blocking seeks to ban will move to peer-to-peer networks, spelling losses for net neutrality, privacy, innovation and competition, he said.

Topics at the April 13 ARCEP conference are to be traffic management, pricing and value-sharing, content access mechanisms for consumers, and what kind of regulation is needed in a converged environment. Speakers include EU Digital Agenda Commissioner Neelie Kroes, FCC Chairman Julius Genachowski (unconfirmed at our deadline), and representatives from the public and private sectors and academia.