New rules now apply in the field of net neutrality. Those rules obligate Internet Service Providers, in principle, to treat all data on the Internet the same. They are based on the European net neutrality regulation (the “Regulation”), which must be applied as from 30 April 2016.
The Netherlands has long been opposed to the content of the Regulation; the Dutch government even voted against it during the European legislative process. Its reason for doing so was that (on the face of it) the restrictions that the Regulation imposes on network providers are not as strict as those that applied under the Dutch net neutrality rules at the time. Unlike the Dutch rules in force until recently, the Regulation does not expressly prohibit price discrimination, for instance. A few amendments to the Dutch net neutrality rules are briefly addressed below, along with an analysis of whether the Regulation is indeed less strict.
European law provides that a regulation may not be “implemented” in national legislation. The Regulation has direct effect. The Regulation allows the continued application of national rules until 31 December 2016, provided that the Member State in question informs the European Commission accordingly. The Netherlands does not appear to have made use of that possibility. The Dutch legislature has abolished relevant provisions of the Dutch Telecommunications Act as from 30 April 2016. But national regulatory authorities are free to thereby impose additional regulations and to take other appropriate and necessary measures. The Ministry of Economic Affairs regards itself as the national regulatory authority in this respect. The Minister has stated, however, that the provisions that supplement the rules under the Regulation will continue to apply (such as the prohibition of price discrimination).
The Regulation and national legislation differ in that the Regulation allows Internet Service Providers to give priority to “services other than Internet access services”, or in other words “specialised services”, and therefore not to treat them equally. That term has deliberately not been defined; the providers may therefore freely interpret it (or bring it in line with the state of technology). This clearly applies to services that have been optimised for specific content, in order to guarantee a higher quality level for services such as machine-to-machine communication, high-quality videoconferencing and healthcare services (tele-surgery). Priority may be given to such services, provided that the network has sufficient capacity.
Unlike the Telecommunications Act, the Regulation furthermore allows Internet Service Providers to take reasonable traffic management measures, e.g. to avoid imminent network congestion. Such measures must be transparent, non-discriminatory and proportionate, and may not be based on commercial considerations. The Telecommunications Acts allows Internet Service Providers to intervene in the Internet data flows only if a data accumulation must be controlled. A frequent criticism of the Regulation is that it is difficult to monitor traffic management measures aimed at avoiding imminent congestion, which may give rise to abuse. An example in the Netherlands related to network congestion is the ACM’s decision of 2013 to put an end to its investigation of the restriction of free Internet in trains by T-Mobile. ACM concluded that the blocking of certain internet services by T-Mobile was permissible to prevent “traffic jams” on the network. At the end of 2014 ACM imposed a €250,000 fine on KPM for blocking access to certain services and applications on the Internet that it offered via Wi-Fi hotspots in the Netherlands.
Another important difference is that the Regulation does not expressly prohibit price discrimination. The Telecommunications Act did prohibit Internet Service Providers from making the Internet access service rate dependent on the services and applications offered or used via the Internet access service. That prohibition applied to both negative price discrimination (charging extra cost for the use of a certain Internet service) and positive price discrimination (zero rating). An example of zero rating can be found in a fairly recent ACM case. In 2014 it imposed a €200,000 fine on Vodafone for offering the HBO application (free of charge) outside the data bundle. On 4 February 2016 the Rotterdam Court upheld this decision of ACM.
Although the Regulation does not prohibit price discrimination, the Dutch legislature nevertheless believes it can maintain that prohibition. In the legislature’s opinion the prohibition of price discrimination is merely a clarification of the provisions of the Regulation. The legislature emphasises that the prohibition of price discrimination is due to the fact that (i) the rights of end users may not be impaired; and (ii) Internet providers must treat all data traffic equally. This gives rise to questions, such as whether zero rating does indeed impair the rights of end users. A more fundamental question is whether maintaining this prohibition does not conflict with the Regulation’s aim, namely “to avoid fragmentation of the internal market resulting from measures adopted by individual Member States”.
All things considered, it would seem that the Regulation will have little impact on the Dutch net neutrality rules. But it remains to be seen how ACM will apply the net neutrality framework in the event of future violations and how the decisions in question will be assessed by the Dutch court. It cannot be precluded that the European Court of Justice will at some point have to address in preliminary-ruling proceedings whether Dutch legislature is compatible with the European rules in the Regulation.
This blog has been co-written by Mr B. Braeken (who, as of 15 July 2019, no longer works at Maverick Advocaten).
