Net Neutrality in EU after 1 Year: Unintended Consequences for operators, content providers, and consumers

The EU’s net neutrality law has been in place for more than a year. Lacking real problems or bad actors to expose, the Body of European Regulators for Electronic Communications (BEREC) needs to invent a reason for continuing to regulate the Internet. It interprets the EU law on open internet access as an opportunity to engage in re-regulation of broadband networks and uses the requirement of annual reporting as a means to push regulation beyond the bounds of the EU law. Even though BEREC’s pronouncements are non-binding, the agency exerts peer-pressure on national telecom regulators to align to a common pro-regulatory view and exploits the law’s reporting requirement to force the toughest interpretations.

Strand Consult has done the painstaking work to collect, translate, and summarize some 30 reports from the national telecom regulators into a single document Net Neutrality in EU after 1 Year: Unintended Consequences for operators, content providers, and consumers, so that you don’t have to.

Strand Consult have investigated the particular issues mentioned in each country. We summarize the results, both quantitatively and qualitatively, and then provide a deep dive on the key issues. Here are the key takeaways from the reports to BEREC and the themes analyzed by Strand Consult.

1. BEREC’s Regulatory Methodology. BEREC’s goal is to create a de facto regulatory regime of speed measurement to preference certain kinds of technologies and methods over others, a clear violation of the EU law’s provision for technological neutrality.

2. Bogus measurement. BEREC promotes gratuitous and egregious monitoring of network speeds and traffic management practices with bogus crowdsourced measuring tools. The goal is to create user generated complaints on missed speed targets which are then automatically forwarded to regulators so that operators can be penalized accordingly. BEREC admits that crowdsourced apps for network quality measurement are inaccurate, but it prefers their “convenience” over scientifically verifiable methods.

3. Commercial practices. The report describes which nations and regulatory authorities want to criminalize zero rating even though the EU law allows it and which regulators have been taken to court.

4. Security. Operators efforts to protect users and secure their networks is being increasingly hindered by net neutrality rules.

5. Privacy. The invasive nature of monitoring of networks and BEREC’s desire to implement always-on surveillance amounts to an invasion of users’ privacy and violation of provisions 8, 9, and 10 of the European Convention on Human Rights.

6. Penalties. How the stated penalties for net neutrality violation differ wildly across countries, from thousands to millions of euros for an infraction, which itself seems to violate EU competition standards.

7. Speed fallacies. The report exposes the false assumptions of EU policymakers that internet speeds will increase linearly indefinitely, regardless of whether users want to buy higher speeds or whether applications need them. The regulators’ focus on speed deprives consumers the ability to select and contract for their preferred features such as flexible pricing, service quality, safety, durability, and so on, which amounts to a regulatory takings of consumer and producer welfare without compensation.

8. Propaganda. The report describes how BEREC commissions marketing materials such as videos, brochures, events, and software to influence the debate to its favor. After grandstanding on the record-breaking response of activist-generated comments to its public consultation in 2016, BEREC now claims it has to popularize its policy on net neutrality because most Europeans have never heard of the issue.

9. Bureaucracy. The report exposes the regulatory redundancies, bureaucratic overlap, and legislative overkill created through the new regime on net neutrality, creating a colossal waste of administrative resources. Some nations now have half a dozen regulatory agencies surveying broadband networks in addition to the telecom regulator. But if a speed disclosure regime is the goal, this can be managed through contracts enforced by the nation’s competition authority. Having a specialized regulator to do this task is a waste of resources. If anything, this is an argument to transition net neutrality to competition authorities.

10. Desperate EU gamble for popularity. The European Commission and Parliament made a gamble to regulate net neutrality and roaming in the same legislation, on the desperate hope that the EU could translate Europeans love of the interent and mobile communications into love of EU government. The EU claims that the reason for the legislation was to protect and guarantee the engine of Internet innovation, but the regime fails on both fronts. The privacy of users is being violated by invasive measurement and blocks against securing networks. As for innovation, there are little to no examples of new European developments since the legislation. If anything, the EU continues to fall behind the US and East Asia in Internet innovation.

11. The report includes a chapter on evidence-based policy and a checklist for good regulation to demonstrate just how far the EU regime misses the mark for best practices.

Strand Consult houses a number of the world’s leading experts on net neutrality and is the leading provider of empirical analysis and international comparisons on this issue.

Strand Consult also exposes the political motivations for net neutrality and key actors such as Sebastian Soriano, head of the French telecom regulator ARCEP who serves as the 2017 BEREC president and who authorized a whopping 87 page report about France’s ambition to regulate the Internet. For ARCEP regulating telecom providers through net neutrality is just the beginning; ARCEP has extended the concept to ”platform loyalty” as a means to regulate content providers.

Buy the report Net Neutrality in EU after 1 Year: Unintended Consequences for operators, content providers, and consumers, today to arm yourself with the facts. BEREC’s whitewashed analysis is expected in December. Contact Strand Consult to order this unique and important report.