Why the US Net-Neutrality Rule is (not) an example for the EU

Today, the US Communications commission (FCC) will propose new net neutrality rules. A vote within the FCC is set to take place on May 15th.

The core of the FCCs proposal seems to be:

1. Internet Service Providers (ISPs) are free to conclude contracts with content or service providers (Netflix, Google, Skype, etc) for a preferential treatment of their data. These deals have to be offered to all content and service providers upon “commercially reasonable” terms. It is yet to be determined what that means. The FCC will be checking all contracts on a case by case basis.

2. End-Users must have access to a “baseline service” which is net neutral. It is yet to be determined what that means. At least, ISPs are not allowed to upfront block or slow down websites or services.



When proposing this, the FCC is – rightly – moving away from net neutrality. How far away exactly will depend on the scope of the “baseline service” which must be net neutral. Defining that baseline service very broad would leave little space to contracts between ISPs and content or service providers.

This is pretty similar to the European Parliament’s ideas of allowing for specialized services only when these do not impede or substitute the “normal” and neutral internet access services, with the European FCCs to define what minimum quality this “normal” internet should offer.


… and Differences

The FCC seems more prone to ease net neutrality rules than the European Parliament though. Firstly: The EP is willing to allow for specialized services only when delivered over a “logically distinct capacity, relying on strict admission control.” That is an additional hurdle that may prove difficult to take. The FCC doesn’t set any such hurdle.

Secondly: The FCC explicitly allows for contracts between ISPs and content or service providers. The European Parliament – unlike the EU Commission proposal – does not.


Our Opinion

We think it is very interesting that the FCC is forcing ISPs to offer preferential treatment to all content or services providers and to check all contracts on a case by case basis. Given the concentrated internet access market in the US and the absence of access regulation and hence few ISPs dominating the market, there might be good reasons to do so.

We believe this is food for thought for the EU. Here, the competition landscape is very different, with many ISPs offering services to end-users. We see no convincing reasons to regulate net neutrality at all and claim (in length in German here) that applying general competition law will do.

Considering all of this, what is most striking is that the EU is not willing to give market forces a chance at all, although there is a lot of competition on its ISP market. The US see less problems doing so, although its ISP market may more easily tend to market abuse.

In a nutshell: The US allows but checks deals between ISPs and content providers. The EU at most tolerates deals. It should be the other way around.

Author: Bert Van Roosebeke, head of cep's telecommunications department