Presentation with legislative update 25 March

1. Regulating and Implementing
Network Neutrality
Professor Chris Marsden
COMREG
25 March 2013

2. The problem in a graphic

3. Net Neutrality: European Approaches
Network neutrality growing policy controversy,
2 elements separated:
present net neutrality 'lite' debate and
the emerging net neutrality 'heavy'
concerned with fibre access networks in future.

4. Implementation by Nation
1. You know about Norway
2. United States
3. United Kingdom
4. Netherlands
5. Slovenia
6. France

5. Net neutrality laws 2013
Country Legal Approach
Netherlands 15 May 2012 (S.7.4.a of Telecoms Law)
Chile & Universal access to ‘unfiltered’ Internet
Finland
United States FCC Open Internet Order Sept ‘11
Norway Co-regulation – 2009 agreement
Canada CRTC rules 2009 (not implemented?)
Japan, UK Self-regulation unenforced
France ARCEP ‘Ten Principles ‘

6. 1. Norway – co-regulation
Happy 4th birthday – since March 2009
Caused by ISP blocking national broadcaster video service
Enforced by co-regulatory pact – complaints?
Other countries are trying less effective forms of ‘co’
While pretending it’s really ‘self’
Examples are US and UK
US since 1999
UK since 2006
I agree – in fact, I wrote a book about it!

7. Book launched
February 2010
100,000
downloads
first 2 months
2nd edition in
paperback 2015
7

8. Net neutrality permanent
feature of telecoms law
It is a debate which
has existed since 1999
will grow in importance as
Internet matures & service quality increases
demand on the network for
more attractive fixed and
mobile/wireless services.

9. 2. United States
Fifteen years and counting…
FCC Chairmen:
Reed Hundt
Michael Powell
Kevin Martin
Julius Genachowski
Still continues to be non-enforced

10. Verizon v. FCC, Case No: 11-1356
D.C. Circuit Court of Appeals
FCC Order: In the Matter of: Preserving the Open
Internet; Broadband Industry Practices
(rel. Dec. 23, 2010)
FCC 10-201; GN Docket No. 09-191; WC Docket No. 07-52
Petition for Review filed September 30, 2011.
2011 Order consolidates case numbers 11-1356, 11-1403,
11-1404, and 11-1411 with lead case number 11-1355
Open Internet Order legitimacy court case
expected judgment now summer 2013

11. Special and Managed Services
FCC excludes Quality of Service
Private ‘managed’ or ‘specialized’ services
IPTV, VOIP, emergency calls and telemedicine
These use the IP pipe, but a reserved section
How big is the private pipe? 10% or 90%
Who gets access? Anyone who pays?
Or only those ‘preferred partners’ to ISPs?
Do you only see certain IPTV channels?
Its making part of the pipe back into cable!

12. FCC uses two advisory groups:
[1] BITAG
Self-regulation:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2032233
Broadband Industry Technical Advisory Group
Set up by Dale Hatfield from Colorado in 2010
Multi-stakeholder – techie-heavy
http://www.bitag.org/bitag_organization.php?action=history
Takes on test cases from 2012 as no referred cases
Handles FCC cases free of charge
Industry pays $60,000 per case (if there were any)

13. FCC: [2]
Open Internet Advisory Committee
Co-regulatory: appointed by FCC in May 2012
http://www.fcc.gov/document/open-internet-advisory-
committee-members-announced
Chair: Jonathan Zittrain (Harvard Law),
Vice-chair David Clark (MIT/IETF/engineer)
Multi-stakeholder – includes NGOs and industry
'Specialized Services' definitions sub-group
When can a managed service lane
be partitioned out of the regular open IP stream?

14. Working assumptions - require case
studies to flesh out their details :
"Specialized services is a term that is
meaningful only within the context of the Order.
It is a way to talk about “anything else”
that is IP-based over a physical access path.
It is NOT a new category of service
for which a class of regulation is applicable."

15. “Service is NOT a specialized service,
and is subject to the Order if:
[1] The service is a general service
e.g. a service like IP on which higher-level services can run,
[2] It reaches most… of the end-points of the Internet
As opposed to a specific “user-level” service like telephony
or home security, which is presumably a specialized service
E.g. one cannot evade the Order
by offering an Internet-like service
that cannot reach a small country somewhere."

16. Limits the reach of specialized
services that evade the Order
Example
"If [a DSL or cable ISP] decided to offer a “poor”
Internet service, would we view this as:
“Better than nothing or unacceptably slow[?]
“Perhaps they can call it Internet but not
broadband?"
Do we:
[1] impose FRAND conditions and
[2] insist that slow service is NOT the 'real' Internet'?

17. 1999
Network Neutrality debate began in 1999
Mergers: cable TV and broadband companies
AT&T/MediaOne and AOL/TimeWarner
Lessig and Lemley FCC submission:
‘The end of End-to-End’
Before ‘Code and Other Laws…’
Fear of closed duopoly model

18. 2000s Debate
2002-4 US ‘Title II’ telecoms competition removed by
courts, Republican FCC
Brand X case, Triennial Review
Lessig and Wu write to Congress 2002:
fear cable-TV business model
Wu coins term ‘net neutrality’ 2003
FCC introduces 4 ‘Net Freedoms’ 2005
Not including enforcement of same!
Congress fails to legislate 2005-6
2008 – Obama campaigns w.net neutrality

19. 2009 –11
FCC,
CRTC and
European Commission
introduce vague broad principles
of non-discrimination
2012 devil lies in the detail…

20. Incidentally it’s not net neutrality...
It’s ‘the open Internet’
In both EC consultation and FCC Order

21. US FCC Order 2011, challenge 2012
FCC Report and Order (2010) Preserving the Open Internet,
25 FCC Rcd 17905
FCC Report and Order, In The Matter Of Preserving The Open
Internet And Broadband Industry Practices,
GN Docket No. 09-191, WC Docket NO. 07-52, FCC 10-201 § 21-30
Published 22 Dec 2010, appeared Federal Register 23 Sept 2011
In Re: FCC, In the Matter of Preserving the Open Internet, Report
and Order, FCC 10-201, 76 Fed. Reg. 59192 (2011),
Consolidation Order - Judicial Panel on Multidistrict Litigation,
Oct. 6, 2011
http://commcns.org/sOFyyT

22. In Europe, something was rumbling..

23. Three wise monkeys
‘We have received no complaints’ is NOT ‘I have not
listened to any complaints’.
Some regulators are:
Seeing no evil
Hearing no evil
Speaking no evil.
BEREC analyzes sensibly!

24. 3. United Kingdom
Deny – problem does not exist until 2006?
Delay – attempt switching/transparency solutions –
some success: changes in General Conditions 2006-8
Using SamKnows to measure performance 2010-
Broadband Speed Code of Conduct 2008-12
Degrade – switch argument into co-regulatory forum:
Broadband Stakeholder (sic) Group
An industry forum funded in part by government
Corporatist conceit

26. Ofcom: ‘no formal complaints’
BEREC (2010) Response to the European Commission’s
consultation on the open Internet and net neutrality in
Europe, BoR (10)42
Charlie Dunstone, Chairman, TalkTalk
Ofcom International Conference, Nov 2006
“We shape traffic to restrict P2P users.
I get hate mail at home from people
when that means we restrict
their ability to play games.”

27. Losing liberty?
ISPs important intermediary limited liability
Based on their wise monkeys role
Behavioural advertising – PHORM 2005-7
EC brings case to CJEU 2010-11
UK Government amends implementation of privacy law
Throttling on non-transparent basis
Removes 2000/31/EC Art.12-14 exemption
Freedom of expression vital to democracy

28. Open Internet Code of Practice
Broadband Stakeholder Group 25/7/12
James Heath, Policy Controller, BBC:
' welcome the code as a positive step forward, alongside
Ofcom's commitment to monitor the development of this fast-
moving market.'‘
Jean-Jacques Sahel, EMEA Policy for Skype/Microsoft,
“Together with Ofcom’s forthcoming annual report on the
Open Internet,
this Code is a crucial step towards ensuring that…
very soon, all remaining discriminations against
end-users’ right to access content of their choice on Internet
cease.”

29. Why do they say Ofcom?
Ofcom tried to strong-arm ISPs into self-regulation
Broadband Code of Conduct in 2009/10
BSG transparency code of practice 2011
Minister Vaizey had to do same for this BSG approach
Ofcom research with SamKnows
Ofcom has regulatory powers:
Transparency – meaningful information on throttling and
peaktime speeds
Minimum Quality of Service
Netherlands simply implemented 2009 EU law

30. Ed Vaizey phones Sir Tim Berners Lee
at home on Sunday 21 Nov. 2010
“I don’t think heavy handed regulation is necessary.
“I’m saying we’re not going to put regulatory hurdles in the
way – the last 20 years have told us not to do that.
“What I announced was business as usual –government was
alive to these issues and prepared to intervene in future.
“I am absolutely as one with someone like Tim Berners-Lee”
Tim disagreed and disagrees!
Enjoyable discussion at OECD Paris June 2011
Vaizey more keen to talk to Stephen Carter of Alcatel-Lucent
Purveyors of DPI equipment to telcos…

31. Voluntary Code meaningless
“It’s ‘old’ ATVOD: shadowing co-regulation?
“The horse designed by a committee which is the
Voluntary Code of Conduct on negative discrimination
(net neutrality 'lite')
“is so voluntary that Voda, EE and Virgin won't sign up
as the porridge is variously considered too hot/cold.”
http://chrismarsden.blogspot.co.uk/2012/07/analyzing-uk-voluntary-
code-of-conduct.html

32. ISPs over to Ofcom’s View?
Language shows ISPs kowtowed to Ofcom Nov. 2011 report:
"it is right that Ofcom take ownership of this issue
“new proposed process will be a useful input to Ofcom… in
monitoring the impact of traffic management practices...
"voluntary commitments being made in this code closely
relate to ongoing monitoring work Ofcom… will conduct.
“happy to discuss with Ofcom how its future work plans
regarding open internet issues could support or input into a
review of these voluntary commitments."

33. My considered view
When will Ofcom engage in heavier persuasion to
persuade ISPs to come up with a workable solution?
I suspect it will take a new minister at the very least, and
possibly a new government.
Skype adds that Ofcom should produce an
Annual Open Internet Report
(which in any case should be a future part of the EC
Implementation Report as part of its commitments made to
the European Parliament in the 2009 Net Neutrality
Declaration).

34. Not very edifying bit of horse-trading
(or camel auctioning), is it?
Reminiscent of the decade of industry garbage about
misleading advertising, over broadband speeds.
Proposal: content providers lodge unresolved complaint
with the Broadband Stakeholder Group (see Annex 1)
instead of going direct to Ofcom or the EC
(or more likely a supportive Euro-MP)
I predict that there will be almost exactly zero such
farcical reports from BSG to Ofcom in 2013.

35. Who has NOT signed it?
The current signatories of the code are:
BE, BT, BSkyB, KCOM, giffgaff, O2, Plusnet, TalkTalk,
Tesco Mobile and Three.
30% of fixed market
Virgin
Only superfast ISP, throttler of peaktime content
60% of mobile market
Everything Everywhere
Only 4G operator in 2013
Vodafone
World’s largest mobile ISP

36. 4. Netherlands
15 May 2012: net neutrality law
Prohibits internet providers from interfering with traffic of users.
allows traffic management in case of congestion and network security,
as long as these measures serve the interests of the internet user.
Anti-wiretapping provision, restricting deep packet inspection (DPI).
They may only do so under limited circumstances,
or with explicit consent of user, which user may withdraw at any time.
The law allows for wiretapping with a warrant.
Internet providers can only disconnect their users in limited
circumstances.
Internet access is very important for functioning information society
Disconnection only permitted in case of fraud or when user doesn’t
pay bills.

37. DIRECTIVE 2009/136/EC
New Articles 20 and 22, Recital 26:
Consumer protection/citizen rights NOT SMP
http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:337:0011:00
36:EN:PDF
Requirements to notify customers & NRAs
But will need civil society activists
To detect discrimination
To notify higher-end consumers of problems
Added to interoperability requirements
Article 5 Interconnection Directive

38. Article 22: Quality of service
1. Member States shall ensure that NRAs are
able to require networks and/or services to publish
comparable, adequate and up-to-date QoS information
2. NRAs may specify the QoS parameters to be measured
content, form and manner of information published,
including possible quality certification mechanisms,
end-users...comparable reliable user-friendly information
3. In order to prevent the degradation of service,
Member States ensure NRAs can set QoS requirements.

39. NRAs shall provide the Commission
1. ... with a summary of the grounds for action,
2. the envisaged requirements and
3. the proposed course of action.
4. This information shall be available to BEREC
The Commission may... make comments
or recommendations...
NRAs shall take the utmost account of the Commission’s
comments or recommendations when deciding on the
requirements.

40. Declaration: Neutrality 2009/140EC
The Commission attaches high importance to
preserving the open and neutral character of the
Internet,
taking full account of the will of the co-legislators
to enshrine net neutrality as a policy objective and
regulatory principle to be promoted by NRAs

41. Specific strengthening of Directives
Article 8(4)(g) Framework Directive
strengthening of related transparency requirements
USD Articles 20(1)(b) and 21(3)(c) and (d)
safeguard NRA powers to prevent service degradation
slowing down traffic over public networks
USD Article 22(3)
Transparency for end-users

42. Commission will monitor closely
implementation in Member States
introducing a particular focus on how
European citizens ‘net freedoms’ are safeguarded
in its annual Progress Report to Parliament and Council.
Commission will monitor impact on ‘net freedoms’
of market and technological developments
reporting to Parliament/Council before end-2010
on whether additional guidance is required, and
will invoke its existing competition law powers
to deal with anti-competitive practices that may emerge.

43. Kroes: BEREC given key role by EC
[1] EC not leading in evidence gathering –for BEREC:
"At the end of 2011, I will publish the results, including any
instances of blocking or throttling certain types of
traffic."
[2] If that produces evidence of widespread
infringement - only Madison River Skype blocking?
recommend setting EU guidance rules
"more stringent measures [in] the form of guidance."
[3] "If this proves insufficient, I am ready to prohibit
the blocking of lawful services or applications.”
That means guidance 2013
regulatory action 2014, if ever.

44. Net neutrality laws 2013 update
19 December 2012: Slovenia net neutrality law
1 January 2013: Netherlands to enforce 2012 law
March 2013: France proposes net neutrality law
And search neutrality? ‘all intermediaries’
That would be 4th country in Europe:
Finland via universal service
Netherlands after mobile WhatsApp blocking
Slovenia

45. 5. Slovenia net neutrality
Economic Communications Act 2012:
"net neutrality means that operators will have to send internet
traffic with uniform speed and permeability regardless of the
content”
ISPs prevented from restricting, or slowing Internet traffic
except to solve congestion, security or addressing spam.
Commercial differentiation of QoS will be prohibited.
ISP prohibited from different connectivity prices
strong impact on mobile operators “data caps”

46. 6. France 13/3/13: digital economy
minister Fleur Pellerin announced
Work with the ministries of justice and the interior
to draft legislation on net neutrality,
National Digital Council (CNN) submitted a report on the subject.
freedom of expression not sufficiently protected in French law
given development of filtering, blocking, censorship, throttling
Wording to be included in 1986 freedom of communication law
CNN suggests extend neutrality to all information access services
including search engines, social networks and mobile apps,
to guarantee access to information and to means of expression
in non-discrimination, fair and transparent manner

47. BEREC response 2010
EC (2010) consultation on the open Internet and net neutrality
in Europe
http://ec.europa.eu/information_society/policy/ecomm/library/public_
consult/net_neutrality/index_en.htm
BoR (10) 42 BEREC Response at
http://www.erg.eu.int/doc/berec/bor_10_42.pdf
“blocking of VoIP in mobile networks occurred
Austria, Croatia, Germany, Italy, the Netherlands, Portugal,
Romania and Switzerland”

48. BoR (11) 40 Rev1
Draft Work Programme for BEREC 2012
NRAs’ regulatory remedies available
to address potential discrimination issues,
link to the quality of service issue
possible IP interconnection market analysis in 2012

49. BEREC overview of European
markets
BEREC investigation task from Commission
regarding switching issues and
traffic management practices
implemented by operators.
thorough investigation request
dedicated task force, together with Commission
results consolidated and published 2012
Summary document, no ‘commercial’ detail
Worse than useless?

50. Quality of Service requirements
Regulatory Framework: competence for NRAs to set
QoS minimum requirements.
When should NRAs set minimum requirements
what should those be?
Harmonised minimum QoS requirements
could avoid creating inefficiencies for operators,
costs ultimately paid by consumers.

51. 2012 further guidelines for NRAs
Methods for measuring and assessing
network and application performance,
including by the end users themselves.
E.g. NRAs can promote or provide tools
end users control or monitor quality
include contractually agreed parameters

52. BEREC Deliverables 2012
1. Detailed guidelines on Transparency;
1. (depending on outcome of the public consultation)
2. Guidelines on Quality of Service Requirements;
3. Completion of BEREC Reports on discriminatory
issues;
4. Report on IP interconnection;
5. Inquiry results on traffic management practices.

53. BEREC preliminary findings
9 March 2012
“traffic management practices in Europe
“blocking of VoIP and P2P traffic is common,
“other practices vary widely.
“in the process of validating, consolidating and
categorising the data”
http://erg.eu.int/doc/2012/TMI_press_release.pdf

54. “BEREC is very pleased with the high
level of responses received.”
250 fixed and 150 mobile operators
25% claim “security and integrity” concerns
e.g. controlling “spam” traffic
“application-agnostic” approach e.g. buffering
OR “application-specific” techniques
throttle specific traffic, such as video streaming
1/3rd of fixed operators manage their networks
offer specialised services (e.g. telephony or TV)
alongside a best efforts) Internet access service.

55. Discrimination:
Prioritisation implicitly is discrimination,
evaluate negative consequences for
competition, innovation and end users’ interests.
2011, BEREC economic analysis of
potential and theoretical effects of discriminatory
behaviour.

56. European Data Protection Supervisor
October 2011
Concerned that traffic management would result in
exposure of users’ personal data
Including IP addresses
‘Opinion on net neutrality, traffic management and
protection of privacy and personal data’
http://www.edps.europa.eu/EDPSWEB/webdav/site/myS
ite/shared/Documents/Consultation/Opinions/2011/11-10-
07_Net_neutrality_EN.pdf

57. Telcos declare war on Google and
Facebook: 25 February 2013
Cesar Alierta, CEO Telefónica:
“Something is now working in the value chain and this is not a level
playing field.”
Franco Bernabè, CEO Telecom Italia:
“a couple of players dominate the market, stifling competition as
others struggle to develop a significant customer base”.
Randall Stephenson, CEO AT&T:
“Policy makers are going to have to be very clear about whether
they desire rapid adoption of the latest technologies,
or do they desire hyper-competition and the lowest prices possible
for the most basic of services.

58. What next? Net neutrality discussed
1st Internet Science conference Brussels 10-11 April 2013
Professor Ziga Turk, minister in charge of Slovenian law
Alissa Cooper, member of FCC OIAC sub-group
Carl-Christian Buhr, advisor to Neelie Kroes
UK, French and Dutch technical engineering experts

59. Toolsets/lessons for each approach
Norway UK Netherlands US
Measurement Self-declared Ofcom: Consumers e.g. FCC: SamKnows
with verification? SamKnows Glasnost/Neubot/
BitsofFreedom
Technical Within co- Broadband NRA – advising BITAG and OIAC
advice regulatory pact Stakeholder ministry self/co-regulation
Group co-
regulation
Legal position Co-regulation Not Implemented Order December
implemented 2009/136/EU 2010, published
2009/136/EU Sept.2011
Efficiency Very fast – first Very slow – Very fast – Very slow – note
mover industry foot legislative panic court delay
dragging
Lesson Act fast, get Death by a 1000 Mobile DPI and Lack of
stakeholder buy- cuts; deny-delay- blocking bipartisanship
in degrade; prompted action causes trench
significant – legislative warfare
political damage panic

60. Comments? Questions?
@ChrisTMarsden
C.Marsden@sussex.ac.uk
http://chrismarsden.blogspot.co.uk/
5000 regular visitors (esp. Washington and Brussels)

61. Glasnost initial results
(Ireland v.small sample)

62. Sir Edward Coke, Institutes of the Lawes of
England (1628) on the Statute of Monopolies
[N]ew manufacture must have seven properties.
1. it must be for twenty-one years or under.
2. it must be granted to the first and true inventor.
3. it must be of such manufactures, which any other at
the making of such letters patent did not use ...
4. the privilege must not be contrary to law ...
5. nor mischievous to the state, by raising the prices of
commodities at home.
6. nor to the hurt of trade
7. nor generally inconvenient.