On a regulatory level, the Netherlands in mid-2012 became the first country in Europe (and the second globally, after Chile) to adopt laws protecting net neutrality. Legislation blocks ISPs from throttling or blocking traffic to specific websites or services, and from charging extra for access to certain websites or applications.
However, ISPs are permitted to manage traffic in cases of congestion and for network security, as long as those measures serve the interests of the internet user. Given the importance of internet access, ISPs can only disconnect users in a limited set of circumstances, such as for fraud or no payment of accounts.
The issue of net neutrality emerged in about 2000 when it became possible for ISPs to adjust traffic based on content or provider. Within a few years the proliferation of available services which competed with those offered by incumbents had led to rampant discrimination: it had become common, particularly among incumbent operators in the Nordics and Germany, for services such as VoIP to be blocked from mobile networks, or for customers to be charged extra for making use of them.
In the Netherlands the issue came to the fore in late 2011 after KPN reported another poor financial performance. The company sought to bolster its revenue by charging a premium for some mobile services (the WhatsApp messaging service was singled out in particular) which effectively replaced those services which KPN also offered. This was thwarted by the States General, which passed legislation guaranteeing network neutrality. The principal had first been elaborated in mid-2011.
A recent report from the research institute SEO Economic Research, commissioned by the Dutch Ministry of Economic Affairs, validates net neutrality as enshrined in the revised Dutch Telecommunications Law. The report has shown that net neutrality encourages ‘one-sided pricing’; by which all consumers pay the same charge for accessing the internet. This has obvious benefits over the non-net neutrality two-sided pricing, by which ISPs create different pricing structures between customers and content providers.
Net neutrality also fosters innovation at the core level: when IPSs charge content providers more for access to their priority traffic on their networks, the cost to the latter reduces the incentive to innovate. Thus net neutrality helps businesses develop products and services since ISPs are prevented from restricting or prioritising traffic to specific applications. The report also confirms that lower access costs encourage greater use of internet services: ISPs also benefit financially since customers (without the threat of having their broadband speed throttled or curtailed) are shown to be willing to pay for more data capacity.
The European Commission, which has longed debated the pros and cons of net neutrality, may take some positive soundings from the Dutch experience.
Exhibit
15
– Netherlands adopted net neutrality legislation
In mid-2012 the Netherlands adopted net neutrality legislation. This blocks ISPs from throttling or blocking traffic to specific websites or services, and from charging extra for access to certain websites or applications. Given the importance of internet access, ISPs can only disconnect users in a limited set of circumstances, such as for fraud or no payment of accounts. |
(Source: BuddeComm)