NetworkNeutralityHistory andFuture                  Roma              15 March 2013
Author:• Regulating Code  – MIT Press, March 2013• Oxford Bibliography of Internet Law  – Oxford UP, 2012• Network Neutral...
Prior art....
In this talk• I explain its past,• explore the legislation and regulation of its  present, and explain that• economics and...
Nothing in regulation is new
Common Carriage not new•   Began with obligations on inns/boats•   Determined by public function of networks•   Continued ...
The Internet as a platform for         innovation             vs.
Network neutrality past/present• “messages received from any individual, or from any  telegraph lines connecting at either...
Federal Communications Commission• 2005 ‘4 Internet Freedoms’• Consumers are entitled to  1. access lawful Internet conten...
European Commission 2009• NRA powers to set minimum quality levels for network  transmission services   – promote "net neu...
The problem in a graphic
Telcos never liked the Internet• AT&T’s Jack Osterman reacting to• Paul Baran’s 1964 concept of the Internet:• ‘First it c...
NORMS FROM ABOVE
Or in a picture…
Net neutrality permanent         feature of telecoms law• It is a debate which  – has existed since 1999  – will grow in i...
1999•   Network Neutrality debate began in 1999•   Mergers: cable TV and broadband companies•   AT&T/MediaOne and AOL/Time...
2000s Debate• 2002-4 US ‘Title II’ telecoms competition  removed by courts, Republican FCC  – Brand X and Trinko cases, Tr...
Telecoms law• More than just competition law• Are ISPs all engaged in similar practices?  – All discriminating against inn...
2009 FCC, CRTC and European Commission          introduce vague broad     principles of non-discrimination                ...
Incidentally it’s not net neutrality...• It’s ‘the open Internet’• In both EC consultation and FCC Order
US FCC Order 2011, challenge 2012• FCC Report and Order (2010) Preserving the Open Internet,   – 25 FCC Rcd 17905• FCC Rep...
Key Policy Concerns• Service available to consumers   – What kind of QoS should consumers expect to get when they purchase...
Anti-NN behaviour addressed?NRAs tackling anti-NN behaviour will depend on:• Ability of complainant to prove discriminator...
Back in 2007…
‘Negative neutrality’                 or        Net neutrality ‘lite’3/18/2013                       26
Net Neutrality: European and   Comparative Approaches2 elements: 1. present net neutrality lite debate 2. Future net neutr...
Discrimination and Net Neutrality                       Non Discriminatory regime      Quality                            ...
Everyone’s shaping traffic
We need rules of the road?
Facebook advert for neutrality?• $100billion business built in 6 years  – billion users  – Not permitted in China/Iran/N.K...
OPTIMISM
Four types of market failure:legitimacy for regulators to act1. Market power  –   As in Comcast (2008) and Madison River (...
DIRECTIVE 2009/136/ECNew Articles 20 and 22, Recital 26:• Consumer protection/citizen rights NOT SMP• Requirements to noti...
Article 22: Quality of service1. Member States shall ensure that NRAs are• able to require networks and/or services to pub...
NRAs shall provide the Commission1.   ... with a summary of the grounds for action,2.   the envisaged requirements and3.  ...
Declaration: Neutrality 2009/140ECThe Commission attaches high importance to preserving  the open and neutral character of...
Commission will monitor closely• the implementation of provisions in Member States,• introducing a particular focus on how...
Kroes: BEREC given key role 2011[1] EC is not leading in evidence gathering –for BEREC:   – "At the end of 2011, I will pu...
BEREC response 2010• EC (2010) consultation on the open Internet and  net neutrality in Europe• BoR (10) 42 BEREC Response...
BEREC on Discrimination• “Prioritisation implicitly is discrimination”• evaluate negative consequences for  – level of com...
BEREC Deliverables:1. Detailed Guidelines on Transparency2. 2012 Results on traffic management practices  1. mobiles emerg...
December 2011 documents• BoR 53(11) Quality of Service• BoR 67(11) Transparency, at  – erg.eu.int/documents/berec_docs/ind...
2013: Kroes no longer net neutralNet neutrality? Let the market decide (Libération)• "consumers need effective choice on t...
Net neutrality laws 2012Country           Legal ApproachNetherlands       Law of May 2012Chile & Finland   Universal acces...
Net neutrality laws 2013 update• 19 December 2012: Slovenia net neutrality law• 1 January 2013: Netherlands to enforce 201...
Slovenia net neutralityEconomic Communications Act 2012:• "net neutrality, which means that operators will have to  send i...
US FCC Order 2011, challenge 2013• FCC Report and Order (2010) Preserving the Open Internet,   – 25 FCC Rcd 17905• FCC Rep...
Net Neutrality a microcosm ofEuropean telecoms policy failures1. generalize from the particular2. pretend competition solv...
1. One size does not fit all•   Generalising from the particular•   Netherlands advanced telecoms competition•   Swedish m...
2. Competition is not the answer• Standard 1990s answer to 1980s monopoly  problem• We are still in some Chicago School fa...
3. Technological neutrality?• Mobile is not fixed!• Cable is not DSL• Why pretend that we can solve this in a  platform-ne...
We need rules of the road?
Managed services FRANDFairReasonable andNon-discriminatoryAccess• means Murdoch, UEFA and Disney   – can’t cut exclusive d...
4. Asymmetrical regulation•   Fixed incumbent regulated as SMP•   Problem is not retailers of wholesale network•   Why don...
5. Prosumer law and redressWhat’s the problem?  – ‘Anecdote’ is not evidence  – Nor is ex post an effective remedyOfcom wo...
Prosumer Law• I have made an extended argument for  prosumers to be protected• Paper at EuroCPR March 22• Book with MIT Pr...
• Published 22March  2013• ‘Prosumer law’ article  (now on SSRN)• Comments welcome!
6. ISPs as police?3/18/2013                        59
Citizens’ freedom of expression• ‘Internet’ is unrestricted• It’s the right to communicate• Restriction is censorship  – T...
Losing liberty?•   ISPs important intermediary limited liability•   Based on their wise monkeys role•   Behavioural advert...
European Data Protection Supervisor           October 2011• Concerned that traffic management would  result in exposure of...
7. What innovation?• Value chain analysis• Problem – innovation at content-app-services  level• Providing fibre is not inn...
Solution: much faster consumer-         oriented regulatory evidence•   Survey of consumer broadband to find problems•   E...
Questions?cmars@sussex.ac.uk@ChrisTMarsden
Four types of market failure: legitimacy for              regulators to act1. Market power  –   As in Comcast (2008) and M...
Copyleft: Blocking injunctionsInjunctions must be effective, proportionate and dissuasive     –   Article 2(3) Enforcement...
Net neutrality: Rome Lega Coop 14 March
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Net neutrality: Rome Lega Coop 14 March

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Includes details of new Slovenia law and French proposed law

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  • http://www.mndaily.com/2009/11/05/net-neutrality-under-public-debate
  • http://www.tele-management.ca/content/10022-the_12_most_prominent_reforms_of_the_eu_telecoms_package
  • Part of the The Sistine Chapel ceiling, painted by Michelangelo between 1508 and 1512http://en.wikipedia.org/wiki/Sistine_Chapel_ceiling
  • Net neutrality: Rome Lega Coop 14 March

    1. 1. NetworkNeutralityHistory andFuture Roma 15 March 2013
    2. 2. Author:• Regulating Code – MIT Press, March 2013• Oxford Bibliography of Internet Law – Oxford UP, 2012• Network Neutrality: A Research Guide – in Handbook Of Internet Research (Elgar, 2012)• Internet Co-regulation – Cambridge UP, 2011• Net Neutrality: Towards a Co-regulatory Solution – Bloomsbury, 2010
    3. 3. Prior art....
    4. 4. In this talk• I explain its past,• explore the legislation and regulation of its present, and explain that• economics and human rights will both play a part in its future.
    5. 5. Nothing in regulation is new
    6. 6. Common Carriage not new• Began with obligations on inns/boats• Determined by public function of networks• Continued into modern networks• E.g. Railways and telegraphs• 1844 Railway Regulation Act – Setting both emergency access (‘kill switch’) – AND Parliamentary trains• FRAND end-to-end access at set cost
    7. 7. The Internet as a platform for innovation vs.
    8. 8. Network neutrality past/present• “messages received from any individual, or from any telegraph lines connecting at either of its termini,• shall be impartially transmitted in order of reception” – [Pacific Telegraph Act of 1860]• “Just as telephone companies are not permitted to tell consumers who they can call or what they can say,• broadband carriers should not be allowed to use their market power to control activity online.” – [Guide to Net Neutrality for Google Users]
    9. 9. Federal Communications Commission• 2005 ‘4 Internet Freedoms’• Consumers are entitled to 1. access lawful Internet content of choice. 2. run applications and use services of choice, 1. subject to the needs of law enforcement. 3. connect their choice of legal devices 1. that do not harm the network. 4. competition among network providers, application and service providers, and content providers.
    10. 10. European Commission 2009• NRA powers to set minimum quality levels for network transmission services – promote "net neutrality" and "net freedoms" for citizens.• Consumers must be informed – before signing a contract – about service subscribing, – including traffic management techniques and their impact on service quality, – as well as any other limitations – (such as bandwidth caps or available connection speed).• NRAs able to separate communication networks from their service branches, as a last-resort remedy.
    11. 11. The problem in a graphic
    12. 12. Telcos never liked the Internet• AT&T’s Jack Osterman reacting to• Paul Baran’s 1964 concept of the Internet:• ‘First it can’t possibly work, and if it did,• damned if we are going to allow the creation of a competitor to ourselves.’
    13. 13. NORMS FROM ABOVE
    14. 14. Or in a picture…
    15. 15. 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.
    16. 16. 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
    17. 17. 2000s Debate• 2002-4 US ‘Title II’ telecoms competition removed by courts, Republican FCC – Brand X and Trinko cases, Triennial Review• Lessig and Wu write to Congress 2002: – fear cable-TV business model – Wu (lessig’s protégé) term ‘net neutrality’ 2003• FCC introduces 4 ‘Net Freedoms’ 2005 – Not including enforcement of same! – Congress fails to legislate 2005-6 – 2008 – Obama campaigns on net neutrality
    18. 18. Telecoms law• More than just competition law• Are ISPs all engaged in similar practices? – All discriminating against innovative users – Blocking gamers and P2P file sharers – Are they all doing it for security reasons?• Vertical integration and discrimination? – US Comcast (2008) and Madison River (2005) – easy FCC vertical integration cases
    19. 19. 2009 FCC, CRTC and European Commission introduce vague broad principles of non-discrimination 2013 devil lies in the detail…
    20. 20. Incidentally it’s not net neutrality...• It’s ‘the open Internet’• In both EC consultation and FCC Order
    21. 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. 22. Key Policy Concerns• Service available to consumers – What kind of QoS should consumers expect to get when they purchase ‘basic’ broadband Internet access? – Will consumers be able to access the applications that they want via the broadband and mobile Internet?• Discrimination/monopoly rents – To what extent can network operators treat differently the traffic of particular content or application providers? – When can network operators charge for QoS on different terms to similarly situated providers?
    23. 23. Anti-NN behaviour addressed?NRAs tackling anti-NN behaviour will depend on:• Ability of complainant to prove discriminatory behaviour – poor customer service distinguished from discrimination?• How the 2009 Framework is transposed• Speed and effectiveness of NRA decision-making• Notifying proposed measures (including non-SMP remedies) – which Commission may vetoIn SMP markets,• SMP analysis before non-SMP remedies can be applied?
    24. 24. Back in 2007…
    25. 25. ‘Negative neutrality’ or Net neutrality ‘lite’3/18/2013 26
    26. 26. Net Neutrality: European and Comparative Approaches2 elements: 1. present net neutrality lite debate 2. Future net neutrality heavy • fibre access networks
    27. 27. Discrimination and Net Neutrality Non Discriminatory regime Quality Charging(QOS discrimination) (price discrimination) Blocking
    28. 28. Everyone’s shaping traffic
    29. 29. We need rules of the road?
    30. 30. Facebook advert for neutrality?• $100billion business built in 6 years – billion users – Not permitted in China/Iran/N.Korea• Rupert Murdoch bought MySpace 2005 – His revolutionary new idea: paywalls• So who’s on the right side of history?• Note: Facebook now cutting deals with mobiles – for advertising revenue share…
    31. 31. OPTIMISM
    32. 32. Four types of market failure:legitimacy for regulators to act1. Market power – As in Comcast (2008) and Madison River (2005)2. Lack of information/asymmetries – Ofcom work on easier switch between ISPs3. Quality of service – Claim of P2P and gamers that they are blocked4. Provision of public goods – Welfare loss through lack of innovation – Much more complex and far-sighted Lessigian view
    33. 33. DIRECTIVE 2009/136/ECNew Articles 20 and 22, Recital 26:• Consumer protection/citizen rights NOT SMP• 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 Access/Interconnection Directive
    34. 34. Article 22: Quality of service1. Member States shall ensure that NRAs are• able to require networks and/or services to publish• comparable, adequate and up-to-date QoS information2. 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 information3. In order to prevent the degradation of service,• Member States ensure NRAs can set QoS requirements.
    35. 35. NRAs shall provide the Commission1. ... with a summary of the grounds for action,2. the envisaged requirements and3. the proposed course of action.4. This information shall be available to BERECThe Commission may... make comments or recommendations... – NRAs shall take the utmost account of the Commission’s comments or recommendations when deciding on the requirements.
    36. 36. Declaration: Neutrality 2009/140ECThe Commission attaches high importance to preserving the open and neutral character of the Internet,• taking full account of the will of the co-legislators now to enshrine net neutrality as a policy objective and regulatory principle to be promoted by NRAs – 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• hindering or slowing down traffic over public networks – USD Article 22(3)
    37. 37. Commission will monitor closely• the implementation of provisions in Member States,• introducing a particular focus on how the ‘net freedoms’ of European citizens are being safeguarded – in its annual Progress Report to Parliament and Council.Commission will monitor the impact of market and technological developments on ‘net freedoms’• reporting to Parliament and 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.
    38. 38. Kroes: BEREC given key role 2011[1] EC is 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] But that produced evidence of widespread infringement - Madison River Skype blocking? – recommend setting EU guidance rules • "more stringent measures...[in] the form of guidance."[3] "If this proves to be insufficient, I am ready to prohibit the blocking of lawful services or applications.”• means guidance 2013 - regulatory action 2014, if ever.
    39. 39. BEREC response 2010• EC (2010) consultation on the open Internet and net neutrality in Europe• 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”
    40. 40. BEREC on Discrimination• “Prioritisation implicitly is discrimination”• evaluate negative consequences for – level of competition, – innovation – end users’ interests.• 2011-12 economic analysis of – potential and theoretical effects of – discriminatory behaviour.
    41. 41. BEREC Deliverables:1. Detailed Guidelines on Transparency2. 2012 Results on traffic management practices 1. mobiles emerged as biggest problem3. Guidelines on QoS Requirements4. Reports on discriminatory issues5. Report on IP interconnection
    42. 42. December 2011 documents• BoR 53(11) Quality of Service• BoR 67(11) Transparency, at – erg.eu.int/documents/berec_docs/index_en.htm
    43. 43. 2013: Kroes no longer net neutralNet neutrality? Let the market decide (Libération)• "consumers need effective choice on the type of internet subscription they sign up to. – real clarity, in non-technical language"• In early 2010, she said ISPs• "shouldnt be allowed to limit the access to service or content out of commercial motivation,but only in cases of security issues and spamming“ • http://chrismarsden.blogspot.it/2013/01/net- neutrality-let-market-decide-says.html
    44. 44. Net neutrality laws 2012Country Legal ApproachNetherlands Law of May 2012Chile & Finland Universal access to ‘unfiltered’ InternetUnited States FCC Open Internet Order Sept ‘11Norway Co-regulation – 2009 agreementCanada CRTC rules 2009 (not implemented?)Japan, UK Self-regulation unenforcedFrance ARCEP ‘Ten Principles ‘
    45. 45. 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
    46. 46. Slovenia net neutralityEconomic Communications Act 2012:• "net neutrality, which 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”
    47. 47. US FCC Order 2011, challenge 2013• 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
    48. 48. Net Neutrality a microcosm ofEuropean telecoms policy failures1. generalize from the particular2. pretend competition solves the problem3. pretend to be technologically neutral4. regulate asymmetrically5. don’t provide effective protection for consumers6. don’t protect freedom of expression7. don’t understand Internet innovation
    49. 49. 1. One size does not fit all• Generalising from the particular• Netherlands advanced telecoms competition• Swedish mobile cartels• Romania has fibre and 450MHz 4G• UK has no 4G nor any sign of it! – 4 MNOs in UK – only one acts for consumer interest
    50. 50. 2. Competition is not the answer• Standard 1990s answer to 1980s monopoly problem• We are still in some Chicago School fantasy?• ‘American problem’ – so why US solution?• All ISPs have incentives to block – file-sharing and VOIP• Naked DSL anyone? – Why do we still have voice telephony?
    51. 51. 3. Technological neutrality?• Mobile is not fixed!• Cable is not DSL• Why pretend that we can solve this in a platform-neutral manner• Architecture matters!
    52. 52. We need rules of the road?
    53. 53. Managed services FRANDFairReasonable andNon-discriminatoryAccess• means Murdoch, UEFA and Disney – can’t cut exclusive deals to freeze out competitors• Universal service must also be considered• As well as Public Service must-carry
    54. 54. 4. Asymmetrical regulation• Fixed incumbent regulated as SMP• Problem is not retailers of wholesale network• Why don’t we ex ante regulate?• NOT cable monopolist• NOR satellite/ISP combine – Must carry – Due prominence
    55. 55. 5. Prosumer law and redressWhat’s the problem? – ‘Anecdote’ is not evidence – Nor is ex post an effective remedyOfcom work on transparency and switching – Transparency like mobile pricing? – Switching like: let them eat cake?
    56. 56. Prosumer Law• I have made an extended argument for prosumers to be protected• Paper at EuroCPR March 22• Book with MIT Press March 22 – with Ian Brown (Oxford Internet Institute)
    57. 57. • Published 22March 2013• ‘Prosumer law’ article (now on SSRN)• Comments welcome!
    58. 58. 6. ISPs as police?3/18/2013 59
    59. 59. Citizens’ freedom of expression• ‘Internet’ is unrestricted• It’s the right to communicate• Restriction is censorship – Tim Berners Lee tells the truth• La Rue: UN Human Rights Council – warns against private as well as state censorship• Akdeniz: OSCE – Article 10 ECHR, Article 19 ICCPR• European Data Protection Supervisor – Warns about behavioural advertising and tracking
    60. 60. Losing liberty?• ISPs important intermediary limited liability• Based on their wise monkeys role• Behavioural advertising – PHORM• Blocking and filtering• Throttling on non-transparent basis• Removes 2000/31/EC Art.12-14 exemption• Freedom of expression vital to democracy
    61. 61. 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/si te/mySite/shared/Documents/Consultation/Opini ons/2011/11-10-07_Net_neutrality_EN.pdf
    62. 62. 7. What innovation?• Value chain analysis• Problem – innovation at content-app-services level• Providing fibre is not innovation by ISPs!• So whole basis of policy is flawed• Do telecoms regulators understand the Internet?• Are politicians ignorami?
    63. 63. Solution: much faster consumer- oriented regulatory evidence• Survey of consumer broadband to find problems• Example: BBC iPlayer ‘traffic lights’ scheme• Example: Skype reporting (that’s Microsoft…)• Example: SamKnows! FCC and Ofcom surveys• Example: Consumer forums/Twitter etc.• Example: Neubot and other consumer software• BUT it needs regulatory commitment• Based on competition AND freedom of expression
    64. 64. Questions?cmars@sussex.ac.uk@ChrisTMarsden
    65. 65. Four types of market failure: legitimacy for regulators to act1. Market power – As in Comcast (2008) and Madison River (2005)2. Lack of information/asymmetries – Ofcom work on easier switch between ISPs3. Quality of service – Claim of P2P and gamers that they are blocked4. Provision of public goods – Welfare loss through lack of innovation – Much more complex and far-sighted Lessigian view
    66. 66. Copyleft: Blocking injunctionsInjunctions must be effective, proportionate and dissuasive – Article 2(3) Enforcement Directive: measures effective, proportionate and dissuasive. – Injunctions directed towards future infringements are not as straightforward. – consider the lengths and expense for online intermediary to complyInjunctions must be fair and equitable – Article 3 Enforcement Directive • not unnecessarily complicated or costly, entail unreasonable time-limits or unwarranted delays.No general obligation to monitor – must not amount to an obligation to actively monitor all customer data: Article 15 ECDInjunctions must not create barriers to legitimate trade – Art.3 Enforcement Directive and basic EU law on the free movement of goods and services. – injunction cannot have as its object or effect a general and permanent prohibition on selling, • for example, all goods bearing a particular trade mark.Injunctions must strike a fair balance• Promusicae) v Telefónica requires Member States to balance competing interests, – rights owner to property (incl. intellectual property) and effective judicial protection, – right of the alleged infringer to the protection of personal data on the other hand.

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