Net neutrality regulation is important for media companies, Internet service providers and consumers as it affects the conditions for distribution of streaming music and video. This paper analyzes and visualizes the dependencies between media companies and ISPs in two cases that involve zero-rating of data, an arrangement in which the data for specific services does not count against a data allowance. The cases show that zero-rating brings a substantial change to the distribution segment of the media-Internet ecosystem. For the many consumers that have subscriptions with a data allowance, the Internet access is effectively divided in two parts, one where data is metered and counts against their monthly allowance and one where they have unlimited flat fee data – for selected applications. Furthermore, the cases show that net neutrality is an important factor, but also clearly not the only factor affecting competition in the media-Internet ecosystem.

1. To Binge or Not to Binge – Net Neutrality and Video
Distribution in Europe and the US
Pieter Nooren
TNO
The Hague, The Netherlands
pieter.nooren@tno.nl
ABSTRACT
Net neutrality regulation is important for media
companies, Internet service providers and consumers as it
affects the conditions for distribution of streaming music
and video. This paper analyzes and visualizes the
dependencies between media companies and ISPs in two
cases that involve zero-rating of data, an arrangement in
which the data for specific services does not count against
a data allowance. The cases show that zero-rating brings a
substantial change to the distribution segment of the
media-Internet ecosystem. For the many consumers that
have subscriptions with a data allowance, the Internet
access is effectively divided in two parts, one where data
is metered and counts against their monthly allowance
and one where they have unlimited flat fee data – for
selected applications. Furthermore, the cases show that
net neutrality is an important factor, but also clearly not
the only factor affecting competition in the media-
Internet ecosystem.
Author Keywords
Net neutrality; video distribution; media ecosystem; zero-
rating; data allowance
ACM Classification Keywords
• Social and professional topics~Governmental
regulations • Social and professional
topics~Broadband access • Social and professional
topics~Net neutrality • Social and professional
topics~Antitrust and competition • Social and
professional topics~Consumer products policy
INTRODUCTION
Media and entertainment companies have come to depend
heavily on the Internet for distribution of their services to
consumers. In 2015, 70% of all IP traffic was IP video
and this is expected to increase to around 82% in 2020
[1]. Providers of broadband Internet access, commonly
known as Internet Service Providers (ISPs), play a key
role in the distribution of IP video. In addition to Internet
access, many ISPs offer their own IPTV services. In
Europe, the US, and several other countries, the offerings
of the ISPs are subject to net neutrality regulation. Net
neutrality regulation aims at promoting end user choice
and innovation in applications by prohibiting the blocking
or throttling of Internet services and applications by ISPs.
In this paper, we analyze how net neutrality rules in
Europe and the United States affect the media distribution
ecosystem. We investigate two cases of streaming media
distribution, one in mobile and one in fixed networks.
The focus is on zero-rating, a commercial arrangement in
which ISPs make the retail tariff of the Internet access
dependent on the applications carried over that access.
Although zero-rating does not affect the technical
treatment of IP flows in the ISP network, it is part of the
net neutrality debate as it affects the conditions for end
users in their choice of applications. A well-known
example of zero-rating that led to a heated industry
debate was T-Mobile’s Binge On service in the US that
allowed unlimited viewing of videos from selected
providers for subscribers that had a data cap [2]. In
Europe, zero-rated services have also been introduced. A
relevant case here is T-Mobile’s Data Free Music offering
in the Netherlands that led to considerable discussion
against the background of the relatively strict net
neutrality rules in the Netherlands [3]. We analyze and
visualize the dependencies between media companies and
ISPs that are relevant in net neutrality using a method that
has been specifically developed for analyzing complex
media-Internet ecosystems: DAMIAN (Digital Asset
Modeling of Interdependencies in Actor Networks [4]).
REGULATORY BACKGROUND OF NET NEUTRALITY
IN EUROPE AND IN THE US
The European rules for net neutrality are laid down in the
European Commission regulation 2015/2120 [5]. The
main elements are that ISPs shall treat all traffic equally
and shall not block, slow down, alter or discriminate
between specific content or applications. For the analysis
below, the implementation guidelines developed by
BEREC, the body of European Regulators for Electronic
Communications, are of particularly relevance [6]. The
guidelines provide the elements to be considered when
assessing the appropriateness of zero-rating
arrangements, such as the market positions of the ISP and
application providers and the effects on entry barriers for
application providers. In the Netherlands, the national
telecommunications law unambiguously prohibits all
zero-rating arrangements. The tension between the
European regulation and guidelines and the strict Dutch
law is at the center of the debate on T-Mobiles data free
music offer.
In the US, the Federal Communications Committee
(FCC) published its latest net neutrality rules in its 2015
Open Internet Order. There are three “bright line rules”:
no blocking, no throttling and no paid prioritization by
ISPs, supplemented by additional rules including a
generic standard for future conduct that could apply to
zero-rating [7]. These rules, and the FCCs jurisdiction
TVX-in-Industry paper, ACM International Conference on Interactive
Experiences for Television and Online Video, June 14-16, 2017,
Hilversum, The Netherlands

2. over Internet access, have been heavily contested by ISPs
in court cases. The latest development is that the new
FCC chairman has indicated his intention to withdraw the
rules [8].
CASE: ‘UNLIMITED’ MUSIC AND VIDEO ON MOBILE
In mobile Internet access, so-called data free or unlimited
plans for music and video streaming have led to
considerable debate. We use the DAMIAN method to
position three music and video services in the media-
Internet ecosystem, see Figure 1. In the top part, we find a
traditional value chain. Below that are the service flows
for the three services that show in more detail how
companies in different segments of the chain interact. We
explain the activities and dependencies in the ecosystem
using the service flow for the Spotify music service,
indicated by the black line. The first step is creation of
music content by record labels such as Warner Music.
Spotify then aggregates music from multiple labels to
build a service that it sells to its customers. Spotify
distributes its service via the global Internet. In the figure,
we assume that the Spotify customer has a mobile
Internet access subscription from T-Mobile Netherlands.
The role of net neutrality in the distribution is discussed
below. Then, the customer can navigate the Spotify
catalogue and select music using the Spotify app, that
runs on the smartphone or tablet he consumes the music
on.
For customers that have a T-Mobile Netherlands
subscription that includes Data Free Music, the data used
for streaming music services associated with the Data
Free Music does not count against their monthly data
allowance, i.e. these music services are zero-rated.
Spotify is such an associated service, as are a range of
other services (25 in total at the time of writing of this
paper). The zero-rated services clearly have an attraction
for consumers who are weary of their limited data
allowances. Conversely, non-zero-rated services, like the
(fictitious) N-Music service in the figure have a
disadvantage that may negatively affect their competitive
position. A key factor here is whether all music services
can associate themselves with the T-Mobile data free
service. T-Mobile does not charge music services for
associating, but does have a number of technical
requirements. The current list of streaming music services
contains both well-known services, like Spotify and
Tidal, and smaller, relatively unknown services [9]. This
suggests that the requirements are mild. Still, the zero-
rating arrangement changes the distribution part of the
ecosystem. The Internet access segment is now made up
of two parts: a part where data is metered or capped and a
part where data is unlimited. Note that this is only the
case for subscribers that have a subscription with the data
free component in their data plan. It does not apply for
subscribers that have a traditional data plan nor for
customers that have unlimited data for all applications.
This means the retail tariffing of the mobile data depends
both on the subscription of the consumer and on the
association of the music service with the data free
program, thus blurring the lines between pricing of
connectivity and pricing of applications for consumers.
As mentioned earlier, the Dutch telecommunications law
prohibits all zero-rating agreements. In December 2016,
Dutch regulator ACM therefore ordered T-Mobile to end
the data free service. The European rules and BEREC
guidelines provide some room for zero-rating and, when
applied to the T-Mobile data free case, could lead to
another judgement. At the time of writing of this paper, a
Dutch court has ruled that the European rules take
Figure 1. Service delivery chains for music and video services over the Internet to mobile devices. In black: Spotify service
assumed to be part of T-Mobile’s Data Free Music service. In blue: fictitious N-Music service assumed not to be part of Data
Free Music. In red: Netflix video-on-demand service throttled to SD quality or kept at HD quality depending on the specific
arrangements in a T-Mobile US subscription. Service delivery chains and company logos are only for illustration purposes.

3. precedence over the Dutch telecoms law. In parallel, T-
Mobile has introduced a mobile data subscription that
offers unlimited data regardless of the application type.
In such subscriptions, the difference between zero-rated
and non-zero-rated services disappears altogether.
The figure also shows the Netflix streaming video
service. In the US (but not in the Netherlands), zero-
rating for streaming video has been introduced by several
mobile operators in different forms and with changes over
time. Compared to streaming audio, the effect of zero-
rating on video is larger as it involves much more data.
The first prominent zero-rating service was Binge On by
T-Mobile US that provided zero-rated data for a number
of associated video services, including Netflix – while
throttling all video to Standard Definition quality (SD
480p, around 1.5 Mbit/s, illustrated by the dashed red line
in the figure). Customers could switch off Binge On and
receive HD video streams that do count against their data
allowance. Note that Binge On touched both the zero-
rating and the no throttling aspects of net neutrality. The
Binge On service received both applause and criticism.
The criticism included points such as the inability to
include all streaming video providers and the technical
requirements (no encryption, no UDP) that T-Mobile had
[2]. T-Mobile and other mobile operators now offer
multiple subscriptions with unlimited and/or zero-rated
elements. The top end subscriptions offer unlimited data
usage regardless of the application.
CASE: UNLIMITED AND ZERO-RATED VIDEO OVER
FIXED NETWORKS
In fixed networks, there has also been debate on net
neutrality and zero-rating in the context of video
distribution. Many fixed ISPs are facilities-based
providers that have triple-play offers of TV, Internet and
telephony. Thus, they use their infrastructure in two roles:
as provider of their own video services and as provider of
Internet access services. This is depicted in Figure 2 for
US-based ISP Comcast that provides triple play services
under its xfinity brand. The solid black line shows the
service flow for the xfinity TV and video services
provided over Comcast’s own infrastructure, delivered to
its set-top box that runs the xfinity Electronic Program
Guide (EPG). In parallel to this managed flow, xfinity
customers can also watch the TV and videos on a variety
of IP-enabled devices, via the xfinity Stream service. This
streaming service is the subject of an ongoing debate.
Comcast does not consider the xfinity Stream services
delivered to their consumers’ homes to be provided over
the Internet, but rather over the xfinity managed network.
This is indicated by the long-dashed line B in the figure.
Its opponents consider the xfinity Stream service to be
provided over the Internet access service that is part of
the xfinity triple play, indicated by the short-dashed black
line. In their view, Comcast applies zero-rating to the
xfinity Stream data flows which puts other streaming
video services at a disadvantage. This is because many of
Comcast customers have subscriptions with data caps and
may prefer the zero-rated xfinity Stream service to avoid
exceeding their cap. Examples of video services that
would be put at a disadvantage are Netflix and the
(fictitious) new N-video service. Netflix is a special case,
as it is also available via the xfinity set-top box.
According to Comcast, the Netflix streams delivered via
this route are not zero-rated [10].
DISCUSSION AND CONCLUSION
Both the mobile and the fixed case show that zero-rating
brings a substantial change to the distribution segment of
the media-Internet ecosystem. For the consumers that
Figure 2. Service delivery chains for video services over fixed networks. In black: Comcast’s Xfinity cable TV
service (solid line) and Xfinity Stream service (dashed lines). In red: Netflix video on demand service. In blue:
(fictitious) N-Video service. Service delivery chains and company logos are only for illustration purposes.

4. have subscriptions with data caps, the Internet access is
effectively divided in two parts, one where data is
metered and counts against their monthly allowance and
one where they have unlimited flat fee data – for selected
applications. The precise arrangements depend on the
subscription details and change over time as applications
are added or removed from the zero-rated set. This blurs
the lines between the pricing of Internet access and the
pricing of applications for consumers. It also makes it
difficult for application providers to inform their
customers about the costs of using their application. As
mobile operators start to introduce subscriptions that
include full unlimited data (i.e., regardless of the
applications), tariff transparency will improve again.
Taking a step back from the zero-rating debate, it is seen
that net neutrality revolves around a key asset that ISPs
control and that content providers need: the Internet
access infrastructure. Net neutrality safeguards the
availability of this infrastructure to content providers.
However, the service flows in the two cases show that the
Internet access infrastructure owned by ISPs is only one
of several important assets that are exploited by
companies in the media-Internet ecosystem to establish
their position. For example, content and content rights
have always been important assets and this importance
has grown in recent years. Companies have moved into
creation of original content ([11]), while ISPs have
acquired studios and broadcast networks ([12]). As
another example, companies depend on access to devices
and app stores for many of their applications. New
technologies (e.g., 5G mobile with its extensive network
virtualization) and new business models (e.g., addressable
TV with personalized advertising based on viewing
behavior) will add new assets to the ecosystem. From that
perspective, the Internet access network is simply one of
several important assets that companies in the ecosystem
need. A regulatory measure aimed at one segment of the
media-Internet ecosystem can therefore affect other parts
as well, as companies base their position on combinations
of their own and other companies’ assets. The added
value of the DAMIAN method is that it explicitly brings
out the dependencies between different companies and
segments in the ecosystem that are important in policy
development. In future work, we will use DAMIAN to
analyze the dependencies in addressable TV and in media
distribution over 5G mobile networks.
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