24 June 2011

Net Neutrality: On The Legislation Path In The Netherlands

A rainbow in front of the Dutch parliamentphoto © 2010 Rainer Ebert | more info (via: Wylio)

Those interested in telecommunications regulation and, particularly, in questions related to net neutrality have already heard it – the Netherlands has become the first country in Europe to introduce the concept of network neutrality into its national law.

Has it really?

Well, last week Kees Verhoeven from Democrats 66 (D66), Martijn van Dam from the Labour Party (PvdA), Sharon Gesthuizen from the Socialist party (SP) and Bruno Braakhuis from the GreenLeft (GroenLinks)

Lodged A Bill

to enshrine net neutrality with the House of Representatives of the Netherlands (the Second Chamber of the Dutch Parliament). Here is a link to the original document (in Dutch) and a fair translation of it in English.

According to Daphne van der Kroft from the Dutch civil rights platform Bits of Freedom

The Second Chamber (parliament) has accepted the bill with an impressively broad majority. Now the bill will go to the senate before entering into force. Because of the majority in parliament, we expect the Senate to pass it too. But we’ll have to wait ’till the end of the year to be sure.

That, to be precise, somehow invalidates the widely celebrated media headlines of the “Dutch enactment” of net neutrality, but – as Daphne writes – the chances, for it to happen, are good.
We are likely to have the final result in a year or so.

Now let us have a closer look at the bill!

Systematically, the applicants have chosen the section

End Users Interests

which is dealt with in Article 7 of the Telecommunications Act to introduce the net neutrality bill.

The bill basically provides that ISP may hinder or slow down end users’ traffic only in the very limited cases described in Article 7.4a (1) a. to d.

A further interesting provision is contained in Article 7.4a (2) – ISP must not shut off end users’ networks from the Internet, if such networks may be considered detrimental (e.g. botnets), unless ISP have given the operators of the affected networks the possibility to rectify the faults in those networks.

The most commented provision, however, is to be found in Article 7.4a (3) – the one that prevents ISP from charging prices that might bar end users from accessing specific services or applications on the Internet.
The applicants stress that this still allows for the charging of different prices for different types of bandwidth, but it nevertheless must not result in overpricing the use of, say, Skype so that no one would consider using it.

Article 7.4a (5) foresees the introduction of minimum requirements regarding the quality of service of public electronic communication services in order to safeguard the above provisions.

Finally and for the sake of completeness, Article 7.4a (4) reflects the recent trend in Dutch legislation to delegate the creation of detailed rules and regulations to administrative bodies.

Conclusion

In my view the beginning to a Europe wide legislation on net neutrality has been made.

Consumers from other member states will very likely create pressure upon their political leadership to follow the Dutch example.

How long could politicians refrain from adopting net neutrality legislation, if their voters start to sing

Somewhere over the rainbow

Way up high,

There’s a land that I heard of

Once in a lullaby.

What do you think?

13 June 2011

Europe’s Annual Report On Bulgarian Telecommunications – An Example Of Finger-Wagging

Viviane Reding - World Economic Forum Annual Meeting Davos 2007photo © 2007 World Economic Forum | more info (via: Wylio)

I know she is no longer the European Commission’s iron lady responsible for Information Society and I found it a pity when she took over the justice and fundamental rights resort.

Nevertheless, the Information Society‘s 2011 report on the Bulgarian telecommunications market bears her style and, when you read it, you can nearly perceive her wagging finger. So I chose to use her image as a story opener.

Going back to the report,  I could identify three important areas of Commission’s criticism.

Let me start with the

Mobile Termination Rates

While the mobile termination rate („MTR“) levels fell down to 6.65 €-cents per minute for peak traffic and 5.64 €-cents per minute for off-peak traffic in 2010, they still exceeded the EU peaktraffic average of 5.46 €-cents by 22%.

The practice of exempting calls originated outside the territory of Bulgaria from MTR regulation became a major issue of complaints to the European Commission since it led to higher termination charges for international incoming voice calls.
While the Bulgarian national regulator, the CRC, considered this market situation to be consistent with its notified market analysis, the European Commission urged the CRC to remedy the issue by uniformly enforcing regulated MTR levels to all types of calls irrespective of their origin.

Number Portability

The CRC announced the introduction of a one-stop shop procedure for all types of number portability as of 6 August 2010, which also made operational non-geographic number portability.

In effect, customers can submit a single application only to the receiving operator. According to the new procedure, the period to port a single number has been reduced to 7 days (10 days for a non-geographic number of the 700, 800 or 900 range or a group of geographic numbers), compared to the EU average of 7.7 days for fixed and 4.2 days for mobile numbers.
The wholesale charge for porting a single number amounts to € 9.2 (€ 15.9 for a non-geographic number), and a discount of 30% applies when porting a group of at least 500 numbers. A retail charge may be levied by the receiving operator, yet this has not become common practice.

In reality, however, the one-stop shop procedure shows flaws and that results in a comparably low amount of ported numbers – according to the CRC only 139 377 mobile numbers (1.38% of all mobile subscribers) and 60 337 fixed numbers (2.5% of all fixed subscribers) have been ported until the end of January 2011.

Consumer Protection

Do you remember the issue with the automatic prolongation of the individual contracts between consumers and mobile operators?
Well, that together with the number portability troubles became the major topics of the about 1 700 consumer complaints lodged at the CRC.

It is funny, but the CRC did not attempt to enforce an adequate consumer protection by undertaking legal proceedings against the mobile operators  – something to which the CRC would be empowered by law. It attempted to merely persuade the operators instead. This is very likely the reason why the European Commission has made the brief and politically correct statement that

With the endorsement of the CRC, all mobile operators have indicated their consent to remove automatic prolongation clauses from individual contracts.

A large portion (about 460) of the complaints on number portability (about 1000) referred to the new one-stop-shop procedure. Due to technical problems with M-Tel’s billing system delivered by Amdocs, many mobile customers experienced problems with incorrect invoices and inadequate service provision.

Further complaints referred to issues with the scope of universal service (in particular fax), availability of telephony services or invoicing.
The CRC has issued 340 penalties to operators, out of which 168 on number portability.

Wrap-Up

All in all, Bulgaria’s MTR remain among the highest in Europe, the number portability is making only a slow progress, if any, and the regulator is not capable to warrant an adequate consumer protection.

No wonder why the report is a finger-wagging towards Bulgaria.

27 February 2011

Net Neutrality: It Is Getting Serious In Austria


Do you remember my primer on net neutrality? In that very same I expressed my concern about the development in the United States and showed some optimism as to the “stable conditions” in Europe. Well, I might have been wrong. But let me first remind you

What is net neutrality about?

In a nutshell: net neutrality is the principle proposed for user access to the Internet, which would prevent Internet Service Providers (ISP) from acts of discrimination related to different kinds of Internet traffic that would result in restricting content, sites or platforms.
Having monitored the press releases this week, I
came across what sounded very much like a war cry against that principle. Somewhat suprisingly, it came from Austria.

What is the current menace?

In a very recent meeting in London, Mr Hannes Ametsreiter, CEO of the Telekom Austria Group, reportedly challenged the principle of  net neutrality, thereby using harsh, even menacing expressions. For those not necessarily familiar with the abovementioned company: Telekom Austria is the incumbent telco operator in Austria that still has a significant market power.

From what I read, he has considered to block the access to services such as Skype and Google Voice, provided they “cannibalize and eat up our revenues“. This sounds scary, does it not? And should Internet users just accept that threat or can they rely on some shelter? Let us have a look at the regulatory front.

What does the regulation say?

You will not find a specific language on net neutrality in the regulations currently in force. The Access Directive from 2002 spends some words on “adequate access, interconnection and interoperability of services” in its Article 5. In the light of the older legislation, however, this represents an instruction related to interconnection rather than to net neutrality. The latter did simply not represent an issue in 2002.

But things have changed with the issuance of the revised Telecoms Package in 2009. The updated version of the Access Directive contains not only European Commission’s declaration on net neutrality, it even mandates the Member States to “promote the ability of end-users to access and distribute information or run applications and services of their choice“. The Member States are under the obligation to transpose that directive by 25 May 2011.
Things look now brighter, do they not? Nevertheless, we should take Mr Ametsreiter’s words very seriously.

My concluding thoughts

I have some understanding for Mr Ametsreiter’s concern. Incumbents such as Telekom Austria are under the obligation to provide for a universal service. In the last decade however, they have gradually been bleeding market share and revenue in the realm of voice services. A good chunk of the customers they have lost went to Skype and Google Voice, since those have a nearly free of charge Voice over IP offerings. Incumbents claim that they remain sitting on the cost of their infrastructure, while Skype and the like absorb the profits. Without such infrastructure, incumbents as well as other ISP assert, there would not be Skype or content providers at all. But would there be any interest in ISP if there were not content providers?
Reminds me of who came first, the chicken or the egg.

The optimists among use might say: the market competition will solve it all.
I do not think so.
It is simple – if an incumbent makes a first step, others will follow and the market will fail. And this is the reason why we have regulation – to remedy such failures, irrespective of whether Mr Ametsreiter likes it or not.

 

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23 January 2011

Why Net Neutrality Matters

Do you support the view that all content flowing through the Internet should be treated equally?

If yes, you are certainly familiar with the ongoing net neutrality debate in the United States. For those that have never heard of it, I recommend to have a butcher’s at this primer written by Rich Greenfield. You see, the issue goes back to as early as 1996, but appears to have attracted a huge medial attention in the last couple of months. Why?

That is what I asked myself and went through some reads, the most of which available online. So, I would like to share the information I gained with you.

It appears that net neutrality has a twofold characteristic: it is about quantity and quality. The qualitative aspect would regard the content and the quantitative – the service availability in terms of speed, performance and pricing.

In the US, net neutrality is commonly defined as “the notion that broadband Internet service providers should not be allowed to show preferences to certain providers of content or types of content by supplying them with faster service” (Ashley Packard, Digital Media Law, 67). This definition covers rather the qualitative aspects and corresponds to the common standards established in the European Union. Europe is known to have put much effort in regulating both, the quantitative and the qualitative aspect. These are the standards I grew up with, so, initially I could not really figure out the controversy so arising.

Well, the key might lie in that in the 1990s the Federal Communications Commission (FCC) began to treat broadband Internet service providers (ISP) favourably in comparison to, say, common carriers. In the result, such ISP have been under no obligation to share their conduits with competitors and have thus benefited from the lack of quantitative regulation. The US Supreme Court’s ruling in Brand X is considered to have cemented that state of affairs.

Besides, ISP had begun to also determine whether or not to convey certain content through their networks. They had, so to say, entered the area of the qualitative net neutrality. Having gained certain advantages by virtue of the missing quantitative regulation, they might have been willing to shape their service also in qualitative terms.

That seems to have been the point where the ball got really rolling. And when customers complained that Comcast secretly blocked their access to BitTorrent, the FCC decided to act and sanctioned Comcast. FCC grounded its order in the Internet Policy Statement it had issued already in 2005 in order to guarantee consumers unfettered access to all legal Web content, applications, and services. Comcast argued FCC would not have authority to regulate an ISP’s network management practices and eventually won before the U.S. Court of Appeals for the D.C. Circuit.

However, FCC did not give up and adopted new rules thereby claiming “an important step to preserve the Internet as an open platform for innovation, investment, job creation, economic growth, competition, and free expression.” How dou you think did the ISP community perceive this act? Well, not necessarily in the affirmative. This time it was Verizon that undertook to challenge the newly issued rules, thereby applying  the successful recipe of the overstepped authority.

Having read that far, what do you think? What might be ISPs arguments to oppose net neutrality? I doubt they would claim changes merely in quantitative terms. Would the assumption that ISP attempt to limit the freedom and openness of the Internet be permissible? I could not figure it out why they should do so. Otherwise Verizon seems very reluctant to provide for cogent reasons why they oppose net neutrality.

For the time being and in contrast to the development in the US, the European Union Commission has managed to defend the concept of net neutrality. They have recognized that there is one Internet and that it should remain open and interconnected regardless of the technologies and services users rely on to access it.

While I understand that quantitative shaping network management might even be necessary, I would never accept a qualitative one. An ISP would then be in charge as to what content I would access. Such an effect would be even fortified by the fact that the market is likely to fail curing discrepancies so arising. You remember – many ISP are not obliged to share their networks with competitors. I could not just walk away from my ISP and sign with another.

Therefore I care for net neutrality. Actually, anyone using the Internet must care about net neutrality.

Otherwise there is a fair chance that we cede ground to persons like Mr Neil Berkett, the CEO of Virgin Media and they make the decisions on our behalf. And, believe me, that will not be necessarily to users’ benefit. Why? I guess that if you ask them, he will say “this net neutrality thing is a load of b****cks!”

 

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25 November 2009

Austrian National Railways must not restrain an ISP to use their infrastructure

Silver Server, an Austrian ISP, approached the National Railways of Austria (ÖBB) and requested access to their infrastructure, particularly their communications lines. Silver Server grounded their request on the joint-use right as outlined in Articles 8 and 9 of the Austrian Telecommunications Act 2003. Upon ÖBB’s refusal Silver Server referred the case to the Telecom-Control Commission (TKK) which regulates the Austrian telecommunications market.

In its recently issued decision, the TKK held ÖBB liable to grant Silver Server access pursuant to their request. In accordance with Austrian administrative law, TKK’s decision serves as a so called “contract substituting ruling”. For this reason the TKK has employed great detail in drafting and has for a first time in a matter of joint-use provided for precise conditions (e.g. definite rental price) and a share of responsibilities (e.g. performance guarantee, maintenance obligations) between the parties.

The decision is noteworthy because it extends the scope of the Telecommunications Act beyond the sector of electronic communication and affirms its applicability also to somewhat unusual market players such as the national railway company.

22 November 2009

Data retention in Austria becomes even likelier

Austria’s DerStandard informs that the data retention bill to amend the existing Austrian Telecommunications Act was in place. In a consultation procedure, the responsible minister Doris Bures has called upon the appraisal of the participants (eg regional authorities, chamber for commerce and industry, trade unions). She thereby vowed to apply “the highest standards under the rule of law” in drafting the bill.

Austria has not implemented the data retention directive yet, wherefore the European Commission threatened the government with the launch of infringement proceedings. Austrian politicians have used the data retention related set of problems in their last election campaign in 2008. For some period thereafter and, since the subject matter is highly controversial, no one appears willing to cease the delay in implementation.

Quite often, the enforcers of intellectual property rights have been viewed as the real beneficiaries of the data retention becoming a fact. Many of their lobbyists and legal representatives utilized the duration caused by the governmental delay in addressing the public and stating the necessity to access retained internet traffic data that evidences, for instance, illegal file sharing.  However and given an implementation, it is still unclear as to whether such enforcers shall have access to data so retained.

According to recent cases on file sharing, Austrian courts seem to opine that file sharers’ interest in the protection of their traffic and identity data outweighs the enforcers’ interests to access such data.

It is clear that the data retention could easily change the so established balance. I hope to soon have certainty on that.

29 October 2009

Commission steps up UK legal action over privacy and personal data protection

The European Commission has moved to the second phase of an infringement proceeding over the UK to provide its citizens with the full protection of EU rules on privacy and personal data protection when using electronic communications. European laws state that EU countries must ensure the confidentiality of people’s electronic communications like email or internet browsing by prohibiting their unlawful interception and surveillance without the user’s consent. As these rules have not been fully put in place in the national law of the UK, the Commission today said that it will send the UK a reasoned opinion.

Specifically, the Commission has identified

Three Gaps In the Existing UK Rules

governing the confidentiality of electronic communications, namely:

No Independent National Authority

to supervise interception of communications, although the establishment of such authority is required under the ePrivacy and Data Protection Directives, in particular to hear complaints regarding interception of communications;

No Need To Grant Explicit Consent

The current UK law the Regulation of Investigatory Powers Act 2000 (RIPA) authorises interception of communications not only where the persons concerned have consented to interception but also when the person intercepting the communications has ‘reasonable grounds for believing’ that consent to do so has been given. These UK law provisions do not comply with EU rules defining consent as freely given specific and informed indication of a person’s wishes;

No Sanctions Against Unlawful Interception

The RIPA provisions prohibiting and providing sanctions in case of unlawful interception are limited to ‘intentional’ interception only, whereas the EU law requires Members States to prohibit and to ensure sanctions against any unlawful interception regardless of whether committed intentionally or not.

The UK has two months to reply to this second stage of the infringement proceeding. If the Commission receives no reply, or if the response presented by the UK is not satisfactory, the Commission may refer the case to the European Court of Justice.

To me, this is a clear signal that data protection and privacy are considered highly valuable achievements that need to be  protected within the European dimension.

8 May 2009

Bulgaria still with highest mobile termination rates

Mobile-Phone-Mastphoto © 2010 Micky Aldridge | more info (via: Wylio)

The European Commission has set out clear guidance for EU telecoms regulators on the cost-based method to be used when calculating termination rates – the wholesale fees charged by operators to connect the call from another operator’s network which are part of everyone’s phone bill. The guidance is in the form of a soft law

Recommendation

that national regulators are obliged to take “the utmost account” of.

The Recommendation indicates specifically that termination rates at national level should be based only on the real costs that an efficient operator incurs to establish the connection. Eliminating price distortions between phone operators across the EU will lower consumer prices for voice calls within and between Member States, saving business and household customers at least

EUR 2 billion in 2009-2012

and help investment and innovation in the entire telecoms sector.

Mobile termination rates varied widely in the EU in 2008 from 2.00 euro cents per minute (in Cyprus) to 15 euro cents per minute (in Bulgaria). Mobile termination rates (on average 8.55 euro cents per minute) are also typically 10 times higher than fixed termination rates (on average ranging from 0.57 to 1.13 euro cents per minute).

29 January 2009

Good news for bulgarian mobile network subscribers

The European Commission (EC) has submitted a letter to the Bulgarian telecoms regulator, the Communications Regulation Commission (CRC) ordering it to to take action to further reduce mobile termination rate.
“Termination rates” are what mobile operators charge each other and are due when a call originated by a subscriber within the network of one operator is to be connected to a subscriber of another operator’s network.

Not surprisingly, with 15.09 eurocent/minute mobile termination rates in Bulgaria were the highest in the EU in 2008 (EU average: 8.7 eurocent/minute).
The EC also asks CRC not to discriminate when setting the level of termination rates between fixed and mobile networks and to apply similar termination rates for mobile calls originating from other mobile and fixed networks.

In its draft measure, the CRC set a target to achieve mobile termination rates at a level of 7.6 eurocents/minute (for peak traffic) in 2010. However, according to the European Regulators Group, which brings together the EU’s 27 national telecoms regulators, this level is already undercut by many Member States such as Cyprus (2.01 eurocents/minute), Sweden (4.55 eurocents), Finland (5.29 eurocents), Austria (6 eurocents), Slovenia (6.38 eurocents), Romania (6.78 eurocents) and France (6.85 eurocents) as of today.

So, thank you EU, for this expected decrease of rates which, I beleive, would never have come by virtue of the national regulator being actually in charge to further competition and subscriber protection.

10 December 2008

So I entered the blogosphere…

Hi everybody out there,

finally I decided to create my own blog and to use it in order to share usefull information in the course of my interests. The most of the information to be made available hereon will to some extent, but without limitations -), have a legal background.

For those wondering about this blog’s name: it is a quotation from Guy Ritchie’s “Snatch” – a film I strongly recommend.

So, let’s get it started with my promise to provide you with some interesting perceptions from the matters I deal with daily.

Cheers!