Sunday, 25 January 2015

Telekom Slovenije and Si.mobil found in breach of net neutrality

It is now official that Slovenia’s largest mobile network operators Telekom Slovenije and Si.mobil have breached net neutrality. A national sector regulator AKOS announced its decisions on Friday. Both operators confirmed to have received the decisions ordering them within 60 days to stop discriminating against internet traffic by music streaming service Deezer (Telekom Slovenije) and cloud storage service Hanger Mapa (Si.mobil). The decisions are final and only an administrative dispute or extraordinary judicial review are allowed.

Investigation initiated by Electronic Communications Council

Several investigations of compliance with net neutrality provisions of the Electronic Communications Act were started on the initiative of the Electronic Communications Council of the Republic Slovenia. 

The council examined unfair, deceptive, abusive or otherwise prohibited business practices in the mobile industry. As AKOS whose senior officials regularly attended the council’s meetings had not started the investigation on its own initiative, the council filed a complaint in July 2014. It alleged Telekom Slovenije to have violated net neutrality provisions with zero-rated products such as music and video streaming services (Deezer, UEFA Champions League and HBO GO) and its own cloud storage service (TViN Shramba).

AKOS later extended the investigation to other mobile operators. Telekom Slovenije and Si.mobil have been found in violation of net neutrality provisions of the Electronic Communications Act. In its final decisions AKOS focused only on zero-rated music streaming (Telekom Slovenije) and cloud storage ( services. 

Despite a narrow scope of investigation, it is expected that the decisions shall apply to other zero-rated products (especially video streaming) as well as to other operators. 

Strong opposition against net neutrality 

When the Electronic Communications Council filed the complaint to AKOS the outcome was uncertain. The council also asked the competition protection authority for its opinion. The authority issued the opinion after a consultation with AKOS in which regulators exchanged and shared views and information on net neutrality issues. 

In the opinion based on dubious facts and presumptions the competition protection authority declined to begin an investigation into a possible breach of competition law in a response to a complaint. It emphasised that zero-rating was likely beneficial for consumers and warned against a linguistic interpretation of net neutrality provisions. It advised AKOS that any regulatory measure should take this into account, be proportional and focus primarily on internet traffic transparency. 

Both regulators were clearly not in favour of enforcing net neutrality provisions. They seemed utterly confident that transparency measures would be sufficient as there was a very strong opposition to net neutrality enforcement banning zero-rating. Apart from the telecommunications industry there was a plethora of professionals and academics working in or for the industry that opposed to net neutrality enforcement beyond blocking, delaying or throttling of internet traffic. In 2012 these groups formed a strong opposition against the enactment of net neutrality regulation. 

Zero-rating violates Slovenian net neutrality law

Less than two months ago the final decision on zero-rating was still uncertain. Several senior officials were still convinced that zero-rating was entirely legal. Their views were rather generalised and lacked thorough analysis. By that time I had already written several blog posts and articles on violation of net neutrality but decided to explain in a blog post in more details why zero-rating violated Slovenian net neutrality law. In addition I conducted an analysis indicating a potential breach of competition law. The topic was also well covered and explained by leading technology journalists.

In the blog post I explained why internet access providers (IAPs) offering content and services as part of their mobile data plans with specific types of traffic exempted from data caps and used without volume limits (or with high volume limits) violated the Slovenian net neutrality law.

As long as different types of traffic are treated equally the net neutrality principle as enshrined in the Electronic Communications Act (Article 3, paragraph 37) is not violated. Product differentiation in terms of different quality at different prices is in general compatible with this principle, if limited to differentiation in speeds, service availability or time delays (ie latency). It is similar in case of data volume limits. By contrast, providing access only to selected sets of content, services or applications represents differentiation that violates the net neutrality principle.
In case of zero-rating, once a data cap is exceeded traffic differentiation begins as open internet traffic is either throttled or blocked. Traffic differentiation may also be performed before data cap is exceeded by prioritisation of zero-rated and degradation of open internet traffic. This leads to selected IAP’s own or its partners’ traffic being favoured over other traffic. That is clearly discrimination between different types of traffic and violation of the net neutrality principle, as the respective internet traffic on a public communications network is not treated equally and independent of its content, service, application, source and purpose of communication. 
As already shown, zero-rating violates the net neutrality principle by discriminating internet traffic — ie favouring the IAP’s own or its partners’ traffic over other traffic. In order to protect the net neutrality principle, the Electronic Communications Act summons IAPs to strive for protection and preservation of the open and neutral character of the internet.  
The Act further stipulates that IAPs shall not block, delay or throttle internet traffic at a level of individual content, service or application, or exercise measures for its degradation, except to protect networks against undue congestion and attacks, restrict unsolicited communications (ie spam), or obey court orders to block access to illegal content (Article 203, paragraph 3).  
Differentiation by blocking, delaying or throttling open internet traffic, which occurs once a data cap is exceeded and may likely occur even before that, represents discrimination between different types of traffic that violates Article 203, paragraph 3, as it does not fall into one of the exempt categories. 
Despite extensive lobbying by the electronic communication industry, zero-rating is still illegal in Slovenia. It also violates the provisions of Article 203, paragraph 5 (unofficial translation): “Services provided by network operators and internet service providers shall not be based on services or applications offered or used via internet access services.” 
The term internet access service shall basically follow a definition as proposed by the Body of European Regulators of Electronic Communications (BEREC) in the Guidelines for the quality of services in the scope of net neutrality in 2012. However, it shall be interpreted broadly in order to prevent circumvention of the provisions of Article 203, paragraph 5. 
If access to content (ie websites), multiple services or applications is offered, this shall be considered as an internet access service. According to Article 203, paragraph 5, IAPs are not allowed to offer services that are based on content, services or applications provided or used via the internet access services. Therefore, taking into account the provisions of Articles 3 and 203, IAPs are not allowed to offer services consisting of access to (certain) content, services or applications, where the traffic is throttled or blocked. Likewise, they are not allowed to offer packages to access only a part of the internet. However, IAPs are allowed to offer separate services over the internet that are not included in packages and are charged separately. It follows that zero-rated products are not allowed in packages that also include internet access. Instead of service based differentiation, IAPs may differentiate their products for internet access in other ways, based on quality (as mentioned earlier) and data limits.

What’s next?

The zero-rating decisions issued by AKOS have not been publicly available yet. They are final but both operators Telekom Slovenije and Si.mobil may file an administrative dispute or extraordinary judicial review in accordance with Article 192 of the Electronic Communications Act.

The decisions have been limited to zero-rated music streaming and cloud storage services. However, they shall automatically apply to other zero-rated products (especially video streaming) as well as to other operators. 

Consumers may shortly expect new data plans and enjoy open and non-discriminatory access to the internet. The decisions shall prevent mobile operators from becoming gatekeepers of online content and services and picking winners and losers online. (See also: Zero-rating violates Slovenian net neutrality law and other blog posts).

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