Statement by Richard Bennett on European Approach to Net Neutrality

April 20, 2011

WASHINGTON (April 20, 2011) - "All in all, the European approach to net neutrality does the right things and refrains from doing the wrong ones. In many ways it represents a more workable approach than the Federal Communications Commission's Open Internet Order proposed last December because it better recognizes and encourages the Internet's collaborative tradition.

The European Commission's long-awaited communication on The Open Internet and Net Neutrality in Europedoes not assume the position of an omniscient regulator, nor does it try to exhaustively list all potential bad practices. It's reasonably permissive with respect to business models and not as restrictive in cases where facilities-based competition is present as when it's absent. America's Internet regulators would do well to study the communication and internalize its messages."

Additional Analysis:

The European Commission's long-awaited communication on The Open Internet and Net Neutrality in Europe strikes a fair balance between informed oversight and the direct regulation of Internet services in the European Union. The EC refrains from recommending a detailed set of telecom-style regulations on Internet Service Providers, relying instead on oversight, competition and disclosure to ensure that end users are free to enjoy the benefits of network-enabled innovation in Europe.

The communication also ensures that ISPs are free to innovate with business models and management practices that enhance the Internet's utility. The Internet's traditional technology is notable, but its overall success is primarily due to committed, extensive, and ongoing collaboration among its key stakeholders. The Commission correctly recognized this and refrained from adopting the "good guys/bad guys" formulation urged by some advocates. It's a mistake to assume that the Internet is a finished system that must be managed and operated in the same way in years to come as it was in the past; network evolution and improvement are fundamental enablers of application innovation, so there must be space in the Internet's regulatory system for the freedom to improve the technology and economics of networks themselves.

The Commission refrained from the unnecessarily complex rules adopted by the FCC in its December Open Internet order. Under the FCC regime, network operator service packages that enable advanced video conferencing applications to work over conventional broadband networks are "a significant cause for concern" because they depart from historical practices. The Commission correctly discerns what's important in the net neutrality debate and what isn't: The essence of net neutrality and the issues underpinning the debate concern first and foremost how best to preserve the openness of [the Internet] platform and to ensure that it can continue to provide high-quality services to all and to allow innovation to flourish, while contributing to enjoyment of and respect for fundamental rights, such as freedom of expression and freedom to conduct business.

As the communication recognizes, this task is not accomplished by adopting the backward-looking framework that found favor with the FCC in the wireline part of its order (but not in the wireless part.) Because the EC's recommendation is not overly restrictive with respect to wireline broadband, it doesn't need to create a specific exception for wireless. This is a sound approach that displays much wisdom and avoids confusion.

The communication treads a very fine line on the question of a minimum Quality of Service level, allowing national regulators to adopt such a regulation as they see fit, but refraining from mandating one across Europe. This nuanced position recognizes that no single operator is in a position to guarantee QoS across network boundaries without specific cooperation between origin and destination networks, which may be composed of different technologies and may operate under very different economic terms and conditions. In order for such a rule to be fully operational, non-uniform advances are needed in the terms under which networks exchange traffic; these are most common in situations where origin and destination networks peer, which is not the typical case across the global Internet. Some nations, such as Singapore, have enacted minimum QoS standards, but they're difficult to enforce in practice. The European framework wisely relies on market power analysis and competition to ensure consumer choice. Network operators with market power are required to provide wholesale access, spectrum is allocated in a pro-competitive manner, and consumers are provided with 24 hour switching between providers. The presence of robust choice allows consumers to "vote with their feet" if a given operator fails to measure up to their expectations.


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