1. Introduction

There are many different definitions of network neutrality. However, the main focus is around unreasonable, anticompetitive or socially damaging discrimination. Thus, net neutrality can be defined as the principle for which Internet service providers and governments should treat all Internet traffic the same ¹. An estrangement from this principle, for example in the case of unreasonable discrimination, could cause some issues to societal welfare, such as anticompetitive behaviour, and potentially threaten innovation, freedom of expression, consumer awareness and privacy ².

There are different economic views on network neutrality. Some quality and price differentiation can be necessary, but other forms are potentially harmful.

In fact, these are practices that, in the absence of market power and anticompetitive discrimination, can benefit both producers and consumers, but can also be used to their detriment in the presence of market power. A producer with significant market power in one segment may attempt an economic foreclosure, trying to prevail in other segments vertically integrated, ultimately harming consumers and potentially determining an economic loss on society.

As the Directorate general for internal policies of the European Parliament underlines, Internet can be also be viewed a “two-sided market, where network operators collectively function as a platform connecting providers of content (e.g., websites) with end-users (who function primarily as consumers of content)” ³. From this point of view, the issue mainly focuses on the division of revenues and profits between the platform provider and the two sides of the market

In this paper I will analyse how net neutrality is regulated. In particular, after a brief recall of the history of net neutrality regulation, I will compare the E.U. regulation to the U.S. legislation. Finally, I will draw my conclusions.

2. Net neutrality

The Body of European Regulators for Electronic Communications (BEREC) defines net neutrality as equal treatment of all electronic communication in a network, regardless of content, application, service, device, sender and recipient ⁵.

The issue around net neutrality initially arose when telecommunication operators have seen the opportunity to differentiate (and monetize) their services in relation to the bandwidth guaranteed to the various operators, who successively use it to offer their services to end users. The core of the issue surrounding net neutrality is therefore represented by the safeguarding of an adequate bandwidth capacity for the benefit of users and operators ⁶.

ISPs should not limit or occlude Internet traffic within local broadband networks based on individual users or the type of service or traffic that those users are employing ⁷. The aim is to provide full access to Internet contents while ensuring that operators using these broadband networks will not have their services interfered with by other operators ⁸.

The debate on net neutrality is focused on whether or not the offer of differentiated access to the Internet (by adopting, for example, paid prioritization and traffic management) is admitted and how it can affect the "basic connections” ⁹. In fact, the issue of net neutrality arises from a technical problem which is strictly connected to the transmission of signals on telematic networks: the increase in Internet traffic through broadband networks, combined with the structural sharing of the internet network, may lead to a congestion of the bandwidth or it can create the need for preferential lanes ¹⁰.

In the European Union, the access to networks has been regulated by the pro-competitive regulation of electronic communications networks and services. On this basis, discriminatory and exclusionary practices are hardly implemented and well monitored.

In fact, the Electonic communication regulation on internet access imposes a wide range of provisions on IPSs regarding internet access services (IAS) ¹¹. The scope of the Regulation is, according to BEREC’s guidelines, to “safeguard equal and non-discriminatory treatment of traffic in the provision of internet access services and related end-users’ rights” and to “guarantee the continued functioning of the internet ecosystem as an engine of innovation” as laid down in Articles 3 and 4. In order to obtain these goals, the Regulation provides obligations on ISPs about the terms and conditions of customer contracts regarding IAS and imposes measures on the system used to manage data traffic on their networks ¹².

2.1. In the E.U

The EU debate on net neutrality has undergone two main phases.

Initially, the EU chose non-binding tools such as Communications and Recommendations to implement the policy on net neutrality¹³. However, the diffusion of services related to content and information, and the progressive acknowledgment of the strong consequences on opinions (e.g. social networks) of information society services, on economic freedoms (economic rights and business freedom of operators offering bandwidth or who ask for it), and on other freedoms considered fundamental in the law of the member countries and of the European Union ¹⁴, has determined a change in the tools chosen for the implementation.

The second phase of the European debate on net neutrality has therefore seen the EU institutions proposing the adoption of a Regulation, determining a more incisive intervention. The first general provisions relevant on net neutrality and regarding fundamental interests and freedoms of the person can be found in Article 1.3 of the Directive 2009/136/CE¹⁵, which provides that "this directive, while not preventing or prohibiting conditions imposed by electronic communication services (…) aimed at limiting the access and / or use of services and applications by end users where permitted by national legislation and in compliance with Community law, however, it provides for an obligation to provide information regarding these conditions.". However, "national access measures (...) respect the fundamental rights and freedoms of individuals.".

The proposed Regulation on the Telecom Single Market (TSM) had to compromise between the demands of operators and users. In particular, in order to balance the various issues raised from different parties, it establishes the right of all users to an open access to the internet. At the same time, if the service does not interfere with one’s right of access to the internet (Article 3.2.)¹⁶, users can also conclude “zero rating” agreements with Internet Access Providers, from which end users can access certain services under specific conditions¹⁷¹⁸

Furthermore, the Regulation establishes the general principle of the equal treatment of all traffic, whilst admitting some reasonable measures of traffic management¹⁹ only for technical and non-commercial reasons and explicitly identifying three exceptions at Article 3.3.²⁰.

Lastly, Article 3.5 provides the possibility for operators to differentiate their offer of higher quality services from the basic internet access services:” Providers of electronic communications to the public, including providers of internet access services, may offer or facilitate such services only if the network capacity is sufficient to provide them in addition to any internet access services provided. Such services shall not be usable or offered as a replacement for internet access services, and shall not be to the detriment of the availability or general quality of internet access services for end-users".

As already mentioned, the Body of European Regulators for Electronic Communications (BEREC) has published Guidelines on the Implementation by National Regulators of European Net Neutrality Rules, expressly designed to provide guidance on the implementation of the obligations of NRAs. These Guidelines constitute recommendations to NRAs, which should take account of the Guidelines, and should contribute to the consistent application of the Regulation, consequently contributing to regulatory certainty for stakeholders.

In particular, BEREC specifies that when the Regulation refers to "end users" it includes individuals and businesses, consumers as well as CAP's (I.e., always according to the definition of the BEREC, Content and Application Providers and therefore web pages, blogs, video, search engines, VoIP applications and other services) ²¹. Furthermore, BEREC underlines that the right of internet access (Art. 3 of the regulation) gives end users the right to receive information, contents or services, and the right to provide such information, contents or services, and it highlights that "the Regulation does not require an ex ante authorization in relation to commercial practices (Article 3.2), traffic management practices (Article 3.3) and specialized services (Article 3.5)" ²².

Ultimately, the limit to these practices is non-discrimination, that is when the rights of end users are not limited and are able "to access and distribute information and content and use and provide applications and services of their choice " (recital 7).

2.2. In the U.S

In the United States, the approach to net neutrality has been less of compromise and much more “politicized”, producing a succession of opposed legal solutions. The debate surrounding net neutrality is essentially between supporters of deregulation and those of regulation and evolves around the economic implications of the legal “order” imposed on the providers.

The supporters of deregulation, who essentially pursue the interests of ISPs, believe that the network has always thrived if organized as a free market, hence without regulatory constraints, which would interfere with innovation and investments ²³.

From another point of view, the supporters of regulation externalize the thought of the Over-the-Top (that is, of the subjects who use the ISP network to offer users digital services that consume data traffic, e.g. Netflix) and argue that net neutrality, and therefore the imposition of a set of rules on the “internet market” constitutes the foundation of a truly democratic and free network.

In fact, historically the US has chosen a “soft regulation” to regulate the network, by issuing the Internet Policy Statement (2005) and then the Open Internet Order (2010).

However, in 2015 the FCC adopted a new Open Internet Order (OIO 2015). The authority, chaired by Chairman Wheeler, regulated broadband access as a telecommunication service under Title II of the Telecommunication Act of 1934, as amended in 1996. Therefore, internet access was considered as a service of general interest, regulated by universality and non-discrimination principles of “common carriage” services, also applicable to broadband on mobile networks. The OIO (2015), contrary to the previous, considered paid prioritization in contrast to a fast, fair and open internet for everyone, and introduced three fundamental principles: no blocking, no throttling, no paid prioritization. These principles prevent providers from: a) blocking access to legal internet content, b) degrading their data traffic, and c) creating “preferential lanes” for certain users or content.

However, in 2017, the new Chairman of the FCC, Ajit Pai introduced (under Trump’s presidency) a new regulatory measure, the Restoring Internet Freedom Order (RIFO), radically opposite to the previous order adopted. In the reasoning of the authority, the internet economy represents a free market that attracts investments and produces innovation only in the absence of strict regulations.

After the approval of the RIF Order, a broad movement of net neutrality supporters asked to reintroduce the previous hard regulation. One of the most significant legal actions against the RIF Order is known as “The Save Internet Act” presented to the House of Representatives on the 6th of March 2019. The objective of the Act is to restore net neutrality cancelling the RIF

Order and prohibiting to introduce measures of this matter.

3. Conclusion

In conclusion, a final aspect to take in consideration is how net neutrality will interact with the new 5G technology, a debate known with the expression “Next Neutrality”. In fact, 5G adopts technological solutions such as “network slicing” and “algorithms orchestration” which connect a significantly larger amount of devices, and that will place demands on the network progressively diverse. In particular, it will divide the network into many different segments according to the different services that travel on the internet, suggesting all data packets are the same outdated. Each segment created has its own specificity.

This raises the issue of the tension between the increasing diversity of demand that will require increasingly differential treatment and the principle of equal treatment of traffic.

Some recent criticisms underline that the non-binding interpretive guidance provided by BEREC does not resolve which approach to 5G will be permissible. We will probably have to wait for the deployment of 5G and the consequent enforcement of decisions from national regulatory authorities to have a solution to these issues. However, these provisions should not be excessively stiff, in order to not restrict the field to innovation.

Bibliography

• BEREC response to the European Commission’s consultation on the open Internet and net neutrality in Europe, BoR (2010)

• BEREC Guidelines on the Implementation by National Regulators of European Net Neutrality Rules (2016)

• Bert Van Roosebeke, Net Neutrality, 2015 How European Rules can Foster Innovation: 6 Recommendations, cepInput, (2015), p. 5

• F. Graziadei, Luiss Guido Carli, Facoltà di Giurisprudenza, Corso di Diritto Industriale e delle Comunicazioni, (a./a. 2019-2020), Seconda parte, p. 51 ss.

• Monitoring compliance with the EU Open Internet Regulation, a report to the European Commission and BEREC, Ofcom, (2019), p. 1

• Net Neutrality – A Look at the Future of Internet, Article in IOSR Journal of Computer Engineering, (2014), p.72

• Network Neutrality: Challenges and responses in the E.U. and in the U.S., European Parliament, directorate general for internal policies, (2011), pp. 14, 18

• Regulation (EU) 2015/2120

• Zero-rating practices in broadband markets, European Commission, final report, (2017), p. ii

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1. Net Neutrality – A Look at the Future of Internet, Article in IOSR Journal of Computer Engineering, (2014), p.72.
2. Network Neutrality: Challenges and responses in the E.U. and in the U.S., European Parliament, directorate general for internal policies, (2011), p. 18.
3. Network Neutrality: Challenges and responses in the E.U. and in the U.S., European Parliament, directorate general for internal policies, (2011), p. 14.
4. Ibidem.
5. BEREC response to the European Commission’s consultation on the open Internet and net neutrality in Europe, BoR, (2010) p. 2.
6. Net Neutrality – A Look at the Future of Internet, Article in IOSR Journal of Computer Engineering, (2014), p.72.
7. In fact, such conduct may result in the blocking or slowing down of data by ISPs. Bert Van Roosebeke underlines that a controversial issue “concerns the question whether Internet Service Providers (ISP) should be allowed to charge Content Service Providers (CSP) (such as Netflix or YouTube for example) for the data they intend to be distributed on ISPs' networks. In exchange, CSPs' data might be granted priority by ISPs ("pay for priority")”. B.Van Roosebeke, Net Neutrality, How European Rules can Foster Innovation: 6 Recommendations, (2015), p.
8. Ibidem
9. F. Graziadei, Luiss Guido Carli, Facoltà di Giurisprudenza, Corso di Diritto Industriale e delle Comunicazioni, (a./a. 2019-2020) Seconda parte, p. 51 ss.
10. Ibidem.
11. Monitoring compliance with the EU Open Internet Regulation, A report to the European Commission and BEREC, Ofcom, (2019), p. 1.
12. bidem.
13. F. Graziadei, Luiss Guido Carli, Facoltà di Giurisprudenza, Corso di Diritto Industriale e delle Comunicazioni, (a./a. 2019-2020), Seconda parte, p. 51 ss.
14. In particular, freedom of expression declined in the possibility to access a certain amount of bandwidth in relation to the technical and economic conditions of the offer, and the possibility to have an effective and easy access to information on the internet. Ibidem.
15. Ibidem
16. Ibidem.
17. Zero-rating practices in broadband markets, European Commission, final report, (2017), p. ii
18. Zero-rating practices in broadband markets (2017) European Commission, final report, p. ii
19. “In order to be deemed to be reasonable, such measures shall be transparent, non-discriminatory and proportionate, and shall not be based on commercial considerations but on objectively different technical quality of service requirements of specific categories of traffic. Such measures shall not monitor the specific content and shall not be maintained for longer than necessary.”. Regulation (EU) 2015/2120, Article 3.2.
20. “Providers of internet access services shall not engage in traffic management measures going beyond those set out in the second subparagraph, and in particular shall not block, slow down, alter, restrict, interfere with, degrade or discriminate between specific content, applications or services, or specific categories thereof, except as necessary, and only for as long as necessary, in order to: comply with Union legislative acts, or national legislation that complies with Union law, to which the provider of internet access services is subject, or with measures that comply with Union law giving effect to such Union legislative acts or national legislation, including with orders by courts or public authorities vested with relevant powers; preserve the integrity and security of the network, of services provided via that network, and of the terminal equipment of end-users; preserve the integrity and security of the network, of services provided via that network, and of the terminal equipment of end-users; prevent impending network congestion and mitigate the effects of exceptional or temporary network congestion, provided that equivalent categories of traffic are treated equally.”. Regulation (EU) 2015/2120, Article 3.3.
21. F. Graziadei, Luiss Guido Carli, Facoltà di Giurisprudenza, Corso di Diritto Industriale e delle Comunicazioni, (a./a. 2019-2020) Seconda parte, p. 51 ss.
22. Ibidem
23. Ibidem.