TMT | IP Publications

Net neutrality; recent judicial developments

A free and open Internet. Many of us take it for grant­ed, the abil­i­ty to ac­cess any web­site at any time, from any de­vice and ge­o­graph­i­cal lo­ca­tion. However, what we take for grant­ed might not ac­tu­al­ly be com­plete­ly open and free. In 2017 Ajit Pai, chair­man of the United States Federal Communications Commission was ac­cused of “killing the Internet” when he re­versed pre­vi­ous pro­vi­sions for­bid­ding Internet providers from block­ing or pri­ori­tis­ing con­tent.

The am­bi­tion to pro­vide a free and open Internet is of­ten re­ferred to as net neu­tral­i­ty. The phrase was coined by the American pro­fes­sor and lawyer Tim Wu back in 2003. Net neu­tral­i­ty ba­si­cal­ly means that Internet ser­vice providers may not pro­mote cer­tain web­sites, com­pa­nies or ap­pli­ca­tions be­fore oth­ers. The Internet as a plat­form is to be open and trans­par­ent, not sub­ject to com­mer­cial in­ter­ests or oth­er forms of lim­it­ing mech­a­nisms.

The ques­tion of pro­vid­ing equal and open Internet to all is no doubt a sub­stan­tial ques­tion in to­day´s so­ci­ety. 30 April 2016 the new Telecom Single Market Regulation (“TSM”) came in­to force through­out the European Union (“EU”). The reg­u­la­tion aims to es­tab­lish com­mon rules to en­sure a free and non-dis­crim­i­na­to­ry treat­ment of traf­fic in the pro­vid­ing of Internet traf­fic ser­vices as well as end-user´s rights. In ac­cor­dance with the TSM all end-users are en­ti­tled to the ac­cess and dis­tri­b­u­tion of in­for­ma­tion and con­tent, to use and pro­vide ap­pli­ca­tions and ser­vices re­gard­less of lo­ca­tion, ori­gin or des­ti­na­tion. Internet providers shall treat all traf­fic equal­ly and may not block, lim­it, dis­rupt or dis­crim­i­nate any spe­cif­ic con­tent. To mon­i­tor, ad­vice and guide the mem­ber states the Body of European Regulators of Electronic Communications (“BEREC”) has been ap­point­ed. BEREC gath­ers all the mem­ber states na­tion­al reg­u­la­to­ry au­thor­i­ties and pro­vides a thor­ough knowl­edge as to the man­age­ment of elec­tron­ic com­mu­ni­ca­tion through­out the EU.

In January 2017 the Swedish tele­com- and in­ter­net ser­vice provider Telia Company AB (“Telia”) was is­sued a de­ci­sion no­tice by the Swedish Post and Telecom Authority (“PTS”) to cease traf­fic man­age­ment mea­sures tak­en in re­la­tion to some of their cus­tomers. Telia had made it pos­si­ble for end-users to con­tin­ue us­ing cer­tain ap­pli­ca­tions such as Facebook, Instagram and Spotify even af­ter their sub­scribed da­ta vol­ume had been con­sumed, a phe­nom­e­non al­so known as ze­ro rat­ing. PTS´s in­junc­tion gave Telia 30 days to end all mea­sures, but Telia ap­pealed to the Swedish Administrative Court of Appeal (sw. Kammarrätten i Stockholm) say­ing that this would lead to sub­stan­tial dam­ages for both Telia and the end-users. The court stat­ed that the in­junc­tion could be in­hib­it­ed since the out­come, should the is­sue be brought to court, was un­cer­tain. Telia al­so called for a pre­lim­i­nary rul­ing at the European Court of Justice as to the in­ter­pre­ta­tion of art. 3.3 of the TSM and Telia´s traf­fic man­age­ment mea­sures. The court re­ject­ed the re­quest.

So what has hap­pened since?

Telia then ap­pealed PTS´s de­ci­sion to the Swedish Administrative Court (sw. Förvaltningsrätten i Stockholm) claim­ing the in­junc­tion should be re­pealed in full and not just in­hib­it­ed. The Administrative Court de­liv­ered ver­dict 28 September 2018 through an in-depth judg­ment with re­gards to the TSM. Telia claimed that PTS had not per­formed an in­di­vid­ual ex­am­i­na­tion of the dif­fer­ent kinds of ser­vices pro­vid­ed to end-users, and that the ser­vices did not in fact con­sti­tute such traf­fic man­age­ment mea­sure­ments that are pro­hib­it­ed ac­cord­ing to the TSM. Lastly Telia claimed that the ex­am­i­na­tion that PTS had per­formed was so in­ad­e­quate that the in­junc­tion should be re­pealed by that fact alone. The court states that traf­fic man­age­ment mea­sures are al­lowed if they are rea­son­able and open, non-dis­crim­i­nat­ing, pro­por­tion­al and not based on com­mer­cial con­sid­er­a­tions, but based on ob­jec­tive­ly dif­fer­ent de­mands on the ser­vices tech­ni­cal qual­i­ty for spe­cif­ic cat­e­gories of traf­fic. The court al­so states that there is no le­gal de­f­i­n­i­tion pro­vid­ed to the term traf­fic man­age­ment mea­sures but that the TSM re­quires equal treat­ment of traf­fic, and that noth­ing had been pre­sent­ed to ob­ject that Telia´s ac­tions were com­mer­cial­ly ini­ti­at­ed. As to the ex­am­i­na­tion that PTS had per­formed, the court states that the rel­e­vant as­pect here is the traf­fic man­age­ment mea­sures, and that there is no rea­son to as­sess these mea­sure­ments dif­fer­ent­ly with­in the frames of the case. Telia´s ap­peal was re­ject­ed in full. Telia have cho­sen not to ap­peal the judg­ment and have ac­cept­ed the court’s line of rea­son­ing by chang­ing the traf­fic ser­vices.

The court al­so clar­i­fies that even though the guide­lines pro­vid­ed by BEREC are in fact not bind­ing, they do pro­vide sub­stan­tial in­for­ma­tion as to the le­gal­i­ty of ac­tions and the in­ter­pre­ta­tion of the TSM.

On 28 February 2018 the Portuguese Telecom Regulator ANACOM is­sued a de­ci­sion no­tice to­wards three Portuguese Internet ser­vice providers to change their of­fers that are in breach with the TSM reg­u­la­tion. These Internet providers had lim­it­ed the ac­cess to Internet by on­ly al­low­ing cus­tomers ac­cess to a few se­lect­ed ap­pli­ca­tions such as YouTube and Netflix. Similar to the ac­tions by PTS, ANACOM or­dered amend­ments of ze­ro rat­ing and sim­i­lar ac­tions with­in 50 days of the de­ci­sion.

Insofar, the ques­tion of net neu­tral­i­ty, ze­ro rat­ing and traf­fic man­age­ment is­sues have been brought up in sev­er­al coun­tries across the EU. To name a few of these both Austria, Belgium, Italy and Norway have all faced sit­u­a­tions re­lat­ing to the TSM. However, most of the is­sues re­lat­ing to oth­er mem­ber states have fo­cused on ze­ro rat­ing ac­tions, where­as PTS put em­pha­sis on the traf­fic man­age­ment mea­sures. As for Sweden, main­ly Telia and Hi3G (“Tre”) have been in fo­cus for PTS´s su­per­vi­sion. However, Tre have con­tin­u­ous­ly replied to PTS that they will ad­just their of­fers that might con­sti­tute a breach of the TSM. Therefore PTS has not ini­ti­at­ed any for­mal de­ci­sions against Tre but con­tin­ues their sur­veil­lance.

It re­mains to be seen how Internet ser­vice providers will con­tin­ue their com­mer­cial­ly ben­e­fi­cial ef­forts to pro­vide dif­fer­ent op­tions to end-users as to the ac­cess of Internet con­tent, and what ef­fects their ac­tions will have. The EU´s am­bi­tion to up­hold a sin­gle mar­ket and well bal­anced com­pe­ti­tion be­tween Internet ser­vice providers no doubt cre­ates hin­ders for far-reach­ing com­mer­cial­ly “cre­ative” so­lu­tions. However, it seems clear that the EU will not stand for any in­equal­i­ty and non-trans­paren­cy when it comes to Internet ac­cess for end-users, and that the EU con­tin­ues its ef­forts in the aims to pro­vide a free and open Internet.

The au­thors are Thomas Nygren and Alexandra Sackemark.