Kroes attacks Dutch net-neutrality rules

Europe's digital agenda chief has criticised the Netherlands for legislating to protect net neutrality, saying it is too early for lawmakers to take sides on the issue.

Europe's digital agenda chief Neelie Kroes has criticised the Netherlands for passing legislation on net neutrality, saying it it too early to take sides. Photo credit: Neelie Kroes

In a speech on Monday, Neelie Kroes said Dutch moves to enshrine net neutrality in law could stop ISPs there from offering customers a limited version of internet access at a lower price than that charged for the "full" internet.

In June, Dutch MPs approved laws that force ISPs to provide a minimum quality of service for customers' connections, while forbidding the ISPs from blocking or degrading any type of traffic except where it is necessary to keep the network running safely. These rules comply with the so-called net-neutrality principle, in that they make sure that ISPs allow the delivery of all internet services on equal terms.

On Monday, digital agenda commissioner Kroes said it was important for lawmakers to wait and see how ISPs approach transparency, blocking and throttling. She said that, if regulators do need to act, this needs to happen in "a co-ordinated way across Europe".

"I regret very much that the Netherlands seems to be moving unilaterally on this issue. We must act on the basis of facts, not passion; acting quickly and without reflection can be counterproductive," Kroes, herself a Dutch politician, said at a Brussels summit with network operators.

According to Kroes, "requiring operators to provide only 'full internet' could kill innovative new offers".

"Even worse, it could mean higher prices for those consumers with more limited needs who were ready to accept a cheaper, limited package," she added.

Wait-and-see attitude

Kroes's antipathy to the Dutch net-neutrality laws stands in contrast with what she herself said in January 2010, when she was about to become the EU's digital agenda commissioner.

"[ISPs] shouldn't be allowed to limit the access to service or content out of commercial motivation, but only in cases of security issues and spamming," Kroes told a confirmation hearing at the time.

We must act on the basis of facts, not passion; acting quickly and without reflection can be counterproductive.

– Neelie Kroes

However, since then Kroes has adopted a wait-and-see attitude. Shortly after taking office, she pointed out that the internet was not inherently neutral, and said regulatory decisions would need to be taken as to the future direction of internet access.

In April, the Commission asked the regulator group Berec to carry out a fact-finding exercise, in which it would log cases of ISPs degrading or blocking services, prioritising certain types of traffic for commercial reasons, or making it difficult for customers to switch operator.

A key example that Kroes cited at the time was that of VoIP. She said she had heard of a telco degrading internet telephony services — a rival to its own revenue stream — to the point of unusability.

On Monday, Kroes maintained that it was important to retain a "robust best-efforts internet", but it was also "very important that we wait for the facts and figures [from Berec's study] before acting".

Net neutrality has not made it onto the statute books of many countries. Chile and the Netherlands have adopted the most robust rules so far. The US's Federal Communications Commission (FCC) codified a set of net-neutrality rules last December, although the heaviest restrictions only apply to fixed, rather than mobile, network providers. Verizon is in the process of trying to overturn the FCC's rules through the courts.

Access to broadband networks

The net-neutrality issue was not the main focus of Kroes's speech on Monday, which marked the launch of a consultation on the pricing of access to broadband networks.

Kroes noted that alternative providers think incumbents charge too much for access to copper networks that have already been paid for, while the incumbent operators themselves say excessively low copper access prices would make it difficult to charge a sufficiently high amount for fibre alternatives.

"I think that there is some truth on both sides," Kroes said. "And I also have the impression that, as it stands, it would indeed be difficult to build new fibre networks competing with cheap parallel copper networks."

The Commission is proposing that access prices for largely depreciated copper networks should be lowered only gradually, but that incumbents should also commit to building fibre networks "in a relevant time frame", while promoting a switch-off of the copper networks.

"Indeed, I have seen evidence that the gradual switch-off of copper could reduce the cost to such a degree that new fibre investments break even in under 10 years, and thus align the interests of investors and long-term financing providers," Kroes said.

The digital agenda commissioner also told the network operators that the Commission would shortly earmark €6.4bn (£5.5bn) for broadband infrastructure, "largely in the form of equity, debt or guarantees".

She said the involvement of the Commission and the European Investment Bank (EIB) would "improve the projects' credit rating by absorbing part of the risk", and potentially generate up to €100bn in broadband investment.