Holland and India prohibit zero-rating: the first of many?

By EDRi · February 10, 2016

The principle of net neutrality requires that internet access providers carry data without discrimination on the basis of origin, destination or type of data. Net neutrality prohibits telecoms operators from blocking or degrading content applications or services. From a telecom operator’s perspective, the goal is to move away from the “any-to-any” principle that is a key characteristic of the Internet, to a situation where they can sell access to their own customers.

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One aspect of net neutrality which has been subject to debate is ‘zero-rating’, which is a practice where data downloaded from certain applications or services is not counted towards a subscriber’s monthly limit. Zero-rating practices run contrary to net neutrality. ‘Positive discrimination’ allows telecoms services to collude with online services and grant them a competitive edge, thereby threatening competition and innovation and ultimately the open and free nature of the Internet.

While being different from more blatant blocking/throttling strategies, zero-rating ultimately achieves the same goal – it allows telecoms operators to sell privileged access to their customer base.

Zero-rating now seems to be losing ground. One of the largest zero-rating projects has been Facebook’s FreeBasics programme, which offers monetarily “free” access to a limited number of Facebook-approved services, with the telecom operator charging the customer for access to all other content. Civil society groups in India have heavily criticised this development, arguing that Facebook is attempting to create a second-class internet for developing countries. EDRi, too, has joined their ranks in a co-signed letter calling Facebook’s CEO from refraining from these practices. Now, In a resounding victory for net neutrality, the Telecoms Regulatory Authority of India (TRAI) officially banned FreeBasics and other zero-rating schemes (PDF) on 8 February 2016.

Closer to home, it has become clear that zero-rating is also prohibited under the Dutch conception of net neutrality. Since the adoption of a pioneering net neutrality law in 2011, article 7.4 of the Dutch Telecommunications Act prescribes that: ‘Internet access providers shall not make their rates for internet access services dependent on the services and applications which are offered or used via their services.’ Nevertheless, Vodafone had granted their users unlimited access to the app HBO Go without this being counted to monthly data caps. When Dutch authorities fined them 200,000 EUR for this policy, Vodafone went to court claiming that their zero-rating was not prohibited under the net neutrality law. However, in their judgment of 4 February 2016, the Rotterdam District Court ruled against Vodafone, reaffirming that the legislation on net neutrality adopted by the Dutch legislator also covered zero-rating.

For Europe, the future of zero-rating has not yet been decided. National net neutrality rules in the Netherlands and elsewhere will soon need to be updated to comply with the upcoming EU Regulation on net neutrality and roaming charges, applicable from 30 April 2016 onwards. Under this instrument, the legal status of zero-rating is not entirely clear. While the Dutch legislator has taken the preliminary view (PDF) that the Regulation will also prohibit (certain forms of) zero-rating, the prohibition is in any case less clear than the current Dutch law and could create higher burdens of proof for enforcement action. Given this ambiguity, the Body of European Regulators for Electronic Communications (BEREC) is set to play a crucial role, as they seek to agree on a common interpretation of the Regulation’s rules. Its implementation guidelines could either reaffirm or undermine the positive developments seen in the Netherlands, and will have a lasting impact on net neutrality and the innovative online ecosystem throughout Europe. It would be particularly unfortunate if large telecoms operators were able to construct new barriers in the online world in Europe at the same time as the European Commissions “digital single market” initiative seeks to tear them down, and at the same time as a more progressive approach is being taken elsewhere in the world.

Many hope therefore that BEREC will take India and the Netherlands as best practices and to embrace a clear, unambiguous approach to net neutrality. A first big step in this direction will be responding to BEREC’s upcoming consultation, planned for June 2016, and taking a firm stance against zero-rating and all other forms of data discrimination.

EDRi-gram: Net neutrality: Freedom also means banning positive discrimination (25.02.2015)

Net neutrality: Freedom also means banning positive discrimination

EDRi-gram: Netherlands: Two telcos fined for net neutrality violations (11.02.2015)

Netherlands: Two telcos fined for net neutrality violations

Rotterdam District Court, Decision Libertel BV v ACM (only in Dutch, 04.02.2016)

EDRi-gram: EDRi’s first input on EU regulators’ net neutrality guidelines (13.01.2016)

Regulation (EU) 2015/2120 on net neutrality and roaming charges (25.10.2015)

TRAI: ‘Prohibition of discriminatory tarriffs for data services’, press release (08.02.2016)

TRAI: ‘Prohibition of discriminatory tarriffs for data services’, full document (08.02.2016)

(Contribution by Paddy Leerssen, EDRi intern)