network neutrality in european legislation after the london conference on cyberspace on 1-2...

8/3/2019 Network neutrality in European legislation after the London Conference on Cyberspace on 1-2 November 2011

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MARIA ISABELA HARO MELONCINI

Network neutrality in European legislation

after the London Conference

on Cyberspace on 1-2 November 2011

Paper composing the activities of the course

of ICT Law of the University of Bologna,

under the chair of Professor Cesare Maioli.

Bologna

2012


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SUMMARY

The principle of network neutrality was created in response to the abusive traffic

discrimination carried on by Internet Service Providers. While they argue that traffic management is

done to improve the quality of service and to obtain resources to invest on the network, the

companies that offer services and content through the Internet claim that traffic management can

limit freedom of expression and information and refrain Internet growth.

Concerned to users' rights, the European Union established the principle of network

neutrality. Under the European Union law, the principle assumes a flexible meaning, allowing

traffic prioritization when it does not affect users' choice. The option of a less intrusive regulation is

justified by the fact that traffic management can improve the quality of service in certain ways. Thetechnical analysis of what traffic management is shows that it is a tool for fighting cybercrimes and

allowing time-sensitive applications as video and voice instant messages. The framework of

network neutrality comprises regulations on competition, transparency, privacy and public

investments.

An efficient policy on network neutrality depends on international cooperation since

network providers from all the world can engage abusive traffic discrimination on Europeans'

online transfers. For this reason, the European Union participated on the London Conference on

Cyberspace, where general guidelines of the principle were established. However, concrete actions

have to be taken word-widely, and European regulatory experience can serve as an role model.

Keywords: Network neutrality, European Union, Internet, London Conference on

Cyberspace, traffic management.


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1. INTRODUCTION

The scope of this work is to highlight the significance of the principle of network neutrality

on the actual European Union context, specifying its delineations after the London Conference on

Cyberspace, that took place on the 1st

and 2nd

of November 2011. Network neutrality was born as a

concept in response to the prioritization of traffic practiced by the Internet Service Providers (ISP)1

of Internets' content and services. It was first established by the European Union Law in 2009,

which stated that information though out the Internet should be transmitted impartially.

The hypothesis at the start of the research was that network neutrality was the same as

prohibiting of discrimination. That was the former meaning of the principle, as it was created by

companies that provide content and services thought the Internet. After some meditation on the

reading material, I believe that the principle has a different significance on the EU law.In Europe, the principle of network neutrality (i) is still in debate and (ii) is not rigid.

European Union institutions are still assessing the impact of the recent law documents on the matter

and studying the implementation of other laws to guarantee consumer protection and competition

burst. With the provisions that we have so far, ISP can manage traffic, but they have to respect the

privacy of users and the principle of proportionality.

The European Union participated on the London Conference on Cyberspace and discussed

the network neutrality on the international context. The international approach is the key on the

effectiveness of the network neutrality's policy, since ISP from all over the world are capable of

traffic managing. The protection of fundamental rights depends on a collaboration and international

agreements.

This work was divided in 6 parts. Part 2 explains the relevancy of the matter by describing

Internets' benefits. Part 3 explains the two visions that created the debate and the creation of the

principle of network neutrality. The investment obligations that fall on Internet Service Providers

are explored in Part 4.

Some interdisciplinary analysis were necessary, since the matter is related to the informatics

field, which I briefly looked into on Part 5. The technical explanation was necessary to understand

what is traffic discrimination and also to provide the enough basis to analyze the political positions

expressed by the sides of the debate.

1 In this text, network providers and Internet Service Providers ISP are used as synonymous, but there is a difference.The Internet is a interconnection of networks, and there are companies that provide high speed, long-distanceconnections, other that provides regional and local connections. ISP can be divided in Backbone providers, Middle-mile providers and Last-mile providers. (YOO, Christopher S. Network Neutrality and the Economics of

Congestion. In Georgetown Law Journal, Vol. 94, June 2006, Vanderbilt Law and Economics Research Paper No.05-28, Vanderbilt Public Law Research Paper No. 05-33.).

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Parts 6 and 7 talks about the issue in the European Union context and the relevance of the

London Conference on Cyberspace. The European meaning of network neutrality and its

implications are expressed out on Part 6.

2. INTERNET: THE MAGNIFICENT VIRTUAL BENEFITS

The Internet is a tool for economic and social growth. By the time it was popularized, it was

found to be a instrument to connect people in different ways that tends to evolve even more over

time. On the social field, people with very specific interests are able to find their equals through out

the Internet, regardless to their locations2. Furthermore, on the economic domain, new services and

ways to firm a contract have uprisen from the Internet facilities, expanding the consumer market

and competition. As a result, in the last 5 years 21% of the GDP growth in mature countries

accounted on the Internet. Although the traditional companies are still the ones that take advantageof the Internet, this powerful tool is responsible for 10% of productivity of small and medium

companies.3 The Internet has a role on politics, since it influences democratic norms and modes,

including its impact on civil society, citizen media and government transparency.

The influence of Internet on economic, social and political growth works as a feedback on

Internets growth. It bursts exponentially on size, processing power and software sophistication.

Every year,the number of people accessing the internet is increasing to even a larger scale. About

every 18 months computer processors and storage continue to double in power and capacity. In

terms of software, all web applications, based on the previous technologies, can evolve fast.4

Experts predict that, in the future, the Internet will lower the price of goods and services and will

allow people to be better informed and more globalized. Evidences of this can already be seen,

for example through the Arabic Spring online protests, whereby protesters were using social medias

to fight against the government. Another example, can be seen through the online encyclopedia

Wikipedia black-out, in a protest against SOPA (Stop Online Piracy Act), a bill that was introduced

in the United States by the House of Representatives. The future of the Internet holds an even more

interconnected society due to globalization which will make real time technologies to be more

accessible.5

2 For example, the Internet has a important role to connect minorities. Because of the characteristics of Web 2.0,which is colaborattive, they can protect their culture by sharing documents related to their history, language andtraditions, and also give information to the general public. By finding a online community, they prevent assimilation.(CIOLEK, Matthew. Internet and Minorities, In: Carl Skutsch (Ed.), 2004. The Encyclopedia of World's Minorities.Independence, KY: Taylor & Francis/Routledge. http://www.ciolek.com/PAPERS/minorities2001.html).

3 McKinsey Global Institute. Internet matters: The Net's sweeping impact on growth, jobs, and prosperity. May, 2011.http://www.mckinsey.com/mgi/publications/internet_matters/pdfs/MGI_internet_matters_full_report.pdf

4 Living the Internet. Internet Growth Rates, last updated April 10, 2011.

http://www.livinginternet.com/i/ip_growth.htm5 Living the Internet. The Future of Internet, last updated April 10, 2011.

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http://www.ciolek.com/PAPERS/minorities2001.htmlhttp://www.ciolek.com/PAPERS/minorities2001.html


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3. TWO POSITION ON MEASURES FOR THE INTERNET GROWTH

The Internet future forecast counts on its freedom of expression. The achievement of the

optimistic expectations on the future of Internet was said to be put into risk because Internet Service

Providers started to block Internet application and content6

. Their allegation was that the quality of

the services could decrease if they would not block content and applications, because applications

considered heavy and time-sensitive, such as VoIP and IPTV would cause network congestion 7. To

maintain the high level and to have the money to fulfill network investment obligations; providers

want to be paid for that traffic, by users or by Internet service providers8.

The companies that provides content and services through the Internet claimed that, without

the imposition of a non-discrimination obligation, ISP would be tempted to monopolize content.

Originally, the Internet as regard to its content and services offered had a meritocratic designedarchitecture, in which the criteria of what is best is decided by the users. This means that the

websites or services that best serves the users are the most popular ones, considering that what

counts for the users usually is the content or service itself. But if a website or an online application

does not work fast, speed of the website starts to be decisive on consumer's choice. Another

characteristic of today's Internet is that the network providers do not have to have a necessary

connection with the companies that provides content or services through the Internet, apart from a

commercial relation.9 In other words, network providers do not control internet content, that is

created on a diffuse basis. Recently, after the advent of Web 2.0, the content can be created by

anyone, even one who does not have technical knowledge, by using a special platform provided by

a domain owner such as wikis, social networks, and others.10

In a response to the action of ISP, the concept of network neutrality was created. Its former

http://www.livinginternet.com/i/ia_future.htm

6 MSNBC. Comcast blocks some Internet traffic, 10/19/2007, at http://www.msnbc.msn.com/id/21376597/#.TyBW_aXOwlI . Accessed at 4th january 2012.7 "We have a responsibility to manage our network to ensure all our customers have the best broadband experience

possible. This means we use the latest technologies to manage our network to provide a quality experience for allComcast subscribers." (MSNBC. Comcast blocks some Internet traffic, 10/19/2007, athttp://www.msnbc.msn.com/id/21376597/ #.TyBW_aXOwlI . Accessed at 4th january 2012. )

8 DLSReport.European ISPs Want Google to Pay for Network Upgrades and Continue to Cry When People Actually Use TheirProduct, 01.08.2011, at http://www.dslreports.com/. Acess on january 10th 2011.

9 For example, Google, Facebook, Wikipedia, Skype (content and application providers) have no connection toVerizon, Tim, Fastweb (network operators).

10 The Web 2.0 is a term to describe a change o perspective on the Internet. Users and enroled a passive part ofInternet's communications, by only receiving information, were able to perform an active and colaborative role onwebsite's content. It was possible after the development of plataforms that allowed the user to contribute on websites

without knowing the technical concepts of Internet. For more, see WIKIPEDIA, Web 2.0.http://en.wikipedia.org/wiki/Web_2.0 )

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definition is that ISP and network providers can not discriminate content, application and

services.11-12It is a regulatory imposition, limiting free market principle on the grounds of network

providers in order to promote the same principle - free market - on the level of Internet content. It

is justified by its defenders because it avoids tying, an anti-competitive practice consisting on the

the sale of a product on the condition on the acquisition of another one.13

In a market where the

network operators control the bandwidth (traffic), these companies would be tempted to control the

content and application usage, because their application and website would work faster in other

words, they would have more quality, or even to be the only content and service available, while

others would be blocked.

On the other hand, network providers say that the control of the bandwidth is for good: to

improve the quality of service for low-volume users and to block potentially harm practice as spams

and virus. They also complain about the regulations that impose them the responsibility to invest onthe network, while content and application providers profit from those investments without having

any investment obligation14. Just to illustrate, Zynga, a company that creates browser-based games

and social network applications that was created in January 2007 and was valued at $20 billion

dollars in June 201115, or even Facebook, valued at $100 billion dollars, despite the fact that they do

not contribute to the improvement of Internet16-17.

4. THE REGULATORY MODEL

11 Tim Wu.Network Neutrality FAQ, at http://timwu.org/network_neutrality.html. Accessed on 20th December 2012.12 The term is also used with other meanings in European Union regulation, for what it is necessary to explain the

difference of them. The Directive 2002/21/EC, on a common regulatory framework for electronic communicationsnetworks and services, mentions the principle of neutrality with regard to the rules in Member States governingthe system of property ownership laid down in Article 295 of the Treaty (exposition of motives 10), a rule of freemovement of goods on the territory of the European Union Member States. The Directive also refers to neutrality oftechnology (exposition of motives 18), enforcing the non discrimination of technologies that offers the same service.It is another principle that is sometimes mistaken with the network neutrality.

13 HYLTON, Keith N. Hylton, SALINGER, Michael, Tying Law and Policy: A Decision-Theoretic Approach, 69Antitrust L. J. 469 (2001).

14 The physical net-work providers (local exchange carriers and cable system operators) argue that they will be

discouraged from undertaking costly and risky broadband network build-outs and upgrades if their networks aresubject to open access and/or non-discrimination requirements that might limit their ability to exploit vertical

integration efficiencies or to maximize the return on (or even fully recoup) their investments. (GOLDFARB,Charles B.CRS Report for Congress. Telecommunication act: competition, Innovation and Reform, 2006, p. 2.)

15 THE WALL STREET JOURNAL, Tech IPOs Test Sky-High Values, June 29, 2011 ,http://online.wsj.com/article/SB10001424052702304447804576414111297459234.html.

16 RedOrbit,Facebook IPO Set For Late May, Valued At $100 Billion, January 17, 2012, athttp://www.redorbit.com/news/technology/1112456278/facebook-ipo-set-for-late-may-valued-at-100-billion/.Acessed 20 January 2012.

17 In response to that critics and in the context of the US' National Broadband Plan, Google announced the GoogleFiber for Communities, a project to construct a fiber otic network. They announced that We'll operate an "openaccess" network, giving users the choice of multiple service providers. And consistent with our past advocacy, we'llmanage our network in an open, non-discriminatory and transparent way. ( Googleblog, Think big with a gig: Our

experimental fiber network, available at http://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.html . Acessed at 2nd February 2012).

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http://timwu.org/network_neutrality.htmlhttp://timwu.org/network_neutrality.htmlhttp://online.wsj.com/article/SB10001424052702304447804576414111297459234.htmlhttp://www.redorbit.com/news/technology/1112456278/facebook-ipo-set-for-late-may-valued-at-100-billion/http://www.redorbit.com/news/technology/1112456278/facebook-ipo-set-for-late-may-valued-at-100-billion/http://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://timwu.org/network_neutrality.htmlhttp://online.wsj.com/article/SB10001424052702304447804576414111297459234.htmlhttp://www.redorbit.com/news/technology/1112456278/facebook-ipo-set-for-late-may-valued-at-100-billion/http://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.htmlhttp://googleblog.blogspot.com/2010/02/think-big-with-gig-our-experimental.html


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The network providers obligations on the network are related to the model of regulation

implemented on the last decades, the so-called Regulatory State18. The Liberal model was inspired

by the ideals of Adam Smith, which defended a negative role of the State on economic and social

relations, the "laissez faire, laissez aller, laissez passer". It was based on the idea that the rules of

the market were able to organize the economic relations. This form of State led to many social

problems, that were reflected on the European Revolutions of 1848 and the American Depression in

1929. At the same time, the communist and socialist's values have risen, and even if a lot of western

world countries - especially the United States, during the cold war - were willing to fight against

those values, the Liberal States had to make conceptions to contain the masses, adopting social

rights and expanding the right to vote, as well as to begin to control the economy. 19

however in comparison to the "first generation's rights, that required only an abstention of

the State to allow citizens to exercise their freedoms, those from the second generation demandedan active state - the Welfare State - , responsible for providing all the services needed to guarantee a

substantial equality, for instance, equality of opportunity and equitable distribution of wealth.

These social rights have been extended over the years. More recently, in parallel with the

phenomena of globalization and the increasingly respect gained by minorities and association rights

in the democratic context, a plural society has been developed. The plural society is comprehended

not only by the traditional idea of society combining ethnic contrasts, but also non governmental

organizations, parties, international organizations and many other institutions. Each of those groups

have different demands, that sometimes oppose the others' requests. Even when these demands are

not opposed, they require a public investment of the scarce public budget. Due to difficulty or even

impossibility of the State to fulfill all the interests, it assumes a position of mediator between the

different social groups, loosing the traditional role of concentrated policy-making. Furthermore, it

recognizes its incapacity to deal with all the fields of economy, privatizing public companies but

without returning to thestatus quo ante. Instead of acting directly on the economic fields, the states

leave it to the private subjects but with technical and specific rules for them to follow so that other

rights can be guaranteed, for example, consumers rights. In other words, the state continue to

intervene on the economy with regulations and also to provide essential services. 20

18 Also, Internet is a type of telecommunication, together with telegraphs, telephones, teleprinters, radio andmicrowave communications, orbiting satellites.

19 DE VERGOTTINI, Giuseppe. Diritto Costituzionale Comparato, V. 1, 8a ed., Padova: CEDAM, 2011, pp. 336-343:The Italian author explain in this book the evolution from the Absolutism to what he calls techdemonocracy(tecnodramocrazia), a state where the administrative employee, labour unions and other normative poles gainforce.

20 MARQUES NETO, Floriano de Azevedo. Agncia Reguladoras Independentes: Fundamentos e Seu Regime

Jurdico, Belo Horizonte: Ed. Frum, 2004, p. 10-40. The book explains the arisen of the power of regulatoryagencies on post-modern states.

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The field communications followed the evolution of the roles of the State. In the Welfare

State, the telecommunication services received a status of a public service, an essential service that

has to be provided to guarantee the dignity of the person. Since the initial investments to create an

infrastructure were so high, it was not the economic interest of private companies to engage in that

field. It was believed to be a natural monopoly, that has high fixed costs and long-term investments.

Also, there was the myth that more than one service provider will higher prices, because of

unnecessary duplicated network21.

As from the monopoly idea, the government had to create public companies to build and

manage the infrastructure and provide the service to end users. After most of the infrastructure was

created, the Welfare State faced its crisis, as described above. Furthermore, the monopoly structure

was criticized since the new technologies had already made it possible for other carriers to enter the

telecommunication market. The natural monopoly idea was criticized. The competition marketstructure was considered a best option to promote better quality services, with better prices 22.

That evolution was global because of the worldwide characteristic of Internet and

telecommunications. Furthermore, it was promoted by international agreements. The Fourth

Protocol to the General Agreement on Trade in Services (GATS) came into force on February 1998,

providing for a progressive liberalization of trade in telecommunications transport networks and

services23. On 2001, a total of 86 World Trade Organizations economies made market access

commitments in telecommunications services24. However, open market alone was insufficient to

promote competition on a level that it could positively impact on services' benefits. The reason was,

mainly, the poor returns on investment, the limit market size and the economic stability. Without

interconnection obligations, consumers' market action is to choose large network over small ones in

order to receive calls from everyone. Also, the lack of interconnection make it difficult for the

market entry and abuse of dominant position is a common practice if not combated 25. Hence, a

21 Thomas J. DiLorenzo, The Myth of Natural Monopoly, The Review of Austrian Economics, v. 9, n. 2, 1996, pp. 43-58, athttp://mises.org/journals/rae/pdf/R92_3.pdf. Accessed on 4th January 2012.22 OCDE. Competition in telecommunication, 1995, athttp://www.oecd.org/dataoecd/34/50/1920287.pdf. Also, The

successful management of competition can be a catalyst to obtaining lower prices, new and better services, greaterconsumer choice and increased investment in telecommunications markets.'(International TelecommunicationUnion. Competition policy in Telecommunications: Background paper. Geneva, 20 - 22 November 2002, athttp://www.itu.int/osg/spu/ni/competition/background/Final%20background%20paper.pdf . Accessed on 12th

January 2012.)23 GATT 1994. Annex 1 Decision on negotiations on Basic Telecommunications.24 International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva,

20 - 22 November 2002, at http://www.itu.int/osg/spu/ni/competition/background/Final%20background%20paper.pdf. Accessed on 12th January 2012.

25 International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva,

20 - 22 November 2002, at http://www.itu.int/osg/spu/ni/competition/background/Final%20background%20paper.pdf. Accessed on 12th January 2012.

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competition policy on telecommunications and telecommunications' regulatory obligations were

created in order to correct the market failures.

The traditional telecommunication regulatory obligations, until today, falls on the network

providers alone. They have the obligations that is regarded to the service classification as a

universal service; some of the obligations are the expansion of the infrastructure to reach as many

users as possible and quality of service. Online services and content companies do not have any

regulatory obligation to invest on the network, nor do they have to pay a different amount of money

to use more or less bandwidth. For example, the traffic of a website, that can bring much profit with

marketing, does not reflect on the infrastructure's technical improvement; the same with a paid

online service. The bigger issue is that those companies can be the ones that are congesting the

Internet traffic.

5. TECHNICAL TERMS

At the debate on network neutrality, the online content and services companies affirm that

discrimination of traffic is an unjust practice . But a technical analysis of what traffic prioritization

is it shows that is has got some good points. It can improve quality of services, specially for

newborn services like voice and video instant transmissions. In addition, it can combat spams and

viruses.

Internet is a interconnection of networks that uses a common protocol (TCP/IP) to connect

people all over the world26. TCP/IP are digital systems used by every computer that permit the

exchange of data between computing system27. On the Internet, the application of specific functions

like processing power, for instance - takes place in the edges (end host) of the network rather then

in the middle (intermediary nodes), principle called end-to-end. The end-to-end principle is mainly

justified to maximize efficiency and minimize costs on the network28. Computers communicates

with each other identified by an IP address, a numerical address used to route packets across the

Internet. It works just as an address, that the postman have to check to see what is your mail; it

isthe geographical descriptor of the virtual world29. Packets are formatted units of data of broken

messages that can be transmitted independently, from the sender to the recipient that are brought

together into the original message at the end30. The message is split into smaller pieces also to lower

26 Wikipedia, Internet, at http://en.wikipedia.org/wiki/Internet. Acessed on 3th january 2012.27 Living Internet. TCP/IP, athttp://www.livinginternet.com/i/ii_tcpip.htm . Acessed on 3th january 2012.28 Brwolff, Matthias.End-to-End Arguments in the Internet: Principles, Practices, and Theory. Dissertation submitted

to the Department of Electrical Engineering and Computer Science at Technische Universitt Berlin in partialfulfillment of the requirements for the degree of Dr. Ing. Berlin, 2010.

29 Living Internet. IP address, at http://www.livinginternet.com/i/iw_ip.htm .Acessed on 3th january 2012.

30 L. Kleinrock,Information Flow in Large Communication Nets, RLE Quarterly Progress Report, MassachusettsInstitute of Technology, April 1962, at http://www.lk.cs.ucla.edu/data/files/Kleinrock/Information%20Flow%20in

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the costs of the network and to enable flexibility. When transmitting the packets, the ISP can add

layers and protocols that allows them to manage the traffic31.

It is a myth that traffic management is a new practice, done only for the worst purposes 32.

The Internet, since its beginning, has provided with mechanisms for discrimination of traffic when

there is a congestion of routing packets. This happens when there are more packets coming than the

capacity of the router to send them on33. A router is an equipment, connected with lots of networks,

used to compute protocols and send packets from one part of the network to another cross point 34. It

has a function to store a certain quantity of packets on its buffer when there is packet jam.

In the case of congestion, the router has two options that can be translated on the

technologies used: (i) first come, first served or (ii) prioritize. The first is the option ofabsolute

neutrality, as the first packet to come is the first to be sent. The packets that overcome the

processing capacity to be transmitted are queued in the buffer. When the buffer is full, the packetsare dropped. The TCP itself is able to detect that a packet has been lost, in order to resend them. The

problem of not prioritizing is that video and voice services are compromised, as they are time-

sensitive. For e-mails and other Internet services, a few seconds of delay does not affect quality. But

if the packets of data that contain voice or video instant message are queued, the quality of these

services will be bad enough to prevent people from using them. The users have full control of what

they want to access, since the network provider is not blocking content or service, but, on the other

hand, will not be able to raise the bandwidth of their most used service. 35.

These issues can be solved by discrimination, in the second option. The traffic shaping tools

can recognize the type of the data that is being transmitted and allow some of them to cut the line36.

With this mechanism, those applications that need instant transmissions can be prioritized and their

quality will be better. The packet queuing systems can also identify the IP address, in a way that

users inform their network providers that they do not want to use some services and in return can

have faster transfers. For example, those users that do not want to use peer-to-peer file sharing can

%20Large%20Communication%20Nets1.pdf. Acessed on 3th january 2012.31 European Data Protection Supervisor, Opinion on net neutrality, traffic management and protection of privacy andpersonal data, Brussels, 7 October 2011, p. 7.

32 Several respondents to the public consultation agreed that traffic management was not new in the field of eletroniccommunications. For example operators prioritized voice traffic, particularly in the case of mobile - EuropeanCommission. Communication to the European Parliament, the Council, the Economic and Social Committee andthe Committee of the Regions on the open internet and net neutrality in Europe. COM(2011) 222 final. Brussels,19.4.2011, p. 7.

33 OECD,Internet Traffic Prioritisation: An Overview, 2007 ,athttp://www.oecd.org/dataoecd/43/63/38405781.pdf.Acess on 3th january 2012, p. 8-10.

34 Living Internet. Internet routers, athttp://www.livinginternet.com/i/iw_route_arch.htm. Acess on 3th january 2012.35 OECD,Internet Traffic Prioritisation: An Overview, 2007 ,athttp://www.oecd.org/dataoecd/43/63/38405781.pdf.

Acess on 3th January 2012, p. 8-15.

36 Compago. Gestione avanzata del traffico internet, at http://www.compago.it/manuali/34-linux/198-gestione-del-traffico-internet.html. Acessed on 3th january 2012.

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choose a network provider that blocks that type of transfer in a way that the other services can have

more bandwidth37. That is possible because traffic can be prioritized even when there is not

congestion, by the fixed allocation of bandwidth for some applications. The per-user base can give

consumers a very personalized service that meet their needs. Since information crossed multiple

networks, network providers would have to agree on the method of prioritization to allow even

more quality. These would require a strong cooperation of providers in a worldwide level, as the

information can cross even 20 routers to arrive the end user38.

The same technology can be used to detect prevent spam and virus. Delaying spam packets

can fight 90% of spam e-mails sent by botnets 39. The separation of legitimate senders from

spammer robots is done, firstly, by a principal component analysis (PCA), which is a mathematical

procedure that reduces the number of the original variables. After that, by using a pre-established

criteria of prioritization that considers content length, time of arrival, frequency of spamming andcontent type of e-mails, it is possible to separate which e-mails are the ones that have to have their

packets delayed40. Those e-mail came from botnets, softwares that execute automatically, repeatedly

simulating a human action41. The criteria does not consider the content itself, in respect of privacy.

An efficient combat of virus can also be made by traffic management that recognize botnets42-43.

A big issue on traffic management is the confidentiality of users information. The packets

has two parts, theIP payloadthat include the content and the IP header that contains the address of

the sender and recipient44. The inspections techniques that uses only the header does not inflict on

the privacy; it can be compared to a postman that reads the outside of a closed letter to know to

whom it has to be delivered. But the protocols that read the payload, even to only specify the type

37 In fact, that example is offered by the companies that produces service control engines. Cisco announce it as abenefit of its product.(Cisco Systems, Using the Service Control Engine and Deep Packet Inspection in the DataCenter, 2007).

38 In the European level, it can be promoted by the European Union enhancing cooperation.39 L. Fulu, M. Hsieh, An Empirical Study of Clustering Behavior: Spammers and Group-based Anti-Spam Strategies,

CEAS, 2006, athttp://web.media.mit.edu/~fulu/CEAS06-final.pdf. Accessed on 3th January 2012.40 Husna, H. Phithakkitnukoon, S. Dantu, R., Traffic Shaping of Spam Botnets,North Texas University, 2008, at http://ieeexplore.ieee.org/Xplore/login.jsp?url=http%3A%2F%2Fieeexplore.ieee.org%2Fiel5%2F4446297%2F4446298%2F04446479.pdf%3Farnumber%3D4446479&authDecision=-203. Access on3th January 2012.

41 Wikipedia. Botnet, athttp://en.wikipedia.org/wiki/Botnet.Accessed at 3th january 2012.42 CISCO Systems. White Paper: Combating Botnets Using the Cisco ASA Botnet Traffic Filter, at

http://www.cisco.com/en/US/prod/collateral/vpndevc/ps6032/ps6094/ps6120/white_paper_c11-532091.pdf .Accessed on 4th January 2012.

43 Traffic management for fighting cybercrime and virus, apart from being authorized, is an obligation for ISP imposedby Australian regulation. (The Parliament of the Commonwealth of Australia. Hackers, Fraudsters and Botnets:Tackling the Problem of Cyber Crime. The Report of the Inquiry into Cyber Crime, 2010, athttp://www.aph.gov.au/house/committee/coms/cybercrime/report/front.pdf. Accessed on 27 january 2012.

44 European Data Protection Supervisor, Opinion on net neutrality, traffic management and protection of privacy andpersonal data, Brussels, 7 October 2011, p. 8-9.

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of communication, influence on the user liberty. It does not mean that consequently it has to be

prohibited, but authorizations of both users are necessary.

Therefore, discrimination of traffic is a common practice that leaves a great power on ISPs

hand. Only more recently the practice was done abusively. hence giving origin on the network

neutrality debate. But the proposed non-discrimination policy in other words, a rigid application

of the principle of network neutrality - would lower the quality of Internet on the grounds of spam

and virus control. The traffic management also can be a practice in service of the user, when one

chooses the way the bandwidth traffic is for some type of data.

6. THE DEBATE IN EUROPE

6.1 Liberalization of the telecommunication market on the European level.

The idea of network on the European level came over the '80s, together with the proposedprinciple of Single Market45. From its beginning, the principle of free movement of services

comprised the telecommunication networks and later inspired specific regulation. Fist, a soft law

was created, known as the Green Paper on the development of the common market for

telecommunications services and equipment, adopted on 30 June 1987. On 1988, the Council

adopted a Resolution providing as a mayor goal, the creation of an open, common market for

telecommunications servicesand invited the Commission to create a legislation on the matter46.

Two year later, another Council Directive provided principles to harmonize member states

provisions on open network, like objectiveness, transparency and non-discrimination47. For the first

time, access and interconnection obligations was established on EU level48. The market was

completely liberalized on the 1st of January 199849.

The most recent policy on the telecommunication field shows the importance of the Internet

on the present scenario. The so-called Digital Agenda for Europe provided the diminishing of the

barriers that still block the free flow of online services, the promotion of interoperability, the pursuit

for security solutions and the stimulation of network investments and research50.

The concept of network neutrality was introduced in the EU legal order with the 2009

45 European Commission, Trans-European networks, at http://ec.europa.eu/ten/index_en.html . Accessed on 4th january2012.

46 Council Resolution 88/C 257/01 on the development of the common market for telecommunications services andequipment up to 1992, 30 June 1988,

47 Council Directive 90/387/EEC on the establishment of the internal market for telecommunications services throughthe implementation of open network provision, 28 June 1990.

48 Council Directive 90/387/EEC on the establishment of the internal market for telecommunications services throughthe implementation of open network provision, 28 June 1990.

49 Council Resolution 93/C 213/01 on the review of the situation in the telecommunications sector and the need forfurther development in that market, 22 July 1993.

50 European Commission. Information Society. Digital Agenda, athttp://ec.europa.eu/information_society/digital-agenda/index_en.htm. Accessed on 20th January 2012.

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Telecom Package. Commission's impact assessment on the proposal of amendment of the

telecommunication directives gave the Commission first delineations of the principle, comparing

the European scenario with the reality in the United States51.. The Commission underlines that the

American way to deal the matter was not adopted in the proposal, as the aimed goals of the two

judicial systems are different. United States established four freedoms on the matter of network

neutrality52, but did not consider that product differentiation is usually positive for the market

because it increases users options of choice. Also, the country internal market is not competitive in

the eyes of the Commission, because only two companies provide the broadband service in almost

all the areas, known as duopoly. However, regulatory measures are not applied to change that.

Hence, the US model is not adequate for the European reality, where promoting competition is

pursued.

The solution provided by the Commission is to ensure competitive markets and establishregulations on access and interconnection. Since differentiation is a harm only when it is an anti-

competitive measure, competition can be promoted by imposing ex ante obligations on non

competitive markets, while the competitive markets can continue to be free of limitations and free

to differentiate.

6.2. Competition law

The general anti-competition laws are applicable on the telecommunications field. They are

divided into three groups: (i) prohibitions of anti-competitive agreements between companies, (ii)

prohibitions of abuse of dominant position and (iii) control on the mergers and acquisitions to stop

those that would have a negative impact on competition53.

The prohibition of agreements between competitors includes agreements on fixing the price

or production (prefixing); on the winner of a bid (bid rigging); on competition division of the

51 EUROPEAN COMMISSION, Impact Assessment Accompanying document to the Proposal for a DIRECTIVE OF

THE EUROPEAN PARLIAMENT AND THE COUNCIL amending European Parliament and Council Directives2002/19/EC, 2002/20/EC and 202/21/EC, Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND

THE COUNCIL amending European Parliament and Council Directives 2002/22/EC and 2002/58/EC and Proposal

for a REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL establishing the EuropeanElectronic Communications Markets Authority, Brussels, 13.11.2007

52 The net freedoms are: 1) consumers are entitled to access the lawful Internet content of their choice; (2)consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement; 3)

consumers are entitled to connect their choice of legal devices that do not harm the network; and 4) consumers areentitled to competition among network providers, application and service providers, and content providers the right

for users to access and distribute (lawful) content, to run applications and connect devices of their choiceFCCpolicy statement of 5 August 2005 at:http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260435A1.pdf.Acessed at 10 november 2011.

53 International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva,

20 - 22 November 2002, p.10, athttp://www.itu.int/osg/spu/ni/competition/background/Final%20background%20paper.pdf. Accessed on 12th January 2012.

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market, geographically or of the consumers(market sharing and non-compete agreements); and on

the supplier (group boycotts).

The form of abuse of dominant positions are a refusal to supply essential facilities to the

competitors; predatory prices; cross-subsidization; excessive pricing, tied sales and margin squeeze.

A essential facility is something indispensable for the entry in the market, controlled by one or more

of the competitors and impossible to be duplicated by the other competitors. The competitors that

do not control the facility need access on reasonable prices to join the market 54. Prices are predatory

when they are cut under the production cost with the scope of winning the market and removing the

competitors, so that can than recover the expenses by increasing the prices. It can have effects on

other markets too, since the impressive low prices can rise the reputation of the company on

markets not yet explored, but where the anti-competitive company wants to enter55.

Cross subsidization is the use of revenues received in a dominant market to lower the pricesin another market56. In the telecommunication field, that practice is even more serious because the

transferred revenues usually are excesses that should be partially invested on the service of the

dominant market. Therefore, both markets are damaged. Excessive pricing is also an illegal practice

that have to be defined on a comparative analysis with the considered competitive price57-58 Tied

sales or bundling is the practice of forcing consumers to buy two products, one of them on which

the company has a dominant position, to gain a dominant position on the other one.

Margin squeeze is a form of abuse of dominant position that is very likely to occur on the

telecommunication field, because it depends on two markets, the upstream market (network

provider) that sometimes acts on a monopoly base, and a downstream market (of services that

depends on that network). By raising the price of access on the upstream market, or by lowering its

54 The term was first used on the case United States v. Terminal Railroad Association, 224 U.S. 383 (1912). The U.S.Supreme Court decided that to block railway companies from passing the rails was a illegal restraint of trade.Available athttp://supreme.justia.com/cases/federal/us/224/383/case.html. Accessed at 3rd January 2012.

55 OCDE.Predatory Pricing, 1989, athttp://www.oecd.org/dataoecd/7/54/2375661.pdf. Accessed at 4th January 2012.56 International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva,

20 - 22 November 2002, athttp://www.itu.int/osg/spu/ni/competition/background/Final%20background%20paper.pdf. Accessed on 12th January 2012.

57 David S. Evans and A. Jorge Padilla.Excessive Prices: Using Economics to Define Administrable Legal Rules;Jnlof Competition Law & Economics, (March 2005), p. 97-122, athttp://jcle.oxfordjournals.org/content/1/1/97.abstract. Accessed on 23 January 2012.

58 The difficulty to characterize excessive pricing can be noted on cases of the European Court of Justice described byEvans and Padilla (citation above). The Court gave a definition of excessive pricing, when it has no reasonablerelation to the economic value of the product supplied., but underlines the insufficiency of the definition. However,

the case-by-case can provide situations where the excessive prices are obvious, like when a company sells the sameproduct in two market, but with really different prices (Case 27/76 United Brands v. Commission, ECR207, 1978).

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price on the downstream market since it can always exclude the price of the network for the use of

itself, it drop competitors59-60.

The control on the mergers and acquisitions are done by analyzing their effects on the

relevant market. Each legislation defines what is considered market dominance and its limits.

Relevant market is the definition of the physical space (and consumers) in which an economic agent

act on the influence of its competitors61, and which it could monopolize62. Usually, it is

characterized by a hypothetical increase of the price of the product on a little percentage for a

certain period of time to determinate which are the products it can be replaced for63. It can also be

considered by defining which forces are able to restrain that product, on a reverse hypothetical

analysis64. The competition law only intervene when there is the the fear of dominance.

Those general antitrust measures, when applied on the telecommunication field, has to put in

account telecommunications' economic characteristics: (i) lots of fixed and sunk costs; (ii) verydifferent services offered; (iii) possibility to provide on local or long distance, depending on the

service; (iv) price is not the only defining variant of domination of a market, but also innovative

services or improved performance; and (v) services are usually consumed in bundles65.

To promote the entry of new competitors in the telecommunication market, provisions

imposing access and interconnection were created on EU law level to harmonize European member

states law. They are: obligations on reasonable prices66, non-discrimination of network access67,

price control when competition is inefficient68 and imposition of auditing separately the vertically

59 VELJANOVSKI, Cento. Margin Squeezes in Telecoms: Recent Cases and Economic Issues, Presentation to Whichcompetition policy for regulated industries? Governance and sector-specific perspectives,Istanbul, 6 September2008.

60 Access Directive provides that the principle of non-discrimination ensures that undertakings with market power donot distort competition, in particular where they are vertically integrated undertakings that supply services toundertakings with whom they compete on downstream markets. (Directive 2002/19/EC of the European Parliamentand of the Council on access to, and interconnection of, electronic communications networks and associatedfacilities (Access Directive), 7 March 2002 (as amended by the Directive 2009/140/EC), recital 17.). Also, CaseCOMP/C-1/37.451, 37.578, 37.579 Deutsche Telekom AG) (OJ C 263/9, 14.10.2003).

61 KATE, Adriaan ten; NIELS, Gunnar. The Relevant market: a concept still in search of a definition, in Jnl ofCompetition Law & Economics, September 15, 2008, at http://jcle.oxfordjournals.org/content/5/2/297.abstract?

maxtoshow=&hits=10&RESULTFORMAT=1&title=relevant+market&andorexacttitle=phrase&andorexacttitleabs=and&andorexactfulltext=and&searchid=1&FIRSTINDEX=0&sortspec=relevance&resourcetype=HWCIT.Accessed on 20 January 2012.

62 GUAL, Jordi. Market Definition in the Telecoms Industry, Consultation to European Commission, 2002, p. 3.63 The European Court of Justice applied the hypothetical monopolist test on the Case T-83/91, Tetra Pak v

Commission, [1994] ECR II-755, paragraph 68.64 GUAL, Jordi. Market Definition in the Telecoms Industry, Consultation to European Commission, 2002, p. 5-6.65 GUAL, Jordi. Market Definition in the Telecoms Industry, Consultation to European Commission, 2002, p. 17-18.66 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic

communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive2009/140/EC), 20.

67 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electroniccommunications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive

2009/140/EC), article 10.68 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic

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integrated companies that operates as backbone providers and last mile providers - to prevent

margin squeeze69..

6.3. Provisions on network neutrality

European Union interfere on Member States regulations under the principle of subsidiary,

which determines that the Union can act only when it is a cross-boarder matter that influences

directly on the Union's competence (principle of attribution) and interests, like the Single Market.

Even if the commercial transaction is all made in the same country - parts and object from the same

member states it will be a European Union matter if it affects other Member States.

Since the European Union established free movement of services regarding also

telecommunication and online services, the regulatory framework at UE level provides the

intervention of National Regulatory Agencies where the quality of service for transmission in an IP-based communication is unacceptably low, thereby preventing monopoly on content and service

delivery through the Internet. To reach the quality of service goal, the Commission described three

options: (i) industrial self-regulation with the scrutiny of the Commission; (ii) strengthen current

regulations and transparency obligations or (iii) do nothing.

The first option, the self-regulation, is more likely to be accepted and enforced by the

companies, once they are the creators of the regulation, but it is also more likely to be infective and

to need a strong monitoring of the Commission, specially on transparency and publication of

information. The following option is to modify current framework in order to intensify providers'

obligations on quality of service by establishing minimum quality levels for the network

transmission of services for end-users. These would be done together with the enactment of

transparency obligations empowering National Regulatory Agencies on the collection of

information on the service. Even if transparency increases prices of services, they are necessary for

the control of the Commission and to facilitate consumer's choice. Finally, the third option is to

leave the regulation as it is, but the effectiveness of current framework on ensuring the quality of

service is not clear and the rules can be outdated because of the technological advance. Blocking or

deliberately slowing Internet traffic from third party service providers would still be a risk, since

providers would be tempted to prioritize their content and service and to lower others on a

unreasonable levels. Analyzing the pros and cons, the Commission considered that the second

option was the most adequate to deal with the matter.

communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive2009/140/EC), article 13.

69 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic

communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive2009/140/EC), article 11.

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By that analysis provided by the Commission, it is possible to interpret the provisions on

network neutrality that were later put into force.

The Access Directive provides that National Regulatory Agencies

may ensure end-to-end connectivity by imposing proportionate obligations on

undertakings that control access to end-users. Control of means of access may

entail ownership or control of the physical link to the end-user (either fixed or

mobile), and/or the ability to change or withdraw the national number or

numbers needed to access an end-user's network termination point. This would be

the case for example if network operators were to restrict unreasonably end-user

choice for access to Internet portals and services.70

The Framework Directive provides, as a task of National Regulatory Agencies, thepromotion ofthe ability of end-users to access and distribute information or run applications and

services of their choice.71.

The Authorisation Directive provides on its annex, as a condition which may be attached to

the general authorisation for the electronic communications network and services, the

transparency obligations on public communications network providers

providing electronic communications services avail87able to the public to ensure

end-to-end connectivity, in conformity with the objectives and principles set out in

Article 8 of Directive 2002/21/EC (Framework Directive), disclosure regarding

any conditions limiting access and/or use of services and applications where such

conditions are allowed by Member States in conformity with Community law, and,

where necessary and proportionate, access by national regulatory authorities to

such information needed to verify the accuracy of such disclosure.72.

The Universal Service Directive states that

The Community and its Member States have undertaken commitments on the

regulatory framework of telecommunications networks and services in the context

of the World Trade Organisation (WTO) agreement on basic telecommunications.

70 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electroniccommunications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive2009/140/EC), recital (6) and (7).

71 Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework foreletronic communications network and services (Framework Directive, 7 March 2002 (as amended by Regulation(EC) n. 717/2007, Regulation (EC) n. 544/2009 and Directive 2009/140/EC), article 8(4)g.

72 Directive 2002/20/EC of the European Parliament and of the Council on the authorisation of electroniccommunications networks and services (Authorisation Directive), 7 March 2002, Annex, item 19.

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Any member of the WTO has the right to define the kind of universal service

obligation it wishes to maintain. Such obligations will not be regarded as anti-

competitive per se , provided they are administered in a transparent, non-

discriminatory and competitively neutral manner and are not more burden some

than necessary for the kind of universal service defined by the member.73

.

The European Parliament, on the Resolution on European Broadband: investing in digitally

driven growth,

calls on the Commission to safeguard the principles of the neutrality and

openness of the internet and to promote the ability of end-users to access and

distribute information and run applications and services of their choice; instructs

the Commission to assess whether the implementation of the revised EU telecomsframework requires specific guidance rules.74.

From the joint reading of the provisions and the Commission's intention, it is possible to

draw a definition on the principle of network neutrality in the European Union. It consists of the

premise of keeping the power of choice in the users' hands. This does not mean that traffic

management is prohibited. In a scenario of regulation simplification, a competitive market is

enough to empower consumers; consequently, only the companies that best serves the users'

demands can be successful. The demand is from consumers that do not want to have unwanted

limits on the content and services that they use, but they can have advantages on traffic

management.

The European definition differs from the former rigid meaning of the principle in order to

give more options to consumers. By letting users choose also the prioritizing criteria of data traffic,

Internets' flexibility grows even more. Furthermore, a flexible tool is what promotes so much social

and economic development.

But still, the free market cannot guarantee that the users are the ones that are choosing the

criterias'. To create a market shaped on freedom and users' needs, the EU framework is the

establishment of specific fundamental rights on Internet access. Consumers have to be given (i) the

information on how the bandwidth traffic is being controlled, (ii) the fast and easy way to change

the provider and (iii) respect on the confidentiality.

73 Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relatingto electronic communications networks and services (Universal Service Directive), 7 March 2002, as amended by

the Directive2009/136/EC, Recital 3.74 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011.

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To solve the lack of investments, the premise is that civil society, public and private sector

need to participate on Internet benefits. Although governments are not able to be responsible alone

for Internet growth, some forms of public investment were provided by European legislation. Those

funds can give a hand on network providers' investments and be an option instead of pricing the

content and services offered online. It is always important to underline that network neutrality does

not mean free internet. Like other universal services transport, postal services, electricity, for

example Internet is also payed. The World Wide Web creator gives a definition of network

neutrality considering the fact that: If I pay to connect to the Net with a certain quality of service,

and you pay to connect with that or greater quality of service, then we can communicate at that

level () Net Neutrality is NOT saying that one shouldn't pay more money for high quality of

service. We always have, and we always will.75.

By the provision on last legislative document on the matters, the European ParliamentResolution, it is clear that the network neutrality debate is not over, because the Commission was

invited not only to make impact assessment of the imposed legislation, but also to act on the means

of promoting the openness of the Internet76.

It's important to underline that network neutrality not being applied rigidly does not mean

that traffic management will be stimulated. To allow traffic management differs from imposing it.

European law forbids Member States to impose obligations on monitoring data77.

64. The less invasive intervention: the pillars on users' choice and quality of service

The actual paradigm is the simplification of regulation and the principle of subsidiarity of

European Union in order to get flexible services. After it has been accessed that a prohibition on

traffic differentiation would be an intrusive law intervention on competition, no provisions

prohibiting that practice was created. On the other hand, the freedom to manage the traffic is

subjected to fundamental rights and some EU law provisions specify how to respect those rights

while traffic managing. Debates are still being held on the matters, to clarify the interest of the

parties involved and to access the impact of proposals, so new legislation can be established. To

prevent network providers from complaining about unjust and unsustainable obligations on network

investment, the European Union provides fund allocations for the construction of broadband

networks.

75 BERNERS-LEE, Tim. Net Neutrality: This is serious, Timbl's blog, 21 June 2006, athttp://dig.csail.mit.edu/breadcrumbs/node/144. Acessed on 4th January 2012.

76 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 18.77 Directive 2000/31/EC of the European Parliament and of the Council on ertain legal aspects of information society

services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce), 8 June 2000,Article 15.

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(a)Public investment. Taking into account the goal of having 100% of broadband access78 ,

the Resolution on European Broadband: investing in digitally driven growthprovides that private

and public sector have to construct a mutually supportive system of investment on the broadband

network. That is because the private sector was not capable of taking broadband network facilities

to all European citizens, specially into rural areas, even if it had spent hundreds of billions of

euros79.

In 2008, 1 billion euros of public funds were allocated on broadband network development,

in order to reach the goal of 100% of connections in 2010. However, neither the investment was

done, nor the goal was reached, and the deadline was postponed to 201380. But it is difficult to

picture Member States investing on broadband networks when there is an economic crisis affecting

their financial stability. Still, the big funding allocation on the fast broadband network is one of theEU 2020 strategies because of the development that it promotes, since the public infrastructures

have to be future-proof, long-lasting and open81. The constructing of a fast broadband network all

over Europe would be a possible strategy to heat up the economy.

The final stage of the development is to have a sustainable infrastructure access and service

competition82. Which means that all the exploitation of the network will pay for the Internet growth,

but the price of access and interconnection and the amount paid by users would be reasonable, so

these values will not affect the liberty of expression. The networks would be open even if private,

and public funds would only be complementary83.

Since the Commission is responsible for executing the budget84, it was granted with the

responsibility to explore new financing sources, in collaboration with the European Investment

Bank and to agree on a EU Broadband Deployment Act, coordinating national, European and

private investments85.

(b) Transparency obligations. Member states are required to create regulations imposing

78 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 29.79 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, recital I.80 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 29.81 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, recital A and

E, and article 38.82 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, recital D.

Also, Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rightsrelating to electronic communications networks and services (Universal Service Directive), 7 March 2002, asamended by the Directive2009/136/EC, recital 4.

83 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 36.84 European Union, Treaty on European Union, article 17.

85 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 49 and51.

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undertakings to send detailed bills and publish constantly transparent and up-do-date information on

price, tariffs and conditions of services86.

In order to ensure transparency on the traffic management, the Body of European Regulator

for Electronic Communications recently published guidelines on the transparency needed for the

practice which explained the way that information should be granted and its content. BEREC

suggests a combination of transparent methods, as a case-by-case approach; real-time information

tools; and providing different levels of information to different types of user. Providers and national

regulatory agencies have a complementary role, since NRA should gather and control ISP

information and publish in an easy and comparative way. As for the content, users must be informed

about the limitations on access and the consequences of the traffic shaping techniques on users'

access. Furthermore, the users must be able to monitor the performance of its access service. Since

the bandwidth will be different for one or more type of data, the ISP are required to give all theratings, not only a single maximum speed figure, but many maximum and minimum quality of

service figures87.

(c) Easy and quick change of provider. The Internet was the second most frequently

switched service in Europe. Different from the other types of services, Internet consumers switched

to a more expensive service, showing that users' priority can be the technology upgrade88. These

numbers show that European Union is in the correct track on the means of easy and quick change of

provider. The obligation to facilitate the change of provider is provided on the Universal Directive89.

(d) Protection of privacy. Confidentiality is a principle provided by the European

Convention of Human Rights90, the Charter of Fundamental Rights91 and the ePrivacy Directive92.

Its applicability on the online field requires that transmission of packets are done with memory-less

approach.

86 Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relatingto electronic communications networks and services (Universal Service Directive), 7 March 2002, as amended bythe Directive2009/136/EC, Annex 1, Part A and Article 21.

87 Body of European Regulator for Electronic Communications.BEREC Guidelines on Transparency in the scope ofNet Neutrality: Best practices and recommended approaches, December 2011.

88 The Guallup Organization.Flash EB No 243: Consumers views on switching service providers. Analytical Report.Survey requested by the European Commission, January 2009, 82- 83.

89 Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relatingto electronic communications networks and services (Universal Service Directive), 7 March 2002, as amended bythe Directive2009/136/EC, article 30.

90 European Convention of Human Rights, article 8.91 European Union. Charter of Fundamental Rights, article 7 and 8.92 Directive 2002/58/EC of the European Parliament and of the Council concerning the processing of personal data and

the protection of privacy in the electronic communications sector (Directive on privacy and electroniccommunications) ,12 July 2002, article 5.

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As it was analyzed on the technical terms , confidentiality can be harmed when the IP

payload is taken into account for traffic prioritization. But prohibiting the traffic management that

takes into account the IP payload is not the best way to go, as the fight against virus usually needs to

retrieve the content93. Following that idea, the European law authorises any lawful process of data,

but if it goes beyond conveyance of communication, ISP needs the users' authorisation94

. This

means a consent of both involved on the transfer of information: sender and recipient. Under EU

law, data subject consent is any freely given specific and informed indication of his wishes by

which the data subject signifies his his agreement to personal data relating to him being

processed95.

The European Data Protection Supervisor was consulted in terms of the protection of

privacy on the network neutrality debate.96 The institution suggested the creation of the EU law

providing the principle of proportionality on the traffic shaping practice, which means taking theless interfering method to achieve the objective. They also suggested that consent should be given

explicitly and freely of constrains, including to compulsory consent to get access to the Internet

service. In other words, ISP should always have the option to offer the service on a non

prioritization basis, first come, first served, without imposing higher prices. Apart from that,

the consent has to be specific for data processing, on a specific form. Thirdly, the users must have to

be well informed on the conditions of the services. Since the authorisation must be given by both

parties, the ISP that wants to take into account the content of the messages has to be able to first

read the header to check if both the sender and recipient are part of the group that permits the IP

payload reading.

Finally, the EDPS noted that it is still not easy to list all the cases that consent is necessary.

Since the effects of traffic management are still partially unknown, EDPS proposes that it is done

only for the purpose of fighting cyber crimes, virus and spams. The use of traffic managing should

not, for now, be used to build profiles for behavioral ads .

7. AN IDEA STILL UNDER CONSTRUCTION: THE LONDON CONFERENCE ON

93 European Data Protection Supervisor. Opinion on net neutrality, traffic management and the protection of privacyand personal data, 7 October 2011, athttp://www.edps.europa.eu/EDPSWEB/edps/Consultation/OpinionsC/OC2011. Accessed on 20th January 2012, p. 11.

94 Directive 2002/58/EC of the European Parliament and of the Council concerning the processing of personal data andthe protection of privacy in the electronic communications sector (Directive on privacy and electroniccommunications) ,12 July 2002, article 4 e 5.

95 Directive 95/46/EC of the European Parliament and of the Council on the protection of individuals with regard tothe processing of personal data and on the free movement of such data, 24 October 1995, article 2(h).

96 European Data Protection Supervisor. Opinion on net neutrality, traffic management and the protection of privacy

and personal data, 7 October 2011, athttp://www.edps.europa.eu/EDPSWEB/edps/Consultation/OpinionsC/OC2011. Accessed on 20th January 2012.

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CYBERSPACE

The London Conference on Cyberspace was a reunion of more than 60 governments,

industry and civil society hosted by the UK's Secretary of State for Foreign & Commonwealth

Affairs to discuss the big issues about cyberspace97. Even if it was an international convention, it

counted with the presence of European Union representatives. Neelie Kroes, the Vice President of

the European Commission and Commissioner for the Digital Agenda was one of the a conference

speaker. It was divided into five themes: economic growth and development, social benefits, cyber

crime, safe and reliable access and international security. The guiding principles on reliable access

were the following: (1) data must be delivered reliably, (2) network security should not compromise

the free flow of information, (3) data must be secure in transit and storage, (4) it's necessary to

make users aware of their responsibilities, (5) it is necessary to balance regulation and self-

regulation, (6) it is necessary to provi

network neutrality in european legislation after the london conference on cyberspace on 1-2...

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