Net neutrality inching ever closer

The Dutch parliament’s recent decision to make net neutrality legal could have a massive impact on mobile service providers.

It’s a concept which never quite goes away, and is perhaps the issue which divides service providers and end consumers more than any other. Net neutrality is already law in Chile. And when the lower house of the Dutch parliament voted to approve net neutrality legislation this week, it once again triggered the debate – and will have hugely worried carriers in the Netherlands and across Europe.

The bill would effectively prevent internet service providers (ISPs) from charging higher fees for web-based communication services like Skype.

Skype hailed the decision as “a victory for innovators and consumers” in its blog yesterday. That’s not a surprising reaction, because net neutrality legislation effectively forces ISP’s to carry the costs of Skype’s services. In fact, in an aggressive posting, Skype referred to carriers’ concerns as “faux ‘but we need the money’ pleas”. It’s not exactly conciliatory in tone.

If the legislation passes through the Dutch parliament’s upper house, which it is expected to do, the Netherlands will become only the second country to have enshrined the principle of net neutrality in legislation.

Net neutrality states that all internet traffic should be treated equally, whatever its format, which sounds innocuous enough. Alex Brown, partner at Simmons & Simmons, has called the principle a “thorny and difficult issue” from a legal perspective, but it’s not just a legal problem. Its implications for carriers could be massive, which led to all major mobile network providers in the Netherlands – including KPN, Vodafone and T-Mobile – lobbying against the bill.

Carriers are faced with the increasingly difficult challenge of turning a profit in these times of exponential growth in data consumption and most, if not all, will be considering the business models which will allow them to stay solvent. The BBC reports that the issue in the Netherlands came to a head when KPN announced plans to charge customers extra for using Skype and WhatsApp, a free text messaging service. Those plans have clearly backfired.

KPN’s comments on the legislation have been restrained so far, simply stating that “Parliament should have taken more time crafting the bill.” The implications of this legislation on the telecoms industry in the Netherlands, across Europe and internationally remain to be seen.

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