Net Neutrality debate, some reality checks

Last week ETNO together with Telecom Italia organised a debate on the outlook of the ICT sector regulation in view of the upcoming Italian Presidency of the European Union. Marco Patuano, the recently appointed CEO of Telecom Italia, participated in the debate, which was an opportunity to bring to the table some first-hand views from the business in the debate on Net Neutrality, which is plagued with myths and scaremongering. Marco Paduano remarked that some over-the-top players (OTTs) said to him they don’t need quality of service guarantees (QoS), but others want. For most of the popular OTT services we know today the end-users are ok with low QoS and low security and privacy compliance; keeping in touch via Facebook is not very QoS sensitive and –apparently- almost nobody cares that Gmail scans the content of Emails for targeted advertising. Nevertheless a myriad of services do benefit from enhanced QoS, or will not even by viable without it; think of e-call (emergency system where your car send an emergency message in case of an accident), smart energy grids, and other smart city applications. A lot of these services are still in their development phase, any ex-ante regulation on how services should or should not evolve or any regulation that would define today how you can manage your network in the future is condemned to hamper innovation in those fields.


Marco Patuano also had questions regarding the severe merger control in the European mobile market -focused on price while forgetting about investment- compared to the absence of any discussion on the Facebook and Whatsapp merger for example. He actually hinted to the elephant in the room; the European competition policy in the context of the global Internet value chain. I think it is time to ask the question if the competition framework we have in Europe is appropriate to address the challenges of dominance in the Internet Ecosystem. Eduardo Martínez-Rivero, DG Comp, noted that competition law has some limits to address discrimination (e.g. need to prove dominance in the OTT space and abuse), and that a possible alternative is ex ante regulation. But, in my view, perhaps another alternative is to evolve our competition law tools. I have the impression that our competition framework is not fit for purpose. Reform, yes, how, I don’t know, but let’s have a look at it. Perhaps it is also the opportunity to address the Net Neutrality concerns some stakeholders have vis-à-vis telecom operators. A reviewed competition policy, that is able to address abuse of dominance by all type players (OTTs, handset makers, Operating systems developers, telcos, etc.) that provide Internet services might be a better way to address concerns and problems when they arise, instead of rushing through an ill-conceived net neutrality regulation that only focuses on some actors.



Chema Alonso

Chief Data Officer, Telefonica.