Net Neutrality EC Consultation: Telefónica´s perspective

In our recent submission to the European Commission Public Consultation on Net Neutrality, Telefónica was happy to report that there are very few real problems with regard to the openness of networks.


We stressed that we don’t think that any additional obligations need to be introduced above and beyond those that are already in existence. Regulatory scrutiny should, above all, be focussed on protecting users’ rights and freedom of choice.


Telefónica stressed that at the same time it is necessary to protect operators’ ability to manage traffic on their networks, and permit differentiation of Internet access service in terms of price and characteristics, subject to guarantees of transparency and of no anticompetitive discrimination.


About Net Neutrality...


The NN principle is shared by most telecom operators, content providers and users. They all agree that the access to Internet should remain open, non-discriminatory and transparent. The issue is really how to pursue this principle.


Up to now, European regulation provides for provisions aimed at protecting user´s rights. Transparency is a key tool to protect users and to ensure competition. Transparency enables consumers to make informed choices and thus benefit fully from competition. As an extreme remedy, in case of major service degradation the Framework empowers National Regulators to impose on operators’ minimum quality of service levels.


In July of this year the European Commission (EC) launched a new Public Consultation on NN. Previous consultations had been of a more general nature, but this last one focuses specifically on transparency, switching and aspects of traffic management. Vice President of the Commission, Neelie Kroes, announced that she wants to publish recommendations fearing a potential lack of effective consumer choice. The consultation will provide input for such guidance which the European Commission is planning to publish in 2013.


What are Telefónica’s Views?


Here are the main points Telefónica has submitted to the EC on the issue of Net Neutrality and traffic management.


Networks are shared resources that are designed to give a certain performance within the boundaries of economic and technical constraints. The Internet requires some traffic management to ensure efficient operation for all users and to prevent degradation of service but this is often at odds with broader definitions of NN.


Nevertheless, “fair” traffic management is now widely used and generally accepted as a necessity to guarantee an efficient operation of the services and networks. It also maximizes performance within the above economic and technical boundaries, in order to deliver the best quality of experience to customers in competition with the other providers. Mobile networks’ performance is more sensitive to traffic load than fixed networks, making traffic management even more critical.


Transparency of network management practices and other relevant features of the commercial offer is necessary to ensure that customers are clearly informed and confident about the different choices available.


We should be pragmatic how to achieve an adequate level of transparency without resorting to over-prescriptive regulation to achieve it. Since no one-size-fits-all solution is possible, operators should be allowed to explore flexible approaches towards ensuring transparency for their customers, which Telefónica believes should definitely include self-regulatory approaches.


With regards the evolution of Internet, best effort networks have to deal with traffic from very different applications which have distinct requirements and compete to satisfy diverse customer usages. Managing the quality of service in order to provide the appropriate Quality of Experience across different segments of customers is the way to fulfill these needs. Differentiation has become a key competitive factor of Internet access services that provides to the customer ability to choose the services they require and best match their needs.


For this reason we fear that any undue strict regulation on NN would reduce the scope for quality of service differentiation and restrain network competition.


We also believe that any overly prescriptive obligation of providing minimum quality of service would be an extreme remedy that would restrict the scope for competition and, subsequently the user’s ability to choose the best option of network services they require.


In fact, having highly competitive Internet fixed and mobile access markets - as it is the case across the EU - is the best way to avoid any concern related to potential practices by ISPs which could undermine customers’ expectations when using and having access to the Internet.


Users should be able to choose among different offers and services providers which best suits their needs. Differentiation in tariffs and service capabilities is the sign that markets are performing in a highly competitive way.


Furthermore, we are convinced that current best effort Open Internet will continue to develop together with new specialized services provided by the access operator, which lead to greater choice for customers and provides enhanced means to access to contents.


Again we want emphasize that any overly prescriptive regulation on NN could limit new business models which in turn will deteriorate innovation and investments on new services and networks.


We are convinced that the current EU regulatory framework as it stands, contains all the appropriate tools to deal with any issue of concern, wherever it arises, and on a case-by-case basis. Additionally, Competition Law as well as other regulatory provisions such as those related to Privacy and Data Protection can tackle any other potential concerns. In that regard, Telefónica is very supportive of ensuring that the privacy and data protection provisions are not undermined by the implementation of any traffic management technique.


In conclusion, Telefónica’s position in the NN debate addresses mainly the protection of users’ rights and their freedom of choice, while at same time claiming for the ability to manage traffic on our networks, and permit differentiation of Internet access service.


You can access the Telefónica whole response to the consultation here.



Javier Alonso Lecuit, Strategy and Regulatory Services, Regulatory Department, Telefónica S.A.