Net neutrality

1. Net neutrality 10 December 2012 Prof Jacques Stern Commissioner -- ARCEP

2. Net neutrality: motivations and definitions • Three out of four people in France today are Internet users. So the way it operates and its development havebecome strategic issues • Net neutrality refers to a principle whereby all electronic communication networks must carry all data streams in a neutral fashion, in other words regardless of their nature, their content, their sender or recipient. In other words, those who operate the information highways should not block or throttle, i.e. slow, certain traffic streams or, on the contrary, give higher priority to others – for instance by giving priority routing to its partners’ content.

3. Net neutrality: the main issues • Some operators are blocking certain contents or prioritizing applications • How much control can they rightly exert over traffic? • Traffic is rising fast and operators have to upgrade their networks • How heavyis the burden? Whoispayingwhat? Is it a viable ecosystem? • “Fast-lane Internet” and other kinds of differentiation are put forward as efficiency-improving solutions • Are wegoingtoward a « two speed » internet ?Is an affordable –yetefficient– best-effort Internet atrisk ?

4. Europe’s first milestones • The “Telecoms Package” gives a flexible framework • Not too prescriptive, while including specific provisions on net neutrality (NN) • The EU institutions are taking position • European Parliament and Council: Adoption in autumn 2011 of positions supporting the protection of NN • Board of european regulators (BEREC): Thorough investigation on the main aspects of NN and publication of reports and guidelines

5. BEREC (regulators of European countries) is building a common understanding • BEREC has identified NN as a key regulation issue since 2010, with guiding principles : • the need for traffic management AND the importance of the “best-effort” model • primary role of effective competition – regulatory tools available if not sufficient • same principles for fixed and mobile • In 2012, BEREC conducted a European-wideinvestigation on traffic management: • Between 36% and 42% of mobile Internet users are affected by P2P restrictions • Between 21% and 38% of mobile Internet users are affected by VoIP restrictions • In 2011 and 2012, BEREC established a common analysis of regulatory challenges and proposed some methodology Quality of service • How to monitor it • When / how to set minimum requirements? Differentiation practices • Assessing their risks IP interconnection • Understanding thisun-regulated,so far efficient market Transparency • Improving information to end users

6. ARCEP’s approach • High-levelprinciples • General recommendations • Progressive implementation

7. ARCEP’s approach: high-level principles • Traffic management is not a priori detrimental …... nevertheless it may be used in some cases for disputable purposes • In best-effort Internet, quality is not guaranteed … ... which does not mean that its quality should not be sufficient • Mobile Internet access has specificities (resources scarcity and sharing) … ... but should follow the same high level principles

8. ARCEP’s approach: general recommendations • Internet access service should follow net neutrality principles,while ISPs can innovate with specialised services • General rules: freedom of use, sufficient quality and equal treatment within Internet access service • Traffic management within Internet access service should remain in any case:relevant, efficient, proportionate, non-discriminatory between parties, transparent • Unrestricted specialized (“managed”) services as long as Internet access not degraded below acceptable level • The regulator needs to foster quality and monitor the market • For consumers: increased transparency on traffic management and quality of service • For the regulator: monitoring traffic management, QoS and interconnection market • Net neutrality is about the whole value chain, not only ISPs • Content and application providers play a big role • Devices should be looked at, too

9. ARCEP’s approach: progressive implementation • A progressive, case-by-case approach, based on recommendations ... … as opposed to prescriptive ex antewhite list / black list regulation • A preventive framework which could, if necessary, become coercive Preventive, immediate action 1st level • Competition • Increased transparency • QoSmeasurements and comparative QoSpublication • Soft guidance issued giving visibility on assessment criteria At stakeholders’ initiative, in case of a problem 2ndlevel • Dispute settlement, on the basis of increased market knowledge and soft guidance issued previously Prescriptive regulatory action, in case of a market failure 3rdlevel • Minimum QoS requirements, addressing general performance or specific degradations

10. Today’s working themes in France • Description of ecosystem • Analysis of traffic, modeling of costs, estimation of revenue, monitoring of trends • ARCEP works at establishing a fact-based background, for a clearer debate • Traffic management • Full review of current practices • Their intensity is decreasing in the market • ARCEP now calls for the steady elimination of VoIP and P2P blocking • Monitoring will continue, in particular on differentiated commercial practices,e.g. contents and websites not counted towards the data allowance • Interconnection • Tensions and fast changes require the regulator’s attention • ARCEP collects information through open sources and a biannual data-collection campaign • Objective: in-depth understanding of trends and potential risks • ARCEP has recentlypublishedits • Report to Parliament and the Government on Net neutrality • on www.arcep.fr(french and english version available)

11. Thank you!