ROCCO HQ London 29 June: When is “unlimited” not “unlimited’? Well actually we begin to know as telecoms consumers that in recent times, there are often limitations.
Here in Europe for example, what is already happening in many countries is that operators advertise their broadband service calling it “unlimited”… even though when the customer reaches a certain threshold (often 1 gigabite, sometimes even 2 gigabites) the speed of connection may often be reduced so that the customer may face considerable speed reductions and may not use the data service any longer.
Operators say that the allowance of internet is indeed “unlimited”, because the service still remains open and they do not block it. However, the quality of the service is so low that it is as if it wasn’t available anymore, many regulators claim. Often, operators reply by saying that in their Terms and Conditions they inform their customers about this “throttling policy”: but even if customers are properly informed, can operators advertise their service as an unlimited service?
So to last weeks news from the USA: A few days ago the US Federal Communications Commission (FCC) hit AT&T with a $100 million fine for slowing down the broadband access of millions of its customers.
AT&T was accused for alleged practices of throttling: FCC found that if an AT&T customer use up a specific amount of mobile data, the ISP reduces his Internet speeds which reaches a much slower level than normal. According to the FCC, the speed was so slow that consumers were unable to use any of the common apps.
In FCC’s view, this slow-down practice has not been properly advertised by the Operator in its Terms and Conditions since AT&T’s policy, has violated the “transparency” requirement of the net-neutrality rules, which requires operators to sufficiently inform consumers about network-management practices. For this reason FCC adopted its decision on the grounds of lack of transparency. It is a strong signal, also in the light of the new FCC net neutrality rules recently entered in force.
Consumers deserve to get what they pay for… Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure.
FCC Chairman Tom Wheeler said in a statement.
Michael Balmoris, an AT&T spokesman, replied that the company will “vigorously dispute” the FCC’s allegations, arguing that AT&T did never mislead consumers since the company put out a press release in 2011 about the policy change and sent notices to all its consumers.
The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers and has known for years that all of the major carriers use it, we have been fully transparent with our customers, providing notice in multiple ways, and going well beyond the FCC’s disclosure requirements,
Mr. Balmoris said.
A similar case has not yet occurred in the European Union, where art. 20 of the Universal Service Directive already provides for transparency rules and where more detailed transparency rules may be adopted in the frame of the Single Telecom Market package, which includes one specific chapter just for the net neutrality’s topic.
However, since this legislative proposal is currently blocked in negotiations and there is not any clear expectations of prompt final approval, the situation is not due to change in the short term. This means that for some years yet European consumers will not get a proper shield against net neutrality violations.
In EU, while transparency rules are generic, the antitrust enforcement is difficult because of oligopoly markets that make it difficult to demonstrate the existence of a joint dominance, otherwise no sanctions can be imposed.
Therefore, in the EU net neutrality sanctions are rare and not relevant. However, it’s worthwhile mentioning a couple of countries where specific national legislations have been enacted, such as Slovenia and the Netherlands. This is the reason why, should the Single Telecom Market package not be approved in the future, most European countries will likely start their autonomous legislative initiatives, following the Dutch and Slovenian examples.
Source: Federica Romano Head of Legal Regulatory and Research at ROCCO, Edri ORG, The Internet Association