Monday, February 9, 2015

Dutch Regulator Fines KPN, Vodafone for Net Neutrality Violations

The Netherlands Authority for Consumers and Markets has imposed fines on two of the country’s operators, KPN and Vodafone, for violating net neutrality regulations. KPN was fined €250,000.00 (US $287,237.00) for not allowing users to access various services including VoIP via its free Wi-Fi hotspots. Vodafone received a penalty of €200,000.00 (US $229,790.00) for offering plans that allowed its subscribers to watch HBO via an app without using any of their data allowances. The regulator in a statement said, “It is forbidden for internet service providers to determine what their customers can and cannot do on the internet.” It added, “Under Dutch law, ISPs are not permitted to charge different access rates for specific online services.”

In 2011 the Netherlands became the first European country and the second in the world to incorporate net neutrality into its laws. The law was put into effect to ban mobile operators from blocking or charging consumers extra for using services such as Skype or WhatsApp. Chile passed a net neutrality law in 2010, and following the Netherlands, Brazil put net neutrality into law in 2014. It is interesting to note that in the Netherlands, although mobile operators raised their charges overall to compensate for lost revenue when net neutrality was adopted, the law was still hailed as a consumer victory. In the recent events for which KPN and Vodafone were fined, only KPN was blocking access to its subscribers. Vodafone was actually allowing customers to use data at no charge, but it violated the law by influencing its customers’ online behavior.
As these fines are being handed down to the Dutch MNOs, proposed reform of net neutrality across the European telecom market is at the center of discussions of the European Council of Ministers, the presidency of which recently passed to Latvia from Italy. Earlier this year, the EC’s published list of priorities said that it would push for a compromise on net neutrality over the next six months. It wants to strike a balance “between high-quality services and a reasonable cost for consumers.” This stance is seen as somewhat opposing the draft of a law passed by the Parliament last April, which strengthened net neutrality rules. While it does not appear that a two-tier internet will exist in the EU anytime soon, it is clear that data use will continue to increase on a global level and have a pronounced effect on the speed and delivery of information. Since operators will not be able to charge extra to discriminate among various internet traffic streams, we believe that they should look for other revenue sources that can be used to invest in infrastructure to enhance their networks and ensure subscribers continued access at reasonable speeds to everything on the internet.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team:

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