TR Editors' blog

Roundup: The EU's Investigates Net Neutrality

The European Commission is walking a careful line between mobile Internet providers and their opponents.

Erica Naone 04/19/2011

The European Commission is looking into how mobile Internet providers are managing data across their networks, opening up a new storm of debate around the idea of net neutrality. The review is in part gearing up for a new European telecommunications law, which takes effect May 25.

Ars Technica's Nate Anderson writes that there's a reason for interested parties to be concerned about the issue,

As today's Commission report noted, throttling of file-sharing and video streaming traffic has been reported in France, Greece, Hungary, Lithuania, Poland, and the United Kingdom. Blocking or charging extra fees for VoIP has been reported on mobile operators in Austria, Germany, Italy, the Netherlands, Portugal, and Romania.

It's not clear that the new law will give sufficient guidance. PCWorld's Jennifer Baker writes,

There is no set definition of "net neutrality" in the European Union, but it will be a legal requirement when the new Telecoms Package comes into force on May 25. This new law, which sets out rules on transparency, quality of service and the ability to switch operator, must be applied in a way "that ensures open and neutral Internet principles are respected in practice." However, it does not specify how member states may achieve this, leading to confusion in some countries about how to adopt the law.

Some companies and organizations are complaining that there are already big problems with how European carriers treat data traveling on the mobile Internet, writes the New York Times,

Advocates of network neutrality criticized the inquiry as insufficient, saying that the fact-finding mission was superfluous and ignored obvious, continuing problems with the mobile Internet. Operators, for example, do not connect Skype calls over their networks because the Internet calling company's services would siphon revenue from their own businesses.

"The European Union appears to be alone in the developed world in tolerating on such a wide scale these types of arbitrary restrictions on Internet use," said Jean-Jacques Sahel, the director of government and regulatory affairs for Skype in London. "It has to cease and we look to European authorities to unambiguously protect consumers."

Though the European Union is well known for the hard line it took with Microsoft in its antitrust investigation, it's not yet clear how the Commission will position itself in this case. In a press conference, Neelie Kroes, European vice president for the digital agenda, toed a careful line between the interests of the operators and those of their opponents, saying,

Today's report shows a general consensus that traffic management can be useful. For example, it is important to keep video calls running smoothly even if that means an email is delayed by a few seconds. Consumers have the right to choose services, and operators have the right to deliver services, that can meet these expectations. I do not like the blocking or degrading of certain services. But if there is such blocking or degradation, then the customer needs to be clearly informed in advance so that they can make an informed choice about the operator that gives them what they want. It is clearly not OK to block or degrade lawful services by stealth, without informing the customer.

Apple's New Subscription Plan Attracts Regulator Attention

The FTC and the Department of Justice are said to have launched preliminary investigations.

Erica Naone 02/18/2011

Apple made waves earlier this week by announcing that it plans to take a 30 percent cut of subscription services, such as magazines and video, sold through the app store. The company also required that app makers sell through the app for the same price as what's available externally—or less, and said it would not allow links within apps that take customers elsewhere to purchase subscriptions.

Perhaps unsurprisingly, the move has invited attention from regulators, including the Federal Trade Commission and the Department of Justice, who are reportedly involved in preliminary investigations.

Part of the problem seems to be the punishing 30 percent rate. Forrester Research has suggested 5 percent would be more appropriate. Carolyn Kellogg from the LA Times writes:

Whether any online retailer will settle for 5% is yet to be seen, but on Wednesday, Google made a move in that direction. In a clear effort to propose a more attractive alternative than Apple's to publishers, the Google tablet subscription model, dubbed Google One Pass, takes a cut of 10% or less.

While magazine publishers have been making the most noise, they're not the ones who stand to lose the most from Apple's new rules, argues PC World's Jared Newman:

To be honest, I'm not really concerned with newspaper and magazine publishers. ... I'm more worried about existing subscription-based services such as Hulu Plus, Rdio and Pandora, all of which have grown to rely on their iOS apps for subscribers. ...For services with high overhead -- say, for licensing music, movies or TV shows -- Apple's new plan presents a difficult choice: Stop supporting the iPhone and iPad, or raise prices to accommodate Apple's 30 percent cut.

The big problem is that even subscribers who aren't using Apple products would be affected by price hikes. Services like MOG and Hulu Plus charge one price for access to all supported devices, so unless they start fragmenting their subscriptions -- a highly undesirable option, I think -- users of other platforms, such as Android, will feel the waves from Apple's ecosystem.

Regardless of what's just, the regulators aren't likely to take the case far, according to Darrell Etherington at GigaOm:

Apple might be susceptible to investigation with regard to the tablet market, where it still holds an overwhelming share, but if the company can convince regulators that in-app subscriptions are part of the greater overall digital and print media markets, then as it stands, it would be impossible for anyone to say they have a dominant overall share, except possibly when it comes to digital music.

Obama's Call for Wireless

Reactions to Obama's proposed wireless plan lean towards the skeptical.

Erica Naone 02/11/2011

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Yesterday, President Barack Obama laid out a vision for how to greatly increase wireless access in the United States. A White House release summarizes the plan point by point, but the crux of the proposal is that Obama hopes to bring high-speed wireless access to 98 percent of Americans within five years. His plan, he says, could do this while reducing the deficit by just shy of $10 billion.

The key will be getting owners of underutilized spectrum to give that wireless real estate back to the government, so that it can then auction it to other providers. The hope is that current owners will give up the spectrum voluntarily.

Arik Hesseldahl at All Things Digital praises the plan, writing that it's vital to bring Internet access to a broader segment of the population:

It's unfortunate that in 2011 the country that gave birth to the Internet hasn't yet found a way to extend its many benefits to every sector of its population.

During the past several weeks we've seen the power of the Internet brought to bear in Egypt, where what's been widely called the Facebook Revolution seems on the cusp of toppling President Hosni Mubarak. It was Mubarak who shocked the world by cutting his country off from the Internet, and it so irritated people both inside and outside Egypt that they banded together to find ways around the digital curtain he tried to erect around his borders. The same chain of events has turned a humble Google marketing exec into a national hero.

However, there could be hiccups in getting it implemented. Aside from possible difficulties involved with getting owners to give up spectrum, the New York Times warns that Obama will face political hurdles:

The plan, which will be included in the budget Mr. Obama releases next week, requires Congressional approval at a time when Republicans have said they are interested in cutting federal spending.

And Ars Technica questions whether access is really the problem:

Free Press research director S. Derek Turner notes that "according to the FCC's own data, 98 percent of households in the United States already have access to wireless broadband service, while less than one-third subscribe to it." Nothing in the plan encourages them to adopt it, Turner said.

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