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Net neutrality may turn out to be a load of cobblers

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The Minister for Communications, Energy and Natural Resources, Alex White TD

The Minister for Communications, Energy and Natural Resources, Alex White TD

The Minister for Communications, Energy and Natural Resources, Alex White TD

What a mess. Last week's European Council meeting, attended by Communications Minister Alex White, was supposed to sort out net neutrality. But it postponed a decision until next year.

And it leaves net neutrality in chassis.

US President Barack Obama may want to protect it. The European Parliament may scream about it. And the Irish Government may utter warm words about it. But if they don't come up with an enforceable regulation soon, the number of companies affected by operators' traffic management (either promotion or demotion) is set to grow and grow.

A reminder of what net neutrality is: it is the principle by which all internet content must be treated equally in terms of speed and access by operators. In business terms, that should mean that a broadband operator can't block or slow down access to one shop's website because a rival shop's website has paid it for exclusivity or priority.

There's a huge international row over whether this historical internet rule should continue. In general, consumer rights groups, small business lobbies and legislators are in favour of formalising the strictness of the current net neutrality practice in law. And in general, telecoms operators are in favour of relaxing the rules to allow them more flexibility in their own commercial models.

At first glance, it is easy to side with the pro-neutrality argument. Online services have transformed our lives over the last ten years. The idea of artificial fast lanes or slow lanes being established for the commercial benefit of operators seems a backward step for society.

And yet operators have a reasonable case to make too. They have invested heavily in networks, connecting huge communities to the online communications and services that we now cannot live without. Last week, Mr White said that companies here have invested €2.5bn in broadband infrastructure in recent years. And their hands are tied in how they can make that money back, especially since most of us are now substituting cheaper online services for older network-based ones.

What the operators appear to be arguing for is the replacement of a strict net neutrality doctrine with one based more on "principles". In other words, they don't mind sticking to the general idea of giving access to everything equally but they'd like to be able to form a few commercial partnerships along the way.

The irony here is that this has already happened. Mobile operators now have commercial partnerships with online companies that separate partners' services from rival ones. For example, Vodafone and 3 both have deals with the music-streaming service Spotify in different European countries. In 3's case, it exempts Spotify use from its usual data limits in some European markets. This is a process called 'zero-rating'. In practice, it means that Spotify customers are given a clear priority over Spotify's rivals for 3's customers in those markets.

Is this fair? Or just an attempt to compete in a cut-throat mobile market?

3 is not alone. Almost half of mobile operators worldwide now offer at least one such 'zero rated' offer, according to a recent industry report. In the majority of cases, it is Facebook. In other words, operators are granting Facebook a hugely preferential status on their platforms over rivals such as Twitter, Tumblr and others.

Should this be against the rules? Operators might reasonably argue that they're simply trying to get subscribers rather than mess with the rubric or the balance of the internet's infrastructure.

And yet if net neutrality is to be strictly adhered to, this kind of promotion should probably be outlawed.

Unsurprisingly, operators' lobbyists are currently going all-out to try and anchor this new-found commercial flexibility.

"In Europe, there is a legacy of outdated telecom-focused regulation, while major internet players remain largely unregulated," said Tom Phillips, the chief regulatory officer of the mobile operators' GSMA association.

"If the region is to regain its digital leadership, the EU institutions urgently need to redress the balance between the rules for network operators, who are actively investing in Europe's digital infrastructures, and those for global internet companies."

Who will win the argument? Right now, it's finely poised. And much will depend on what government ministers such as Alex White agree to - neutrality versus 'principles' - at the next Council of Ministers.

But a vacuum in regulation is usually filled with commercial services. The longer authorities wait to legislate for this, the less net neutrality really means.

Sunday Indo Business