EU looks unlikely to support ban on zero-rating of content

The European Union (EU) appears unlikely to support a ban of the so-called "zero-rating" of content that enables mobile operators to provide free access to online services including streamed music, TV and social networking sites as part of promotional offers to attract users.

A document published by the new EU Latvian Presidency on net neutrality discusses a proposal to include a ban on "positive price discrimination"--which is the term applied to zero-rated content--across the European Union. Critics say that the zero-rating of content violates the principle of net neutrality as it is a form of price discrimination that favours particular applications, and have called for the practice to be banned.

However, the Presidency notes that while an explicit proposal to ban positive price discrimination has gained the support of several member states, other states have opposed such a ban, leading the Presidency to conclude that an explicit ban "cannot gain the necessary support."

The Presidency added that it would seek guidance from member states on whether and how this issue needs to be resolved in draft legislative text. One possible option could be to allow each member state to decide whether to ban positive price discrimination at national level, or leave the assessment of such practices to general competition law.

However the Presidency noted that such a solution "would not ensure a consistent approach across the Union."

Norway is one country to have already adopted a net neutrality code to which Internet service providers have adhered on a voluntary basis. In November 2014, the Norwegian Communications Authority noted that zero-rating would constitute a violation of the guidelines in Norway.

"At first glance it may appear that all traffic is handled equally in this charging model, but the fact is that once you have used your quota, the traffic that is exempted will be allowed to continue, while all other traffic will be throttled or blocked. This is clearly a case of discrimination between different types of traffic," the regulator said in a blog.

Research company Rewheel has been a particularly vocal critic of the zero-rating of content. In October last year, the company issued a list of 75 "zero-rated, potentially anti-competitive mobile applications/services in the 28 member states of the European Union," for example.

Emma Mohr-McClune, service director, global consumer services at Current Analysis, also said in October last year that in the space of just 18 months, "zero-rating has gone from being an exotic and highly innovative charging mechanism to common practice across the globe. It's now just one of the pricing and positioning choices carriers consider in creating the marketing mix for any new digital service," she said.

Mohr-McClune argued that from a European perspective, operators may launch zero-rated services and products as long as the launch of this service doesn't act as a restriction in terms of consumer freedom of choice. "So far, the net neutrality lobby attempting to argue that case hasn't found many compelling case studies to draw on," she commented.

In July last year, service optimisation and revenue generation specialist Allot Communications found that round 45 per cent of mobile operators worldwide now offer at least one zero-rated application, and the zero-rated app in 65 per cent of these cases is Facebook.

For more:
- see this document from the Latvian Presidency of the EU
- see this blog by the Norwegian Communications Authority

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