Net-neutrality realities changing quickly for business and regulators

Author: Ricardo Tavares
Published: 2014-12-01

The battle for “net neutrality” has waged for more than a decade and is from far over. However, we are clearly moving into a new phase where a variety of policies are being developed, allowing for different things to happen on a country-by-country basis. At the same time, telecom operators and over the top (OTT) players are still bashing each other, but a number of creative agreements will allow consumers to benefit from new experiences. This variety of policies and business strategies will soon provide a better view of what works and what doesn’t.

The South Korean government has passed what is in effect an anti-neutrality law allowing operators to charge for OTT services. The Chilean and Dutch governments have passed strict net-neutrality pieces of legislation. Swiss operators have voluntarily signed a net-neutrality pact. US President Barack Obama intervened in the American neutrality debate suggesting telecom should be considered a utility regulated by the highly-restrictive “common carriers” Title II section of the 1934 Telecommunication Act which told the then telephone monopoly Bell Systems it was running a public utility, and as such could not use its privileged position to discriminate against people. In today’s world Title II would mandate the strictest form of net neutrality. The EU has proposed similar legislation, but some individual governments are blocking it.

The two critical actors in the private sector—telcos and OTT players such as Google, Facebook, Netflix and others—continue to fight for regulation that is beneficial to their particular interests. But at the same time the two sets of players are also negotiating agreements between themselves, whether regulatory authorities like it or not. Creative, mutually-rewarding commercial agreements are being set up.

European incumbents are interested in laying down the red carpet for video-on-demand Netflix, because they want to offer more content to fight cable operators. Other telcos accuse Netflix of eating their cake without contributing to the roll out of infrastructure. Facebook is signing so-called zero-rate agreements with mobile operators in Africa and other emerging markets, providing FB and other selected content for free to entice users to enjoy mobile broadband and pay for it in the future. Operators are engaging with Facebook because in countries such as Myanmar, FB is a synonym for Internet. But in some countries, such as Chile, this type of agreement has been blocked in the name of neutrality. Google is also involved in a broad agreement with Etisalat in the UAE to strengthen its services via the operator.

Interestingly some operators who are at war with OTTs are making agreements with them at the same time. The discussion is really evolving into a more complex environment for regulators and business strategists alike. We should be glad there is not a world government to impose a single set of regulations when it comes to such a complex issue as net neutrality. It is too early to put armour on it.

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