Module 1: Infrastructures

From Technology Governance Wiki
(Redirected from Infrastructures)
Jump to navigation Jump to search

Net Neutrality and Zero-ratings

Net neutrality is the principle that internet service providers (ISPs) treat all online traffic equally and openly, without discrimination, blocking, throttling or prioritisation. Zero-rating is a commercial practice whereby an internet access provider applies a zero tariff, or a tariff that is more advantageous, to all or part of the data traffic associated with an application or category of specific applications, offered by partners of that access provider.

Brazil

The legal framework and relevant regulatory actors for telecommunications in Brazil

The national government of Brazil is competent to organize, regulate and investigate the telecommunication sector. This competency is laid down in Law No. 9472/1997, the General Telecommunications Law. The telecom sector should be organized and based on free, broad and fair competition, according to this law. Brazil has no strict limitations on foreign ownership on telecommunication service providers, other than that such companies ought to be organized in accordance to Brazilian law.

Anatel

The General Telecommunications Law also established the Brazilian national telecom authority, Anatel. Its main tasks are:

  • construct policies for granting, providing and using telecommunication services in both the public and private sector
  • implement national policies for telecommunications sector, issued by the Brazilian government
  • conduct investigations
  • issue sanctions for violating provisions in the telecom legislative framework

Most regulation of telecommunications services in Brazil is ex ante, and some provisions also look at the regulation of competition aspects for the market. More specifically Anatels resolution No. 600/2012 provides several guidelines for:

  • competition aspects;
  • measures concerning transparency, isonomic and non-discriminatory treatment;
  • price control;
  • the obligation of access and provision of specific network resources;
  • the offer of wholesale products according to conditions set by such agency;
  • obligations aimed to remedy specific market failures or to comply with the legal and regulatory rules in force; and
  • accounting, functional or structural separation.
The Brazilian Internet Steering Committee

The Brazilian Internet Steering Committee (CGI.br), coordinates and integrates all Internet service initiatives in Brazil, promotes technical quality, innovation, and dissemination of Internet services. Its main tasks include:

  • propose policies and procedures regarding regulation of Internet activities;
  • recommend standards;
  • establish strategic directives;
  • coordinate allocation of Internet addresses and registration in the .br domain.

Anatels regulatory parameters and guidelines, which are in turn established by Brazil’s Internet Steering Committee (CGI.br)

CADE

Another important regulatory body in Brazil is CADE (Administrative Council for Economic Defence), which is the national antitrust authority. For some competition aspects of Anatels regulation, CADE may need to analyse and approve Anatels work, according to Law No. 12,529/2011.

The Internet Law (2014)

In 2014, the Internet Law was created (Law No. 12.965/2014). This piece of legislation sets out specific conditions and standards for net neutrality and zero-rating. More specifically, preserving and ensuring net neutrality is one of its core principles for using the internet in Brazil (Article 3). Net neutrality is further addressed in article 9, which states that the party in charge of the transmission, switching or routing has the duty to process any conveyed information in a neutral manner. As a result, throttling (intentionally slowing down the speed of a service) is also not allowed. There are some exceptions to this rule, for instance when internet traffic discrimination is necessary for technical reasons or to prioritise emergency services (Article 9). For instance, during the COVID-19 pandemic, mobile network operators were requested to provide zero-rating access for all mobile plans to health applications. In such exceptional situations, service providers have to take in account some precautions to:

  • not cause damage to users
  • act with proportionality, transparency and equality to the internet traffic
  • inform users pre-emptively in a clear and transparent manner, and take traffic management, mitigation practices and network security into account
  • offer services in a non-discriminatory manner for commercial use, and;
  • refrain from anticompetitive conduct (Art. 9)
Subsequent Decree (2016)

In 2016, Law No. 12.965/2014 was complemented by Decree 8871/2016. This Decree specifies technical requirements for the adequate provision of services and applications. These technical requirements shall aim to maintain their stability, safety, integrity, and functionality which arise from:

  • Addressing network security issues, such as restriction of mass mailings (spam) and control of denial of service attacks; and
  • Handling of exceptional congestion situations of networks, such as alternative routes in cases of main route interruptions and emergencies.

According to article 6 of the decree, such technical measures have to be consistent with international standards and should be in accordance with Anatels regulatory parameters and guidelines, which are in turn established by Brazil’s Internet Steering Committee (CGI.br). On a more technical level, article 9 and 10 of the Decree reinforce net neutrality and the prohibition of anti-competitive treatment of online service providers (i.e. zero-rating). The decree regulates the commercial relationships between the infrastructure operator and actors in the ‘logical’ layer, who cannot “compromise the public and unrestricted nature of Internet access,” “prioritize data packets due to commercial arrangements,” or favor applications offered by the infrastructure operator itself. In short, the decree prohibits zero-rating strategies and determines that content companies must have legal headquarters in Brazil.”

Zero-rating allowed after all?

However, the zero-rating prohibition was challenged, and successfully so, in 2017. What happened was that an alleged violation of net neutrality was taken by the Public Prosecutor’s Office to CADE, Brazil’s anti-trust authority. The complaint constituted that four major mobile network operators, namely, Claro, Oi, TIM Brasil and Telefônica Brasil, who control almost the entire market, had supposedly adopted discriminatory commercial practices. They were accused of offering their users data plans that differentiate the conditions of access to certain Internet services, through the charging of reduced amounts or even the total exemption from charge (i.e. zero-rating). In another model, called "sponsored access", the holder of the application supposedly remunerates the provider for the data traffic generated by its users. The complaint was that such offers to access apps without consumption of data franchising were a violation of the Brazilian Civil Rights Framework for the Internet. Anatel was notified of this complaint, but was of the opinion that this did not constitute a violation of the relevant provisions in the Internet Law (No. 12.965/2014). Their reasoning was that zero-rating is allowed, as long as it applies to the same class of services. Following Anatel's view on the matter, according to which the zero rating "has economic rationality and generates, undeniably, noticeable well-being via consumer and producer surplus", CADE decided to consider that zero rating should not be prohibited ex ante. CADE stated that these offers are “not expressly prohibited, not discriminatory, provide free access under the same conditions, and that, in practice, they would not have an adverse impact on market concentration.” PROTESTE, a consumer rights group, appealed this decision, “arguing that CADE did not consult with other actors and that, for example, in the case of pre-paid plans, these are used by lower-income sectors, and, since there are mostly zero-rating offers with Facebook and WhatsApp, the aspect of competition and market concentration regarding applications becomes fragile and unfounded.”

This decision was heavily protested by the Brazilian Civil Rights Framework for the Internet Watch. Their view of zero-rating in this case was that (direct quote:) “By subsidizing some applications and creating a fee - that is, the consummation of the franchise - to access the others, zero rating practices can transform the nature of the Internet from a general purpose network, whose modalities of use are defined autonomously by each user, into a network whose purposes are established in a centralized manner by operators. Such an evolution would limit users' Internet experience, discouraging them from venturing beyond the services provided to them free of charge, and would greatly limit the ability to create and disseminate new applications and introduce new competitors to the market. Clearly, this scenario is opposite to what the principle of neutrality aims to promote.” In short: the window for innovation would shrink as a direct result of a more competitive market because certain applications are offered through zero-rating. Moreover, the civil rights group claims, Zero rating practices increase the well-being of the consumer of the services included in the zero rating plans, as well as the providers of these services. They do not increase the well-being of the Internet access consumer, whose choice is dramatically reduced, nor of service providers excluded from the zero rating.

The Brazilian telecommunications market and its regulation

About operators

In Brazil, there are four main operator groups that dominate the mobile telecom market: Telefónica (33,60%), América Móvil (22%), Oi (15.70), and Telecom Italia. The market seems to follow a pro-competitive model. Oi, the fourth-largest operator, provides zero rating for almost all of their plans, but this has not led to significant market growth.

About internet usage among the population and costs

Most people in Brazil use their mobile phone to access the internet. Since 2016, there has been a steady growth in the coverage of the 4G network (66.68% in 2016 compared to 92.36% in 2022), the number of mobile cellphone and broadband subscriptions, and the percentage of Wi-Fi connection time for mobile Internet users has also increased (from 58.55% in 2016 to 68.2% in 2022). In 2022, the most used mobile social networks in Brazil were, in order, WhatsApp, Instagram, Facebook, TikTok and Facebook Messenger. (p.12) The price of roaming in Brazil has steadily decreased since 2017. This is mostly due to a higher number of operators and a good deployment of 4G mobile access networks. It led to a reduction in access costs, especially for mobile broadband. The affordability is mostly calculated as a percentage of average income, where the aim is that the price of 1 GB of data should not exceed 2% of a person’s average monthly income (the so-called “1 for 2” limit).

Brazil has also seen an increase in app development and digital skills. This, according to one article on the topic, is likely due to a high level of naitonal technological innovation capacity. The article therefore questions whether zero-rating is a risk for the digital market, although it could still pose a risk to the content sector.

About zero-rating

Generally, in South America, zero-rating is a dominant commercial strategy. The main zero-rating models that are deployed by MNOs, which are promoted by the operators themselves. “They also offer some vertically integrated, lower-cost Internet services, with the same operators providing their own and third-party content, such as messaging and calls (WhatsApp, Line, Messenger), music (Spotify, Deezer), and video (YouTube, Movistar Play, ClaroTv, Oi Play, Amazon Video, and Netflix).”

Effects of net neutrality and zero-rating on the market competition in Brazil

In general, and in comparison, to other countries in the region, the impact of zero-rating on network neutrality and competition in Brazil is a bit complex. On the one hand Brazil’s mobile markets are less concentrated than its neighbors’, implying more competition in the MNO market. On the other hand, smaller and local app development and content is limited due to the zero-rating of major applications by major MNOs. Zero-rating thus creates certain barriers of entry for smaller competitors. Furthermore, MNOs may also apply zero-rating to their own applications (vertical integration), as long as they don’t discriminate against apps developed by others in the same field. These negative effects are, nevertheless, may be somewhat mitigated by Brazil’s competitive market and government emphasis on digital skills development. Still, the research found no positive relationship between zero-rating and increased mobile access or lower prices.

Sources used

  • OECD, Digital Trade Review of Brazil (OECD 2022) <https://www.oecd-ilibrary.org/trade/digital-trade-review-of-brazil_0b046dfe-en> accessed 24 September 2024.
  • Miguel Botto-Tobar, Henry Cruz and Angela Díaz Cadena (eds), ‘Artificial Intelligence, Computer and Software Engineering Advances: Proceedings of the CIT 2020 Volume 1’ (Springer International Publishing 2021) <https://link.springer.com/10.1007/978-3-030-68080-0> accessed 24 September 2024.
  • Roberto Triviño, Antonio Franco and Rafael-Leonardo Ochoa-Urrego, ‘Evaluating Zero Rating: A Comparative Analysis of Four South American Countries’ (2024) 5 Digital Government: Research and Practice 1.
  • Website: Observatorio do Marco civil da Internet (05/12/2017). Accessed 24/09/2024: https://www.omci.org.br/jurisprudencia/207/neutralidade-de-rede-e-ordem-economica/
  • UNESCO, Assessing internet development in Brazil. Using UNESCO internet universality ROAM-X Indicators.
  • Law No. 12,965, April 23, 2014 (Marco Civil Law of the Internet in Brazil)
  • Decree No. 8771, May 11, 2016
  • Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25 November 2015 laying down measures concerning open internet access and amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services and Regulation (EU) No 531/2012 on roaming on public mobile communications networks within the Union (the Open Internet Regulation)
  • Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code (Recast)

China

China follows a governmental control model for internet and telecommunications regulation. Under this model, the government has control of all aspects of the internet, including who is allowed access, what content is accessible, and the rate of delivery of that content. China can be considered as the most controlling jurisdiction of internet content and is not in support of network neutrality. Access to the internet in China from the outside world is limited and all Internet traffic in China must pass through one of three large computer centers in Beijing, Shangai and Guangzhou. The Chinese government maintains control over China’s gateways to the global internet, giving authorities the ability to cut off cross-border information requests in order to restrict connectivity or access to content hosted on servers outside the country. This arrangement is the foundation for the ‘Great Firewall’, which is considered the world’s most sophisticated internet censorship program.

Another strategy for control of the internet in China is that state-owned companies dominate the ISP sector of the mobile market: China Mobile, China Telecom, and China Unicom. In 2019, British Telecom (BT) became the first foreign telecommunications company to receive permission to provide internet services across the country. Authorities exercise tight control over cybercafes and other public access points, which are licensed by the Ministry of Culture in cooperation with other state entities.

Another key part of the regulation of the telecommunications sector in China is content management, or censorship. This is not the focus of this Wiki. We address elements of cybersecurity or censorship laws as they relate to the infrastructure elements of the telecommunications sector in China (such as from the Cybersecurity Law 2017). Accordingly, the law we focus on here is the Telecommunications Regulation 2000. Before we jump into the legal framework, we explain first the policy context and then the market structures.

Policy Context

Chinese internet policy shows distinct features at different stages, heavily influenced by the political thinking and outlook of the leadership at the time as well as China’s social, economic and political conditions.

The early phase, before a period of reform in the 1980s, saw telecommunications under strict state control, with limited infrastructure and services primarily serving governmental needs. Post-1980s economic reforms introduced a gradual liberalisation, allowing room for infrastructural growth and services expansion. This led to the implementation of the Telecommunications Regulation in 2000, establishing a legal framework that aimed to separate government functions from business operations, reduce monopolistic practices, and promote competition and innovation (Article 4). The turn of the millennium saw a rapid acceleration in policy evolution market competition, marked by China's accession to the World Trade Organization (WTO) in 2001.

Before 1998, the telecommunications regulator was the Ministry of Posts and Telecommunication (MPT). Until 1994, the MPT was instrumental in promoting the development of the Chinese telecommunications sector. During this period, the telecoms industry was monopolized and there was no clear distinction between the functions of government and enterprises. From 1998, competition has been introduced into the telecom market, with the creation of a second communications network operator, China Unicom. The second stage started with the establishment of Ministry of Information Industry (MII) in 1998. It became the principal regulator of the telecommunications and information industry and was initially granted operational control over both China Telecom and China Unicom. During 1999 and 2000, China Telecom and China Unicom were restructured to promote greater competition, creating a total of seven distinct Chinese state-owned telecommunications providers each with primary operations in a different functional aspect. Yet, given the relatively low accessibility of telecommunications to the Chinese population, Chinese telecommunications policy remained oriented towards the development of telecommunications infrastructures. With the adoption of the Telecommunications Regulation in 2000, telecommunications regulation entered the stage of regulation according to laws, and a regulatory framework has been established.

The situation shifted in in 2001 with China admission to the WTO. Obligations under the WTO required China to adopt telecommunications regulations to introduce and promote market competition, to protect the rights and interests of consumers and to increase the welfare of consumers. This era led to further reforms, including the restructuring of state-owned enterprises (SOEs), the introduction of foreign investment in the telecommunications sector, and an emphasis on digitalisation. Establishment of MIIT (ministry of Information Technology in 2008, the Antimonopoly Law (AML) was finally adopted in 2007 and became effective in 2008. Similar to competition rules in other jurisdictions, the AML also prohibits anti-competitive agreements (Chapter II), abusing dominant positions (Chapter III), and anticompetitive mergers (Chapter IV).

Net Neutrality in China and the Great Firewall

A key part of the regulatory framework of the internet in China is the Great Firewall. Although the Great Firewall is inherently content moderation, not specifically related to net neutrality, it is important to understand in order to view internet regulation through the norms of the Chinese political framework.

The Great Firewall controls how internet content is distributed to citizens; what they can and cannot access. While the principle of net neutrality suggests citizens should be able to access different products on the internet without discrimination, the Great Firewall imposes this discrimination as government policy. In other words, net neutrality is not a principle considered in Chinese internet policy, and the policy position is pro-discrimination via content management in the name of national security.

The Great Firewall means that any new domain or platform which wants to enter Chinese cyberspace must adhere to domestic regulations. Consequently, domains that do not adhere to domestic regulations are banned; Facebook, Twitter, YouTube, Wikipedia, and Instagram.

Technologically, the Great Firewall is made up of two software’s:

  1. Last mile providers of internet services to consumers automatically filter suspicious references, also considered access requests; and
  2. ISPs implement filters that blocked Chinese websites, also called interconnecting networks.

The GFW relies on filtering methods like blocking Internet Protocol (IP) address, Transmission Control Protocol (TCP) packet filtering and forging, Domain Name System (DNS) spoofing, redirection, and filtering Uniform Resource Locator (URL) by transparent proxies.

The implication of this system is that net neutrality - the equality of access by citizens to different parts of the internet - is not a consideration, as discrimination of content to “advance the dissemination of core socialist values” (Art 6, CSL) is inherent in the internet policy of the state in the name of cyber security.

Telecoms Regulation in China

The Chinese government structures its regulations to control political risks through carefully designed institutional arrangements, control of network operation, and tight regulations on end-users. The legal foundation of telecommunication regulation is stated in China’s State Council Order 195, ‘Interim Regulations on International Interconnections of Computer Information Networks in the PRC’. (PRC meaning People’s Republic of China.) Order 195 granted the Steering Committee on National Information Infrastructure, part of the Ministry of Information Industry, primary regulatory responsibility for China’s internet, which includes determining and coordinating important issues of international interconnections.

Primary telecoms regulator: Steering Committee on National Information Infrastructure

In the internet server provision sector, Order 195 divides China’s Internet networks into two categories:

  1. interconnecting networks and
  2. access networks.
Interconnecting networks
Interconnecting networks are directly linked to the global internet through international leased lines and must have the approval of the State Council in order to operate. These interconnecting networks assume heavy and important responsibilities of internet regulation, including responsibility for online content blocking and filtering.
In this area, only four licences have been granted - CERNet and CSTNet and ChinaNet and ChinaGBN. These four interconnecting networks are tied closely to government agencies. ChinaNet is operated by China Telecom, which falls under control of the Ministry of Information Industry (MIIT).
Access networks
The Chinese access networks are the equivalent of internet service providers (ISPs), providing access and content services but no direct global interconnection. An access network provider has to be licenced by and gain global access through one of the four interconnecting networks. ISPs are key to filtering the huge number of sensitive words on the blacklist. In such circumstances, Chinese ISPs are more political than commercial.
In summary, the provision of internet to consumers resembles:
Global internet ➡ Interconnecting network ➡ Access Network ➡ Consumer

Telecommunications Regulations

The Telecommunications Regulations, first issued in 2000 and then revised in 2016, covers licensing, fee collection, interconnectivity, operation and regulation of telecoms services in mainland China. The Classified Catalogue of Telecommunications Services, effective from 1 March 2016, sets out the specific and categories of services that are regulated under the telecommunications licensing regime. These regulations provides general regulations on domestic telecommunication services, including the licensing of telecommunication services, the provision of telecommunication services, the construction of telecommunications facilities and telecommunications security.

The aim of these regulations are to regulate the order of the telecommunications market, safeguard the legitimate rights and interests of telecommunications subscribers and operators, ensure the safety of telecommunications networks and information, and to promote the sound development of telecommunication industry (article 1). The regulations are addressed to anyone that engage in telecommunications activities or telecommunications-related activities (article 2). Article 4 provides that the supervision and regulation of the telecommunications industry shall be based on the principles of separation of government administration from enterprise management, elimination of monopoly, encouragement of competition and innovation, as well as principle of openness, fairness and impartiality. Under article 5, telecommunications operators shall provide telecommunication subscribers with services that are fast, accurate, secure, convenient and reasonably-priced.

The Telecommunications Regulation is mainly comprised of two substantial chapters for the purpose of promoting competition.

Licencing scheme
As far as market entry is concerned, a two-layer authorisation mechanism is established based firstly on services and secondly on geographic coverage. In terms of services, Category I of basic telecom services and satellite facilities (Category II of basic telecom services) are exclusively licensed by the Ministry of Industry and Information Technology (MIIT), and are so far only awarded to the three SOEs. With regard to other telecom services, intra-provincial operation licenses are administered by provincial-level telecom authorities while inter-provincial ones are authorised by the MIIT.
Cybersecurity Law
The Cybersecurity Law (CSL) establishes the overarching security framework relevant to internet traffic in China, including the governing of internet infrastructure (Art 2 CSL). To safeguard data sovereignty, the CSL imposes data localisation requirements on critical information infrastructure operators. Other relevant obligations in the CSL are:
* Article 9: Network operators shall, when conducting business operations and providing services abide by laws and administrative regulations, respect social morality, observe business ethics, operate in good faith, perform their obligations to safeguard cybersecurity, accept supervision by the government and the public, and undertake social responsibilities.
* Article 12: The State shall protect the rights of citizens, legal persons and other organisations to use networks in accordance with the law, promote improved network access, provide better network services, provide the public with secure and convenient network services, and guarantee the lawful, orderly and free circulation of network-based information.
It is unclear what is meant by reference to ‘social morality’ and ‘business ethics’, but that we view this through the prism of Chinese international relations and our understanding of societal values - essentially connecting these ideas to community, state-first control of information. This is not translatable to European norms associated with fundamental rights and the single internal market.

Other related legislation

Other related legislation includes:

  • State Council - Regulations on Security Protection of Computer Information Systems, Administrative Measures for Internet Information Services
  • The national intelligence law
  • Ministry of Public Security - Administrative Measures for Prevention and Treatment of Computer Viruses
  • Ministry of Public Security and five other ministries - Administrative Measures for Hierarchical Protection of Information Security
  • NPC Standing Committee - Law on Guarding State Secrets

Sources

The above information is based on our consideration of the Telecommunications Regulations, Cybersecurity Law and the following secondary sources:

  • Hu, Henry L. “The Political Economy of Governing ISPs in China: Perspectives of Net Neutrality and Vertical Integration.” The China Quarterly, Volume no. 207 (2011) 523–40. Available here: http://www.jstor.org/stable/41305255
  • Pranavnayar 'The Legality of China’s Great Firewall: How Does the International Law Fare' Metacept 6 June 2021 <https://metacept.com/the-legality-of-chinas-great-firewall-how-does-the-international-law-fare/
  • Christine M. Stover, ‘Network Neutrality: A Thematic Analysis of Policy Perspectives Across the Globe’ [2010] Global Media Journal Volume 3(1) pp. 75-86
  • Bernd Holzenagel, Xu Junqi and Thomas Hart, ‘Regulating Telecommunications in the EU and China: What Lessons to be Learned?’ Arbeitsberichte Zum Informations-, Telekommunikations- Und Medienrecht Volume 16 [2009]
  • Martyn Taylor, ‘Reforming China’s telecommunications law: lessons from the Australian experience’, International Journal of Communications Law and Policy Issue 7 [Winter 2002/2003]
  • Becky P Y Loo, ‘Telecommunications reforms in China: Towards an analytical framework’ Telecommunications Policy 28 [2004] pp 679-714
  • Report from US Embassy Beijing [2024] Available at: https://irp.fas.org/world/china/netreg.htm
  • Zixiang Alex Tan, ‘Regulating China’s Internet: convergence toward a coherent regulatory regime’ Telecommunications Policy Volume 23, Issues 3-4, [1999] pp. 261-276
  • Grace Wang, ‘Telecoms regulations in China’ Lexology [2022] Available at: https://www.lexology.com/library/detail.aspx?g=c8e8fd3d-4989-4db0-8887-45fd7a86f1a5
  • Liyang Hou, ‘When competition law meets telecom regulation: the Chinese context’ Computer Law and Security Review 31(5) [2015]

India

The Indian regulatory framework currently features a strong commitment to net neutrality and a ban on zero rating. The development of this framework, however, cannot be understood without due attention paid to the legislative players in India and the context of the proliferation of zero rating services in 2015. Consequently, this section outlines the regulatory authorities responsible for telecommunications regulation in India, the resulting regulatory framework relating to net neutrality and zero-rating, and further challenges to net neutrality and food for thought. India has a Department of Telecommunications (DoT) which is responsible for setting out its telecommunications policy. Under section 3 of the Telecom Regulatory Authority of India Act by the DoT, the Telecom Regulatory Authority of India (TRAI) was established as a statutory body of the DoT.

Zero rating: Facebook's "Free Basics Ban"

The debate on net neutrality followed primarily from the debate on the zero rating due to the proliferation of zero rating packages in 2015, the most notorious of which included Facebook’s “Free Basics” service and Airtel’s zero rating platform for app developers. In India, only around 50% of the population purchased data plans for their smartphones, and out of those who used it, it was shown that the average data package used was around 80MB per month in 2015. Therefore, due to the small data packages, zero rating was an attractive and reliable service. The problem arose with the introduction of Facebook's zero rating model with Internet Access Providers, which included a service called Internet.org, which despite its misleading name offered exclusively Facebook services free of charge under the “Free Basics” model. Internet.org was meant to be an open platform that gives Indian developers additional services offered for free, used by those users who could not afford traditional internet access. Nevertheless, only partner websites and applications would be able to be included, ultimately going against the principles of net neutrality. As a result of the misleading and untransparent, in 2016, TRAI published the “Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016” which prohibited zero rating. Article 3 of the aforementioned regulation outlines this prohibition, whilst Article 4 stipulates a potential derogation for providing emergency services “or at times of grave public emergency.” However, the telecom provider must notify this reduced tariff to TRAI and the authority’s decision on its compliance with the Discriminatory Tariffs Regulation is final.

Net neutrality

The ban on zero rating was followed up with an overarching debate on net neutrality. Both TRAI and a Committee under the DoT consequently released papers advocating for the adoption of net neutrality principles throughout telecommunication legislation. As a result, the DoT signed off on TRAI’s recommendation to wholly support net neutrality principles and amended numerous parts of its core telecommunication legislation to integrate such principles. In 2018, the DoT amended the “Unified License for Telecom Service Providers (TSPs) and Unified License (Virtual Network Operators) and Unified Access License Agreement to incorporate the principles of non-discriminatory treatment of content.” In 2019, further amendments occurred regarding the Internet Service Provider License for Regulatory Framework. Some exemptions are present regarding the principles of non-discriminatory treatment of content and/or traffic for when “quality of service is essential,” such as in the cases of autonomous vehicles. Despite these net neutrality principles, there remains the problem of the Indian government’s ability to legally order ISPs to block access to certain content, either for its own purposes or due to court orders. Whilst India’s net neutrality principles do not presuppose such government requests as violations per se, the problem lies in the perceived clash between the legislative provisions. For example, such government orders would be permissible as long as the measures adopted by the ISP are “proportionate, transient, and transparent;” however, the rules regarding the blocking of content stipulate a legal requirement to maintain the confidentiality of blocking requests and subsequent actions.

Opposition to net neutrality

Additionally, some scholars critique India’s strict approach to net neutrality due to the rapid developments in the internet space. For example, “complexities such as vertical partnerships between [internet service providers (ISPs)] and [content and application providers],” content delivery networks, and the deployment of 5G show the limits of India’s ex-ante net neutrality approach. As a result, further ex-post enforcement may be necessary to bolster net neutrality in India.

In sum, India’s regulatory framework started with a ban on zero rating as a result of controversy arising from the proliferation of zero rating with services such as Facebook’s “Free Basics.” This later erupted in a political debate on whether India should, as a result, commit fully to net neutrality, which was ultimately answered in the positive when the DoT implemented TRAI’s recommendations throughout India’s various telecommunications regulations. However, criticisms remain about the limited exceptions to net neutrality rules, and the Indian government’s eager censorship through blocking requests to ISPs may still pose threats to a free internet in India.

Sources

  • Lok Sabha Secretariat, ‘Net Neutrality: India's Position,’ (Parliament Library And Reference, Research, Documentation And Information Service, 2016) Reference note No.6/RN/Ref./February/2016.
  • Raghuvansh Seth, ‘Fleeting neutrality: The inadequacies of the ex-ante net neutrality regulations in India’ (2022) 23 Competition and Regulation in Network Industries 1.

United States

Federal Regulatory Framework

To the extent that Internet Service Providers (ISPs) are regulated by the United States (US) Congress, it is under the Communications Act of 1934, as amended by the Telecommunications Act of 1996.

Pursuant to Sec. 1, the purpose of this Act is to regulate

‘interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States [...] a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges’.

Sec. 230(b) outlines the policy specifically with respect to the Internet. It is, inter alia, ‘to promote the continued development of’ and ‘to preserve the vibrant and competitive free market for’ the Internet.

Pursuant to Sec. 2(a), this Act applies ‘to all interstate and foreign communication by wire or radio[, and] transmission of energy by radio, [...] and to all persons engaged’ in such pursuits. It also applies ‘to all persons engaged [...] in providing [cable] service’.

To ensure the ‘effective execution of this policy’, Congress created the Federal Communications Commission (FCC) under the Communications Act of 1934.

Yet, the Commission’s authority to regulate the addressees of this Act depends crucially on whether they fall under Title I (‘information service’) or Title II (‘common carrier service’). Common carrier services are expressly prohibited from granting preferential treatment:

‘It shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with like communication service, directly or indirectly, by any means or device, or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.’

To ensure reasonable pricing rates and non-discriminatory practices, the Communications Act of 1932 grants the FCC broad regulatory authority under Title II. In contrast, Title I services remain mainly unregulated by the FCC.

However, the term ‘information service’, which is defined as ‘the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications’ [sic!], and the term ‘common carrier service’, which is defined as a person ‘engaged as a common carrier for hire’, in any of the pursuits mentioned above, are ambiguous when it comes to ISPs.

So far, the FCC has been responsible for the interpretation of these terms, as affirmed by the Supreme Court in National Cable & Telecommunications Association v. Brand X Internet Services (2005).

As the Commission’s Commissioners are ‘appointed by the President, by and with the advice and consent of the Senate’, the Commission’s stance on the classification of ISPs and the corresponding regulatory regime has always depended on the administration in power. This has led to relatively frequent shifts in administrative practice in the past.

During the Obama administration (2009-2017), the FCC classified ISPs as Title I services and introduced net neutrality principles in the FCC Open Internet Order 2010. However, the Court of Appeals for the District of Columbia Circuit in Comcast Corp. v. FCC (2010) and Verizon Communications Inc. v. FCC (2014) ruled that the FCC lacked the authority to enforce these principles on Title I services. Thus, the FCC reclassified ISPs under Title II in the FCC Open Internet Order 2015, enshrining net neutrality principles. This (first) reclassification was upheld by the Court of Appeals for the District of Columbia Circuit in United States Telecom Association v. FCC (2016).

Under the Trump administration (2017-2021), the FCC reversed course by reclassifying ISPs as Title I services again (FCC Restoring Internet Freedom Order 2018), effectively rolling back federal net neutrality regulations. This (second) reclassification was upheld by the Court of Appeals for the District of Columbia Circuit in Mozilla Corp. v. FCC (2019).

In the Biden administration (2021-present), the FCC decided to restore net neutrality under Title II in the order on ‘Safeguarding and Securing the Open Internet; Restoring Internet Freedom’ (FCC Net Neutrality Order 2024) in April 2024.Then, in June 2024, providers under the National Cable & Telecommunications Association filed a lawsuit, challenging the FCC’s authority to reclassify ISPs – just after the Supreme Court in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce (2024) overturned the Chevron deference established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984). Chevron deference directed courts to defer to an agency’s reasonable interpretation of ambiguous statutes – specifically, to agency interpretations of congressional statutes that are ‘silent or ambiguous with respect to the specific issue’ at hand –, and was central to previous cases like National Cable & Telecommunications Association v. Brand X Internet Services (2005). In lieu of Chevron, the Supreme Court assigned the determination of congressional ambiguity to the federal courts, with executive agency expertise still to be considered under the weaker Skidmore deference established in Skidmore v. Swift & Co. (1944). Then, in August 2024, in a per curiam decision, the Court of Appeals for the Sixth Circuit granted a temporary injunction against the FCC’s 2024 Net Neutrality Order as well as a stay, extending an earlier temporary pause. In a concurring opinion, Chief Judge Sutton writes that the FCC’s flip-flopping on net neutrality between administrations makes it difficult to even apply the lower standard of Skidmore deference – thus, the ISPs challenging the latest iteration of the rule are likely to succeed on the merits. Citing Skidmore', Sutton writes,

‘an agency’s power to persuade turns on the thoroughness of its reasoning, its technical expertise, and its consistency with earlier and later pronouncements, especially those contemporaneous with the statute’s enactment. [...] The problem is, we do not know which group of experts to respect.’

Sutton adds,

‘the consistency query makes matters worse. The Commission’s intention to reverse course for yet a fourth time suggests that its reasoning has more to do with changing presidential administrations than with arriving at the true and durable meaning of the law.’

This leaves the Communications Act of 1934, as amended by the Telecommunications Act of 1996, as the central regulatory framework at the federal level.

State Regulatory Framework

In response to the FCC’s 2018 Restoring Internet Freedom Order, which rolled back federal net neutrality rules, several states introduced their own legislation to maintain net neutrality. States like California, New York, and Vermont enacted laws prohibiting ISPs from practices such as blocking or throttling content. New York’s ConnectALL program, for instance, prioritises service providers that adhere to net neutrality principles. Additionally, states like Nevada and Minnesota passed laws focusing on ISP privacy and data protections.

The California Internet Consumer Protection and Network Neutrality Act of 2018, which has been lauded as the ‘gold standard’ of net neutrality laws, was signed into law in 2018. With the repeal of the FCC’s 2015 Open Internet Order, California sought to restore similar principles at the state level. Although the US Department of Justice initially challenged the law, arguing that federal regulations preempted state rules, the courts ultimately upheld California’s right to enforce its own net neutrality protections.

The law includes several key provisions to ensure an open internet. First, it prohibits ISPs from blocking or throttling lawful internet traffic, ensuring that all users have equal access to content without interference. It also bans paid prioritisation, preventing ISPs from charging content providers for faster delivery speeds, thus maintaining a level playing field for all internet services, regardless of financial power. Additionally, the law contains a broad prohibition against unreasonable interference, meaning ISPs cannot engage in practices that unfairly disadvantage or restrict access to lawful content and services. This provision serves as a general safeguard against ISP behaviour that might harm competition or limit consumer choice. Finally, the Act requires ISPs to disclose their network management practices transparently, ensuring consumers are informed about any restrictions that might affect their internet access.

Focus On: Zero-Rating in the US

With the 2015 Open Internet Order, the FCC addressed and thoroughly analysed the effects of zero-rating and similar practices on competition, consumer welfare and net neutrality. It acknowledged that zero-rating could potentially disrupt the market and encourage the use of restrictive data caps. However, it also noted that, depending on their specific structure, such offerings could provide benefits to consumers (e.g. increased choice and lower costs) and competition (e.g. more investments in broadband infrastructure). The FCC then established a standard under which zero-rating offers would be assessed. In particular, the FCC decided that it would have looked at and assessed such practices ‘under the no-unreasonable interference/disadvantage standard, based on the facts of each individual case, and take action as necessary’.  As a result, in 2016 the FCC’s Wireless Bureau initiated investigations into whether the zero-rating practices of several wireless service providers were consistent with the 2015 Open Internet Order. For instance, among others, the FCC investigated AT&T for its ‘Data Free TV’ feature of its DIRECTV App, that allowed AT&T Mobility customers who App on a zero-rated basis. The FCC raised many concerns on competition and consumer protection basis, concluding that AT&T seemed to be acting in ways that harmed the open Internet.

Nonetheless, following the 2016 elections and the changes in the membership of the FCC, the Wireless Bureau closed the investigations arguing that ‘free data plans have proven to be popular among consumers’ and that ‘they have also enhanced competition’. This shift in approach led to the repeal of the 2015 net neutrality rules in December 2017. Additionally, the FCC entered into a partnership with the FTC to monitor ISPs and noted that antitrust and consumer protection laws could handle specific cases of anti-competitive behaviour.

As mentioned in paragraph 2, in September 2018, California passed a net neutrality law, considered by many as the strictest in the United States. One section of the law addresses zero-rating specifically and prohibits individual apps from being zero-rated, but it allows for entire categories such as music or video to be zero-rated. Notwithstanding many opponents harshly critique the California law, the FCC has explicitly stated that it does not consider the regulation of zero-rating to be detrimental. This position allows states to experiment and develop their own strategies within the overarching federal framework. Such an approach promotes innovative solutions that can address regional needs and preferences, contributing to a dynamic environment for internet services and consumer protection.

In 2024, the FCC once again addressed the issue of zero-rating with its Net Neutrality Order highlighting several key concerns, including:

  • the preferential treatment of certain products over others, particularly through paid agreement or affiliations;
  • potential harm to the open internet, akin to the issues associated with paid prioritisation;
  • undue advantage given to large providers;
  • the creation of negative externalities that elevate costs across the market, stifling innovation and disrupting the virtuous cycle;
  • the hindering of consumers’ ability to choose, access, and utilise broadband internet service or the internet content, applications, services or devices of their choice.

To address these potential risks, the FCC proposed to evaluate zero-rating programs under a multi-factor analysis within its general conduct standard, which allows for case-by-case assessments. Indeed, the FCC acknowledges that some zero-rating programs may offer potential benefits or are less likely to cause concerns such as, for instance, zero-rating products during low traffic hours or within the same category of products.

This flexible approach was intended to strike a balance between encouraging beneficial innovations and limiting practices that could distort the market or harm consumers. However, following the appeal brought by broadband providers against the FCC Net Neutrality Order 2024, as of today, there is no enforcement against zero-rating practices at a federal level and uncertainty prevails.

References

Retrieved from "https://wiki.ivir.nl/index.php?title=Module_1:_Infrastructures&oldid=981"