Transport, Telecommmunications and Energy
Ministers in the European Parliament

Before the European Parliament, Nicolas Schmit justifies maintaining the "zero rating" in the EU telecommunications sector, which "presents risks" but "also a certain number of tangible benefits"

11-11-2015

On 11 November 2015, Nicolas Schmit, the Minister responsible for relations with the European Parliament during the Luxembourg Presidency of the EU Council, spoke to MEPs on behalf of the Council at the plenary session in Brussels, during a debate on the so-called "zero rating" practice used by access providers (Internet, mobile) in the context of the recently adopted regulation on open Internet access and the end of roaming charges.

Context

On 27 October 2015, the European Parliament formally adopted the agreement concluded after two years of negotiations with the Council of the EU on the regulation on the single market for electronic communications. This text provides for the progressive phasing out of roaming charges for mobile telephones by 15 June 2017, as well as the introduction of the first EU rules aiming to safeguard open Internet access, thereby ensuring Internet neutrality.

However, the adoption of this regulation is the subject of criticism by, among others, the NGOs gathered together in the "Save the Internet" collective, and figures such as Tim Berners-Lee, the Web's inventor, with regard to the "zero rating" practice which continues to be authorised by this text. For an access provider, this consists of not invoicing the end user for the bandwidth used to access certain services (for example, music streaming), either for promotional purposes, or by virtue of agreements with service providers. Critics of this practice believe that it may have indirect effects on open Internet access resulting in the discrimination of certain services.

"The zero rating practice presents risks but also a certain number of tangible benefits, especially for the consumer"

In his speech, Nicolas Schmit again hailed the Parliament for "its essential contribution throughout the legislative process" and, in particular, on this ruling which has helped "to break down the barrier to the internal market, i.e. roaming charges", and "confirm the importance of non-discriminatory access to all services offered via the Internet". "We needed some time, but, together, we are defining a common vision for the benefit of consumers which opens the door to the innovative services we want to see continuing to develop in Europe", declared the Minister.

However, Nicolas Schmit agreed that zero rating was "indeed a subject which deserved to be discussed" in the context of open Internet access, as illustrated by certain reactions to the adopted text. On 26 October, Tim Berners-Lee invited MEPs to adopt amendments which would allow Member States to create their own rules to regulate the practice of zero rating.

Although the subject was discussed at the Council and the Parliament, it was not adopted, explained the Minister, who indicated that, for the Parliament and the Council, "it was important to obtain genuine European coherence in order to continue to develop the single telecommunications market". "We wanted to avoid increasing the number of legislations which could be barriers to the single market", he continued, noting that, in this sense, the adoption of a European regulation was "ideal".

Furthermore, the Minister revealed that, during discussions on zero rating, the opinions and experiences of countries that had prohibited or accepted, within a certain limit, this practice had been collected and that, in this context, co-legislators had noted that "although it involved some risks, [it] also offered a certain number of tangible benefits, especially for the consumer".

According to the Minister, the main risk concerns the power of operators "who may favour their own services or choose the services to be privileged in the consumer's place". "We understand that if competition between operators or services is insufficient, this practice poses real risks for open Internet access", he declared. 

In light of these elements, the choice was taken not to abolish the practice but rather to regulate it by means of "a security system" based on controls by the competent national authorities, indicated Minister Schmit. "In concrete terms, the regulation requires the competent authorities to supervise and guarantee that there is no effect on end users' rights, as defined in the regulation". They are also accredited to intervene against agreements or practices which infringe end users' rights, and even to sanction them.

"With this agreement, we have reached a balanced comprise which guarantees open Internet access, preserves the interests of consumers and Web surfers and excludes abusive behaviour, but allows full innovation opportunities as much for both new companies and established operators, and favours investment from everyone", declared Nicolas Schmit.

The Minister was keen to point out that the EU was working relentlessly to improve the internal market and the digital attractiveness of Europe, in particular by developing very high-speed infrastructure. Yet, the more the latter is "present and accessible, the less interesting the practice of zero rating will be", stated the Minister, who also revealed that, with the end of roaming charges, additional competition opportunities between operators had been created in Europe which should "also help reduce the risk related" to this practice.

Finally, Nicolas Schmit concluded by insisting on a "great step forward" with the definition of open Internet access, which, "once and for all, puts an end to practices that, for too long, have been harmful for consumers", such as the range of services which compete with those of the operator.

"Although the practice has not been completely forbidden, there is no question of granting operators a blank cheque"

The European Commissioner in charge of the Digital Economy and Society, Günther Oettinger, supported Minister Schmit and insisted on the fact that the regulation was very clear and that it guaranteed that access providers will be required to deal with traffic in a fair manner without any discrimination, restriction or interference.

In this context, the Commissioner revealed that although the practice was not completely forbidden, there was no question of granting operators a blank cheque, with the practice only being acceptable "if it respects the rule of Internet neutrality". He also highlighted the role of the national authorities, especially the regulators, who are obliged to supervise and ensure that end users' rights are not infringed and are able to react accordingly.

Furthermore, if abuse is noted, the European Commission will react, assured Günther Oettinger, who promised that the legislation would be evaluated over time and that, if necessary, modifications would be integrated.

The debate

Above all, the debate between the MEPs brought to light two main trends against the subject.

One part of the political groups insisted, with regard to the single digital market which should be free and competitive, on the need to prove the alleged harmful effects of the zero rating practice, deemed to be a commercial practice for the benefit of consumers, before deciding to forbid it. Thus, the aim is to ensure that users have choice and that they are able to make use of such services if they wish. As for compliance with rules of competition and non-discrimination, the national authorities have the expertise to prevent all forms of abuse in this field.

The other groups stressed the risks of such practices, which would undermine Internet neutrality as such and would have consequences for competition by fostering monopolistic tendencies among the most powerful players. In this respect, the practice of zero rating would have a contrary effect to the one sought by limiting end consumers' final choice and penalising new companies in the sector. Furthermore, the application of rules by national regulators, deemed to be relatively unclear by some MEPs, may risk creating a patchwork of different interpretations and, therefore, a lack of legal security in the matter.

As a conclusion to the discussions, Nicolas Schmit again stressed that everyone at Parliament and the Council shared one major concern, namely to "finally develop the single digital market in Europe", a subject on which there are "huge delays" despite it being "the strength of the European economy of the future". In this sense, the agreement of 27 October is "a major step" and contains the guarantees needed "to prevent and correct all forms of abuse".

  • Updated 12-11-2015