Net Neutrality: The FCC’s new approach for net neutrality in the US vs. EU and Member State Regulation

Christoph Werkmeister; Dana Post; Philipp Becker

doi:10.9785/cri-2014-0404

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Net Neutrality

The FCC’s new approach for net neutrality in the US vs. EU and Member State Regulation

Christoph Werkmeister
Christoph Werkmeister

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, Dana Post
Dana Post

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and Philipp Becker
Philipp Becker

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Published/Copyright: August 15, 2014

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From the journal Computer Law Review International Volume 15 Issue 4

Christoph Werkmeister/Dana Post/Philipp BeckerNet NeutralityThe FCC’s new approach for net neutrality in the US vs. EU and Member State Regulation ̧Dr. Christoph Werkmeister, LL.M. (Cambridge) is an Associate at Fresh-fields Bruckhaus Deringer, Cologne. Dana Post is a Special Counsel atFreshfields Bruckhaus Deringer, NewYork. Philipp Becker is a PrincipalAssociate at Freshfields Bruckhaus Deringer, Cologne. Thank you toDean Rosenberg, Summer Associate at Freshfields Bruckhaus Deringer,New York, and to Carsten Bormann, Research Assistant at FreshfieldsBruckhaus Deringer, Cologne, for their assistance with this article. Fur-ther information about the authors at p. 128.The Internet is a global system of interconnected net-works that has developed into one of the most complexstructures of our time. The number of connected serversand the volume of transmitted data has constantlyincreased. However, similar to road networks, the Inter-net’s infrastructure is constantly challenged to keep upwith the increasing amount of traffic. “Traffic jams” onthe Internet could lead to a slowdown of data flows andthus have a significant economic impact. A solution toavoidsuchcongestionmightbefoundintheconstruc-tion of fast lanes for privileged data packages. In opposi-tion to such an approach is the concept of net neutrality,which promotestheidea of equality of data. TheUS Fed-eral Communications Commission (FCC) is currently inthe process of adopting a new framework to govern netneutrality. At the same time, European Union (EU) leg-islation is in the making. The following article willexplain the different approaches to tackling increasingnetwork traffic and discuss the latest developments intheUSandtheEU.I. IntroductionIn principle, data flows on the Internet are based on a“first come – first serve” or so called “best efforts” prin-ciple. According to this principle, data on the Internetshould be transmitted irrespective of its origin, content,purpose or recipient.11Cf.Wimmer, ZUM 2013, p. 641.Internet Service Providers (ISPs)therefore generally treat a simple e-mail check with thesame priority as a video stream or file sharing (i.e. thenetwork is neutral to the content transmitted). The bestefforts principle embodies the concept of net neutrality,which prohibits the privileging of particular data flows.Going back to the introductory example of road net-works, this means that there may be no fast lanes for cer-tain kinds of data where data is transmitted at differentspeedsorwithdifferentpriorities – all data is supposedto be carried on the same networks at the same speed.1. Graded Net NeutralityDue to the massive increase in data being transmitted,ISPs have taken measures to protect their infrastructurefrom collapsing in order to safeguard adequate datatransmission speeds. One such measure is the exclusionof certain services from flat-rate offers by ISPs, such astelephony, voice over Internet or file sharing.22Cf.Baran/Eckhardt/Kiesow/van Roosebeke, Netzneutralität alsRegu-lierungsziel, p. 2.Thereby,users can be blocked from using traffic-heavy servicesand overwhelming the network unless they pay an extrasurcharge.33Cf.Wimmer, ZUM 2013, p. 641.Instead of blocking certain services for users, ISPs couldalso offer privileged access totheir infrastructure to con-tent providers. These so-called “Quality-of-Service”(QoS) features are of particular interest for content pro-viders who are dependent on non-intermittent data com-munication, including video streaming providers such asNetflix, Whatchever or Amazon Prime.44Cf.Van Schewick, Network Neutrality and Quality of Service, p. 13.2. Absolute Net NeutralityHowever, proponents of a strict implementation of netneutrality argue that special fees for QoS features wouldhinder technological innovation because start-up con-tent providers do not have sufficient funds to purchasepriority access.55Cf.Schlauri, Network Neutrality, p. 286.The counterargument concerns thedevelopment of telecommunication infrastructure. Inthis regard, ISPs argue that the purpose of QoS featuresis not to discriminate against certain content providersbut rather to ensure their participation in infrastructureinvestments. In their view, those who benefit from fasterInternet should also be willing to support it financially.66Cf.Wimmer, ZUM 2013, p. 641 (644).This brief introduction illustrates that both proponentsand opponents of net neutrality have legitimate argu-ments. Because of the ever-growing customer demandfor network coverage and capacity, a mutually equitablelegal regime in this area would be most welcome. Thecompetent regulatory body for telecommunication ser-vices in the United States, the FCC, has now proposedsuch a legal framework, which would enforce certain netneutrality obligations but could also potentially allowISPs to deviate from these requirements under certaincircumstances. At the same time, draft EU legislation onnet neutrality is pending, which involves a different butto some extent practically similar approach.II. Net Neutrality in the United StatesThe US Internet regulatory regime is in significant flux.The FCC, the agency responsible for regulating commu-nications technology in the United States, including theInternet, has been grappling with the question ofwhether to strictly regulate broadband technologies as apublic utility or subject them to a more flexible regula-tory scheme. Recently, theagency has been addressingthe controversial question of whether broadband pro-viders should be permitted to provide prioritized net-work access to particular content suppliers.1. The History of U.S. Internet RegulationThe FCC operates subject to the Communications Act of193477 48 Stat. 1064.and Telecommunications Act of 199688 110 Stat. 56.. The 1996Telecommunications Act distinguishes between two108CRi 4/2014

Published Online: 2014-08-15

Published in Print: 2014-08-15

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