EU to Vote on Web Traffic Regulation

By Frances Robinson 

BRUSSELS--European Union lawmakers vote Thursday on a broad package of reforms that will ultimately influence how online traffic will be regulated across bloc and whether or not Internet providers will be able to charge more for certain services.

The proposed legislation covers everything from ending roaming charges to consumer rights, such as switching mobile tariff plans, but the most contentious part is the issue of "net neutrality"--the concept of giving equal treatment to all Internet traffic, regardless of location, the device used or the content of the service.

The reform package, once approved by the EU parliament Thursday and then by individual member states in the coming months, will be Europe's first ever "net neutrality" legislation: currently, only the Netherlands and Slovenia have enshrined the concept in national law.

"Net neutrality is the single most important part of the legislative package," Christian Engström, a Swedish Pirate Party MEP backing the Socialist/Green amendments, told The Wall Street Journal. "This debate is what freedom of enterprise was 100 years ago."

Parliamentarians will likely vote to strengthen the net neutrality clauses from the European Commission's original proposals put forward last year--potentially adding terms about the "right to access and distribute information and content, run and provide applications and services" irrespective of location or device, and ensuring that all traffic is treated equally, rather than privileging that of some customers over others.

But there are two sets of possible changes on the table: one agreed by the Parliamentary Committee on Industry, Research and Energy (ITRE) earlier this month, which strengthen the "net neutrality" provision from the commission's original proposal, and a rival set of amendments, which go further on not restricting Internet traffic, put forward by parties including the socialists, green parties, liberals and the far-left.

Whichever set of amendments wins the vote will be the Parliament's stance when it negotiates with EU member states--represented by the European Council--on the final legislative text. In the unlikely event the majority of the parliament fails to back either set of amendments, the original commission text will prevail. EU member states have yet to agree on their common position: once they have, the council and parliament both negotiate the final text at the commission, which is hoping for a final outcome by October 2014.

Decisions taken in Europe now could have far-reaching consequences as online traffic explodes. Video services such as Google Inc.'s YouTube and Netflix Inc. place unprecedented demands on the Internet's infrastructure. The parallel debate in the U.S. has seen Federal Communications Commission (FCC) rules on net neutrality challenged in court, and Netflix Inc. agree to pay U.S. cable operator Comcast Corp. to ensure quality of service.

According to Cisco Systems Inc.'s global Internet Protocol (IP) traffic forecast, consumer Internet video traffic will be 69% of all consumer Internet traffic in 2017, up from 57% in 2012--not including peer-to-peer (P2P) file sharing. Mobile Internet use on smartphones and connected devices such as cars or health monitoring chips are also adding to the strain on networks.

Internet providers, such as those represented by trade association ETNO, the European Telecommunications Network Operators' Association, want to charge more for certain services, such as guaranteed connection quality for corporate teleconferencing

Open Internet advocate Mr. Engström, said the Internet providers' argument was "completely self-serving," and such companies should be building more networks to cope with growing demand, rather than behaving as "rent-seekers." "Only former monopolies could start thinking like that," he added.

The run-up to the vote has been heated with both sides of the debate putting forward public positions. European Commissioner for the digital agenda, Neelie Kroes, who drafted the original proposal, said, "if we agree on the need to manage specialized services carefully, then the debate that we are having is about how we achieve this, not about being for or against the open Internet."

Write to Frances Robinson at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires