Toward ne(x)t neutrality. A Re-thinking of the EU open Internet Regulation

This paper focuses on net neutrality regulation, which in the EU is considered and designed as a legislation mainly aimed to protect end-users’ interest, within the composite electronic communications’ regulatory framework. For this reason, the current EU Open Internet Regulation has been developed without a sound consideration of its economic impact on markets, in terms of static and dynamic efficiency, which has been identified as one of the main problems regarding the implementation of Net Neutrality rules in Europe, especially in light of new technologies development. This pitfall has been intensified by the significant technological and market changes happened in the last few years within the “extended digital ecosystem” where a much wider set of players interplay. These evolutions transformed market positions of the largest Content and Application Providers (CAPs) both in terms of countervailing power and their ability to influence end-users’ internet experience. In this context, the paper advocates for a ne(x)t neutrality approach, embracing a “proportionality” principle as well as having a systemic perspective and thus reframing the existing asymmetric approach vis à vis the different actors in the digital ecosystem. A first step in this direction would be to update and clarify at the EU level the Open Internet Regulation’s provisions, by embracing an interpretation that takes into account technology and market evolution. A second step would be grounded on a more radical rethinking, by allowing more flexibility and freedom for ISPs to implement a quality differentiation, as for premium quality services, as well as for zero-rating offers, both as ‘class-based offers’ and ‘content-specific retail offers’, yet only when it is the end-user choosing for such a differentiation. This could be done by introducing an ‘application-agnostic anchor product’ for IAS with a minimum QoS that all users are enabled to choose. This consumer-empowering approach to net neutrality could strike an effective regulatory balance by guaranteeing a freedom of choice, on one side, yet without over-restricting the economic and commercial freedom of companies, on the other side.