Market Insight

Dutch pass net neutrality law

May 17, 2012

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On May 8, the Dutch Senate passed a new telecom law, making the Netherlands the first country in Europe to adopt laws protecting network neutrality.

All Dutch citizens are guaranteed unrestricted access to the Internet - which will prevent mobile Internet providers from charging for access to specific services such as Skype and WhatsApp. Also, ISPs are prohibited from slowing down or blocking traffic to specific websites or services, but are allowed to throttle traffic if they must in order to protect their network and prevent congestion - as long as they treat all internet users and services equally.

Regulations which protect privacy are also covered, and it is now unlawful to inspect Internet communications using techniques such as Deep Packet Inspection (DPI) without consent or a legal warrant.

The law has received a mixed reception from telcos and consumer groups. Telcos such as Vodafone, T-Mobile and KPN were against the law on the grounds that it would lead them to impose unfair price increases because they can no longer single out heavy users. Consumer organizations are largely in support of the law because they think that operators should not be allowed to control and restrict the Internet.

Operators in countries such as South Korea and Australia are levying charges for the use of their networks and services in a bid to avoid network congestion and enforced traffic shaping - but with the new law, this is no longer an option for Dutch operators. (For more detail please see our reports: "KT's blocking of Samsung Smart TVs places net neutrality debate in sharp relief" and "Fees levied on Internet giants in South Korea").

By the end of 2011, there were almost 6.5 million broadband users in the Netherlands, covering an area of just over 16,033 square miles. In terms of size, usage and the number of Internet users, the Dutch market is in many ways an ideal one for testing network neutrality. A study of how the market develops following the implementation of this law could be useful in helping to predict the possible impact of the introduction of network neutrality rules in other European markets.

In the meantime, Western European telcos are under increased pressure to supply high-speed services and as a consequence are looking for ways to supply these services without sacrificing speed and delivery quality.

Maintaining advertised speeds in Europe will be particularly important in the light of new rules soon to be implemented by the UK-based Advertising Standards Authority and Committee of Advertising Practice. From April 2012, UK broadband providers will need to demonstrate that at least 10 per cent of customers can achieve their maximum advertised speeds.

Equivalent authorities in other European countries could look to implement similar rules to protect the interests of their broadband customers. This move, coupled with laws enforcing network neutrality, could lead to a lowering in advertised speeds, affecting those telcos unable to keep pace with the rate of increase in Internet traffic.

Europe Netherlands
KPN T-Mobile Vodafone
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