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So the next talk is
done by Thomas Lubanga,
who I remember from his
speech at Deutsche Telekom,
where he talked about zero rating
and about the telecom
implementing it first dream on.
And, um,
yeah, he's the CEO of
the works, uh, formerly known as Foghat
in Austria.
And he's also a frequent guest
at the podcast and Lookbook Brunette's
politic, where we can
hear him talking about
net neutrality, which is his
really, really special topic.
Um, he's going to tell us about,
um, the law of net neutrality
in Europe and how it is
implemented, how it is controlled and
how offers
like zero rating are violating it.
Please give a warm round of applause to
Thomas.
OK, thanks, everyone.
Good. So I'm going to talk a little bit
about net neutrality enforcement in
the European Union,
as you might know, we have a quite a long
tradition about net neutrality in Europe.
The debate has been going on for many
years. And we are now at a point where
we have legislation that covers
all of Europe and protects the Internet.
But now it's about the tricky parts of
actually getting it enforced.
Um, this is not so
much a beginner stock, but still, I would
like to briefly explain what net
neutrality is in case you
need a reminder.
So net neutrality protects the
Internet from interference from the
network operators that control the
physical infrastructure of the Internet.
And it keeps
us in control about deciding
which services we want to use or want to
offer without any gatekeepers
in between.
And usually those interferences
in the network happen in two ways, either
technically by slowing down,
blocking or prioritizing
traffic or in an economical sense,
by making certain applications more
expensive than others.
So this is the basic principle,
but to really understand why net
neutrality matters, we have to remind
ourselves why the Internet is different
in previous different communication
networks.
In a television system, usually
you are a receiver and you cannot
really start your own television series
from from a home yard.
But in the Internet, everyone can use
and offer services.
It's a bidirectional network.
And it's also different than the
telephone system, because until after you
have a centralized, controlled entity
decides whether or not you can make this
call between those two end points.
And it also gives those two main
points in their connection, a dedicated
price per unit, which is also
different from a global packet switch
network as the Internet is.
So much for the basics.
We are not in the vacuum here in Europe,
we have in this talk I compare
what's happening here in Europe with the
situation in the U.S., as I'm sure
most of you have heard, there are some
quite some big change recently and
also in India, which we do not hear that
much about, but which is also a really
interesting point of comparison for us
here in Europe.
What combines those three areas
is the way in which net neutrality was
enshrined, and it was always a bottom
up movement from protests on
the street, from
academia's Liberian's start startups,
from many different people that came
together and decided net neutrality is
not just a good idea, it ought to be the
law. And of course, the debate
in the US was, um,
long lasting. So they started in 2007
and we are now in the fifth iteration.
In our first, we prevented a battle on
net neutrality and then we established
a weak law.
Then this law was lost in court and we
established another one.
And now recently in mid-December,
we lost those rules in the US,
in the EU, which is different.
We had a really stony path towards
the European regulation, which means it
is a law which is directly
applicable to all of the European Union.
So we have one legal basis and then
many different regulators that now have
to really use that law.
The telecom regulators will be a big
point of discussion in this talk.
In India, it is kind of similar.
So there you had a huge pushback
against Facebook trying to more
or less replace the Internet in India
for a large part of the population, and
Indians stood up to prevent it.
And now India has really good protection
or net neutrality.
And again, it is regulation.
So it's not really a law, but it is
covered by the ministry.
So it is a little bit more solid legal
standing than in the U.S., where every
new administration can more or less
appoint a chairperson to the FCC and
overdone overdo everything that their
predecessors have done.
If we compare the content of the three
different regulations,
we have very similar situation in
Europe and the U.S., actually.
So blocking or throttling is prohibited
periodization, specialized
services, which basically means
those things which are not the Internet,
but run over the same pipes and
we have device freedom.
So we cannot be discriminated for being
iOS or Android users or using
Linux or any other hardware.
So network operators cannot dictate
which devices we use.
And then it's the tricky part.
We have weak case by case rulings
on zero rating, which
means making data less expensive
or interconnection, which is the area
where Twisp is actually exchange data
between each other.
And there is something unique in Europe.
Um, the law gives us the right
that we no longer just have up to a
certain speed of our Internet connection,
but instead we have also a minimum
average and maximum speeds
that should be in the contract of every
fixed line Internet connection.
You might wonder because you might not
have seen those. And that's part of the
weak for enforcement at all.
Talk about and in India,
at least previously, we only had rules
and zero rating.
So given those rules,
why aren't we done?
Why do we still need to talk about net
neutrality?
The thing is, in the world of telecom
regulation, you have those weird entities
called telecom regulatory authorities
short answers.
And they are they like the
police and the judge when it comes to net
neutrality, they oversee the market and
implement rules.
So we have to really work with those guys
and make them to do their job.
Regulation works a little bit like
the old story of the stick and the
carrot. So regulators can use
carrots to give companies something
which is an incentive for them to make
them behave, or they can use the stick to
punish them, issue fines, or in
the worst case, even take away their
license.
And at the end, you know, we
are dealing with multibillion
multinational companies that need to
abide by the law. And so, of course,
they are very different interests.
Regulators have
a problem of revolving doors.
So if you look at the personnel of
several owners of several regulatory
authorities, you see that those people
all have histories in the industry.
And usually it's quite a fast rate from
the industry to the authority
from the government. It should oversee
the same industry.
And so, of course, there is particularly
a strong revolving door between
large countries that have state
owned or partly state owned telecom
companies like Deutsche Telekom or
France Telecom and Regulatory
Authority, which is usually a little bit
more lenient towards this company
that also contributes to the government's
income.
Not important thing to know is those
those authorities have
a limited budget.
So in some cases, they only can afford
X amount of cases.
And so that would have an incentive to
only pick cases which they are sure
they can win, which makes them
a little bit cowardice.
So how did we enforce how did those
regulatory authorities actually
use the law? And I have a little bit
of statistic here with their
activities that you would expect them to
do now that we have net neutrality in
order to make it work and the percentage
of countries that have actually done it
and which were good countries.
And bear in mind with me,
we have the net neutrality law
in Europe covers 31 countries.
That means that you 28 member states
and the European economic area,
free countries.
But in this survey, we are
we're missing, too. So it's only just 29
countries. That's why this statistic is
off.
So only 17 percent.
So five venerates updated their website.
In most countries, if you are a user,
you see a problem online charity,
you go to the right authority.
But still you are, let alone you don't
have any information on actually how to
submit a violation, a
dedicated complaint mechanisms for net
neutrality. Only France has this.
So three percent, at
least half of the entries offer the users
a speed test to measure their own
connection. And we heard before we now
have a right for an average Internet
speech. But still, how to get that
right is still quite questionable.
Um, and then really measuring the
Internet on a whole to really see
if there is blocking or throttling
that might not every user see
very few entries are actually doing that,
which is a huge problem.
And then the most weird
part you would expect of a
multi-billion company is
not obliging the law if it breaks the
law, actually, that there would be
penalties, but there are a few countries
for that do not even have
penalties. So there is no price
tag attached to violating
net neutrality.
And I would play a little bit of game.
What do you think, what is the highest
penalty for net neutrality in Europe?
It's actually three million or 10 percent
of the annual turnover, which is quite
high, so you would think, wow, this is
really preventing companies from
misbehaving.
If you look at the lowest penalty, it's
250 euros in Bulgaria.
That's Europe.
And now let's go back to the
graphic that we have before of the types
of discrimination with the things that
we are actually protected against with
the European legislation and how well
those have been implemented.
When it comes to blocking and throttling,
we see problems blocking not so much,
but throttling, particularly of
video streaming content that is
very widespread as part of the zero
rating offers. And so this type of
throttling is really
frustrating all around Europe.
And regulators are really slow to act
like we have seen now in Germany, where
it took the German regulator from April
to December to come to a decision.
And now this decision will be upheld in
court for probably two years.
So streetman is here to stay, and that's
part because of these problems.
Paid prioritization, not really an
issue. Specialized services,
we haven't seen them yet.
But in the next two or three years, when
5G is rolled out, we'll see a huge
push from the industry to reinvent
the Internet, repackage it as
specialized services.
And 5G gives them a little bit of a
technological background to argue
why these should be specialized services.
And here, the problem of the missing
measurement comes back to haunt us
because specialized services should not
eat into the bandwidth of the open
Internet. But if the regulator is not
measuring how good the quality of the
Internet in a country actually is, you
don't know if it gets worse with
specialized services.
Device freedom is not really a problem,
tattering blockade's or something like
that were a big problem in Eastern
Europe. Those problems are distinct
and then the minimum, maximum and average
speeds. That's the big problem that
we still have, because only
about 48 percent of the countries have
actually implemented that properly.
And that's why you don't see those really
basic statistics about the thing that
you're buying.
And this is also something that is not
really a net neutrality issue.
But here in Europe it is.
And it's also something that,
particularly in rural areas, is
important, because if you ISP
is not offering is not really delivering
the speed that you're paying for, you
have the right to exit the contract
interconnection, the part where ISPs
exchange data between the networks.
We just don't know because this area
usually has no end user involvement.
There are very, very few statistics.
And you mostly rely on whistleblowers or
people in the Internet exchange shops
that give us information.
But we cannot really say whether or not
it is working in that field.
But now to the biggest problem.
080.
Zero rating, explain a little
bit more in detail is the practice of
accepting certain applications from
your monthly data volume.
If you have a mobile, a fixed line,
volume based offer, and so you have
your two gigabytes and then
Spotify does not count towards that.
That would be a classical zero rating
deal.
So certain data is more expensive.
And to partner services offering.
Isn't that nice?
So this type of net neutrality
violation we see in almost all European
countries, so 86 percent
of the countries have at least one.
For the most part, it's several zero
rating offers out there in the market and
that for several years already, if
we only look at those 25 countries
that have that problem, just to go back
once, mostly to countries which don't
have zero rating, are the ones with
which don't have data
volumes. So, dear, if you buy a SIM
card, you buy a SIM card with an offer
of a certain bandwidth and speed,
but the volume is unlimited.
And then, of course, the zero rating
problem is also solved.
But in the 25 countries where we have to
fight about that, only 11.
Had formal investigation into
these practices in the
in the other countries, the regulator did
not even look at the products there,
according to what they told the European
regulators.
And so out of these 11 countries where we
at least had a look, if zero rating
is legal or not, what do
you think? How many how many products
were prohibited?
How many injuries stood up against
the industry and said, no, this is
illegal?
Not a single case of zero rating
has been decided in favor of net
neutrality in Europe, which is exactly
the same number of zero rating cases
which were ruled by the FCC in the US.
So not a single one, which
means the case by case rule on zero
rating is not working.
There has been only one case, to my
knowledge, where a case by case rule and
zero rating led to the prohibition of
such a product.
And that was in Canada already a few
years ago.
But the problem is we have products like
this from Portugal, from the Portuguese
incumbent, you know, this is the
biggest telecom company in Portugal.
If you buy enough, if
you buy Internet from them with a SIM
card, you get 500 megabyte.
And then if you really want to use the
Internet, you have to buy Dell's
application specific bundles.
And those are not really zero rating.
You just buying 10 gigabytes of WhatsApp
or 10 gigabytes of Spotify and
SoundCloud.
And this is still not prohibited
in Portugal. That's about the level of
scrutiny that the telecom regulators
have shown us so far.
Going back to the legislative side, so
this is this was the situation
mid 2017.
Then Trump came into office
and he appointed a new chairperson to the
FCC, Ajit Pai.
This is him in a video
as Santa Claus.
And yes, this is real.
This is not Photoshop.
And those two guys then killed the
U.S. net neutrality laws.
They are gone.
There's a hope to maybe get them back,
either in court, which usually takes two
years or via congressional
review after politicians step up, which
is unlikely with a Republican Congress,
or the states could create a patchwork
of net neutrality protections.
If you have like California enshrining
something in their law particularly,
or forcing ISPs
to do it. But also those are all just
patchwork solutions, solutions.
But there's also bright light.
India, India only had
a rule on zero rating before, but
in December, they closed
the gap on all the other net neutrality
issues and came up again with the best
legal solutions that I've seen.
So the Indians are at the forefront of
that issue.
And, um, so we have a
general picture of the U.S.
really going down, India going up,
and Europe is on a crossroads.
So for us, the whole debate now is
about enforcement and 2018.
But then we will have another big
discussion, because in April 2019,
the European Commission, which is not
really a fan of the beginning of the open
Internet, um, they will have
to release a report on whether or not
to review the European law on net
neutrality.
And then you have the industry pushing
with 5G for regulatory
Holliday's, which basically means just
let us do our our market
capitals and our new products without
interference. We don't want the
government to cut into
whatever promises we make about 5G.
And so there is a huge political pressure
to go lenient on net neutrality while at
the same time we already see that the
current regime is not really working.
And the way in which we enforce
net neutrality, it's also worth to
compare this approach,
because both in the U.S.
and in Europe, we have a so-called
ex-post regulation.
So only after the damage is done,
the regulator might get active, start
looking into it, have proceedings which
usually take a few months, then
deliberates, then maybe makes a decision,
and then this decision can be held up in
court.
So we see this
in Germany with Deutsche Telekom.
Now already we see it in Belgium,
we see it in Sweden and
in the U.S., of course.
I mean, they only started investigating
zero rating right at the end of Obama's
term when it was clear they could not
really deliver.
Contrary to that, in India, they have
a really cool system, so as a telecom
company, you are free to offer whatever
product you like.
But within seven days, the regulator
takes a close look at it, tells you
whether or not it's legal.
And if it is not legal, then they might
suspend your license to be a telecom
operator in India.
So net neutrality is tied
into the license agreement in
order to be a telecommunications operator
in India.
And if you think about.
We actually I know that a few people from
India are watching this talk, so thank
you for giving them a round of applause.
Um, and this is why
it is working in India and they really
take net neutrality series, which
is also the right approach.
If you think about the damage that is
done to the market, to
to innovation, to democracy, if
suddenly ISPs start blocking or
throttling or prioritizing only their own
services.
So given the damage that can be caused
by really taking the Internet
away from a society, um,
it is only the right approach
to have a big stick here and
not just a carrot.
Finally, I would like to explain
the Internet, but also
to say that there has been a shift,
we have good protections,
at least better protection in Europe than
in the US, particularly when it comes to
zero rating.
And that means that the telecom industry
adopted its model.
You know, you can molest they are like
EPOs in the net neutrality debate.
Originally, it was about blocking
services you don't like, then it was
about throttling BitTorrent because
you don't want to clutter up your
network.
Then it was about giving preferential
treatment, pay for a specialized service,
pay to become curated.
All of these things are hard to argue in
Europe these days, and that's why the
telecom industry came up with a new
model. Streetman and Vodafone Partners
are two very well-known examples
that we have in about 15 countries in
Europe. And I will explain here what
exactly changed and why we still have
a problem with those open Class-Based
generating offers.
To leave.
The Internet works, you have nice people,
you have a customer that gives money for
access to easy.
And the customer dreams of a service
that she or she wants to use in this
case, it is a bit of a decentralized
podcast hosting service, which is
really popular in Germany.
And so.
This service allows podcast producers to
reach a really wide audience without
having to pay any hosting fee,
which is really cool.
So there's the service love
that also pays for access.
And then you have the clout
interconnection part where those two ISPs
exchange data and
everyone is happy.
The classic model of net neutrality
violation would be that the ISP
wants to get money from the
content and application provider from
Bitola, so suddenly not
a money flow that gives preferential
treatment either prioritized
in a technical way, your data is faster
or your data is cheaper because
I don't deducted from the arbitrary
volume gap did I enforce on
my users?
And what you get here is basically a two
sided market so the ISP
can open up its hands from both sides and
get money.
This is a really old concept in
telephony, you know, and when
you when I make a call with you, then
my operator pays your operator
because he terminates the call.
It's called calling party network PAICE.
That's the way telecommunication
companies have made most of their money
for decades.
And now we have this old model,
more or less forced into the Internet
and to, for example, call it sending
party network. Paice So again, I
am Deutsche Telekom.
I am Vodafone.
I have a huge customer base.
I want to get money from both sides, both
from the users that I'm offering
access service and from the application
providers that want to reach these
customers.
I'm in control.
I have to access Monopoly on both sides.
That's the old model.
And the new model is different
products like these that are old model
after binge on program of T-Mobile US
have been really widespread in Europe
and we now also have other companies like
INDs in Austria and Telia
did all follow the same approach.
And the new model is different.
Suddenly, you're no longer just by axis,
you get YouTube or Netflix or
ZF mediatheque, and are
you pay for these particular services
to be 088 or they're just given for
free? It doesn't matter in that model.
It's just a minor detail.
The really important thing here is
those ISPs have competitors, hopefully,
and they have suddenly the customer has
to decide which service do I
want to I want this type of access of
that type of access
or which services do I get?
Certainly the product matrix gets really
complicated.
Suddenly, using a new cool service is no
longer a question of just signing up on
their website, but changing the access
product that you have, certainly
internet is no longer a universal
block that connects you to a whole globe
and all of the innovative capacity that
will be invented tomorrow.
Now, you have a subscription that is
with your telecommunications company,
usually has a period of two years
before you can end the contract in most
countries.
And you have a shift here
in the way how agile users
can vote with their feet.
And that, of course, makes it
more complicated for users.
But real big problem is when you
reintroduce the application provider,
let's take Bittle off again with loved
ones to also be 088,
let's say. And so they would
have to also be part of the stream
on or Vodafone Pass program,
which means they have to enter into a
contract in that country
in that language.
They have to continuously cooperate
with the telecom company to have their
data accelerated, that means to
have it identifiable by that operator,
which is quite tricky to do in most
cases.
And you have to give them 30 days notice
before Vodafone phone parcel, four weeks
or streetman before you make a change
on your own service, which is quite
a drastic interference on the
innovative capacity of any company.
And this is just, you know, and finally,
you could be held liable
for any wrongfully billed data volume,
which means as a small company or
in this case, as better off as a
community project.
You face a lot of potential costs
if you make a mistake.
And it's just one 018 program.
There is another one in Germany.
There are around 25 mobile operators
in Germany alone,
25 contracts
that you have to keep up with, 25
people you have to notify every time you
make a change on your own service.
In Europe, it would be roughly 3000
mobile operators that you would have to
enter into contracts with.
Almost no company can do that,
um, at least not,
as Sammy said, we are talking about in
the digital single market.
And then what would happen is that you
only choose the biggest ISPs
with the hugest user base to
make deals with them and just forget the
smaller ones.
And there we have the mafia effect.
You know, those that already have
accumulated a lot of market capital
will have a much more easier to
reinforce their market position.
But then, of course, if you are really a
big kid on a playground like Netflix,
you can just make one deal.
And then you accelerated in all of
Europe.
But love can do that.
And there is another problem.
Why this will not work with Pitler?
Because Spitler is a decentralized
podcast hosting service.
It uses BitTorrent as an underlying
technology.
It does not have centralized
servers that it can rely on
for distributing its content.
And these types of models only
work with centralized services.
So you need to have a heart ID
marker and you cannot rely on any
network.
You know, most of the things like the
block chain would not be possible to be
088.
Many new technologies that don't
have centralized hierarchies
cannot be part of this type of the
Internet. So we see a drastic change
and we lose a lot of the innovative
capacity and we might
never see services which are possible
in the Internet we have right now.
And on a final note, there's a huge
privacy problem that I would like to
mention.
In order to be a service that exhilarated
you can you have to be identifiable
for the network operator so you can rely
on IP addresses to get a report
numbers. But in most cases, you have
your House or Senate server
name ID certificates.
Those two things are most widely used in
order to identify a service.
But that means, you know,
the Internet is structured in layers.
Deep packet inspection is in the red area
that's off hands off limits for an
speed, they should not look deep into the
packages in the layers
to top three layers.
And this is also prohibited by the
European net neutrality regulations.
And we are speaking about criteria which
are really high on the list.
Jarrell's Layer seven application
layer.
And now comes the tricky
part.
You have a bill from a telecom company
every month that you have to date a
volume that you've used.
You know, from telephony that
if they wrongfully pilley billu for
a call that you have not made,
you have the right to dispute dispell.
They have to store the data.
They have to do data retention in
order to be able to
have this dispute resolution done.
Now, suddenly, your URLs become
a the same thing as the callers
that the calls that you've made with your
telephone.
So this could be data retention through
the back door.
And there is not just a whole net
neutrality aspect that we have to talk
about. Having this level of deep
down control in every Internet
contract also means at the end that
you might need you might need
to legally be obliged as an ISP
to store every URL that a user
has accessed and amount of data
that was transferred at least to that
house.
And this is not unthinkable.
Like in Denmark, they have data
retention, which is on a national basis.
It's actually quite close to this
already.
So in here, the interests of the telecom
industry and of governments
that want to surveil their citizens
actually online quite neatly.
And I think this is a ticking time bomb
about the whole net neutrality
and generating debate.
And I wanted to bring that to your
attention.
Finally, we have workshop later today at
six p.m. at lecture hall three,
if you want to get active in your own
country and help us
make enforcement of net neutrality, if
you are a customer of
Streetman or Vodafone pals or any
other net neutrality violating offer,
come to us and we might actually
have some collaboration that we can do.
And and yeah, in general, we
need more people.
We are hiring and we also have
many volunteer possibilities.
If you are a Pyfrom Jaguar developer,
we always need telecom lawyers from all
EU member countries or economists
and designers, web developers, companies
and particularly leaker's
from telecom companies to negative
points.
And of course, regulatory authorities are
always welcome.
Thank you very much.
Thank you, Thomas.
We have time for one question.
So microphone number four, please.
Yes, uh, maybe we can both
agree that the Internet has grown as
large, good as it is,
due to the overall lack of government
regulation.
Historically speaking.
Why do you think now is the correct time
to introduce a very far reaching,
detailed government regulation of the
Internet?
Isn't there a potential this will
backfire?
I mean, you're talking about government
bureaucrats inspecting people throughout
the configurations.
Basically, Republicans have made
exactly the same point in the recent
interview that I'm not a Republican.
I believe you. But the problem is the
Internet was born neutral.
And to quote Lawrence Lessig,
we are more or less just protecting the
original way the Internet was built.
And yes, we need laws and
some type of government regulation in
order to enforce it.
But I just see no other way to market
forces would inherently drive telecom
companies to more profit and more control
over the users.
And we have to keep the Internet open.
And in a democracy, laws are the only way
that we have in order to give limits to
the market. And also, a free market
economy relies on a certain framework
within which to market can happen.
And without this framework, I think we
have to capitalism and definitely
no free and open Internet.
So, again, another round of applause
for Thomas.