Netherlands Enacts Net Neutrality

Published May 31, 2016

Net neutrality—the idea that Internet service providers should not favor one source of data over another—is now the law of the land in the Netherlands. The country became the first in the European Union to enact net neutrality in May.

The new law makes it illegal for Internet Service Providers to block or slow down any type of Internet traffic and prohibits ISPs from charging extra to access specific Web sites or services. There are some exceptions to the law: ISPs can manage traffic if the network is congested, but otherwise providers are required to treat all traffic as equal.

The law is expected to cause a ripple effect. Other members of the European Union are debating proposed net neutrality laws of their own. In the United States, the debate still remains rancorous as telecom companies and activist groups fight over who will get to manage internet traffic over the companies’ infrastructure.

Market Interference
Devon Herrick, a senior fellow with the National Center for Policy Analysis, a research institute in Dallas, Texas, says at first glance net neutrality appears like a reasonable policy to ensure equal access to all Web content, without consumers running into roadblocks or stopping at tollbooths. However, on closer examination, it is anything but fair to the telecommunications firms that own the Web infrastructure that constitutes the Internet, he says.

Herrick uses roads as an analogy. “Some roads are privately owned. Large 18-wheel trucks pay higher tolls to use toll roads than smaller, passenger cars. Commercial trucks also pay much higher taxes and registration fees to use the public roads than small, economy cars. Drivers who use the roads heavily pay more—primarily in gasoline taxes—than Sunday drivers. This policy is designed largely to reflect the actual use people get from our roads,” Herrick said.

“Net neutrality, by contrast, assumes every content provider should pay the same regardless of how much of the Internet roadway their content takes up. For example, YouTube videos require far more bandwidth than a printer-friendly newspaper article. The premise of net neutrality is that the purveyors of low-bandwidth content should subsidize those business models that require large bandwidth,” he explained.

“Governments should recognize that net neutrality interferes with this market process. The market needs to work out the details. Telecommunications firms that own bandwidth should be free to negotiate with content providers to establish a fair price,” he said.

‘Proscriptive, Burdensome Laws’
Dominique Lazanski, head of digital policy for the TaxPayers Alliance, a Great Britain-based independent grassroots group advocating lower taxes, says the Netherlands’ choice of net neutrality creates disincentives for ISPs to innovate and invest in new and better network infrastructure.

“The law effectively tells ISPs how to run their own businesses that they, as businesses, already know how to run,” said Lazanski. “Traffic management is essential to any ISP and allows for maximum flexibility for content to get through. By requiring that all content should be treated the same, ISPs will be spending time ensuring that the law is implemented rather than that business best practices and optimal infrastructure performance are achieved,” she said.

“Net neutrality law in the Netherlands goes against the European Union’s self-regulatory and wait-and-see approach to Internet regulation,” Lazanksi continued. “In the United Kingdom, stakeholders, including ISPs and civil society, have agreed to work together in addressing issues captured under the misunderstood and misused net neutrality moniker. They communicate regularly about questions and concerns on traffic management. This is a far better approach than proscriptive and burdensome laws,” she said.

Kenneth Artz ([email protected]) writes from Dallas, Texas. Bruce Edward Walker ([email protected]) is managing editor of InfoTech & Telecom News.