12. Zero-rating is a commercial practice where the consumption of data traffic associated with certain content, applications or services is not counted for the purposes of calculating the consumption of data volume associated with the offer subscribed to by the customer; normally no charge is made for the traffic associated with this set of content, applications or services. The traffic associated with the practice is often unlimited and provided at no cost to the user.
13. It should be noted that, in addition to practices that can be classified as zero-rating, there are other practices which, while not involving provision of content on a purely free-of-charge basis, may be understood as being equivalent or having similar effects - for example: (i) practices which entail free access to specific applications or content with an additional traffic limit that is higher than the basic tariff ceiling; and (ii) those which allow the user to subscribe to specific applications or content for an associated traffic charge - more than zero - which differs from the basic offer price, and which may or may not apply a traffic limit.
14. As mentioned above, according to Article 3(2) of the TSM Regulation, agreements between IAS providers and end-users on commercial and technical conditions and the characteristics of internet access services such as price, data volumes or speed, and any commercial practices conducted by IAS providers, shall not limit the exercise of the rights of end-users laid down in paragraph 1 of the same article - i.e. to access and distribute information and content, use and provide applications and services, and use terminal equipment of their choice, irrespective of the end-user’s or provider’s location or the location, origin or destination of the information, content, application or service, via their internet access service.
15. In addition, the Net Neutrality Guidelines make it clear that Article 3(2) of the TSM Regulation contains two relevant aspects: on the one hand, the freedom to conclude agreements (contractual relationships) between IAS providers and end-users relating to commercial conditions (e.g. pricing) and technical conditions (e.g. data volume and speed) as well as characteristics of the IAS, and on the other hand, the provision that such agreements and commercial practices shall not limit exercise of the end-users’ rights referred to above.
16. The Net Neutrality Guidelines also gives examples of the practices which are in line with the TSM Regulation and other practices which do not comply with the TSM Regulation, such as offers in which access to certain applications and/or content is contractually barred, since this would constitute a sub-internet service. According to BEREC, a sub-internet service is a service which restricts access to services or applications, or which enables access to only a pre-defined part of the internet, and, except where qualified as a specialised service, is incompatible with the TSM Regulation.
17. Note is also made of the case of practices involving price differentiation, which may influence the exercise of rights by end-users without effectively limiting these rights. In this context, reference is made, as an example, to differentiated prices applied to certain applications, or sets of applications, or the identification of these as zero-rated. In these cases, although end-users are not prevented from accessing applications or content beyond those defined as zero-rated (or those subject to a lower price), there may be an economic incentive to use such applications or content, rather than other options. Furthermore, this incentive may be more significant if such "favouring" refers to specific applications or content, rather than applied to a whole category of applications or content.
18. The TSM Regulation does not prohibit zero-rating, equivalent or similar practices across the board, but calls for a case-by-case examination of each offer taking into account the rights of end-users in particular, specifically in terms of the options available and position enjoyed by the IAS providers and by the content, service and application providers in the market. Nevertheless, certain zero-rating practices are explicitly contrary to the TSM Regulation, particularly where there is differentiated application of traffic management practices, with impact in terms of effectively limiting the exercise of end-user rights. Accordingly, and as is clear from the Net Neutrality Guidelines, under Article 3(3) of the TSM Regulation, for example, a zero-rating practice is expressly prohibited where, after the traffic limit is reached for the majority of content or applications, traffic associated with such content or applications is blocked or slowed down whereas traffic associated with content or applications covered by zero-rating remains unaffected.
