IV. International practices in implementation of the TSM Regulation, in particular as regards zero rating and similar practices

126. Since the adoption of the TSM Regulation (and in some cases earlier) some national regulatory authorities have been analysing issues related to the Regulation, in particular as regards zero-rating offers launched by some IAS providers. Although in many cases no final conclusion has yet been reached in the analysis, the specific cases in some countries where national regulatory authorities have taken decisions on this point are relevant, in order to highlight the arguments used and their relationship to the provisions of the TSM Regulation.

127. In this respect, note is made of Belgium, Hungary, the Netherlands, Sweden, Italy, Norway, Austria and Germany1. According to available information2, although some national regulatory authorities introduced regulation on these matters prior to the entry into force of the TSM Regulation (Slovenia and the Netherlands), most of those who have decided on the subject have adopted a case-by-case approach.


128. In January 2017, the Belgian regulator considered that two offers launched by an IAS provider3, whereby end-users could choose an application whose traffic is zero-rating until the overall Internet access cap is reached, were in line with the TSM Regulation and the Net Neutrality Guidelines. This conclusion was supported by the fact that separate treatment was not applied to the zero-rated application, after consumption of the general Internet allowance in its entirety, whereas the national regulatory authority noted that the overall Internet access cap was significant; as such, the existence of certain zero-rated applications would not have a limiting impact on user behaviour, and the market positions of the providers of internet access services and content and application providers involved in the offer in question would not indicate an impact on users' rights.


129. The Hungarian national regulatory authority determined in November 2016 and January 2017 that two IAS providers4 cease offers with characteristics of zero-rating, taking the view that they were discriminatory in nature and were not in accordance with the regulatory framework of net neutrality. In particular, the regulator noted that the offers in question resulted in discriminatory treatment of Internet traffic by allowing unrestricted access to some specific applications without regard to the general internet access cap, while all other traffic was blocked or access speed reduced, when this general cap was exceeded. The national regulatory authority considered that these offers created a disadvantageous situation for other applications not included in the offers, constituting a discriminatory restriction of traffic and causing users to use applications pre-selected by the IAS provider over any others, for which they would have to pay an additional charge when the general Internet access cap is exceeded.


130. The Dutch national regulatory authority intervened with respect to zero-rating offers, initially in 2015, prior to the entry into force of the TSM Regulation, and later in 2016, in both cases preventing the zero-rating of content/services (initially through a fine applied to an IAS provider5 for making the HBO-GO application available and later through a request, to another IAS provider6, that the availability of music streaming services be discontinued under zero-rating). According to the national regulatory authority, existing national legislation, in line with the non-discriminatory treatment of traffic under the TSM Regulation, bars any form of price discrimination, including zero-rating, whereby it concluded that all zero-rating practices would be prohibited. This decision was challenged by one of the providers of internet access services7 in court, claiming that its offer provides music streaming services in general with zero-rating, without selecting specific applications. In April 2017, the court ruled that the national law on which the national regulatory authority based its decision was not in accordance with European law in this matter, thereby annulling the national regulatory authority's decision, stating that national regulatory authorities must assess the impact of zero-rated offers on a case-by-case basis, taking into account the effect on user choice. Following a subsequent analysis, in October 2017, the national regulatory authority concluded that the service in question do not violate European rules on net neutrality, given that it is available to all music streaming service providers and does not limit the possibility of user choice8.


131. The Swedish regulator intervened with respect to an offer of two IAS providers9 characterized by zero-rating access to social media applications and music streaming. During the national regulatory authority's investigation, one of the IAS providers10 chose to withdraw its offer. Regarding the other IAS provider11, in January 2017, the regulator had to require that it cease provision of such an offer as it would imply traffic management practices based on commercial justifications and was not in accordance with the provisions of the TSM Regulation, in particular with regard to specific exceptions where management of traffic is allowed. The national regulatory authority also took the view that the offers would not be in compliance with the Net Neutrality Guidelines insofar as access to competing applications was blocked when the general Internet cap was exceeded. This decision was challenged in court by the IAS provider in question. In March 2017, the court suspended the national regulatory authority's decision, and the final decision remains pending. The Swedish national regulatory authority has opened another investigation into a similar offer from another IAS provider12, in which services of music streaming were not blocked after the general Internet access cap was exceeded, as opposed to the remaining content - the IAS provider chose to withdraw the offer before the national regulatory authority made any decision.


132. In March 2017 the Italian national regulatory authority issued a warning to a IAS provider13, requiring it to withdraw availability of its music and communications applications under a zero-rating scheme, and concluded that this represented discriminatory treatment insofar as these applications could continue to be used once the general access cap was exceeded, while all other traffic was blocked or slowed down. The regulator proposed to further investigate the issue of vertical integration, as zero-rating applications are owned by the IAS provider. It is also noted that the national regulatory authority’s reference to another IAS provider’s14 voluntary withdrawal of an offer with similar characteristics as the regulator commenced investigations into it.


133. The Norwegian regulator decided in July 2017 that an offer launched by a IAS provider15, with zero-rating of music streaming services, was compatible with net neutrality rules. According to available information, this offer allows the use of music streaming which is not counted against the general internet access cap, along with other applications. The national regulatory authority's decision is essentially based on the fact that zero-rated traffic is treated in the same way as other traffic when the general cap is exceeded and that there is a possibility of including other streaming music services. Subsequently, analysis also focused on the offer of another IAS provider16 which, like the previous one, allows the use of music streaming, through a set of applications, without the traffic being counted for the purpose of the general Internet access cap. In December 2017, the national regulatory authority concluded that this offer was also compatible with the principle of net neutrality, highlighting the reduced scale of zero-rating offers in the country and the existence of alternative offers for end users, thereby refraining from intervention with corrective measures. However, it critically commented, among other things, on the reduced data allowances in Norway compared to other countries, which encourages the use of these offers to the detriment of others.


134. In Austria, a zero-rated music and video streaming offer from an IAS provider was the subject of analysis17. The offer in question is characterized by the fact that its zero-rated video content has reduced bandwidth compared to other content, causing videos to be viewed with low resolution. In this sense, in December 2017, the Telekom-Control-Kommission determined that the offer could continue to be marketed because it did not directly violate net neutrality rules, however the IAS providers would have to discontinue the speed reduction and/or reduction in video and image resolution, since the regulation prohibits any traffic management measures which have a negative impact on data streaming for end-users18.


135. The German regulator has analysed an offer from an IAS provider19 consisting of a service that can be added, free of charge, to certain customer tariffs with a contract that encompasses fixed access and mobile access, and on the basis of which the consumption of audio and video streaming from providers with which the IAS provider has an agreement is not counted towards the general Internet access cap. The offer is open to participation by other content and application providers, which must, however, meet certain requirements established by the IAS provider. At certain tariffs, the access bandwidth for video streaming is reduced, while for the remaining traffic it is not. If customers wish to watch high-definition content, they should turn off the bandwidth reduction option, in which case the data consumption is counted for the purposes of the general internet access cap. This condition is not applied under the most expensive tariffs. After a series of analyses, in December 2017 the national regulatory authority submitted a final decision determining that the offer in question was not compatible with the principles of net neutrality and Roam Like at Home, insofar as traffic is to be treated equally and the traffic from the StreamOn services cannot be deducted from the subscriber's tariff cap when the customer is roaming in the EEA. The IAS provider has been given until the end of March 2018 to make the necessary adjustments to the offer in order to comply with the rules of the European Union.

136. In light of the above, the national regulatory authority's actions appear to be largely based on two arguments: (i) the issue of traffic management, in particular discriminatory treatment between zero-rated offers and Internet access in general and (ii) the impact that offers may have on end-user choice. More recently, there has also been a decision to safeguard the application of the Roam like at home principle, as also introduced in the Roaming Regulation amended by the TSM Regulation.

137. It should also be noted that BEREC continues to monitor this issue in the various countries, seeking to contribute to greater consistency and homogeneity in the application of the provisions of the TSM Regulation.

1 It should be noted that the national regulatory authority in Slovenia also intervened in relation to zero-rated offers. Notwithstanding, the decisions in question were taken under national law and the national regulatory authority did not assess compliance with the TSM Regulation and therefore it was decided not to refer to it in this survey.
2 BEREC annual report on the implementation of the TSM Regulation (available at http://berec.europa.eu/eng/document_register/subject_matter/berec/reports/7529-berec-report-on-the-implementation-of-regulation-eu-20152120-and-berec-net-neutrality-guidelineshttp://berec.europa.eu/eng/document_register/subject_matter/berec/reports/7529-berec-report-on-the-implementation-of-regulation-eu-20152120-and-berec-net-neutrality-guidelines), websites of national regulatory authorities, and publications of Cullen International.
3 Proximus.
4 Magyar Telekom and Telenor Hungary.
5 Vodafone.
6 T-Mobile.
7 T-Mobile.
8 Available at https://www.acm.nl/en/publications/t-mobile-can-continue-offer-its-data-free-music-servicehttps://www.acm.nl/en/publications/t-mobile-can-continue-offer-its-data-free-music-service.
9 Telia and Tre.
10 Tre. In 2017, this IAS provider re-marketed the offer, informing the national regulatory authority that it would adjust its characteristics in accordance with the national regulatory authority's interpretation of the TSM Regulation, and therefore the national regulatory authority did not issue a decision on it, but continues to follow the process.
11 Telia.
12 Hi3G.
13 Wind Tre.
14 Telecom Italia.
15 Telenor.
16 Telia.
17 A1 Telekom Austria AG.
18 Available at https://www.rtr.at/en/pr/PI20122017TK.https://www.rtr.at/en/pr/PI20122017TK
19 Deutsche Telekom.