Netherlands first to regulate on net neutrality

Analysts say Ofcom will not likely consider intervention just yet

The Netherlands is likely to become the first European member state to successfully pass legislation that will ensure its internet remains neutral.

The legislation is expected to be signed off by the Dutch government next week, following a vote.

Net neutrality, which would see every internet packet treated equally, has been a hot topic for regulators and ISPs in recent months, but to date other EU countries have appeared more reticent to regulate.

But will this move by the Dutch government provoke other countries into creating their own legislation?

It might, but the Netherlands faces a unique set of circumstances that has partially paved the way for this move.

First, the country has an active internet rights organisation that has been good at lobbying for and promoting the issue.

In addition, a few weeks ago, KPN, the Dutch incumbent telecoms company, and Vodafone, were found to be using Deep Packet Inspection techniques to filter and kill off VoIP traffic.

Alex de Joode, security officer at LeaseWeb, the leading Netherlands-based hosting provider, said there was widespread outrage as a result.

"The whole country was amazed by this and, consequently, the issue has been framed in such a way that net neutrality was the only acceptable solution," he said.

De Joode does, however, believe that countries which are highly "internet-ready" will be the first to follow suit, and he points to the UK as an example.

"[In the Netherlands] 80 per cent of the population have internet at home - usage is very high. It is going to be countries such as this where you will see similar regulation," said de Joode.

"The big telcos are worried that instead of having a managed services business involving voice, TV, broadcasting and SMS, they are just going to become pipes to the internet," added de Joode.

"Where telcos feel a similar pressure is where you will see regulation being brought in. You will probably see this on other highly internet-ready environments, such as the UK and Scandinavia."

However, Matthew Howett, analyst at Ovum, disagrees and suggests that other EU countries will wait to assess the outcome of this type of legislation.

"The Netherlands is going out on a limb here. The majority of other legislators in Europe have taken a let's wait and see approach," said Howett.

"In particular, they are waiting for two things to happen. First, they are waiting for the European Commission to do its research on specific instances of blocking from each member state, and pool together such current experiences from within Europe.

"Second, they are waiting to see how much of a deterrent the new European telecoms framework has been in trying to promote an open and neutral internet."

On 25 May, an EU directive was passed that aims to ensure telecoms companies in EU member states are both transparent and non-discriminatory.

The transparency clause looks to ensure the ISPs make information about their traffic management policies available to customers, and the non-discrimination clause limits how far they can manage traffic on their networks.

For instance, an ISP could not discriminate against one VoIP provider over another. This ensures ISPs do not strike deals with providers of such services to prioritise traffic.

"These are essentially two very powerful remedies that might act as a deterrent, and it is only fair they are given time to play out and see if they work to dissolve any disputes. To do anything before that would be premature," said Howett.

"Ofcom is planning to release research later this year, and I doubt it will say it needs to intervene," he added.

"Also, the move by the Netherlands is politically driven, rather than driven by their communications regulator. If you listen to MPs such as Ed Vaizey and Jeremy Hunt, they are averse to doing anything too soon.

"I don't see the UK immediately following the Netherlands. They are going to be a bit of a unique case for quite some time," said Howett.