MARIA ISABELA HARO MELONCINI

Network neutrality in European legislation after the London Conference on Cyberspace on 1-2 November 2011

Paper composing the activities of the course of ICT Law of the University of Bologna, under the chair of Professor Cesare Maioli.

Bologna 2012

SUMMARY

The principle of network neutrality was created in response to the abusive traffic discrimination carried on by Internet Service Providers. While they argue that traffic management is done to improve the quality of service and to obtain resources to invest on the network, the companies that offer services and content through the Internet claim that traffic management can limit freedom of expression and information and refrain Internet growth. Concerned to users' rights, the European Union established the principle of network neutrality. Under the European Union law, the principle assumes a flexible meaning, allowing traffic prioritization when it does not affect users' choice. The option of a less intrusive regulation is justified by the fact that traffic management can improve the quality of service in certain ways. The technical analysis of what traffic management is shows that it is a tool for fighting cybercrimes and allowing time-sensitive applications as video and voice instant messages. The framework of network neutrality comprises regulations on competition, transparency, privacy and public investments. An efficient policy on network neutrality depends on international cooperation since network providers from all the world can engage abusive traffic discrimination on Europeans' online transfers. For this reason, the European Union participated on the London Conference on Cyberspace, where general guidelines of the principle were established. However, concrete actions have to be taken word-widely, and European regulatory experience can serve as an role model.

Keywords: Network neutrality, European Union, Internet, London Conference on Cyberspace, traffic management.

1. INTRODUCTION The scope of this work is to highlight the significance of the principle of network neutrality on the actual European Union context, specifying its delineations after the London Conference on Cyberspace, that took place on the 1st and 2nd of November 2011. Network neutrality was born as a concept in response to the prioritization of traffic practiced by the Internet Service Providers (ISP) 1 of Internets' content and services. It was first established by the European Union Law in 2009, which stated that information though out the Internet should be transmitted impartially. The hypothesis at the start of the research was that network neutrality was the same as prohibiting of discrimination. That was the former meaning of the principle, as it was created by companies that provide content and services thought the Internet. After some meditation on the reading material, I believe that the principle has a different significance on the EU law. In Europe, the principle of network neutrality (i) is still in debate and (ii) is not rigid. European Union institutions are still assessing the impact of the recent law documents on the matter and studying the implementation of other laws to guarantee consumer protection and competition burst. With the provisions that we have so far, ISP can manage traffic, but they have to respect the privacy of users and the principle of proportionality. The European Union participated on the London Conference on Cyberspace and discussed the network neutrality on the international context. The international approach is the key on the effectiveness of the network neutrality's policy, since ISP from all over the world are capable of traffic managing. The protection of fundamental rights depends on a collaboration and international agreements. This work was divided in 6 parts. Part 2 explains the relevancy of the matter by describing Internets' benefits. Part 3 explains the two visions that created the debate and the creation of the principle of network neutrality. The investment obligations that fall on Internet Service Providers are explored in Part 4. Some interdisciplinary analysis were necessary, since the matter is related to the informatics field, which I briefly looked into on Part 5. The technical explanation was necessary to understand what is traffic discrimination and also to provide the enough basis to analyze the political positions expressed by the sides of the debate.
1 In this text, network providers and Internet Service Providers ISP are used as synonymous, but there is a difference. The Internet is a interconnection of networks, and there are companies that provide high speed, long-distance connections, other that provides regional and local connections. ISP can be divided in Backbone providers, Middlemile providers and Last-mile providers. (YOO, Christopher S. Network Neutrality and the Economics of Congestion. In Georgetown Law Journal, Vol. 94, June 2006, Vanderbilt Law and Economics Research Paper No. 05-28, Vanderbilt Public Law Research Paper No. 05-33.).

Parts 6 and 7 talks about the issue in the European Union context and the relevance of the London Conference on Cyberspace. The European meaning of network neutrality and its implications are expressed out on Part 6. 2. INTERNET: THE MAGNIFICENT VIRTUAL BENEFITS The Internet is a tool for economic and social growth. By the time it was popularized, it was found to be a instrument to connect people in different ways that tends to evolve even more over time. On the social field, people with very specific interests are able to find their equals through out the Internet, regardless to their locations2. Furthermore, on the economic domain, new services and ways to firm a contract have uprisen from the Internet facilities, expanding the consumer market and competition. As a result, in the last 5 years 21% of the GDP growth in mature countries accounted on the Internet. Although the traditional companies are still the ones that take advantage of the Internet, this powerful tool is responsible for 10% of productivity of small and medium companies.3 The Internet has a role on politics, since it influences democratic norms and modes, including its impact on civil society, citizen media and government transparency. The influence of Internet on economic, social and political growth works as a feedback on Internets growth. It bursts exponentially on size, processing power and software sophistication. Every year,the number of people accessing the internet is increasing to even a larger scale. About every 18 months computer processors and storage continue to double in power and capacity. In terms of software, all web applications, based on the previous technologies, can evolve fast. 4 Experts predict that, in the future, the Internet will lower the price of goods and services and will allow people to be better informed and more globalized. Evidences of this can already be seen, for example through the Arabic Spring online protests, whereby protesters were using social medias to fight against the government. Another example, can be seen through the online encyclopedia Wikipedia black-out, in a protest against SOPA (Stop Online Piracy Act), a bill that was introduced in the United States by the House of Representatives. The future of the Internet holds an even more interconnected society due to globalization which will make real time technologies to be more accessible.5
2 For example, the Internet has a important role to connect minorities. Because of the characteristics of Web 2.0, which is colaborattive, they can protect their culture by sharing documents related to their history, language and traditions, and also give information to the general public. By finding a online community, they prevent assimilation. (CIOLEK, Matthew. Internet and Minorities, In: Carl Skutsch (Ed.), 2004. The Encyclopedia of World's Minorities. Independence, KY: Taylor & Francis/Routledge. http://www.ciolek.com/PAPERS/minorities2001.html). 3 McKinsey Global Institute. Internet matters: The Net's sweeping impact on growth, jobs, and prosperity. May, 2011. http://www.mckinsey.com/mgi/publications/internet_matters/pdfs/MGI_internet_matters_full_report.pdf 4 Living the Internet. Internet Growth Rates, last updated April 10, 2011. http://www.livinginternet.com/i/ip_growth.htm 5 Living the Internet. The Future of Internet, last updated April 10, 2011.

3. TWO POSITION ON MEASURES FOR THE INTERNET GROWTH The Internet future forecast counts on its freedom of expression. The achievement of the optimistic expectations on the future of Internet was said to be put into risk because Internet Service Providers started to block Internet application and content6. Their allegation was that the quality of the services could decrease if they would not block content and applications, because applications considered heavy and time-sensitive, such as VoIP and IPTV would cause network congestion7. To maintain the high level and to have the money to fulfill network investment obligations; providers want to be paid for that traffic, by users or by Internet service providers8. The companies that provides content and services through the Internet claimed that, without the imposition of a non-discrimination obligation, ISP would be tempted to monopolize content. Originally, the Internet as regard to its content and services offered had a meritocratic designed architecture, in which the criteria of what is best is decided by the users. This means that the websites or services that best serves the users are the most popular ones, considering that what counts for the users usually is the content or service itself. But if a website or an online application does not work fast, speed of the website starts to be decisive on consumer's choice. Another characteristic of today's Internet is that the network providers do not have to have a necessary connection with the companies that provides content or services through the Internet, apart from a commercial relation.9 In other words, network providers do not control internet content, that is created on a diffuse basis. Recently, after the advent of Web 2.0, the content can be created by anyone, even one who does not have technical knowledge, by using a special platform provided by a domain owner such as wikis, social networks, and others.10 In a response to the action of ISP, the concept of network neutrality was created. Its former

http://www.livinginternet.com/i/ia_future.htm 6 MSNBC. Comcast blocks some Internet traffic, 10/19/2007, at http://www.msnbc.msn.com/id/21376597/ #.TyBW_aXOwlI . Accessed at 4th january 2012. 7 "We have a responsibility to manage our network to ensure all our customers have the best broadband experience possible. This means we use the latest technologies to manage our network to provide a quality experience for all Comcast subscribers." (MSNBC. Comcast blocks some Internet traffic, 10/19/2007, at http://www.msnbc.msn.com/id/21376597/ #.TyBW_aXOwlI . Accessed at 4th january 2012. ) 8 DLSReport. European ISPs Want Google to Pay for Network Upgrades and Continue to Cry When People Actually Use Their Product, 01.08.2011, at http://www.dslreports.com/ . Acess on january 10th 2011. 9 For example, Google, Facebook, Wikipedia, Skype (content and application providers) have no connection to Verizon, Tim, Fastweb (network operators). 10 The Web 2.0 is a term to describe a change o perspective on the Internet. Users and enroled a passive part of Internet's communications, by only receiving information, were able to perform an active and colaborative role on website's content. It was possible after the development of plataforms that allowed the user to contribute on websites without knowing the technical concepts of Internet. For more, see WIKIPEDIA, Web 2.0. http://en.wikipedia.org/wiki/Web_2.0 )

definition is that ISP and network providers can not discriminate content, application and services.11-12 It is a regulatory imposition, limiting free market principle on the grounds of network providers in order to promote the same principle - free market - on the level of Internet content. It is justified by its defenders because it avoids tying, an anti-competitive practice consisting on the the sale of a product on the condition on the acquisition of another one.13 In a market where the network operators control the bandwidth (traffic), these companies would be tempted to control the content and application usage, because their application and website would work faster in other words, they would have more quality, or even to be the only content and service available, while others would be blocked. On the other hand, network providers say that the control of the bandwidth is for good: to improve the quality of service for low-volume users and to block potentially harm practice as spams and virus. They also complain about the regulations that impose them the responsibility to invest on the network, while content and application providers profit from those investments without having any investment obligation14. Just to illustrate, Zynga, a company that creates browser-based games and social network applications that was created in January 2007 and was valued at $20 billion dollars in June 201115, or even Facebook, valued at $100 billion dollars, despite the fact that they do not contribute to the improvement of Internet16-17. 4. THE REGULATORY MODEL
11 Tim Wu. Network Neutrality FAQ, at http://timwu.org/network_neutrality.html . Accessed on 20th December 2012. 12 The term is also used with other meanings in European Union regulation, for what it is necessary to explain the difference of them. The Directive 2002/21/EC, on a common regulatory framework for electronic communications networks and services, mentions the principle of neutrality with regard to the rules in Member States governing the system of property ownership laid down in Article 295 of the Treaty (exposition of motives 10), a rule of free movement of goods on the territory of the European Union Member States. The Directive also refers to neutrality of technology (exposition of motives 18), enforcing the non discrimination of technologies that offers the same service. It is another principle that is sometimes mistaken with the network neutrality. 13 HYLTON, Keith N. Hylton, SALINGER, Michael, Tying Law and Policy: A Decision-Theoretic Approach, 69 Antitrust L. J. 469 (2001). 14 The physical net-work providers (local exchange carriers and cable system operators) argue that they will be discouraged from undertaking costly and risky broadband network build-outs and upgrades if their networks are subject to open access and/or non-discrimination requirements that might limit their ability to exploit vertical integration efficiencies or to maximize the return on (or even fully recoup) their investments. (GOLDFARB, Charles B.CRS Report for Congress. Telecommunication act: competition, Innovation and Reform, 2006, p. 2.) 15 THE WALL STREET JOURNAL, Tech IPOs Test Sky-High Values, June 29, 2011 , http://online.wsj.com/article/SB10001424052702304447804576414111297459234.html . 16 RedOrbit, Facebook IPO Set For Late May, Valued At $100 Billion, January 17, 2012, at http://www.redorbit.com/news/technology/1112456278/facebook-ipo-set-for-late-may-valued-at-100-billion/ . Acessed 20 January 2012. 17 In response to that critics and in the context of the US' National Broadband Plan, Google announced the Google Fiber for Communities, a project to construct a fiber otic network. They announced that We'll operate an "open access" network, giving users the choice of multiple service providers. And consistent with our past advocacy, we'll manage our network in an open, non-discriminatory and transparent way. ( Googleblog, Think big with a gig: Our experimental fiber network, available at http://googleblog.blogspot.com/2010/02/think-big-with-gig-ourexperimental.html . Acessed at 2nd February 2012).

The network providers obligations on the network are related to the model of regulation implemented on the last decades, the so-called Regulatory State18. The Liberal model was inspired by the ideals of Adam Smith, which defended a negative role of the State on economic and social relations, the "laissez faire, laissez aller, laissez passer". It was based on the idea that the rules of the market were able to organize the economic relations. This form of State led to many social problems, that were reflected on the European Revolutions of 1848 and the American Depression in 1929. At the same time, the communist and socialist's values have risen, and even if a lot of western world countries - especially the United States, during the cold war - were willing to fight against those values, the Liberal States had to make conceptions to contain the masses, adopting social rights and expanding the right to vote, as well as to begin to control the economy.19 however in comparison to the "first generation's rights, that required only an abstention of the State to allow citizens to exercise their freedoms, those from the second generation demanded an active state - the Welfare State - , responsible for providing all the services needed to guarantee a substantial equality, for instance, equality of opportunity and equitable distribution of wealth. These social rights have been extended over the years. More recently, in parallel with the phenomena of globalization and the increasingly respect gained by minorities and association rights in the democratic context, a plural society has been developed. The plural society is comprehended not only by the traditional idea of society combining ethnic contrasts, but also non governmental organizations, parties, international organizations and many other institutions. Each of those groups have different demands, that sometimes oppose the others' requests. Even when these demands are not opposed, they require a public investment of the scarce public budget. Due to difficulty or even impossibility of the State to fulfill all the interests, it assumes a position of mediator between the different social groups, loosing the traditional role of concentrated policy-making. Furthermore, it recognizes its incapacity to deal with all the fields of economy, privatizing public companies but without returning to the status quo ante. Instead of acting directly on the economic fields, the states leave it to the private subjects but with technical and specific rules for them to follow so that other rights can be guaranteed, for example, consumers rights. In other words, the state continue to intervene on the economy with regulations and also to provide essential services.20
18 Also, Internet is a type of telecommunication, together with telegraphs, telephones, teleprinters, radio and microwave communications, orbiting satellites. 19 DE VERGOTTINI, Giuseppe. Diritto Costituzionale Comparato, V. 1, 8a ed., Padova: CEDAM, 2011, pp. 336-343: The Italian author explain in this book the evolution from the Absolutism to what he calls techdemonocracy (tecnodramocrazia), a state where the administrative employee, labour unions and other normative poles gain force. 20 MARQUES NETO, Floriano de Azevedo. Agncia Reguladoras Independentes: Fundamentos e Seu Regime Jurdico, Belo Horizonte: Ed. Frum, 2004, p. 10-40. The book explains the arisen of the power of regulatory agencies on post-modern states.

The field communications followed the evolution of the roles of the State. In the Welfare State, the telecommunication services received a status of a public service, an essential service that has to be provided to guarantee the dignity of the person. Since the initial investments to create an infrastructure were so high, it was not the economic interest of private companies to engage in that field. It was believed to be a natural monopoly, that has high fixed costs and long-term investments. Also, there was the myth that more than one service provider will higher prices, because of unnecessary duplicated network21. As from the monopoly idea, the government had to create public companies to build and manage the infrastructure and provide the service to end users. After most of the infrastructure was created, the Welfare State faced its crisis, as described above. Furthermore, the monopoly structure was criticized since the new technologies had already made it possible for other carriers to enter the telecommunication market. The natural monopoly idea was criticized. The competition market structure was considered a best option to promote better quality services, with better prices22. That evolution was global because of the worldwide characteristic of Internet and telecommunications. Furthermore, it was promoted by international agreements. The Fourth Protocol to the General Agreement on Trade in Services (GATS) came into force on February 1998, providing for a progressive liberalization of trade in telecommunications transport networks and services23. On 2001, a total of 86 World Trade Organizations economies made market access commitments in telecommunications services24. However, open market alone was insufficient to promote competition on a level that it could positively impact on services' benefits. The reason was, mainly, the poor returns on investment, the limit market size and the economic stability. Without interconnection obligations, consumers' market action is to choose large network over small ones in order to receive calls from everyone. Also, the lack of interconnection make it difficult for the market entry and abuse of dominant position is a common practice if not combated 25. Hence, a

21 Thomas J. DiLorenzo, The Myth of Natural Monopoly, The Review of Austrian Economics, v. 9, n. 2, 1996, pp. 43-58, at
http://mises.org/journals/rae/pdf/R92_3.pdf . Accessed on 4th January 2012.

22 OCDE. Competition in telecommunication, 1995, at http://www.oecd.org/dataoecd/34/50/1920287.pdf . Also, The successful management of competition can be a catalyst to obtaining lower prices, new and better services, greater consumer choice and increased investment in telecommunications markets.'(International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva, 20 - 22 November 2002, at http://www.itu.int/osg/spu/ni/competition/background/Final%20background%20paper.pdf . Accessed on 12th January 2012.) 23 GATT 1994. Annex 1 Decision on negotiations on Basic Telecommunications. 24 International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva, 20 - 22 November 2002, at http://www.itu.int/osg/spu/ni/competition/background/Final%20background %20paper.pdf . Accessed on 12th January 2012. 25 International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva, 20 - 22 November 2002, at http://www.itu.int/osg/spu/ni/competition/background/Final%20background %20paper.pdf . Accessed on 12th January 2012.

competition policy on telecommunications and telecommunications' regulatory obligations were created in order to correct the market failures. The traditional telecommunication regulatory obligations, until today, falls on the network providers alone. They have the obligations that is regarded to the service classification as a universal service; some of the obligations are the expansion of the infrastructure to reach as many users as possible and quality of service. Online services and content companies do not have any regulatory obligation to invest on the network, nor do they have to pay a different amount of money to use more or less bandwidth. For example, the traffic of a website, that can bring much profit with marketing, does not reflect on the infrastructure's technical improvement; the same with a paid online service. The bigger issue is that those companies can be the ones that are congesting the Internet traffic. 5. TECHNICAL TERMS At the debate on network neutrality, the online content and services companies affirm that discrimination of traffic is an unjust practice . But a technical analysis of what traffic prioritization is it shows that is has got some good points. It can improve quality of services, specially for newborn services like voice and video instant transmissions. In addition, it can combat spams and viruses. Internet is a interconnection of networks that uses a common protocol (TCP/IP) to connect people all over the world26. TCP/IP are digital systems used by every computer that permit the exchange of data between computing system27. On the Internet, the application of specific functions like processing power, for instance - takes place in the edges (end host) of the network rather then in the middle (intermediary nodes), principle called end-to-end. The end-to-end principle is mainly justified to maximize efficiency and minimize costs on the network28. Computers communicates with each other identified by an IP address, a numerical address used to route packets across the Internet. It works just as an address, that the postman have to check to see what is your mail; it isthe geographical descriptor of the virtual world29. Packets are formatted units of data of broken messages that can be transmitted independently, from the sender to the recipient that are brought together into the original message at the end30. The message is split into smaller pieces also to lower
26 Wikipedia, Internet, at http://en.wikipedia.org/wiki/Internet . Acessed on 3th january 2012. 27 Living Internet. TCP/IP, at http://www.livinginternet.com/i/ii_tcpip.htm. Acessed on 3th january 2012. 28 Brwolff, Matthias. End-to-End Arguments in the Internet: Principles, Practices, and Theory. Dissertation submitted to the Department of Electrical Engineering and Computer Science at Technische Universitt Berlin in partial fulllment of the requirements for the degree of Dr. Ing. Berlin, 2010. 29 Living Internet. IP address, at http://www.livinginternet.com/i/iw_ip.htm .Acessed on 3th january 2012. 30 L. Kleinrock, Information Flow in Large Communication Nets, RLE Quarterly Progress Report, Massachusetts Institute of Technology, April 1962, at http://www.lk.cs.ucla.edu/data/files/Kleinrock/Information%20Flow%20in

the costs of the network and to enable flexibility. When transmitting the packets, the ISP can add layers and protocols that allows them to manage the traffic31. It is a myth that traffic management is a new practice, done only for the worst purposes32. The Internet, since its beginning, has provided with mechanisms for discrimination of traffic when there is a congestion of routing packets. This happens when there are more packets coming than the capacity of the router to send them on33. A router is an equipment, connected with lots of networks, used to compute protocols and send packets from one part of the network to another cross point 34. It has a function to store a certain quantity of packets on its buffer when there is packet jam. In the case of congestion, the router has two options that can be translated on the technologies used: (i) first come, first served or (ii) prioritize. The first is the option of absolute neutrality, as the first packet to come is the first to be sent. The packets that overcome the processing capacity to be transmitted are queued in the buffer. When the buffer is full, the packets are dropped. The TCP itself is able to detect that a packet has been lost, in order to resend them. The problem of not prioritizing is that video and voice services are compromised, as they are timesensitive. For e-mails and other Internet services, a few seconds of delay does not affect quality. But if the packets of data that contain voice or video instant message are queued, the quality of these services will be bad enough to prevent people from using them. The users have full control of what they want to access, since the network provider is not blocking content or service, but, on the other hand, will not be able to raise the bandwidth of their most used service. 35. These issues can be solved by discrimination, in the second option. The traffic shaping tools can recognize the type of the data that is being transmitted and allow some of them to cut the line36. With this mechanism, those applications that need instant transmissions can be prioritized and their quality will be better. The packet queuing systems can also identify the IP address, in a way that users inform their network providers that they do not want to use some services and in return can have faster transfers. For example, those users that do not want to use peer-to-peer file sharing can
%20Large%20Communication%20Nets1.pdf. Acessed on 3th january 2012. 31 European Data Protection Supervisor, Opinion on net neutrality, traffic management and protection of privacy and personal data, Brussels, 7 October 2011, p. 7. 32 Several respondents to the public consultation agreed that traffic management was not new in the field of eletronic communications. For example operators prioritized voice traffic, particularly in the case of mobile - European Commission. Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions on the open internet and net neutrality in Europe. COM(2011) 222 final. Brussels, 19.4.2011, p. 7. 33 OECD, Internet Traffic Prioritisation: An Overview, 2007 ,at http://www.oecd.org/dataoecd/43/63/38405781.pdf. Acess on 3th january 2012, p. 8-10. 34 Living Internet. Internet routers, at http://www.livinginternet.com/i/iw_route_arch.htm. Acess on 3th january 2012. 35 OECD, Internet Traffic Prioritisation: An Overview, 2007 ,at http://www.oecd.org/dataoecd/43/63/38405781.pdf. Acess on 3th January 2012, p. 8-15. 36 Compago. Gestione avanzata del traffico internet, at http://www.compago.it/manuali/34-linux/198-gestione-deltraffico-internet.html. Acessed on 3th january 2012.

choose a network provider that blocks that type of transfer in a way that the other services can have more bandwidth37. That is possible because traffic can be prioritized even when there is not congestion, by the fixed allocation of bandwidth for some applications. The per-user base can give consumers a very personalized service that meet their needs. Since information crossed multiple networks, network providers would have to agree on the method of prioritization to allow even more quality. These would require a strong cooperation of providers in a worldwide level, as the information can cross even 20 routers to arrive the end user38. The same technology can be used to detect prevent spam and virus. Delaying spam packets can fight 90% of spam e-mails sent by botnets
39

. The separation of legitimate senders from

spammer robots is done, firstly, by a principal component analysis (PCA), which is a mathematical procedure that reduces the number of the original variables. After that, by using a pre-established criteria of prioritization that considers content length, time of arrival, frequency of spamming and content type of e-mails, it is possible to separate which e-mails are the ones that have to have their packets delayed40. Those e-mail came from botnets, softwares that execute automatically, repeatedly simulating a human action41. The criteria does not consider the content itself, in respect of privacy. An efficient combat of virus can also be made by traffic management that recognize botnets42-43. A big issue on traffic management is the confidentiality of users information. The packets has two parts, the IP payload that include the content and the IP header that contains the address of the sender and recipient44. The inspections techniques that uses only the header does not inflict on the privacy; it can be compared to a postman that reads the outside of a closed letter to know to whom it has to be delivered. But the protocols that read the payload, even to only specify the type

37 In fact, that example is offered by the companies that produces service control engines. Cisco announce it as a benefit of its product.(Cisco Systems, Using the Service Control Engine and Deep Packet Inspection in the Data Center, 2007). 38 In the European level, it can be promoted by the European Union enhancing cooperation. 39 L. Fulu, M. Hsieh, An Empirical Study of Clustering Behavior: Spammers and Group-based Anti-Spam Strategies, CEAS, 2006, at http://web.media.mit.edu/~fulu/CEAS06-final.pdf . Accessed on 3th January 2012. 40 Husna, H. Phithakkitnukoon, S. Dantu, R., Traffic Shaping of Spam Botnets, North Texas University, 2008, at http:// ieeexplore.ieee.org/Xplore/login.jsp?url=http%3A%2F%2Fieeexplore.ieee.org %2Fiel5%2F4446297%2F4446298%2F04446479.pdf%3Farnumber%3D4446479&authDecision=-203 . Access on 3th January 2012. 41 Wikipedia. Botnet, at http://en.wikipedia.org/wiki/Botnet .Accessed at 3th january 2012. 42 CISCO Systems. White Paper: Combating Botnets Using the Cisco ASA Botnet Traffic Filter, at http://www.cisco.com/en/US/prod/collateral/vpndevc/ps6032/ps6094/ps6120/white_paper_c11-532091.pdf . Accessed on 4th January 2012. 43 Traffic management for fighting cybercrime and virus, apart from being authorized, is an obligation for ISP imposed by Australian regulation. (The Parliament of the Commonwealth of Australia. Hackers, Fraudsters and Botnets: Tackling the Problem of Cyber Crime. The Report of the Inquiry into Cyber Crime, 2010, at http://www.aph.gov.au/house/committee/coms/cybercrime/report/front.pdf . Accessed on 27 january 2012. 44 European Data Protection Supervisor, Opinion on net neutrality, traffic management and protection of privacy and personal data, Brussels, 7 October 2011, p. 8-9.

of communication, influence on the user liberty. It does not mean that consequently it has to be prohibited, but authorizations of both users are necessary. Therefore, discrimination of traffic is a common practice that leaves a great power on ISPs hand. Only more recently the practice was done abusively. hence giving origin on the network neutrality debate. But the proposed non-discrimination policy in other words, a rigid application of the principle of network neutrality - would lower the quality of Internet on the grounds of spam and virus control. The traffic management also can be a practice in service of the user, when one chooses the way the bandwidth traffic is for some type of data. 6. THE DEBATE IN EUROPE 6.1 Liberalization of the telecommunication market on the European level. The idea of network on the European level came over the '80s, together with the proposed principle of Single Market45. From its beginning, the principle of free movement of services comprised the telecommunication networks and later inspired specific regulation. Fist, a soft law was created, known as the Green Paper on the development of the common market for telecommunications services and equipment, adopted on 30 June 1987. On 1988, the Council adopted a Resolution providing as a mayor goal, the creation of an open, common market for telecommunications servicesand invited the Commission to create a legislation on the matter 46. Two year later, another Council Directive provided principles to harmonize member states provisions on open network, like objectiveness, transparency and non-discrimination47. For the first time, access and interconnection obligations was established on EU level 48. The market was completely liberalized on the 1st of January 199849. The most recent policy on the telecommunication field shows the importance of the Internet on the present scenario. The so-called Digital Agenda for Europe provided the diminishing of the barriers that still block the free flow of online services, the promotion of interoperability, the pursuit for security solutions and the stimulation of network investments and research50. The concept of network neutrality was introduced in the EU legal order with the 2009
45 European Commission, Trans-European networks, at http://ec.europa.eu/ten/index_en.html . Accessed on 4th january 2012. 46 Council Resolution 88/C 257/01 on the development of the common market for telecommunications services and equipment up to 1992, 30 June 1988, 47 Council Directive 90/387/EEC on the establishment of the internal market for telecommunications services through the implementation of open network provision, 28 June 1990. 48 Council Directive 90/387/EEC on the establishment of the internal market for telecommunications services through the implementation of open network provision, 28 June 1990. 49 Council Resolution 93/C 213/01 on the review of the situation in the telecommunications sector and the need for further development in that market, 22 July 1993. 50 European Commission. Information Society. Digital Agenda, at http://ec.europa.eu/information_society/digitalagenda/index_en.htm. Accessed on 20th January 2012.

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Telecom Package. Commission's impact assessment on the proposal of amendment of the telecommunication directives gave the Commission first delineations of the principle, comparing the European scenario with the reality in the United States 51.. The Commission underlines that the American way to deal the matter was not adopted in the proposal, as the aimed goals of the two judicial systems are different. United States established four freedoms on the matter of network neutrality52, but did not consider that product differentiation is usually positive for the market because it increases users options of choice. Also, the country internal market is not competitive in the eyes of the Commission, because only two companies provide the broadband service in almost all the areas, known as duopoly. However, regulatory measures are not applied to change that. Hence, the US model is not adequate for the European reality, where promoting competition is pursued. The solution provided by the Commission is to ensure competitive markets and establish regulations on access and interconnection. Since differentiation is a harm only when it is an anticompetitive measure, competition can be promoted by imposing ex ante obligations on non competitive markets, while the competitive markets can continue to be free of limitations and free to differentiate. 6.2. Competition law The general anti-competition laws are applicable on the telecommunications field. They are divided into three groups: (i) prohibitions of anti-competitive agreements between companies, (ii) prohibitions of abuse of dominant position and (iii) control on the mergers and acquisitions to stop those that would have a negative impact on competition53. The prohibition of agreements between competitors includes agreements on fixing the price or production (prefixing); on the winner of a bid (bid rigging); on competition division of the
51 EUROPEAN COMMISSION, Impact Assessment Accompanying document to the Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND THE COUNCIL amending European Parliament and Council Directives 2002/19/EC, 2002/20/EC and 202/21/EC, Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND THE COUNCIL amending European Parliament and Council Directives 2002/22/EC and 2002/58/EC and Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL establishing the European Electronic Communications Markets Authority, Brussels, 13.11.2007 52 The net freedoms are: 1) consumers are entitled to access the lawful Internet content of their choice; (2) consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement; 3) consumers are entitled to connect their choice of legal devices that do not harm the network; and 4) consumers are entitled to competition among network providers, application and service providers, and content providers the right for users to access and distribute (lawful) content, to run applications and connect devices of their choiceFCC policy statement of 5 August 2005 at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260435A1.pdf. Acessed at 10 november 2011. 53 International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva, 20 - 22 November 2002, p.10, at http://www.itu.int/osg/spu/ni/competition/background/Final%20background %20paper.pdf . Accessed on 12th January 2012.

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market, geographically or of the consumers(market sharing and non-compete agreements); and on the supplier (group boycotts). The form of abuse of dominant positions are a refusal to supply essential facilities to the competitors; predatory prices; cross-subsidization; excessive pricing, tied sales and margin squeeze. A essential facility is something indispensable for the entry in the market, controlled by one or more of the competitors and impossible to be duplicated by the other competitors. The competitors that do not control the facility need access on reasonable prices to join the market 54. Prices are predatory when they are cut under the production cost with the scope of winning the market and removing the competitors, so that can than recover the expenses by increasing the prices. It can have effects on other markets too, since the impressive low prices can rise the reputation of the company on markets not yet explored, but where the anti-competitive company wants to enter55. Cross subsidization is the use of revenues received in a dominant market to lower the prices in another market56. In the telecommunication field, that practice is even more serious because the transferred revenues usually are excesses that should be partially invested on the service of the dominant market. Therefore, both markets are damaged. Excessive pricing is also an illegal practice that have to be defined on a comparative analysis with the considered competitive price 57-58 Tied sales or bundling is the practice of forcing consumers to buy two products, one of them on which the company has a dominant position, to gain a dominant position on the other one. Margin squeeze is a form of abuse of dominant position that is very likely to occur on the telecommunication field, because it depends on two markets, the upstream market (network provider) that sometimes acts on a monopoly base, and a downstream market (of services that depends on that network). By raising the price of access on the upstream market, or by lowering its

54 The term was first used on the case United States v. Terminal Railroad Association, 224 U.S. 383 (1912). The U.S. Supreme Court decided that to block railway companies from passing the rails was a illegal restraint of trade. Available at http://supreme.justia.com/cases/federal/us/224/383/case.html . Accessed at 3rd January 2012. 55 OCDE. Predatory Pricing, 1989, at http://www.oecd.org/dataoecd/7/54/2375661.pdf . Accessed at 4th January 2012. 56 International Telecommunication Union. Competition policy in Telecommunications: Background paper. Geneva, 20 - 22 November 2002, at http://www.itu.int/osg/spu/ni/competition/background/Final%20background %20paper.pdf . Accessed on 12th January 2012. 57 David S. Evans and A. Jorge Padilla. Excessive Prices: Using Economics to Define Administrable Legal Rules; Jnl of Competition Law & Economics, (March 2005), p. 97-122, at http://jcle.oxfordjournals.org/content/1/1/97.abstract . Accessed on 23 January 2012. 58 The difficulty to characterize excessive pricing can be noted on cases of the European Court of Justice described by Evans and Padilla (citation above). The Court gave a definition of excessive pricing, when it has no reasonable relation to the economic value of the product supplied., but underlines the insufficiency of the definition. However, the case-by-case can provide situations where the excessive prices are obvious, like when a company sells the same product in two market, but with really different prices (Case 27/76 United Brands v. Commission, ECR207, 1978).

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price on the downstream market since it can always exclude the price of the network for the use of itself, it drop competitors59-60. The control on the mergers and acquisitions are done by analyzing their effects on the relevant market. Each legislation defines what is considered market dominance and its limits. Relevant market is the definition of the physical space (and consumers) in which an economic agent act on the influence of its competitors61, and which it could monopolize62. Usually, it is characterized by a hypothetical increase of the price of the product on a little percentage for a certain period of time to determinate which are the products it can be replaced for 63. It can also be considered by defining which forces are able to restrain that product, on a reverse hypothetical analysis64. The competition law only intervene when there is the the fear of dominance. Those general antitrust measures, when applied on the telecommunication field, has to put in account telecommunications' economic characteristics: (i) lots of fixed and sunk costs; (ii) very different services offered; (iii) possibility to provide on local or long distance, depending on the service; (iv) price is not the only defining variant of domination of a market, but also innovative services or improved performance; and (v) services are usually consumed in bundles65. To promote the entry of new competitors in the telecommunication market, provisions imposing access and interconnection were created on EU law level to harmonize European member states law. They are: obligations on reasonable prices66, non-discrimination of network access67, price control when competition is inefficient68 and imposition of auditing separately the vertically
59 VELJANOVSKI, Cento. Margin Squeezes in Telecoms: Recent Cases and Economic Issues, Presentation to Which competition policy for regulated industries? Governance and sector-specific perspectives,Istanbul, 6 September 2008. 60 Access Directive provides that the principle of non-discrimination ensures that undertakings with market power do not distort competition, in particular where they are vertically integrated undertakings that supply services to undertakings with whom they compete on downstream markets. (Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive 2009/140/EC), recital 17.). Also, Case COMP/C-1/37.451, 37.578, 37.579 Deutsche Telekom AG) (OJ C 263/9, 14.10.2003). 61 KATE, Adriaan ten; NIELS, Gunnar. The Relevant market: a concept still in search of a definition, in Jnl of Competition Law & Economics, September 15, 2008, at http://jcle.oxfordjournals.org/content/5/2/297.abstract? maxtoshow=&hits=10&RESULTFORMAT=1&title=relevant+market&andorexacttitle=phrase&andorexacttitleabs= and&andorexactfulltext=and&searchid=1&FIRSTINDEX=0&sortspec=relevance&resourcetype=HWCIT . Accessed on 20 January 2012. 62 GUAL, Jordi. Market Definition in the Telecoms Industry, Consultation to European Commission, 2002, p. 3. 63 The European Court of Justice applied the hypothetical monopolist test on the Case T-83/91, Tetra Pak v Commission, [1994] ECR II-755, paragraph 68. 64 GUAL, Jordi. Market Definition in the Telecoms Industry, Consultation to European Commission, 2002, p. 5-6. 65 GUAL, Jordi. Market Definition in the Telecoms Industry, Consultation to European Commission, 2002, p. 17-18. 66 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive 2009/140/EC), 20. 67 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive 2009/140/EC), article 10. 68 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic

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integrated companies that operates as backbone providers and last mile providers - to prevent margin squeeze69.. 6.3. Provisions on network neutrality European Union interfere on Member States regulations under the principle of subsidiary, which determines that the Union can act only when it is a cross-boarder matter that influences directly on the Union's competence (principle of attribution) and interests, like the Single Market. Even if the commercial transaction is all made in the same country - parts and object from the same member states it will be a European Union matter if it affects other Member States. Since the European Union established free movement of services regarding also telecommunication and online services, the regulatory framework at UE level provides the intervention of National Regulatory Agencies where the quality of service for transmission in an IPbased communication is unacceptably low, thereby preventing monopoly on content and service delivery through the Internet. To reach the quality of service goal, the Commission described three options: (i) industrial self-regulation with the scrutiny of the Commission; (ii) strengthen current regulations and transparency obligations or (iii) do nothing. The first option, the self-regulation, is more likely to be accepted and enforced by the companies, once they are the creators of the regulation, but it is also more likely to be infective and to need a strong monitoring of the Commission, specially on transparency and publication of information. The following option is to modify current framework in order to intensify providers' obligations on quality of service by establishing minimum quality levels for the network transmission of services for end-users. These would be done together with the enactment of transparency obligations empowering National Regulatory Agencies on the collection of information on the service. Even if transparency increases prices of services, they are necessary for the control of the Commission and to facilitate consumer's choice. Finally, the third option is to leave the regulation as it is, but the effectiveness of current framework on ensuring the quality of service is not clear and the rules can be outdated because of the technological advance. Blocking or deliberately slowing Internet traffic from third party service providers would still be a risk, since providers would be tempted to prioritize their content and service and to lower others on a unreasonable levels. Analyzing the pros and cons, the Commission considered that the second option was the most adequate to deal with the matter.
communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive 2009/140/EC), article 13. 69 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive 2009/140/EC), article 11.

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By that analysis provided by the Commission, it is possible to interpret the provisions on network neutrality that were later put into force. The Access Directive provides that National Regulatory Agencies may ensure end-to-end connectivity by imposing proportionate obligations on undertakings that control access to end-users. Control of means of access may entail ownership or control of the physical link to the end-user (either fixed or mobile), and/or the ability to change or withdraw the national number or numbers needed to access an end-user's network termination point. This would be the case for example if network operators were to restrict unreasonably end-user choice for access to Internet portals and services.70 The Framework Directive provides, as a task of National Regulatory Agencies, the promotion of the ability of end-users to access and distribute information or run applications and services of their choice.71. The Authorisation Directive provides on its annex, as a condition which may be attached to the general authorisation for the electronic communications network and services, the transparency obligations on public communications network providers providing electronic communications services avail87able to the public to ensure end-to-end connectivity, in conformity with the objectives and principles set out in Article 8 of Directive 2002/21/EC (Framework Directive), disclosure regarding any conditions limiting access and/or use of services and applications where such conditions are allowed by Member States in conformity with Community law, and, where necessary and proportionate, access by national regulatory authorities to such information needed to verify the accuracy of such disclosure.72. The Universal Service Directive states that The Community and its Member States have undertaken commitments on the regulatory framework of telecommunications networks and services in the context of the World Trade Organisation (WTO) agreement on basic telecommunications.
70 Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive), 7 March 2002 (as amended by the Directive 2009/140/EC), recital (6) and (7). 71 Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for eletronic communications network and services (Framework Directive, 7 March 2002 (as amended by Regulation (EC) n. 717/2007, Regulation (EC) n. 544/2009 and Directive 2009/140/EC), article 8(4)g. 72 Directive 2002/20/EC of the European Parliament and of the Council on the authorisation of electronic communications networks and services (Authorisation Directive), 7 March 2002, Annex, item 19.

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Any member of the WTO has the right to define the kind of universal service obligation it wishes to maintain. Such obligations will not be regarded as anticompetitive per se, provided they are administered in a transparent, nondiscriminatory and competitively neutral manner and are not more burden some than necessary for the kind of universal service defined by the member.73. The European Parliament, on the Resolution on European Broadband: investing in digitally driven growth, calls on the Commission to safeguard the principles of the neutrality and openness of the internet and to promote the ability of end-users to access and distribute information and run applications and services of their choice; instructs the Commission to assess whether the implementation of the revised EU telecoms framework requires specific guidance rules.74. From the joint reading of the provisions and the Commission's intention, it is possible to draw a definition on the principle of network neutrality in the European Union. It consists of the premise of keeping the power of choice in the users' hands. This does not mean that traffic management is prohibited. In a scenario of regulation simplification, a competitive market is enough to empower consumers; consequently, only the companies that best serves the users' demands can be successful. The demand is from consumers that do not want to have unwanted limits on the content and services that they use, but they can have advantages on traffic management. The European definition differs from the former rigid meaning of the principle in order to give more options to consumers. By letting users choose also the prioritizing criteria of data traffic, Internets' flexibility grows even more. Furthermore, a flexible tool is what promotes so much social and economic development. But still, the free market cannot guarantee that the users are the ones that are choosing the criterias'. To create a market shaped on freedom and users' needs, the EU framework is the establishment of specific fundamental rights on Internet access. Consumers have to be given (i) the information on how the bandwidth traffic is being controlled, (ii) the fast and easy way to change the provider and (iii) respect on the confidentiality.
73 Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive), 7 March 2002, as amended by the Directive2009/136/EC, Recital 3. 74 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011.

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To solve the lack of investments, the premise is that civil society, public and private sector need to participate on Internet benefits. Although governments are not able to be responsible alone for Internet growth, some forms of public investment were provided by European legislation. Those funds can give a hand on network providers' investments and be an option instead of pricing the content and services offered online. It is always important to underline that network neutrality does not mean free internet. Like other universal services transport, postal services, electricity, for example Internet is also payed. The World Wide Web creator gives a definition of network neutrality considering the fact that: If I pay to connect to the Net with a certain quality of service, and you pay to connect with that or greater quality of service, then we can communicate at that level () Net Neutrality is NOT saying that one shouldn't pay more money for high quality of service. We always have, and we always will. 75. By the provision on last legislative document on the matters, the European Parliament Resolution, it is clear that the network neutrality debate is not over, because the Commission was invited not only to make impact assessment of the imposed legislation, but also to act on the means of promoting the openness of the Internet76. It's important to underline that network neutrality not being applied rigidly does not mean that traffic management will be stimulated. To allow traffic management differs from imposing it. European law forbids Member States to impose obligations on monitoring data77. 64. The less invasive intervention: the pillars on users' choice and quality of service The actual paradigm is the simplification of regulation and the principle of subsidiarity of European Union in order to get flexible services. After it has been accessed that a prohibition on traffic differentiation would be an intrusive law intervention on competition, no provisions prohibiting that practice was created. On the other hand, the freedom to manage the traffic is subjected to fundamental rights and some EU law provisions specify how to respect those rights while traffic managing. Debates are still being held on the matters, to clarify the interest of the parties involved and to access the impact of proposals, so new legislation can be established. To prevent network providers from complaining about unjust and unsustainable obligations on network investment, the European Union provides fund allocations for the construction of broadband networks.
75 BERNERS-LEE, Tim. Net Neutrality: This is serious, Timbl's blog, 21 June 2006, at http://dig.csail.mit.edu/breadcrumbs/node/144. Acessed on 4th January 2012. 76 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 18. 77 Directive 2000/31/EC of the European Parliament and of the Council on ertain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce), 8 June 2000, Article 15.

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(a)Public investment. Taking into account the goal of having 100% of broadband access78 , the Resolution on European Broadband: investing in digitally driven growth provides that private and public sector have to construct a mutually supportive system of investment on the broadband network. That is because the private sector was not capable of taking broadband network facilities to all European citizens, specially into rural areas, even if it had spent hundreds of billions of euros79. In 2008, 1 billion euros of public funds were allocated on broadband network development, in order to reach the goal of 100% of connections in 2010. However, neither the investment was done, nor the goal was reached, and the deadline was postponed to 201380. But it is difficult to picture Member States investing on broadband networks when there is an economic crisis affecting their financial stability. Still, the big funding allocation on the fast broadband network is one of the EU 2020 strategies because of the development that it promotes, since the public infrastructures have to be future-proof, long-lasting and open81. The constructing of a fast broadband network all over Europe would be a possible strategy to heat up the economy. The final stage of the development is to have a sustainable infrastructure access and service competition82. Which means that all the exploitation of the network will pay for the Internet growth, but the price of access and interconnection and the amount paid by users would be reasonable, so these values will not affect the liberty of expression. The networks would be open even if private, and public funds would only be complementary83. Since the Commission is responsible for executing the budget84, it was granted with the responsibility to explore new financing sources, in collaboration with the European Investment Bank and to agree on a EU Broadband Deployment Act, coordinating national, European and private investments85. (b) Transparency obligations. Member states are required to create regulations imposing
78 79 80 81 82 Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 29. Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, recital I. Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 29. Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, recital A and E, and article 38. Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, recital D. Also, Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive), 7 March 2002, as amended by the Directive2009/136/EC, recital 4. Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 36. European Union, Treaty on European Union, article 17. Resolution 2010/2304(INI) on European Broadband: investing in digitally driven growth, 6 July 2011, article 49 and 51.

83 84 85

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undertakings to send detailed bills and publish constantly transparent and up-do-date information on price, tariffs and conditions of services86. In order to ensure transparency on the traffic management, the Body of European Regulator for Electronic Communications recently published guidelines on the transparency needed for the practice which explained the way that information should be granted and its content. BEREC suggests a combination of transparent methods, as a case-by-case approach; real-time information tools; and providing different levels of information to different types of user. Providers and national regulatory agencies have a complementary role, since NRA should gather and control ISP information and publish in an easy and comparative way. As for the content, users must be informed about the limitations on access and the consequences of the traffic shaping techniques on users' access. Furthermore, the users must be able to monitor the performance of its access service. Since the bandwidth will be different for one or more type of data, the ISP are required to give all the ratings, not only a single maximum speed figure, but many maximum and minimum quality of service figures87. (c) Easy and quick change of provider. The Internet was the second most frequently switched service in Europe. Different from the other types of services, Internet consumers switched to a more expensive service, showing that users' priority can be the technology upgrade88. These numbers show that European Union is in the correct track on the means of easy and quick change of provider. The obligation to facilitate the change of provider is provided on the Universal Directive89. (d) Protection of privacy. Confidentiality is a principle provided by the European Convention of Human Rights90, the Charter of Fundamental Rights91 and the ePrivacy Directive92. Its applicability on the online field requires that transmission of packets are done with memory-less approach.
86 Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive), 7 March 2002, as amended by the Directive2009/136/EC, Annex 1, Part A and Article 21. 87 Body of European Regulator for Electronic Communications. BEREC Guidelines on Transparency in the scope of Net Neutrality: Best practices and recommended approaches, December 2011. 88 The Guallup Organization. Flash EB No 243: Consumers views on switching service providers. Analytical Report. Survey requested by the European Commission, January 2009, 82- 83. 89 Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive), 7 March 2002, as amended by the Directive2009/136/EC, article 30. 90 European Convention of Human Rights, article 8. 91 European Union. Charter of Fundamental Rights, article 7 and 8. 92 Directive 2002/58/EC of the European Parliament and of the Council concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) ,12 July 2002, article 5.

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As it was analyzed on the technical terms , confidentiality can be harmed when the IP payload is taken into account for traffic prioritization. But prohibiting the traffic management that takes into account the IP payload is not the best way to go, as the fight against virus usually needs to retrieve the content93. Following that idea, the European law authorises any lawful process of data, but if it goes beyond conveyance of communication, ISP needs the users' authorisation
94

. This

means a consent of both involved on the transfer of information: sender and recipient. Under EU law, data subject consent is any freely given specific and informed indication of his wishes by which the data subject signifies his his agreement to personal data relating to him being processed95. The European Data Protection Supervisor was consulted in terms of the protection of privacy on the network neutrality debate.96 The institution suggested the creation of the EU law providing the principle of proportionality on the traffic shaping practice, which means taking the less interfering method to achieve the objective. They also suggested that consent should be given explicitly and freely of constrains, including to compulsory consent to get access to the Internet service. In other words, ISP should always have the option to offer the service on a non prioritization basis, first come, first served, without imposing higher prices. Apart from that, the consent has to be specific for data processing, on a specific form. Thirdly, the users must have to be well informed on the conditions of the services. Since the authorisation must be given by both parties, the ISP that wants to take into account the content of the messages has to be able to first read the header to check if both the sender and recipient are part of the group that permits the IP payload reading. Finally, the EDPS noted that it is still not easy to list all the cases that consent is necessary. Since the effects of traffic management are still partially unknown, EDPS proposes that it is done only for the purpose of fighting cyber crimes, virus and spams. The use of traffic managing should not, for now, be used to build profiles for behavioral ads . 7. AN IDEA STILL UNDER CONSTRUCTION: THE LONDON CONFERENCE ON
93 European Data Protection Supervisor. Opinion on net neutrality, traffic management and the protection of privacy and personal data, 7 October 2011, at http://www.edps.europa.eu/EDPSWEB/edps/Consultation/ OpinionsC/OC2011. Accessed on 20th January 2012, p. 11. 94 Directive 2002/58/EC of the European Parliament and of the Council concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) ,12 July 2002, article 4 e 5. 95 Directive 95/46/EC of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data, 24 October 1995, article 2(h). 96 European Data Protection Supervisor. Opinion on net neutrality, traffic management and the protection of privacy and personal data, 7 October 2011, at http://www.edps.europa.eu/EDPSWEB/edps/Consultation/ OpinionsC/OC2011. Accessed on 20th January 2012.

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CYBERSPACE The London Conference on Cyberspace was a reunion of more than 60 governments, industry and civil society hosted by the UK's Secretary of State for Foreign & Commonwealth Affairs to discuss the big issues about cyberspace97. Even if it was an international convention, it counted with the presence of European Union representatives. Neelie Kroes, the Vice President of the European Commission and Commissioner for the Digital Agenda was one of the a conference speaker. It was divided into five themes: economic growth and development, social benefits, cyber crime, safe and reliable access and international security. The guiding principles on reliable access were the following: (1) data must be delivered reliably, (2) network security should not compromise the free flow of information, (3) data must be secure in transit and storage, (4) it's necessary to make users aware of their responsibilities, (5) it is necessary to balance regulation and selfregulation, (6) it is necessary to provide protection against abuses98. As assets, the meeting brought some principles and a lot of questions still unanswered. The principle of network neutrality appeared as open flow of information and free flow of ideas99. Since the need to debate cyberspace and net neutrality remains, future conventions will be held in 2012 and 2013, in Hungary and South Korea. The convention is so important for the net neutrality debate because a complete framework for Internets is only possible with the participation of all countries. The issues related to the Internet are worldwide, hence the most adequate source of law are the international agreements, world widely signed. International agreements signed Member States that falls into the European Union competence and international agreements signed by the Union are EU law100. Therefore, EU participation on the network neutrality debate on a worldwide scale is vital. Furthermore, European internal legislation on network neutrality is still not complete. A lot of EU institutions are studying solutions and accessing the impact of the imposed provisions. Still, the EU framework is a lot more ahead in comparison to the international debate. The London Conference on Cyberspace had only enlighted some general concepts in terms of network neutrality, but did not suggest any concrete action. That can be justified by the large quantity of topics
97 United Kigdom's Foreign and Commonwealth Office. London Conference on Cyberspace, at http://www.fco.gov.uk/en/global-issues/london-conference-cyberspace/ . Last accessed on 20th January 2012. 98 London Conference on Cyberspace . Map, available at http://debategraph.org/ForeignOffice_LCC . Accessed on 20th January 2012. 99 Hague, William. Foreign Secretary's closing remarks at the London Conference on Cyberspace, London, 02 November 2011, at http://www.fco.gov.uk/en/news/latest-news/?view=Speech&id=685672482 . Accessed on 20 november 2011. 100 The Treaty of European Union provides that the Union have international legal personality (article 17). Thereby, it can sign treaties with third countries. The procedure is stated on the article 218 of the Treaty of the Functioning of European Union.

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discussed. The Conference had a wide scope; therefore the discussions could not reach deep conclusions in many areas. In addition, the discussion is blocked because UN has a extreme position on the matter. As it the network neutrality debate in Europe is more evolved, European Union has a lot to contribute to the International debate. Besides, the efficiency of European Unions' regulations on network neutrality depends on a common worldwide approach. 8. CONCLUSION The principle of network neutrality is still on development. In Europe, it represents the empowerment of the user on the choice of the content and service accessed and on the possibility of defining a traffic discrimination for one's connection. However, that concept is not consolidated. Under the Europe law, traffic discrimination is seen as an option for the consumer, limited only when in contrast to fundamental rights and regulatory obligations; in opposition, the online content and service companies consider it as a permission on access, therefore, forbidden, thus limiting freedom of information and expression. Europe have chosen to not adopt the rigid significance of network neutrality because the practice can be used to promote quality of service and fight cybercrimes. In 1998, the European Parliament put into force a regulation authorizing international negotiations on an Internet Charter101. Fourteen years later, the paradigm is still the same, which is the pursuit of international cooperation on Internet matters. On the grounds of network neutrality, as a consequence of Internets' globalized framework, Internet Service Providers from all the world have the power to use traffic management methods that access content. To protect the confidentiality of online information, the European Union have to search for international cooperation. The London Conference on Cyberspace was on important try, but the international law on network neutrality need to develop much more and be more then generic principles. The international negotiations will face the barrier of different concepts of network neutrality among the countries and the parties involved.

101 Resolution COM(98)0050 C4-0153/98 of the European Parliament on the communication from the Commission on Globalisation and the Information Society: The Need for Strengthened International Coordination, Official Journal C 104 , 14/04/1999 P. 0128.

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