Japan, Italy and China Face Net Neutrality Issue

By Dave Burstein

Japan’s Ministry of Internal Affairs and Communications has an important policy paper on the Framework for Competition Rules that includes these principles:

1. Consumers are entitled to access the lawful Internet contents of their choice.
2. Consumers are entitled to run applications and use 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.
4. Consumers are entitled to competition among network providers, application and service providers, and content providers.

These are, of course, the FCC’s “Four Freedoms” platform and are properly credited. Several ideas the U.S. should borrow in turn from Japan are in the report.

In Italy, Telecom Italia (TI) has 75 percent of the broadband market and FastWeb half of the remainder. The European Competitive Telecommuni-cations Association’s (ECTA) managing director, Steen Clausen, warns that, “Unless AGCOM (the Italian Communications Authority) acts now to prevent a walled garden strategy in the IPTV market, and promotes open standards for IPTV, we are in danger of seeing the same monopolistic behavior.” Italy has battled these issues for years. Sky Italia maneuvered to prevent FastWeb from carrying football. Mario Monti at the EU decided to step in, knowing FastWeb’s TV offering might otherwise fail. ECTA wants to solve the access problem by making things easier for competitors to TI, but that’s only a partial solution. TI and FastWeb will almost inevitably dominate for several years to come, allowing them to “wink and nod,” and both prevent video that competes with their own offerings.

China Mobile’s (CM) new policies are resulting in service provider sales drops of up to 35 percent, William Bao Bean of UBS estimates. CM intends to claim most of the revenues from instant messaging, ringtones, music and video to mobile phones. With government support, CM is clamping down on abusive billing practices as well as pornography. They’ve dropped more than 100 providers, insisted on buyers confirming orders, and require a short-time money back guarantee. Beyond these consumer-friendly measures, however, is “a goal of the policies to drive smaller players out of the market.” CM is using control of the network to force customers to use its IM service rather than the popular service from Tencent. Some CM phones will completely block MSN Messenger and QQ IM, according to People’s Daily.

The U.S. is facing this issue first because some very dedicated advocates, like David Isenberg, have fought hard to bring it to the policy agenda. But carriers around the world tell me of their plans to protect themselves from “over-the-top” video, and the issue will soon be significant in Germany and many other countries.

Dave Burstein is editor of the online newsletter DSL Prime (www.dslprime.com).