Deutsche Telekom streaming service accused of flouting net neutrality rules by regulator

Deutsche Telekom (DT) is the latest operator to fall foul of net neutrality rules after being instructed to make some modifications to its controversial zero rated StreamOn streaming service in Germany.

However, the modifications are quite small and even if the Telco’s appeal against them fails the service will still roll out substantially unchanged. For this reason, the ruling by the Federal Network Agency was immediately rebuked by the Federation of German Consumer Organizations (VZBV), which had called for an outright ban on DT’s zero-rated service. Under zero rating data associated with a given service does not count towards a subscriber’s contracted monthly total. Many advocates of net neutrality want the practice outlawed because they contend it encourages use of zero rated services at the expense of others that consume the user’s data allowance.

In this case DT, while appealing against the regulator’s ruling, does not seem too dissatisfied with the verdict. “We are pleased to note that the Federal Network Agency confirms our position that zero-rating is generally possible,” said a DT spokesperson, referring to the confirmation that the service would be allowed to stand if these modifications were made. This really echoes the EU stance, which overrides the positions of individual member states, that zero rated services are permitted so long as the service provider does not allow them to continue after subscribers have reached their data cap for a given period, usually a month. In other words, a subscriber can only use the zero-rated service while there is some data left over within the monthly allowance for other services.

The point here is that if users could carry on accessing the zero-rated service after using up their data allowance for all other non-zero-rated services, then according to the EU’s BEREC guidelines covering roaming in all member states, these others would be effectively blocked. This would violate the fundamental principle of non-discrimination between services under net neutrality.

Net neutrality advocates contend that this is splitting hairs, on the grounds that non-zero-rated services are effectively discriminated against anyway if their data counts against the user’s allowance while the zero-rated services do not. Until the point at which the data cap has been reached, subscribers would be encouraged to use the zero-rated service because it left more data over for the rest of their activities.

The EU’s response to this charge so far has been merely to encourage operators to increase their data allowances for a given tariff in the hope that this will diffuse net neutrality criticisms. Meanwhile service providers such as DT in turn are trying to take the sting out of the debate by opening out their zero-rated service free of charge to any content provider that wants to use it. This means that video partners, which include Netflix, Amazon Prime Video, YouTube, Sky Go, ARD/ZDF’s youth service “funk”, ZDF, 7TV (ProSiebenSat.1), Spiegel TV, Entertain TV, Telekom Basketball and Telekom Eishockey, pay nothing for having their content delivered free of data charges via DT’s German mobile network.

 The regulator’s ruling for Deutsche Telekom to modify its StreamOn streaming services was criticized for not going far enough by the Federation of German Consumer Organizations (VZBV) chairman Klaus Müller.

The regulator’s ruling for Deutsche Telekom to modify its StreamOn streaming services was criticized for not going far enough by the Federation of German Consumer Organizations (VZBV) chairman Klaus Müller.

This contrasts with the related concept of sponsored data, where a third-party provider will pay for data associated with its service. In the US AT&T launched a sponsored data program as early as January 2014 followed over two years later by rival Verizon. Both have struggled to attract big name sponsors partly out of reluctance to start paying for their data but also out of concerns that this would flout at least the spirit of net neutrality if not the law, since it definitely does seem to discriminate against those third-party services or content providers unwilling or unable to pay for their data.

This is also why sponsored data has not caught on in Europe and why DT believed it had found the right balance and was therefore taken aback by the regulator’s request for changes. The regulator has called on DT to treat video and audio services equally even though they generate very different amounts of data and also ensure that StreamOn can be used in EU countries outside Germany where it might appear to violate roaming regulations. DT had two weeks from the date of the ruling to remove these “faults” identified by the regulator.

DT’s zero-rated service was launched in April 2017. The situation is being watched with interest by arch rival Vodafone, which followed up by announcing its similar zero-rated service in September 2017 and which the Federal Network Agency is currently investigating.

The net neutrality issue also continues to court controversy elsewhere in the world, particularly concerning global initiatives from the big US Internet players such as Facebook and Google. Facebook’s is a partnership involving major handset or ecosystem vendors including Samsung, Ericsson, MediaTek, Opera Software, Nokia and Qualcomm. The idea is to bring affordable Internet access to selected services in developing nations though a combination of increased efficiency and new business models, including zero rating.

The relevant Facebook app, renamed Free Basics in September 2015, has been deployed in various nations in partnership with local mobile carriers. The difference from the German situation lies in the involvement of Facebook which, although not paying for the data directly, has invested in technologies to improve efficiency and also to lease backhaul capacity via satellites and other infrastructures to transport data around the world for accessing websites.

Facebook also acts as gatekeeper in determining which websites are allowed to participate, which has led to strong criticism on the grounds of violating net neutrality in India. This culminated in Telecom Regulatory Authority of India (TRAI) in January 2016 banning the Free Basics service in India for violating the "Prohibition of Discriminatory Tariffs for Data Services Regulations, 2016" notification.

But the service continued in many other nations that are perhaps less advanced technologically than India, including Ghana in partnership with carrier Airtel and the Philippines with Smart Communications. The service remains contentious on various grounds and has survived only because it provides at least limited Internet access in parts of the world where there is no other option.

Over time the issue may subside as 5G services roll out and mobile data becomes so plentiful that zero rating is not needed, although it is still possible it will continue longer for high bit rate services such as full Ultra HD TV and Virtual Reality gaming.

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