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Outside an Apple store in the Netherlands. Two years ago the country mandated
that Internet providers treat all traffic equally. Credit Jasper Juinen/Bloomberg
News, via Getty Images |
THE HAGUE —
When Bruno Leenders takes the 50-minute train ride to Amsterdam, he likes to
stream blues and funk music through his smartphone. At home, Mr. Leenders, a
Dutch technology consultant, watches Steven Seagal action movies on Netflix.
Between meetings, he dashes off a few emails.
Mr.
Leenders’s digital life has not changed all that much in the two years since
the Netherlands started demanding that Internet providers treat all traffic
equally, the same sort of rules that the United States adopted on Thursday.
His bill
has gone up just marginally. He surfs, streams and downloads at the same speed
— if not a little faster given the upgrades to Netherlands’ network, already
one of the world’s best.
In short,
the new law was not the Internet Armageddon that many Dutch telecommunications
companies, industry lobbyists and some lawmakers had predicted.
“I can
still watch what I want, when I want,” Mr. Leenders said on a half-empty
commuter train recently, as he checked his emails and the latest news on his
smartphone. “It is not up to any company to tell what I can do online.”
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Students use tablets in a school in Sneek, the Netherlands. The country’s
telecommunications infrastructure has seen continuing investment.
Credit Michael Kooren/Reuters |
As the
United States moves to regulate broadband Internet service as a public utility,
the Netherlands offers a rare case study of what could await American consumers
and companies. The Netherlands was the second country in the world to adopt
so-called open Internet rules, after Chile.
It is not a
perfect comparison.
The
Netherlands, with a population of about 17 million, is geographically about the
size of Maryland. That makes it far easier and cheaper for operators to provide
high-speed Internet access compared with carriers trying to serve all of the 50
states.
The Dutch
rules also allow for some premium deals between operators and services like
Netflix, the online video-streaming company. Such agreements are supposed to be
tightly restricted under the new regulations by the Federal Communications
Commission.
Still, the
Dutch experience — at least in the short term — could be instructive.
As with the
American plan, Dutch carriers cannot discriminate among types of content, say
by putting the brakes on data-hungry services like movie streaming. Nor can
they charge extra for faster speeds and more reliable connections to the
Internet’s pipelines, which could give deep-pocketed technology companies an
advantage over fledgling start-ups.
And net
neutrality opponents made all the same arguments in the Netherlands as they
have been in the United States.
Local
telecommunications providers, including the country’s former monopoly KPN, had
wanted to charge Internet and media companies like Google and WhatsApp, the
messaging service, for premium access to their networks. Companies warned that
the price of consumers’ monthly contracts would rise if they could not levy
additional fees. Otherwise, telecommunications companies said they would not be
able to invest in technology and infrastructure — and the networks could grind
to a standstill.
“If you
overregulate through net neutrality, there’s a risk you reduce the levels of
investment because the rules become too onerous,” said Michel Combes, chief
executive of Alcatel-Lucent, the French-American telecommunications manufacturer.
Proponents,
though, countered that such deals would potentially limit what content could be
used online, giving carriers and broadband companies too much control over how
people surfed the web. As more people worldwide rely on high-speed Internet
access, the net neutrality debate has become a rallying call for advocates who
consider unobstructed online access akin to a human right
“There was
a lot of pressure to pass these rules,” said Nico van Eijk, a professor at the
University of Amsterdam, who specializes in telecommunications and media law.
“People didn’t want to be told which online services they could and couldn’t
use.”
But two
years later, the Internet business in the Netherlands is still humming along.
Consumers
have not cried foul en masse over the costs. Dutch consumer groups say
cellphone and cable packages in the last two years have remained relatively
stable, with contracts priced at as little as $25 a month for the ability to
stream online content. The average cellphone contract in the Netherlands is
about one-third the price of an equivalent plan in the United States.
Sophie van
Haasen, 31, a social worker, uses her mobile data package to stream music
online through her Spotify account, and she said she was thinking about signing
up for Netflix, mostly to watch the series “House of Cards.” She pays about $35
a month for her cellphone, and $40 for home broadband.
“I can’t
say my payments have gone up, maybe a little as I’m using my phone more to get
on the Internet,” she said, sitting at a cafe in Amsterdam in the late
afternoon on her day off. “But that’s O.K. I’m getting what I paid for.”
Telecommunications
companies in the Netherlands have also continued to invest in their
infrastructure, bolstering network speeds around the country, which were
already pretty fast before the rules went into effect. The average broadband
speed is around 14 megabits a second, up about 10 percent since late 2013,
according to Akamai Technologies. That compares to 11.5 megabits a second in
the United States
“Prices
didn’t go up,” said Martijn van Dam, 37, the deputy leader in Parliament of the
Dutch Labor Party, who helped draft the Internet rules. “Our experience in the
Netherlands shows that it’s nonsense to say that companies won’t invest.”
In part,
that comes down to competition.
While
rivalry among broadband providers remains relatively limited in much of the
United States, there is fierce competition in the Netherlands between wireless
and broadband providers to attract customers. To give consumers greater choice,
regulators have limited efforts to consolidate the number of cellphone
carriers, while KPN and Ziggo, a cable provider, fight doggedly to sign up
customers for superfast home broadband.
Analysts
say this competition, more than net neutrality, has forced companies to compete
solely on price and speed — and not on which services come bundled with monthly
cellphone or broadband packages.
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“You don’t
need net neutrality if you have healthy competition,” said Ot van Daalen, a
privacy lawyer who helped push through the Dutch net neutrality rules. “But the
U.S. has less competition than in Europe. The U.S. needs net neutrality a lot
more than the Dutch do.”
But the
Dutch rules do color the landscape.
The
Netherlands does not police so-called interconnection arrangements, in which
content companies pay a fee to guarantee fast and reliable access to a network.
Those deals proved controversial in the United States after Netflix struck such
agreements with Comcast and other providers. Under the new rules, the F.C.C.
will tightly regulate those relationships.
In
contrast, the Dutch authorities have taken a harsher line on so-called
zero-rating deals. Those deals allow operators to offer free access to certain
online services like music streaming as part of monthly cellphone or broadband
contracts.
Under the
Dutch rules, such agreements are outlawed because they prioritize some Internet
traffic over others. But experts predict that the F.C.C. will offer more leeway
in this area, provided it does not harm the overall market.
And there
are signs that Dutch regulators are taking an increasingly tough line with
operators that try to skirt the rules. Vodafone was fined $225,000 last month
after bundling HBO’s smartphone app into its monthly package, which was deemed
a violation of the zero-rating prohibition. KPN, Vodafone’s main rival,
received a $280,000 penalty for blocking Internet calling services on some of
its Wi-Fi hot spots.
“As a way
to protect consumers, net neutrality has worked,” said Bart W. Schermer, a
partner at Considerati, a Dutch technology consultancy. “More than anything
else, it’s created a level playing field.”
Correction:
March 2, 2015
An article
on Friday about the effect of net neutrality rules in the Netherlands misstated
the position of Martijn van Dam, who commented on the matter. He is the deputy
leader in Parliament of the Dutch Labor Party, not the deputy leader of the
party as a whole.
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Have you seen innovation and invention in the past decade that required thinking out of the box of an old reality? Indeed, you have. I can't tell you what's coming, because you haven't thought of it yet! But the potentials of it are looming large. Let me give you an example, Let us say that 20 years ago, you predicted that there would be something called the Internet on a device you don't really have yet using technology that you can't imagine. You will have full libraries, buildings filled with books, in your hand - a worldwide encyclopedia of everything knowable, with the ability to look it up instantly! Not only that, but that look-up service isn't going to cost a penny! You can call friends and see them on a video screen, and it won't cost a penny! No matter how long you use this service and to what depth you use it, the service itself will be free.
Now, anyone listening to you back then would perhaps have said, "Even if we can believe the technological part, which we think is impossible, everything costs something. There has to be a charge for it! Otherwise, how would they stay in business?" The answer is this: With new invention comes new paradigms of business. You don't know what you don't know, so don't decide in advance what you think is coming based on an old energy world. ..."
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