Xnet reports “Zero Rating” offers contrary to net neutrality in Spain

Xnet requests the Secretariat of State for the Information Society and the Digital Agenda in the Ministry of Energy, Tourism and Digital Agenda to apply the new rules of net neutrality in the European Union [1] to put an end to the discrimination that Internet providers in Spain are practicing with their “Zero Rating” offers.

“Zero Rating” is a business practice in which data downloaded from certain applications or services is not counted towards the customer’s monthly download limits. It seems that the company is offering discounts, but at the same time it gives a lot of power over what applications or services users will use and will obviously direct them to their own services or those of their partners, limiting their freedom of choice and hurting new or small businesses and services and limiting innovation. This practice gives an incentive to Internet providers to keep their data caps low, thus hurting users who end up depending on “Zero Rating” offers to not exceed their monthly data cap.

It is difficult for the individual customer to perceive the damage that these types of offers can cause to the consumer, the market and the Internet ecosystem.That is why the Body of European Regulators for Electronic Communications (BEREC) has issued guidelines to address some of these practices to prevent breaches of net neutrality [2]. As the regulatory agency in Spain in charge of enforcing the Regulation, the Ministry of Industry, Tourism and Digital Agenda has the power to act ex officio against this type of offer contrary to the net neutrality, to prevent them from distorting the markets, limiting users’ freedom of choice and creating monopolistic alliances between large Internet and technology providers that are harmful to consumers.

“Zero Rating” practices that do not respect net neutrality rules in Spain

Vodafone’s “Vodafone Pass” offer

As it can be seen in the description of the “Vodafone Pass” tariff, Vodafone offers a flat rate with unlimited data to a small number of selected applications. The Social Pass version includes Facebook, Instagram, Twitter, Linkedin, Snapchat, Tinder, Flickr and Tumblr; The Músic Pass version includes Apple Music, Spotify, Napster, SoundCloud and Deezer. The preferential treatment of these applications is clearly contrary to net neutrality, anticompetitive and discriminatory. Vodafone, knowing has been very careful to advertise, as a legal disimulation to side step over a thin grey area of the European net neutrality Regulation [1], that any company that requests it can be included in the plan. However, no matter the applications that are added, if it ever really happens, there will always be a discriminatory treatment with respect to those that are outside the plan. The companies that Vodafone took care to include in their offered for the launching are basically the ones that they are interest into and that give them a competitive difference, otherwise Vodafone could simply offer a full flat rate of the complete data. Moreover, to request inclusion in the plan it is necessary to be a constituted company, which is a very limiting factor that will reduce innovation, remember, for example, that long before they were companies Facebook or Twitter were born and grew only as Web applications.

Xnet considers that such offers should not be allowed in the light of the objectives of the European net neutrality regulation, in particular the Article 3 of the Regulation:

Article 3

Safeguarding of open internet access

1. End-users shall have the right to access and distribute information and content, use and provide applications and services, and use terminal equipment of their choice, irrespective of the end-user’s or provider’s location or the location, origin or destination of the information, content, application or service, via their internet access service[…].

2. Agreements between providers of internet access services and end-users on commercial and technical conditions and the characteristics of internet access services such as price, data volumes or speed, and any commercial practices conducted by providers of internet access services, shall not limit the exercise of the rights of end-users laid down in paragraph 1.

3.
Providers of internet access services shall treat all traffic equally, when providing internet access services, without
discrimination, restriction or interference, and irrespective of the sender and receiver, the content accessed or distributed,
the applications or services used or provided, or the terminal equipment used.
[…]

Likewise, BEREC gave consideration to how such offers should be interpreted as being contrary to the net neutrality in its guidelines for the application of the Regulation.

Vodafone’s “Chat Incluido” (Chat Included) offer

As it can be seen in the description of the “Chat Incluido” rate (formerly “Chat Zero”, a name that was most likely modified to disguise the evidence of being a “Zero Rating” offer contrary to net neutrality), once the user has consumed the limit of his data rate, all internet navigation, applications and services of are slowed or blocked except those few applications selected in Vodafon’s offer “Chat Inclido” (if the user has the option +Mega activated, he can continue browsing at normal speed but at a price per megabyte far higher than the price paid in his data rate.) This practice is a breach of Article 3(3) of the rules on net neutrality in the European Union, Regulation (EU) 2015/2120 which entered into force on 30 April 2016, as specified by BEREC in its guidelines:

“41. A zero-rating offer where all applications are blocked (or slowed down) once the data cap is reached except for the zero-rated application(s) would infringe Article 3(3) first (and third) subparagraph […]”
Source:
http://berec.europa.eu/eng/berec-guidelines-mplementation.pdf

We consider that Vodafone’s “Chat Incluido” offer should not be allowed under the new net neutrality rules. The Secretariat of State for the Information Society and the Digital Agenda is the institution responsible for acting in these cases. As foreseen in the Regulation, the Secretariat has the capacity and task of issuing cease and desist orders in case of infraction, in addition to being able to impose sanctions in this resgard.

Measures of this kind have already been taken in other Member States. In Austria, mobile operator Hutchison Drei withdrew a similar offer from Zero Rating following the complaint filed by Epicenter.works based on the new net neutrality rules in the European Union. In this case in Austria, as in previous cases in Slovenia and in the Netherlands, the action against Zero Rating offers resulted ina a general increase in the data volume offers of the operators involved, proving that net neutrality is beneficial for operators and consumers.

An anticompetitive and discriminatory practice, which stifles innovation and is not clearly advertised

Vodafone promotes its offer in the following way: “Chat Incluido is a new service that allows you to use messaging APPs like WhatsApp, Telegram, Line or Message+ (own by Vodafone) without consuming data from your tariff”. This wording as a non-exhaustive list gives the impression to the consumer that all (or most) of the messaging applications are included within this offer. However, the complete list is limited to: WhatsApp, Line, Telegram, We Chat, Blackberry IM and Message +, leaving out popular messaging applications such as Hangouts-Allo (Google), Skype (Microsoft), iMessage (Facebook) or Snapchat, in addition to an innumerable number of other smaller messaging services. This anticompetitive practice implies discrimination against these excluded services and de facto limits the freedom of the user to choose which applications and services he prefers to use.

This kind of offers stifle innovation, condemning to failure any new application or messaging service that will never be able to compete with the big settled applications that enjoy the advantages of being distributed under offers of “Zero Rating”. Innovative approaches using other types of protocols, such as P2P or XMPP messaging, potentially much more respectful of privacy, would never be available to reach the Spanish consumers, since only large companies can enter into this kind of commercial agreements with ISPs.

Simyo’s “Bono Chat”

Simyo’s rate “Bono Chat” offers 300MB of data to consume with either Telegram or Whatsapp applications. This is a “Zero Rating” type practice in which these two applications enjoy a lower price for mega consumed compared to the price of any other application, service and normal navigation.

These 300MB from “Chat Bonus” are not quantified within the monthly data cap of the user. If the user reaches the data limit of his rate, he can continue using Whatsapp and Telegram within these differently counted and charged 300MB, while the rest of navigation is slowed, blocked or charged at a price per megabyte much higher. In the same sense as “Chat Incluido” by Vodafone, this “Zero Rating” practice does not respect Article 3(3) of the European Union net neutrality rules.

Simyo also offers the possibility to contract “Bono Chat” as a stand alone, giving the user access to navigate only with Whatsapp and Telegram applications. In this sense, Simyo is offering limited access to Internet or sub-internet service that goes against Articles 3(1), 3(2) and 3(3) of the Regulation. As explained by BEREC:

“17. BEREC understands a sub-internet service to be a service which restricts access to services or applications (e.g. banning the use of VoIP or video streaming) or enables access to only a pre-defined part of the internet (e.g. access only to particular websites). NRAs should take into account the fact that an ISP could easily circumvent the Regulation by providing such sub-internet offers. These services should therefore be considered to be in the scope of the Regulation and the fact that they provide a limited access to the internet should constitute an infringement of Articles 3(1), 3(2) and 3(3) of the Regulation. BEREC refers to these service offers as “sub-internet services”

We consider that Simyo’s “Bono Chat” offer should not be allowed under the new net neutrality rules and we ask the Secretariat of State for the Information Society and the Digital Agenda to study and act to stop this practice. The Secretariat has the capacity and task of issuing cease and desist orders in case of infringement, in addition to being able to impose sanctions in this regard.

“Voz Digital”: Tuenti’s own VOIP at Zero Rating

Even more clear is the case of Tuenti’s “Voz Digital” application. Tuenti advertises its rates with which you can “call […] from Tuenti’s app. All our current rates include unlimited minutes to national mobiles and to a lot of international destinations. Even if you call over the Internet, you do not consume megas of your data bonus”. In this anticompetitive practice the Internet provider discriminates against other services in favor of its own services that it distributes at “Zero rating”. In fatc, in the FAQs section of Tuenti’s website, it directly compares the advantages of using “Voz Digital” VOIP calls over Whatsapp calls: https://www.tuenti.com/movil/soporte/entrada?id=115007543067.

We continue working to ensure net neutrality

In addition to these cases, there might be other “Zero Rating” offers contrary to net neutrality out there more or less concealed. If you detect them, please let us know in our twitter @X_net_ so that we can analyze them and we can act. If you prefer, you can also report these practices, including those in other countries of the European Union, through https://respectmynet.eu/.

Our presentation of these reports is framed in the context of the first report on the application in Spain of the new net neutrality rules [3], from its entry into force in April 30th 2016 to the end of this year, published by the Ministry of Energy, Tourism and Digital Agenda.

Free, open and neutral internet.

[1]
Net neutrality Regulation in the European Union, (EU)2015/2120, which entered into force on 30 April 2016:
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015R2120&from=EN#page=8

Guidelines by the Body of European Regulators for Electronic Communications (BEREC) on (EU)2015/2120 Regulation enforcement:
http://berec.europa.eu/eng/document_register/subject_matter/berec/download/0/6160-berec-guidelines-on-the-implementation-b_0.pdf

On how Xnet and organizations in defense of digital rights worked to obtain strong net neutrality rules for the European Union with the campaign Save the Internet:
https://savetheinternet.eu/
https://xnet-x.net/en/areas/net-neutrality/#posts