EU taunts US: Net neutrality's better here

In a major speech this week, Viviane Reding, the European Commissioner in charge of “Information Society and Media,” talked some serious smack about the US. She claimed that network neutrality was better in Europe—thanks to “pro-competitive EU regulation” that curbstomps the preferred “deregulatory” approach in the US. Reding also made the issue personal, telling Europeans that she plans to be “Europe’s first line of defense whenever if comes to real threats to net neutrality.”

Reading was speaking at a conference in Brussels on “The Future of the Internet and Europe’s Digital Agenda,” and she opened her Tuesday remarks with a bang. After waxing eloquent about the wonders of the Internet and it’s continued massive growth rates, Reading made a powerful statement about the European Commission’s stance on network neutrality.

“Prioritizing some traffic means restricting the rest, and it will be essential to remain vigilant as regards the impact this has on competition,” she said. “The European commission attaches high importance to preserving the open and neutral character of the net in Europe, in the interest of fair competition and tangible consumer benefits.”

And not only is the Commission solidly behind the idea of a neutral net, but it believes that Europe is already doing better in this area than the US.

“In general, consumers and service providers in Europe seem to be in a relatively good position overall with regard to net neutrality, compared to the situation in the US where the debate is just really starting now,” Reding added. “This is because European consumers generally have, thanks to pro-competitive EU regulation, a greater choice of competing broadband service providers available to them than US consumers under the strongly deregulated US telecoms market.”

There’s a new sheriff in ~~town~~ Brussels

She’s referring largely to rules requiring telco incumbents to open their lines to other ISPs at regulated rates, a move which has ensured multiple DSL providers across large parts of Europe. While European regulators have not generally laid down rules about what “neutrality” should mean, the operating idea here is that they won’t need to so long as competition exists in the market. Harmful, “non-neutral” behavior can be addressed by switching to another provider.

This approach has its own problems; switching costs for both DSL and wireless services can be high in terms of money, time, and effort, and that sort of market friction can keep people locked in with non-neutral providers. Reding even gives an example of this in her speech. Although Europe has plenty of wireless operators, she noted that “blocking or discrimination of Voice over IP services by mobile operators in several countries” continues to exist.

The Telecoms Package, a major set of reforms to the sector that had been under consideration since 2007, looks set to pass into law soon, and it will direct national regulators to “safeguard the openness of the Internet” in cases where “competitive forces alone are not enough.” But if national regulators fail to take action under the new directive, Reding makes clear that the Commission itself is willing to intervene. When it comes to VoIP over wireless devices, in particular, Reding announced her willingness to stop the practice.

Despite the alleged awesomeness of neutral networks in Europe, Reding closed her remarks on the topic by noting that the situation can change quickly. If it does so, she’s prepared to strap on a badge and gun and stand up for neutrality herself; “I plan to become Europe’s first line of defense whenever it comes to real threats to net neutrality.”

If it sounds like she and FCC Chairman Julius Genachowski are both operating from a similar playbook, it should. Genachowski has already called for neutrality principles that would govern both wired and wireless networks. Just this week, FCC pressure apparently forced AT&T’s hand, as the wireless giant suddenly reversed course and allowed VoIP applications to run across its wireless network—the very behavior Reding wants to encourage.

But the American context is different, and Genachowski isn’t (yet, anyway) calling for more line-sharing regulations. What’s interesting about Reding’s remarks is the way she reframes the debate over regulation and competition, two things often seen in the US as existing in opposition. To Reding, though, the right sort of ground rules are actually pro-competitive and can do a better job than widespread deregulation at keeping markets vibrant.