"Managed Services" Fare Worse Under Amended Connected Continent Legislation

After initial passage of Connected Continent legislation by the European Commission, the proposals are now headed for review by the council of ministers. But key amendments now have been added to the proposed legislation by members of the European Parliament.

The original language allowed for exemption from the “best effort only” rules for consumer Internet access for “specialized services.” That language was meant to allow ISPs to create and sell managed services such as voice and video entertainment, with quality of service mechanisms.

To be sure, some might argue the changes of wording are subtle. According to the amended text, ISPs will be able to prioritize traffic for managed services, so long as the packet prioritization is not to "the detriment of the availability or quality of internet access services" offered to other companies or service suppliers.

The original text instead simply said that the specialized services could be provided as long as they "do not substantially impair the general quality of internet access services."

The amendments now specify that any managed services must not affect availability or quality of Internet apps, period.

Service providers obviously will object, since all services now are moving to delivery by a single set of physical assets, delivering best effort Internet access as well as managed services such as voice and video entertainment.

Almost by definition, setting aside bandwidth for managed services will affect the total amount of access bandwidth available for all purposes and applications supported by any access link.

“Specialized service” is defined as an electronic communications service optimized for specific content, applications or services, or a combination thereof, provided over logically distinct capacity, relying on strict admission control, offering functionality requiring enhanced quality from end to end, and that is not marketed or usable as a substitute for internet access service.

Perhaps nobody would argue that voice service and linear video subscriptions are prime examples of such services. But one also might agree that the amendments essentially ensure that future online streaming services could not be classified as “managed services.”

The amendments specify that “providers of internet access, of electronic communications to the public and providers of content, applications and services shall be free to offer specialized services to end-users.”

But “such services shall only be offered if the network capacity is sufficient to provide them in addition to internet access services and they are not to the detriment of the availability or quality of internet access services.”

In other words, using rules yet to be developed, it might be unlawful to create a managed video streaming service, if doing so negatively affected best-effort Internet services. The devil is in the details, one might well argue.  

What constitutes “sufficient network capacity?” What does “negatively affect” mean, in quantifiable terms?

Already modified since original passage, it is reasonable enough to expect further changes when ministerial officials start to grapple with the implications.

Might even the ability to deliver linear video services using Internet Protocol be impaired? What access bandwidth implications would follow, if service providers want to deliver linear video using IP?

To be sure, the legislation tries to deal with two separate problems, including ISP blocking of lawful applications, and the extent to which new managed services can be created. In the U.S. market, the former is dealt with under Internet Freedoms principles that already make unlawful any actual ISP blocking of lawful apps.

The Connected Continent legislation conflates the two problems, first outlawing lawful application blocking (a good idea) but also limiting the creation of new services that actually might need quality of service mechanisms (packet prioritization).

The outcome remains unclear, as further changes could come. That incentives to invest in networks will be affected is uncontestable, even if the impulse to constrain anti-competitive behavior also is reasonable.

Some might argue remedies for anti-competitive behavior already exist. If so, innovation and investment also could suffer, even if the reasonable goals of permitting consumer access to all lawful apps, and preventing unfair business practices, are the formal goal.