Net Neutrality

Regulator Raps DT Zero-Rating Service

German Federal Networks Agency Bundesnetzagentur (BNetzA) has disqualified certain elements of StreamOn, Deutsche Telekom's (DT) zero-rated streaming service. The regulator found that these violate EU requirements on net neutrality and roaming. The operator has until the end of March 2018 to make the required changes, or face fines.

Customers of the StreamOn packages can stream audio and video content without it counting towards their data allowance. BNetzA has ruled that this violates net neutrality principles as all data is not being treated equally.

Additionally, it ruled that the same principle applies for roaming within Europe under the EU's "Roam like at Home" rules introduced in June 2017. Currently StreamOn usage while roaming in Europe is counted towards the user's monthly data allowance. And lastly, the operator is no longer allowed to offer lower streaming quality for lower tiers of service. Currently, subscribers of DTs MagentaMobil L Tariff only get videos in standard definition as the operator caps bit-rates for this subscriber tier.

This is a significant setback for DT as the zero-rating offer has been a big hit among subscribers and has helped with its brand image as well, particularly among younger subscribers. It also argues that StreamOn is exempt from "Roam like at Home" requirements because it is offered as a free supplementary contract in Germany.

The EU's position on zero-rating is not entirely clear. EU Telecom Single Market (TSM) regulation doesn't ban zero-rated services, but the Body of European Regulators for Electronic Communications (BEREC) has listed some aspects of zero-rating that would infringe on net neutrality requirements, and provides more direction for European National Regulatory Authorities (NRA). (See Telekom Austria Launches Zero-Rated Service.)

However, the implementation of these guidelines has not been entirely consistent across different European countries as this infographic shows.

And in the US, the FCC's decision to repeal net neutrality regulation makes the issue a moot point -- though legal challenges and fresh legislation could change that. (See FCC Ends Net Neutrality.)

BNetzA's decision is not entirely unexpected, as it had expressed concerns about StreamOn and was investigating it -- along with the equivalent services from Vodafone Germany. This ruling could affect Vodafone as well, and also Telekom Austria, Belgian operator Proximus and Irish operator eir, all of whom offer zero-rated services within the EU.

While complying with the "Roam like at Home" requirements and lifting bit-rates for the lower tier will hurt DT's bottom-line, the inability to differentiate by only offering zero-rated content from partners is probably the most significant part of the ruling.

The operator pointed out that it had amended its terms and now allowed streaming providers with a download function to become StreamOn partners. This change fulfills the EU requirement for "open and discrimination-free participation," according to the operator.

DT described the ruling as "absolutely incomprehensible," and does not plan on making any changes right away. It does plan to file a legal challenge to the ruling, reiterating that it does not believe StreamOn violates EU law.

It also warned that forcing it to offer StreamOn across the EU countries could spell the end of the free service.

— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation

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