Marc Peeters on Network Neutrality: “Ironically, the Internet Isn’t Neutral At All”

I have known Marc Peeters personally since 2009 when we both studied Law and Technology at Tilburg University. During this time, I have learned (at least) three important things about him. He is a brilliant lawyer, a good friend and a real party person.

I have decided to ask Marc several questions in relation to his experience not only because he has always been a great company to discuss things with, but also given the public interest that net neutrality and related topics have been enjoying lately.

Marc, you have studied Law and Technology, which 5 years ago when you started it, has been raising in popularity but it was still was seen as somehow exotic. How do appreciate it now – has it been useful to you?

Invaluable I would say. As with most careers, it’s paramount to jump on the ladder and start climbing your way up. What’s different though is that I think ours is one of the earlier generations to be specifically trained to do this work. That is not to say that there was an absence of academics and legal professionals that deal with law and technology before that. There were plenty pioneers that developed the specialism much time ahead of our generation. Their individual efforts were a response to real challenges in society that came with the use of technology.

At some turning point this specialisms gained sufficient momentum to stand on its own. It’s hard to pin point exactly what caused this, when and where. (For example, you can’t deny the long standing practice on patents, which has been around for centuries.) Looking at our time though, I believe that time the two waves of Internet (first fixed, then mobile) have pushed law and technology issues to the foreground in our society.

Convergence is a big word in our industry from a product and services point of view, and I think that is reflected in law and technology as well. Topics that were previously more separated are now more closely linked. If you are running an online shop, it’s rather easy to be subject to regulation with regards to privacy but also consumer protection for distance sales, but also data protection, security and intellectual property. So it makes sense to approach law and technology in a similar way.

Law and technology is a converged approach and I do believe that it is fundamental for the way we deal with the challenges that a digitalizing society faces. That’s the new ladder that was built by previous generations and it’s up to our generation to reach new heights and leave something for the next to come. We’re in a profession that is still experimenting a lot, making plenty of mistakes and learning lessons. It’s a great place to be and I think it is not a temporary development. Like developments in technology, our profession is sometimes incremental, sometimes revolutionary. Certainly more interesting new technologies and new challenges than we currently have will surface in the future.

Do you have any advice for law students and young lawyers who are thinking of embarking on a career in law and technology?

Do it. If you have that urge, follow it. It’s an adventurous path, there is plenty room to explore and find a comfortable place for you to enjoy.

What do you like best about your job?

There never is a dull moment. I can honestly say that not a day has been the same. It is hard to predict what the next day will look like. It could be the few things you planned to do, but there also could be the next major new product, service or issue to deal with. And it is always in the spotlight. We deliver a service which society depends on quite a bit nowadays.

What kind of law-related topics do you deal with in your everyday work?

There is so much we have to deal with: competition, intellectual property, net neutrality, security, privacy and data protection, consumer protection. That is just a high level overview as these subjects tend to have broad effects. Take IP: we produce content, buy distribution rights, broadcast it, we use all kinds of systems with software on them.
And that is just from the legislative and regulatory point of view. In our industry it is a must to have basic (and preferably a higher) understanding of economics and technology to makes sense of the legal reality (or legal fiction).

Net neutrality is usually defined as the principle that internet service providers should treat all online content equally, without blocking or slowing down specific websites on purpose or allowing companies to pay for preferential treatment. Could you add something to it from your experience?

It’s hard to define net neutrality really. Or at least, to define it in a way that everybody agrees with. There is a broad collection of dynamics in the Internet value chain, which determine the ability for an end-user to access the information, services and applications of their choice. In my view, net neutrality is about regulating those dynamics so that you can ensure that ability. So it’s about control over the Internet, or more precisely, avoiding that anyone has a decisive control over it. That could range from what operating systems and applications on your devices allow you to do, what internet access service providers deliver in terms of services, all the way to connectivity choices made by those offering services and applications on the Internet.

The debate is often captured by pompous opinions in two directions, demanding either strong regulation or a hands-off approach. You can understand why it could be bad if certain applications would be flat out blocked. At the same time unsolicited e-mails serve very little purpose in relation to the amount of bandwidth (and therefore costs) they consume. Even worse, some traffic is harmful or even with criminal intent (ransom ware, phishing, DDOS).

Similarly, yes it’s a fair principle to treat all traffic the same. And at the same time, the way the internet protocol is built that doesn’t really work. Intrinsically that protocol serves small, non-real time applications best. So ironically, the Internet isn’t neutral at all. Should we leave it at that? Or do we want to optimize the flow of traffic through all individual parts of the value chain so that we can treat traffic in a way that leads to maximum efficiency and the best quality at the best price? I think in that regard neutrality is more about equality in the sense of non-discrimination (equal traffic treated equally) rather than similarity (all treated the same, regardless the needs).

This is just scratching the surface and already it becomes quite complex rather soon. So how do you deal with this? I don’t believe that allowing one party in the value chain to have definitive control would be a good idea. And at the same time it’s not a great idea for innovation to make every dynamic into something static. Do we really believe that the Internet today is the best Internet there is? If we look at where we’ve come from and what has been achieved in such a small timeframe (without notable net neutrality legislation, by the way), I like to dream of a future with an even more capable, faster and more readily available Internet ecosystem.

How in your opinion net-neutrality or the lack of it would affect the internet use?

That’s the million dollar question. Fanatics always paint grim pictures of the future if there is no or too much regulatory intervention: pseudo-internet access services that don’t give access to anything but a few preferred applications, or on the other end of the spectrum access services that are congested and unusable because it doesn’t pay to invest in it. I honestly don’t believe that people would really buy those crippled services and sit idly by, or that investments would come to a complete halt. Those destinations are unlikely, but the general directions are real. There is a whole spectrum of possibilities and outcomes along the way. Whether or not and to what extent you need net neutrality to reach the optimum is a really, really good question.

I couldn’t tell you the answer simply because it also depends on other dynamics. Take competition for example. Competition on the market is a much more precise instrument to ensure that services are offered to end-users than any legislation or regulatory effort could achieve. Companies that need to contend for the favour of the consumer are disciplined to ensure that they are favourable. That goes for every part of the value chain. And that discipline is much more dynamic and aligned with the changing needs and behaviour of users, competitors and suppliers than legislation or regulation can be.

On June 4, 2012, the Netherlands became the first country in Europe and the second in the world, after Chile, to enact a network neutrality law. Could you share any Dutch experience in this regard – what has been done in the Netherlands in terms of implementing this law that is still to be done elsewhere?

Not much really, if you measure it by the actions taken. The Dutch legislation is a national initiative. It came into force in 2013. There were a few issues with zero-rating content which have been addressed, but in general those were really small instances compared to what has changed in the Internet ecosystem since then. I think the absence of big issues in countries that don’t have elaborate net neutrality legislation yet is more telling.

In the USA FCC is fighting a battle following a Jan 2014 court decision which allows ISPs to charge for certain data access. In early 2015 the FCC ruled in favor of net neutrality by reclassifying broadband access as a telecommunications service and thus applying the common carrier regime to internet service providers. Do you think ISPs should be classified as common carriers (i.e. utility, like telephone, electricity, etc.) and should internet be regulated like a public utility?

Instinctively I would not be in favour of this approach, but I understand why the FCC did this. Without prejudice to the necessity of net neutrality rules in the US and whether the level of regulation that was applied is justified, it was probably the only way to regulate the Internet and to safeguard a level of net neutrality. However, that has nothing to do with the actual challenges that or the factual situation. The choice the FCC made to classify internet access service providers as telecommunications services (to which the common carrier principle applies) rather than information services was a technical choice: it was necessary to satisfy formal requirements in order to have the appropriate mandate apply.

I’m not saying it was wrong of the FCC to do so. To me it exposes a weakness in the very binary system of the US. Something is either telecommunications (allowing a suite of regulatory intervention) or it’s information services (which pales in comparison). Of course you can then argue whether the classification of broadband services as information services was correct in the first place, but for me that’s beyond the point. When you have to choose between two extremes the debate becomes very polarized.

If exceptions are applied regarding general net neutrality regime, what do you think such exceptions should cover?

Anything that allows actors on the Internet to make rational decisions that have a positive impact on the Internet ecosystem. I know this is vague, but I do believe that a strong preconception towards regulating the Internet is likely to cause either too strong or too weak intervention. As explained above, the situation is much more complex than very prescriptive and detailed legislation can do justice.

Do you think a problem with the internet actually exists, as some say that the entire net neutrality argument is more like searching a solution for a problem that does not exists because the internet is not actually damaged?

I touched upon that a little in the previous questions already. I think the issues are real, but not to the extent that some stakeholders tend to present them. The Internet is an ecosystem that seems fairly balanced so far. Every major force is challenged by another major or a large set of minor forces. I believe that environments like that thrive best when they can find their own solutions. Once you have definitive evidence that they can’t, intervention is warranted. In the meantime it could be fine to have some safeguards, but those shouldn’t be too intervening.

Lately MEPs voted down four proposed amendments that would have probably closed loopholes in the regulation of net neutrality. The rejected amendments included proposals that would have ensured there was no network discrimination, all internet traffic would be treated equally, ISPs would not be allowed to become gatekeepers, and ISPs would have only been allowed to manage traffic when it was congested. How would you comment such decision by the European Parliament?

I principally don’t agree that these are loopholes. I think it was a rational decision for the EU not to regulate beyond what was done. After all, the EU is very focused on competition on infrastructure level and has access regulation in case of market failure. Those loopholes may well be theoretical, because the market already forecloses any abuse.