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Until recently, Slovenia was one of the few EU countries that had implemented strict pro net neutrality legislation and banned operators from marketing offers based on zero-rating; however, a court ruling in July 2016 will now lift the ban. The decision is also in line with the Body of European Regulators for Electronic Communications' (BEREC's) draft guidelines on net neutrality, which currently allow zero-rating with some exceptions. Partnerships between telcos and over-the-top providers (OTTs) should receive a boost from the improved regulatory clarity.
Despite the recent approval of an EU-wide regulation, the state of net neutrality in EU countries has been unclear until recently. In particular, inconsistencies can be found in how different countries deal with issues such as zero-rating.
Slovenia is one of the EU countries where the regulator had explicitly ruled against the practice. In January 2015, the national regulator, AKOS, stopped Telekom Slovenia from offering the music-streaming service Deezer in zero-rating mode, and decided that the mobile operator SI Mobile could not do the same with its own cloud service, Hangar Mapa. However, a recent court ruling in July 2016 rejected AKOS's stance on zero-rating, noting that the national law on net neutrality does not ban such a practice because it does not include provisions on the financial treatment of traffic. More precisely, it argued that not charging for certain data cannot be equated to restricting or slowing down traffic or applications.
The ruling comes at a critical moment because BEREC is about to finalize its guidelines for the enforcement of the European Commission's (EC's) regulation on net neutrality, which was passed in November 2015. A draft of the guidelines has already clarified that zero-rating will not be considered a breach of net neutrality rules unless non-zero-rated services are blocked once a customer's data allowance is exhausted, leaving a zero-rated service accessible. All other types of zero-rating offers will have to be assessed on a case-by-case basis. BEREC is expected to finalize its guidelines in August 2016; however, the huge amount of responses received to the consultation could cause delay the deadline. At present, it is unclear whether the approved guidelines will differ significantly from the draft that was published for consultation in June 2016. If anything, the Slovenian court case is likely to further strengthen the stance for zero-rating, thereby making BEREC's job easier in passing its guidelines. It could also be a useful precedent for companies in other EU countries, such as the Netherlands, that are looking to challenge bans on zero-rating.
The above should be good news for telcos and OTTs seeking ways to establish profitable partnerships. As Ovum found in its The Regulatory Position on Telco–OTT Partnerships report, zero-rating is one of the most common ways for these partnerships to take shape. Ovum's Telco–OTT Partnerships Tracker: 1H15 also shows that Europe is one of the geographies where these partnerships are more common. Now that more clarity on zero-rating is in sight, telcos and OTTs will have more freedom to experiment and market attractive offers to customers.
The Regulatory Position on Telco–OTT Partnerships, TE0007-000925 (July 2015)
Telco–OTT Partnerships Tracker: 1H15, TE0004-001033 (July 2015)
"Zero-rating is likely to be safe under BEREC's guidelines," TE0007-001031 (June 2016)
Luca Schiavoni, Senior Analyst, Regulation
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