On 20 November the Administrative Court in Köln upheld an earlier 2017 decision by the Bundesnetzagentur (the Federal Network Agency) that Deutsche Telekom’s zero-rated “StreamOn” offer violated net neutrality regulations.
As Preiskel & Co Senior Partner and telecoms law expert Daniel Preiskel explained, “we found the court decision interesting and worth noting, especially as the use of zero-rating has been debated across Europe amongst mobile industry leaders, regulators and academics alike. This particular ruling was consistent with the advice we have been providing as to how zero-rated streaming offers can be structured in a way that is compatible with EU net neutrality rules.”
“Zero-rating” is the practice of not charging customers for data use when they access specific websites and services. Accordingly, zero rating plans can be used by internet service and mobile service providers to create more tempting limited data plans for customers while favoring their own, affiliate or popular sites. In this way, some websites and internet services are being treated differently and, in some circumstances, this can raise questions in respect of net neutrality.
With StreamOn, 1.7 million Deutsche Telekom customers are able to stream movies, series, sports or music through over 350 content partners. Initial concerns that the preferred treatment of certain platforms could harm net neutrality were thought to be circumvented by Telekom, by making participation in StreamOn free of charge for the content partners in question.
However, in 2017, the Federal Network Agency informed Deutsche Telekom that it would need to redesign its StreamOn offer in order to be compliant with the EU rules. Deutsche Telekom disagreed, and the regulator turned to the courts in Köln for legal clarification.
The court’s analysis turned on two important facts. Firstly, speeds were throttled to speeds below 1.7 Mbps for streaming. Secondly, the zero-rated data in question were not available outside of Germany (ie, when roaming elsewhere in the EU). Deutsche Telekom had argued that the StreamOn offer was “voluntary,” but the court found that customers could not in fact opt out of the service.
Deutsche Telekom may appeal the decision to the Oberverwaltungsgericht (the Higher Administrative Court for North Rhine-Westphalia) in Münster. We consider this avenue is likely to be followed, noting that a company spokesperson stated that Deutsche Telekom “will continue to make use of all legal possibilities so that StreamOn can continue to be offered.”
The decision is grounded in the interpretation of the EU’s Open Internet Access Regulation 2015/2120 of 25 November 2015, commonly known as “the Net Neutrality Regulation.” You can find the original press release from the Court here.
If you have any questions about zero-rating, net neutrality, or other aspects of internet and communications law, please contact Daniel Preiskel or Jose Saras.