Summary
At present, possible approaches regarding "net neutrality" are discussed controversially at policy, regulatory and market level. Based on existing net neutrality analyses and discussions for fixed network this study analyses the specific situation and developments in the mobile market. The subject is worked on from a technical, a market/competition and a regulatory/competition policy perspective. Furthermore, empirical research – desk research and expert interviews with providers, NRAs, organisations for consumer protection) – enlightens central aspects of the discussion exemplified on the German mobile phone market.
Specific technical peculiarities of mobile services as well as a dynamic technical progress and standardisation do have sustainable effects on network performance and QoS. Traffic management is generally required for an efficient use of capacities, prevention of congestion, etc., and is practised since many years. Measures on traffic routing by MNOs such as intentional blocking of applications / providers, degrading of individual suppliers, services, users, etc. had only limited relevance so far, but could in principle be used. Incidentally (more) quality differentiated services in the mobile network can be anticipated. All in all, one can think of a number of possible starting points for net neutrality injuries. Not necessarily to be regarded as such are access restrictions through MNOs in terms of pricing and product development; these do need substantiated economic evaluation on a case-by-case basis. Services and applications competitive to those offered by MNOs may give reason for an intensive examination. Access restrictions and other activities of MNOs could be signs for "foreclosure" (e.g. mirror a "raising rivals’ costs" behaviour). Especially the intensity of competition and the question, if and to what extent there is collusion, will be of utmost importance to the final evaluation. To what extent (if at all) end customers and content providers should make payments to MNOs cannot only be answered by the two-sided market analysis. This rather depends on multiple factors such as e.g. elasticities (with a view to both subscription and use) as well as externalities.
The German mobile network does not show a systematic discrimination with regards to traffic management; only limited access to VoIP-applications touches aspects of net neutrality. The present practice of mobile network operators could be seen as simple price differentiation as long as functional competition, sufficient transparency and low barriers to switching operators are present. However, the transparency in the German mobile market needs to be improved with respect to price and product information as well as MNOs’ traffic management practices. In order to limit net neutrality problems, the definition of minimum quality criteria might then be required.
Discussion Paper is available for download.
