Amidst an economic and political turmoil, Brazil gave a significant step towards protection of network neutrality – the principle that keeps the Internet an open space, free from undue control by Internet service providers (ISPs). A Presidential Decree issued right before Dilma Rousseff was temporarily removed from power on May 10 consolidates the regime established by the Marco Civil – a Federal Statute known as the “Internet Bill of Rights” in Brazil - and brings clarity to the application of meaningful rules that may effectively preserve network neutrality.
The Internet was designed as an open platform for communication and innovation. These design principles made the network infrastructure neutral – meaning that all applications, services or content should be treated equally and the network owner had no interference over them. This design has fostered unparalleled innovation, because anyone can build applications online without intervention by network providers. As a result, entrepreneurs with few resources can launch their ideas online without paying for a faster connection to audiences or seeking permission from network providers to enter. Some of the world’s most important online innovations would not exist today without this open online environment, including Amazon, Facebook, Google, and Netflix.
However, network providers have overcome those design principles and currently have the power to treat information packets differently, i.e. to block, slow down or prioritize websites. There are many examples of these initiatives in several countries, and Brazil is not different. Skype and other phone applications have been subject to blocking practices, and there are many instances of traffic throttling against bit torrent applications. Also, prioritization through zero-rating plans has become widespread in the mobile sphere and now threatens the broadband environment with ISPs’ announced plans to significantly reduced bandwidth caps.
While some speculate that some of the practices may allow ISPs to grow their revenues and then invest more in developing networks, the discrimination of applications (either to degrade or prioritize) puts at risk the open Internet as we know it. These practices would eliminate the neutral character of the network infrastructure, creating the potential for anticompetitive conducts (when the ISP favors its own content or application) while also undermining innovation in the edges and consumer choice.
That’s why academics, regulators, and industry observers have called for regulation to codify net neutrality into law. Many countries like the US, Netherlands and Chile have established rules to preserve network neutrality. Brazil took a vital step through adopting the Marco Civil in 2014 and now takes another relevant step by issuing a Decree that consolidates the net neutrality regime.
The Marco Civil clearly establishes a statutory regime that aims at protecting network neutrality. The Statue elects several principles and targets for Internet regulation in Brazil that must be properly weighed in the interpretation of specific rules in further sections of the Statute. Notably, many of these principles are not only consistent with a meaningful network neutrality regime - they actually demand it. Article 2 expressly provides that free speech, diversity, openness, free competition, among others, are the foundations of the regulation in Brazil. Similarly, article 3 establishes the principles of the regulation of the Internet, including (i) free speech; (ii) preservation and guarantee of network neutrality, (ii) preservation of the stability and safety of the network, (iii) preservation of the participative nature of the network, and (iv) respect to different business promoted through the Internet. Finally, article 4 provides that Internet regulation must promote, among other things, (i) the access to information and the participation in culture and public matters and (ii) innovation and the diffusion of new technologies and models of use and access.
Therefore, the Marco Civil elected several principles that orbit the notion of network neutrality (free speech, openness, etc) as the basis of Internet regulation in Brazil and expressly turned the preservation and guarantee of network neutrality itself and the participative nature of the network into guiding principles for Internet regulation in Brazil. These general provisions constitute a powerful set of tools that must directly influence the interpretation of the specific rules disciplining Internet Service Providers (ISPs) behavior.
In line with those principles, article 9 sets forth a few rules that have the potential to put into force a strong neutrality regime. It provides that ISPs must treat all data packages equally and bans all forms of discrimination, but for two narrowly-defined exceptions. First, providers may prioritize emergency services, such as emergency calls to police. Second, providers can discriminate to meet “technical requirements essential to the adequate provision of services and applications.” These exceptions should be further disciplined by a much expected Presidential Decree.
While the “technical requirements” exception could eventually be subject of attempts by ISPs to “force” interpretations that would allow harmful discrimination, the Presidential Decree recently enacted (and two years after the Marco Civil came into force) consolidates a neutrality regime in Brazil by reinforcing that discrimination of traffic must be extremely exceptional. The Decree clearly limits the “technical requirements” that can justify some degree of discrimination to reasonable network management measures that are indispensable for an “adequate” provision of the services and aim at preserving the network’s “stability, safety, integrity and functionality”. According to the Decree, ISPs can only adopt traffic management practices to deal with safety threats and exceptional congestion situations; while doing that, they must not differentiate applications or classes of applications unless an application specific measure is indispensable. Also, all management techniques must be properly disclosed to consumers, that should have access to clear explanations about the measures and their impacts on traffic.
Importantly, the Decree expressly bans agreements or unilateral conducts by ISPs that (i) could violate the public and unlimited nature of access to the Internet and the principles and goals of the regulation of the Internet cited above; (ii) prioritize data packages based on commercial arrangements; and (iii) prioritize ISPs’ own applications. As a result, ISPs cannot offer fast lanes for applications that pay more or decide to give preferential treatment for their own content.
To be sure, there are points in the Decree that warrant careful consideration. One of them is the definition of “specialized services”, that should be narrowly interpreted so as to avoid the fragmentation of the Internet. This provision must serve as an exception to contemplate the provision of ordinary pay-TV and phone services using the same infrastructure network, and not result in a free pass for ISPs to circumvent network neutrality principles.
Also, the ban on prioritization cannot be interpreted as merely forbidding “fast lanes”. If the rule against paid prioritization only forbids payment for “fast lanes”, it would allow broadband providers to negotiate any other forms of preferential treatment, including zero-rates, guaranteed delivery in times of congestion or application-specific pricing. Nevertheless, similar to fast-lanes, these forms of differential treatment are actual prioritization and may distort the nature of the Internet as an open space where any application can be successful and consumers may freely elect winners.
Protecting the open Internet is essential for the future of Brazil. Internet freedom has the potential to resolve long-standing inequalities, strengthen democratic institutions, and empower people that would not have voice in traditional media channels. The Presidential Decree is an important step towards meaningful network neutrality rules in Brazil. Going forward, the interpretation of the rules in individual cases will determine whether the protection of network neutrality in Brazil will be effective. Future enforcement by ANATEL and Courts must vigorously enforce the ban on blocking and discrimination established by the statute. The good news is that the institutional framework is well set to allow a meaningful neutrality regime.
Date published: July 21, 2016