Dutch pass law to ensure open Internet access

AMSTERDAM, THE NETHERLANDS: The Dutch parliament on Wednesday passed a law banning telecommunications providers from charging their subscribers extra fees for Internet services such as Skype and instant messaging.

The law is intended to preserve open access to the Internet at a time when some mobile operators in Europe are blocking or charging extra for specific voice over Internet protocol (VOIP) services including Skype and instant messaging such as WhatsApp, used on Apple's iPhone.

"Blocking these types of services or placing an extra charge on them curbs innovation. That is not good for the economy. We are now going to regulate that with the Parliament. That way we'll guarantee an open Internet," Economy Minister Maxime Verhagen said.

The Netherlands would be one of the first countries in the world to legislate open access to the Internet if the law is also enacted by the Dutch Senate or upper house.

The legislation also imposes stricter regulations on the use by websites of so-called cookies, which collect data about a consumer's Internet use and personal preferences. The data can be used for more focused online advertising.

Dutch telecoms company KPN, which is struggling to reverse a decline in its domestic business, is likely to be affected, analysts said.

KPN has lost market share in its mobile business, largely because smartphone users are increasingly turning to free forms of communication such as Facebook, Twitter and instant messaging, at the expense of traditional mobile services.

In May, KPN flagged that it plans to raise data prices for consumers as it tries to offset revenue losses - for example, following the example of France Telecom, which charges customers for using Skype.

KPN declined to say previously how the law will affect the pricing of its new data and voice packages, due to be released this summer, adding it has not yet quantified the impact.

"It means that no mobile operator in the Netherlands can block access to mobile VoIP services, or indeed charge for its use. For KPN and others, it means they must now kiss goodbye to any revenue that they currently generate from charging for access to mobile VoIP services," RBS analyst Giles Thorne told Reuters.

He added that they would also have to drop "any plans they had to insulate their legacy voice and text businesses by launching mobile VoIP tariffs. The latter is something that KPN had explicitly said they wanted to do."

Thorne said that given EU policy harmonisation, it was likely that similar laws would follow in other countries, either led by the parliaments in the member states (as in the Dutch case) or driven by the EU in the centre.

"Whichever way you cut it though, the powers that be are falling clearly down on the side of having an open and neutral Internet. Pro-consumer, pro-competition, pro-harmonisation. The EU way!"

KPN's 47 per cent share of its home market is under threat as it competes with Vodafone Group and Deutsche Telekom AG and increasingly with cable firms wooing customers with bundled packages of super-fast broadband, television and telephone services.