2010, Nigeria; the International Internet Connectivity (ICC) is currently dominated by three major players providing bandwidth access on a wholesale and retail basis to the Nigerian end users. These players are the state owned Nigerian Telecommunications Limited (NITEL) providing access via the SAT-1 submarine cable, Glo through the GLO-1 submarine cable and MainOne Cable company via the MainOne submarine cable, of these cables, only the GLO-1 and MainOne submarine cables have broadband (or high speed) internet access capability.
In recent times, global policy issues on broadband internet access have focused on network neutrality, that is whether broadband network operators should be allowed to favor (or as is emotionally argued; discriminate) one data traffic over another one that passes through its network.
This is the main thrust of this paper. Arguments in support of network neutrality have tended to lean towards the belief that discriminating data traffic is anti-consumer and may be capable having an anti-competitive effect under certain conditions. With the current expansion of internet services in Nigeria and particularly the current investment in broadband infrastructure, the need arises to revisit the issue of network neutrality in the Nigerian context. In considering the question of network neutrality, guidance is sought from the Nigeria Communications Act 2003 (NCA) and the relevant regulations made under the Act.
NETWORK NEUTRALITY
The internet in its simplest terms refers to a system of decentralized, interconnected network of computer networks that allows computers to communicate with each other. The internet has come a long way since 1960 when it was then known as the Advanced Research Projects Agency Network (ARPANET), the first operational packet switching network owned by the United States Department of Defense. The internet as we know it today has evolved rapidly and extended far beyond the territory of the United States. As at 2008, almost 1.6 billion people worldwide had access to the internet, of these figures only 23, 982, 208 had access from Nigeria.
The growing rate of internet penetration in Nigeria has closely been linked to the Global System for Mobile Communications (GSM) revolution; where GSM service providers have also been capable of providing access to the internet via their mobile network infrastructures.
Today, the geometric growth rate of the Nigerian telecommunications market has created a demand for bandwidth intensive application such as cloud computing (especial software-as-a-service; SaaS), streaming media and Voice-over-internet protocol (VoIP) services which has necessitated the investment in the provision broadband services.
Network neutrality as a principle recommends that all internet traffic passing through a network should be treated alike irrespective of the source of the traffic, destination or nature of the traffic. According to Google, Network neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet. The Internet has operated according to this neutrality principle since its earliest days... Fundamentally, net neutrality is about equal access to the Internet. This definition is based on the notion of a free and fair internet and that broadband should be available to users who have paid to access this service. This definition is centered on the four basic “Internet Freedoms”.
The concept of network neutrality can be traced to the end-to-end principle which sees the internet as a “dumb” network designed to treat all data traffic equally. In this sense, the network doesn’t ask questions about the sender of the traffic, the recipient or its content; it simply analyzes the traffic and passes it onward for delivery to the end user through the next available node.
A related concept to network neutrality is access tiering which refers to the models used by a particular network operator in treating its traffic. This can be manifested by the network operator in giving bandwidth priority to websites and online service providers that pay for Quality of Service (QoS), websites owned by or in partnership with; or that have paid a premium to the network operator This ultimately means that the content of such favored websites/online service providers would ride faster over the operators last mile to the subscribers.
The different models (which are the subject of network neutrality) used for access tiering are:
a) The “best efforts” rule. Here, the network operator treats all data traffic equally. By this rule, the first data traffic in, is the first the data out. The rule however is subject to variable performance and periods of congestion. This rule seems to assume a similar stance with the maxim in equity … the first in order of time shall prevail.
b) “Needs-based discrimination” treats all data traffic in accordance with the best effort rule until such a time when there is network congestion. At this point certain time sensitive data traffic (such as live streaming or internet telephony data streams ) are moved to the front of the queue for onward delivery to the recipient.
c) “Active discrimination” This is forms the subject of this discourse. The discrimination occurs where a network operator without any reasonable justification prioritizes data for delivery to the end-user in accordance with pre-defined rules. This discrimination may be as a result of the origin, destination or nature of the data traffic.
In the words of American Professor of Law Tim Wu, ”The basic principle behind network [neutrality] regime is to give [internet] users the right to use non-harmful network attachments or applications, and give innovations the corresponding freedom to supply them.” The principle of network neutrality works to prevent the unnecessary restriction of how the end-user accesses the internet, this no doubts creates value in the use of a particular network. These discriminatory practices are well illustrated by these hypothetical cases.
a) Service provider discrimination: An operator such as MainOne Cable Company may enter into company with (or even own) live streaming service A under which A’s content is favored over the contents of live streaming service B. In such scenarios, it’s possible for the internet end users who subscribe to B’s services to become frustrated at the slow pace at which they receive B’s service, this may result in their migration to A’s service due to the faster and better performances offered.
b) Application discrimination: Though this form is not relevant under the current discourse, nevertheless a network operator may discriminate against time sensitive applications such as streaming services or VoIP applications over less time sensitive data traffic like emails.
This priorisation and de-priorisation of internet traffic (otherwise known as access tiering) forms the core of the network neutrality debate. This debate has assumed some measure of popularity in the United States where many have been prompted to ask whether some form of regulatory intervention should not be introduced to curtail instances of internet data discrimination. The fear in the United States is hinged on what network operators might be tempted to do rather than what they are currently doing in the absence of any network neutrality law. The Madison River case further lays credence to this claim. In that case, an Internet Service Provider (ISP) allegedly blocked its customers from accessing a competing VoIP provider. The ISP entered into a consent decree with the sector regulator, Federal Communications Commission (FCC) that prohibited the ISP from blocking ports used for VoIP traffic. The ISP also made a voluntary payment of $15,000 to the US treasury.
It is important to bear in mind that this debate is two sided, on one side are the operators of internet/broadband networks who claim that any form of network neutrality regime is likely to impede broadband internet access and may actually be disadvantageous to innovation. Their belief is that effective network management strategies may require that certain internet data traffic be favored over others. They also contend that a small number of end users can degrade network performances through the use of bandwidth-intensive applications such as live streaming video services and peer-to-peer (p2p) applications. They further contend that network resources may not be capable of accommodating such situations and that network expansion may be expensive, leaving them with the only viable alternative of the cost effective method of network management. On the issue of technology innovation, advocates argue that network operators should be allowed to innovate freely with their different service offering which is the real essence of competition, for them any network neutrality regime is a restriction of new types of competition which in turn restricts innovation. According to them experimenting freely with new service offerings is likely to benefit competition and enhance efforts in innovations in the belief that where failures result from such innovations, network operators are likely to learn from their mistakes in other to compete effectively in the market.
ASSESSMENT OF NETWORK NEUTRALITY UNDER NIGERIAN COMPETITION LAW
The primary aim of all Competition regimes is to ensure the existence of a state of affairs in which output is maximized, price is minimized and the consumers are able to make their own choices. The overall intention of Competition policies is to protect the consumers from unfair market practice. For this, there arises the need for the Government to intervene to stimulate and preserve a competitive environment. Phrases like “substantially lessening of competition,” “anti-competitive agreements and practices” and “abuse of dominant position” are relevant and come within the scope of a Competition regime.
As no general competition law currently exist in Nigeria at the moment, the relevant competition provisions are embedded in the NCA & its subsidiary Competition Practices Regulations (CPR) 2007 which are both applicable in the Nigerian Communications market.
The competition concerns of network neutrality can be viewed from various angles in Nigeria, for instance and depending on the particulars of a conduct, it seems likely that blocking access to broadband access (for the purpose of inducing a subscriber to migrate to another service) or discriminating in favor of a service provider with whom the broadband network provider has some sort of contractual relationship with, is likely to be caught by Sections 9 e and 14 e of the CPR which respectively provides:
discriminating in the provision of interconnection or other communications services or facilities to competing Licensees, except under circumstances that are objectively justified based on supply conditions, such as discrimination based on differences in the costs of supply; and
exclusive dealing agreements, pursuant to which a Licensee enters into an agreement with another party for the supply of products or services on an exclusive basis, and where that exclusivity has or may have the effect of substantially lessening competition in related communications markets.
For instance an exclusive dealing agreement precludes a supplier’s competitors from doing business with the buyer during the agreed period. In the broadband market, an ISP might enter into agreement with content or application providers to provide exclusive, or preferential, access to consumers. In such instances, an ISP might arrange to allow access only to a single service provider and the other service providers are then be denied last-mile access to that ISP’s customers or end users.
In enforcing these provisions, the Nigerian Communications Commission (NCC), the sector regulator will be guided by the provisions of Section 91 (2) of the NCA and Section 6 of the CPR which both emphasize that in assessing whether any conduct is capable of “substantial lessening of competition” reference will be made to the following circumstances; the relevant economic market, the impact of the conduct on existing market players, the impact of the conduct on barriers to market entry and the impact of the conduct on consumers. The test here is to determine the extent of encumbrance against market competition which results in a significant injury to either the competitors or consumers or both. In the case of an exclusive dealing arrangement the assessment goes beyond the number of competitors closed out, as competition authorities worldwide seem to have a convergent opinion in assessing exclusive dealing arrangements where the market definition, the amount of foreclosure in the relevant market, the duration of the contracts, the extent to which entry is deterred, and the reasonable justifications, if any, for the exclusivity are all taken into account.
While a conduct capable of “substantial lessening of competition” seems like a potential threat to the consumers access to broadband services, the claim by proponents of network neutrality that internet data discrimination is anti-competitive seems to be forward looking as the major concern as is in the United States is focused on not what broadband network providers are currently doing, but rather on what they are capable of doing.
THE CURRENT NIGERIAN POSITION ON NETWORK NEUTRALITY
Though no specific Network Neutrality Law currently exists in Nigeria, however (bearing in mind that one of the primary goals of the NCA is to ensure that fair competition exists in the communications sector and that the rights of all consumers and service providers are protected) in the context of interconnection and access to network facilities/services embedded in Sections 96-103 of the NCA, 2003, in particular Section 97 b mandates that all interconnection agreement comply with the principles of neutrality [emphasis mine], transparency, non-discrimination, fair competition, universal coverage, access to information, equality of access and equal terms and conditions. Though neither this section nor the NCA has given a proper description of what constitutes neutrality, however it is safe to assume that this section intends to ensure the absence of prioritization measures or differential treatment of communications traffic when interconnecting with other licensees or providing access to network facilities to interested parties.
Another passive instance of network neutrality can be found in the grant of a licence for the provision of internet services under Section 32 of the NCA. In particular condition 5 of the Licence provides:
5.1 The Licensee shall not (whether in respect of charges or other terms or conditions applied or otherwise) show undue preference to or exercise undue discrimination against any particular person or persons of any class or description in respect of;
a) the provision of a service under this Licence; or
b) the connection of any equipment approved by the Commission.
5.2 The Licensee shall be deemed to have shown such undue preference or to have exercised such discrimination if it unfairly favours to a material extent a business carried on by it or by its lawful telecommunications associates in relation to any of the matters mentioned in paragraph 5.1 so as to place at a significant competitive disadvantage persons competing with that business.
These provisions without mentioning “network neutrality” has in some implicit way taken a stance in favour of network neutrality by making it a license condition that internet access providers must not show “undue preference to” any person. The subsequent provision goes further in defining a conduct indicative of “undue preference” as indiscriminately giving preference in the provision of internet service and or in the connection of any equipment approved by the commission to the business of its “lawful telecommunications associates.” A breach of these provisions is likely to entitle the NCC to revoke the internet license of the licensee.
CONCLUSION
The reality on ground is that the Nigerian broadband access market is still very much in its infancy stage, more market entry is needed for the market to be more competitive. The argument here is that increased broadband market participation is likely to reduce discriminatory practices as was noted in the US by AT & T Chairman Ed Whitacre that “Any [network] operator that blocks access to content is inviting customers to find another provider. And that’s just bad business.” Whether the likelihood of broadband discrimination is real or imagined in the absence of any network neutrality regime in Nigeria, notice must be taken of the vision of the NCA and the National Communications policy which includes inter alia, the promotion of easily accessible communications services for Nigerians.
Whichever way the pendulum swings, effective consumer protection will be needed for effective market competition to be sustained. In this vein, Service Level Agreement that addresses consumer protection concerns will play a role in clearly spelling out the terms of different broadband packages, these material terms may include traffic management practices of the network operator, after all of what use would be the effect of a competition regime if the consumers are not able to exercise their right to choose.
The dabate on network neutrality is likely to change how data is transmitted and consumed online while the question of broadband service discrimination remains alive, however, sight must not be lost of the principles surrounding network neutrality should a law for it become inevitable. These principles as stated by the US Federal Communications Commission (FCC) in its Broadband policy statement adopted on August 5th, 2005 revolves round the rights of broadband consumers to; access lawful content of their choosing, use applications and services of their choosing, connect network devises that to not degrade network performances and finally are entitled to competition among the various service providers. These principles will guarantee that these four basic “Internet Freedoms” are protected and preserved.
