This week, Neelie Kroes, European Commission Vice-President for the Digital Agenda, gave a much anticipated speech before the European Summit on the Open Internet and Net Neutrality.  Taking stock of the debate thus far, Vice President Kroes outlined the important pillars of her policy judgment on net neutrality.

She stressed the importance of avoiding regulation that might deter investment and efficient use of available resources.  She cited the need for investment to avoid bottlenecks and allow for the development of new bandwidth-hungry services and applications.  To deter that investment through unnecessary regulation “would be cutting off our noses to spite our face.”

In addition, Vice President Kroes recognized that effective traffic management is essential – not only to optimize the “best effort” services prevalent on the Internet today, but to allow for the development of the type of specialized services that will enhance the value of the Internet in the 21st century.

She further recognized the power of the marketplace to police provider conduct, encouraging consumers to leave mobile providers who limit their choices. 

Vice President Kroes also noted differences between the EU and U.S. marketplaces.  Although some have claimed that there is more unbundling-based competition in Europe, thus lessening the need for net neutrality regulations, they tend to ignore the substantial benefits of facilities-based competition in the U.S., which has led to wider deployment of fiber-based networks as well as higher speeds, greater usage and lower prices for consumers.

In the end, she recommended that Europe’s net neutrality efforts be aimed at three relatively straight-forward goals:  effective competition; transparency so consumers are fully informed; and ease of switching providers so consumers can in fact vote with their euros.   She warned that should the Commission encounter significant problems in the future, she would not hesitate to support more drastic intervention.  But such action at this time was not necessary, particularly given her desire to foster investment and innovation.

By balancing the many competing voices on net neutrality, Vice President Kroes found a way past the rhetoric to an effective middle ground, as she telegraphed in a speech back in April.  Her recommendations embody her belief that any content or application that is legal and which does not cause harm should be accessible.  But she drew the line far short of “must carry” obligations that could deter investment and stifle new applications and services.

Virtue lies in the middle ground.  With this recommendation, Ms. Kroes and key Members of the European Parliament are effectively leading the European institutions beyond the extremes of the net neutrality debate to an agenda focused on the great infrastructure challenge of deploying broadband networks for the 21st century.  It is time that we join them.

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