Digital Latam: Net Neutrality – A Strategic Tool For Society

In the first article of our “Digital Latam” series, dedicated to digital policy developments in Latin America, Access Partnership’s Senior Advisor for Latam, Fernando Borjón, argues that net neutrality is a strategic priority and a basic requirement for every society.

Digital Latam: Net Neutrality – A Strategic Tool For Society

The time we have spent in quarantine due to COVID-19 has given us time to reflect on many different issues, some essential for our lives and others less important, but all characterised by keeping us indoors and staying up to date about what is happening in the world.

We have managed to stay in contact with others and carry out some of our usual activities despite the quarantine. This at a time when we have repeatedly been told that we must abide by “social distancing”. We have continued working remotely, met with friends and professional colleagues, and stayed informed, communicated and entertained, largely thanks to the Internet.

In this era where physical separation and healthcare have been necessary, telecommunications has been essential to continue with our lives. In Mexico, telecommunications networks have been the means to comply with a fundamental right: access to the Internet.

During the COVID-19 pandemic, we have seen how services that operate over the Internet, OTT (over the top) services, and other platforms have given us tools to continue our lives and provide alternatives to drive economic recovery.

The International Telecommunications Union has estimated that, like other sectors of the economy, the telecommunications sector could fall by 3.5%. However, this is low compared to other sectors.

This represents an opportunity for countries to invest in better telecommunications infrastructure, which has proven essential to our lives. We can learn from the pandemic: we must promote the digital transformation of our countries with telework, telehealth, telemedicine, distance education, entertainment and security, among other services that can be offered through the Internet.

Access to the Internet should be given freely and fairly, with a neutral approach, that is, without giving preference to specific content, services or applications. That is why neutrality in Internet access, or net neutrality, becomes a basic requirement for our work, health, education, entertainment and safety, among other activities, making it a strategic priority for countries.

“Net neutrality” is a concept that became popular following the publication of the 2003 article “Network Neutrality, Broadband Discrimination” by Professor Tim Wu. It raised possible problems of discrimination in the treatment of Application, Content and Service Providers (PACS) by Internet Access Service Providers (ISP), which could result in ISPs blocking access to certain PACS without user consent, among other unwanted practices.

From 2003 to now, the growth of telecommunications networks has advanced technologically, in coverage, quality, speed and prices. Likewise, the services, content and applications offered on the Internet have increased significantly, creating a virtual world in constant evolution.

This growth has prompted the debate between PSI and PACS to seek greater benefits for their respective operating models, since PSIs are the means to reach the user. Also, as predicted by Wu himself, the way in which net neutrality is applied has been adjusted to drive innovation in networks and services, as well as to ensure that Internet access remains open to users and PACS.


Net neutrality is an issue addressed by regulators around the world. Its goal is that users have access to all the information and content on the Internet. To do this, ISPs must treat traffic fairly when providing Internet access services, without discrimination, restriction or interference. This must be independent of who or what the sender and receiver are, the content accessed or distributed, the applications or services used or provided, and the terminal equipment used.

The above does not mean that all data types are the same or require the same network characteristics. For example, there will be those who do not require instant interaction such as email or messages on social networks. However, there can also be calls in VoLTE, VoIP, high definition video streaming and even remote monitoring of a person’s health to make decisions about their life. What is relevant is that the traffic of each group of services is treated equally, without benefiting one over the other PACS.

ISPs can take reasonable measures for traffic management, which must be adopted with transparency, considering the performance conditions of the network and avoiding discriminatory practices. It should be noted that these measures will not monitor the content and will not be maintained for longer than necessary. Other issues are also important when considering Internet access, such as privacy management, as well as the proper use of personal data. However, these issues are the subject of other specific legislation.

As can be seen, the principles of net neutrality are specific and are considered by many to be a fundamental base for maintaining open access to the Internet for everyone and the key to the success of the platforms that have been developed there.

The platforms that operate on the Internet require telecommunications networks and ISPs for end users to access their platforms. This market is made up of three elements: user, PSI and PACS, and is studied by economists as a two-sided market. This is a market in which one or more platforms allow interaction between end users and try to get two (or several) sides to “join” the platform by appropriately charging on each one.

In this market, it is considered that the proper application of net neutrality can prevent the practice of discriminatory and anti-competitive activities, while simultaneously promoting supply and innovation in infrastructure, applications, content and services.

The application of net neutrality has caused controversy in the United States. There have been cases in which ISPs have blocked or reduced the ability of some platforms to reach their users. In 2015, the Federal Communications Commission (FCC) attempted to implement what some considered to be stringent regulation to uphold the principles of net neutrality.

To this end, the FCC redefined the broadband Internet access service from being an information service to considering it a public utility, like telecommunications companies, to establish specific obligations. This caused a controversy and more than 3.7 million comments in its public consultation process, as some infrastructure providers thought the attractiveness for telecommunications network operators to improve the capacity of their networks was inhibited.

The above relates to issues such as fast lane, a network management technique that could be used to favour PACS, which by paying a fee, can reach its users in better conditions than a  competitor, as well as other practices that have the potential to inhibit competition.

Some equipment suppliers envisioned that market regulation would solve the problem, but since this possibility did not exist, the improvement of network capacity was inhibited. Meanwhile, others considered that it had the potential to affect competition between PACS and the ability for users to access them.

In 2017, with the change of administration from Democrats to Republicans, the majority view of the FCC also changed, arguing that its 2015 rules could inhibit investment. To change the rule, the FCC carried out a public consultation that broke previous records: it received 22 million comments. In December 2017, the FCC scrapped its previous rules and established a light-touch regulatory framework to guarantee access to an open Internet.

Through the light-touch scheme, ISPs must provide full transparency of their business practices. ISPs are required to publicly disclose information about their network management practices, performance, and business terms of service. The FCC believes that this information encourages innovation, investment, and competition by ensuring that both large and small businesses have the technical information necessary to create and maintain online content, applications, services, and devices.

Most of this regulation has been challenged and has been legally upheld by the United States Court of Appeals in accordance with the ruling on 1 October 2019. There were two aspects that the Court observed to be unfounded. The FCC did not demonstrate the authority to issue the directive to prevent states from imposing any additional rules or stricter requirements on such federal regulation. By March 2020, 20 states of the American Union, the District of Columbia and Puerto Rico had legislated on the matter.

The second aspect corresponds to specific features that need to be corrected: the rules did not make a due examination of the implications for public safety. The regulation regarding the use of equipment on the poles was insufficiently explained, and the FCC did not adequately address applicants’ concerns regarding the effects of the regulation on the Lifeline programme, which is part of the United States universal service programme. These issues are being analysed by the FCC to correct the regulation.

The approach of the European Union (EU) proposes a regulation based on the principles of net neutrality that have been previously discussed, as well as a scheme for its application through criteria established by BEREC, which groups together the regulators of all EU countries.

As observed in both schemes, the regulation is relatively simple in its principles, which is explained by the high degree of evolution and growth of the Internet. Its correct application depends to a high degree on the supervision carried out on the application of these principles under the competition scheme.

The Case of Mexico

In the case of Mexico, net neutrality is established in articles 145 and 146 of the Federal Law on Telecommunications and Broadcasting. It is established that ISPs must abide by the general guidelines issued by the Federal Telecommunications Institute (IFT), in accordance with the following: free choice, non-discrimination, privacy, transparency and information, traffic management, quality and sustained development of infrastructure.

The law also establishes that the Internet access service provided must respect the capacity, speed and quality contracted by the users regardless of the content, origin, destination, terminal or application, as well as the services that are provided over the Internet. This is the principle that is currently in operation, since the IFT is in the process of issuing the guidelines provided in the law.

It should be noted that, contrary to other obligations established by the IFT, in this case the Legislative Power did not establish a deadline for the IFT for the issuance of these guidelines, which was possibly due to the complexity of the case, as observed by the experience of the US.

Currently, the IFT is conducting a public consultation process to issue the guidelines for traffic management and network administration to which concessionaires and authorised persons who provide Internet access service must abide. It should be noted that, in my opinion, net neutrality is one of the issues that illustrates the value of the IFT as a telecommunications regulator and, at the same time, the competition authority in the matter.

The public consultation began on 17 December 2019 and concluded on 15 July 2020. As is customary in complex cases, the IFT has made available the proposed regulation, the regulatory impact analysis, and a study on the neutrality of network.

Additionally, on this occasion, marked by the time of self-isolation and greater use of telecommunications, the IFT has taken a further step forward by organising the Virtual Forum “Neutrality of the Network in Mexico: Analysis and Debate”. This forum consists of five thematic panels that are held publicly by videoconference and broadcast on its Internet page. The recordings of the panels are available on the IFT website.

The topics of the panels are: traffic management and network administration techniques, digital divide, specialised services, user rights and differentiated services.

I had the opportunity of participating in the third panel on specialised services. The panel hopes to have contributed to the construction of proposals to improve regulation, as well as to give greater clarity of the concept of specialised services, since it is one of the elements that can drive innovation in networks and services, but also represents a risk in its application to keep the Internet open.

Net neutrality is a fundamental issue to comply with the constitutional obligation of the State to guarantee the right of Internet access for all Mexicans. That is why it is necessary for the net neutrality guidelines to guarantee this right and allow the promotion of investment for the growth of telecommunications networks, as well as for greater adoption and innovation in applications, content and services.

To view a Spanish version of this article, please visit DPL News website.

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