Mobile operators banned from charging extra for Skype and other web-based communications

Netherlands enshrines net neutrality in law

The Netherlands could be the first country in Europe to legislate open access for the internet.

The Dutch parliament has passed a law banning telecommunications providers from blocking or charging extra for voice calling internet protocol (VOIP) services such as Skype and instant messaging like WhatsApp on Apple's iPhone.

The Dutch Senate is expected to approve the bill, making the Netherlands the first country in Europe to enshrine the concept of net neutrality in law.

"Blocking these types of services or placing an extra charge on them curbs innovation and that is not good for the economy," Economy Minister Maxime Verhagen said.

"We are now going to regulate that with the Parliament and that way we'll guarantee an open internet."

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.

Telecoms company KPN, the Dutch market leader, and the Dutch arms of Vodafone and T-Mobile are likely to be affected, analysts said.

KPN is struggling to reverse a decline in its domestic business after losing market share in its mobile business.

This is 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.

KPN announced in May that it planned to raise data prices for consumers as it tries to offset revenue losses, 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," RBS analyst Giles Thorne said.

"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."

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."

Given EU policy harmonization, Thorne said it was likely that similar laws would follow in other countries, either led by the parliaments in the member states as in Netherlands, or driven by the EU.

"Whichever way you cut it though, the powers that be are falling clearly down on the side of having an open and neutral internet," he said.

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

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