Net Neutrality Wreaking Havoc upon Dutch Broadband Industry and Consumers

Last month, the Parliament of the Netherlands passed Net Neutrality rules which have, since their passage, forced telecommunications companies to begin restructuring the ways in which they operate. Now burdened with harmful regulations, these companies must now find the means to deal with the financial losses associated with regulatory compliance. Ultimately, this means raising rates on their customers—a strategy which is already being employed by the largest Dutch wireless company, KPN.

The Net Neutrality rules prevent Internet Service Providers (ISPs) from managing network congestion and prioritizing data—including data-heavy applications (e.g. Skype, Netflix, etc.) – not to slow speeds, but to make network efficiency gains. Thus, as the rules turn ISPs into “dumb pipe” broadband providers, this then forces the companies to hike their prices in order to create more throughput as they are unable to manage their own or others’ data.

This week, KPN announced that in order to comply with the rules set forth by Parliament, they would have to significantly raise rates for mobile Internet customers, and other Dutch wireless companies are proposing the same—a fate that will be inevitable for American consumers should our comparable rules fail to be repealed.

Congress is currently working on rolling back the Net Neutrality rules. In the House, legislation (H.R. 2434—the Financial Services and General Government Appropriations Act of 2012) is under consideration to appropriate $319 million to the FCC—$35.2 million below President Obama’s budget request for the regulatory agency. In this legislation, as well, are plans to scrap the Net Neutrality rules enacted by the Commission last December, a proposal which has incited an uproar in the Obama White House.

H.R. 2434 was reported out of the House Appropriations Committee on July 7 and is currently awaiting a vote.

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