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Germany bans zero-rated price plans

Deutsche Telekom and Vodafone have been ordered to withdraw their controversial zero-rated tariffs and switch affected customers to different contracts.

German telco regulator the Bundesnetzagentur (BNetzA) issued the decree last week, asserting that these price plans breach the principles of net neutrality.

“We’re putting a stop to the unequal treatment of data traffic associated with zero-rating options,” said a statement from BNetzA president Klaus Müller. “We expect the providers will now offer tariffs with higher data volumes or cheaper mobile flat rates, which will benefit consumers.”

The price plans in question are Deutsche Telekom StreamOn and Vodafone Pass, each of which let customers access services from various content partners – including music and video streaming providers – without that usage counting against their monthly data allowance.

It doesn’t take a genius to see why these tariffs run counter to net neutrality, given they explicitly discriminate between traffic generated by different online service providers. Nonetheless, BNetzA’s ruling represents the culmination of a years-long battle between the authorities and the telcos, as the latter fought hard to keep their zero-rated tariffs on the market.

BNetzA fired the first salvo at DT way back in October 2017, finding that certain elements of StreamOn violated net neutrality rules. The elements in question were DT’s policy of throttling the bandwidth of StreamOn users, and preventing customers from accessing the zero-rated benefits of StreamOn while roaming within the EU. A couple of months later the watchdog followed up its decision by ordering DT to end these restrictive practices.

However, StreamOn was proving popular with customers, and the incumbent wasn’t about to give up on it that easily, so it appealed BNetzA’s decision at the Administrative Court of Cologne. The court promptly sided with the regulator. The ever-resourceful Deutsche Telekom was not going to let a setback like this ruin its zero-rating fun though, so it appealed that decision to the Higher Administrative Court for North Rhine-Westphalia. That court upheld the lower court’s ruling. After that, the incumbent grudgingly tweaked StreamOn as per BNetzA’s original order.

That was not to be the end of it though, because amid all this legal to-ing and fro-ing, the German courts reached out to the European Court of Justice seeking its opinion about whether StreamOn and Vodafone Pass were compatible with EU net neutrality rules. In September, the EU court concluded that zero-rating treats data traffic unequally by not counting certain services and applications against the customer’s data allowance, therefore enabling their unlimited use and putting them at an advantage over all other services and applications.

After this opinion was issued it fell to BNetzA to act on it, which brings us to last week’s decision.

“Marketing of ‘StreamOn’ and ‘Vodafone Pass’ must cease by 1 July 2022. The two zero-rating options are not to be bookable via any sales channel after that time,” BNetzA said. “The providers have until the end of March 2023 to end the zero-rating options for existing customers. As there is a large number of affected customers, the implementation period is necessary to enable a consumer-friendly transition to other tariffs.”

It looks like the zero-rating party might be over, given that Deutsche Telekom and Vodafone have already exhausted most of their legal options. However, you wouldn’t put it past them to have one more crack at appealing the decision.

 

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2 comments

  1. Avatar Andy Tiller 04/05/2022 @ 12:07 pm

    Throttling traffic of a given type selectively is clearly against net neutrality (eg video from a partner company should not be given priority on the network over video traffic from other providers). But why should telcos be banned from zero-rating partner services? This impedes the telco’s ability to form meaningful partnerships with OTT providers. The regulators (not only in Germany) seem intent on blocking any moves by telcos to offer differentiation and commercial innovation – they are determined that telcos should become basic utilities (and yet somehow still find the cash to invest heavily in next generation networks).

    • Scott Bicheno Scott Bicheno 04/05/2022 @ 3:14 pm

      Agreed. Zero rating and throttling are completely different things.

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