Overall internet prices to rise if net neutrality is approved, warn telcos

Internet prices for all Brazilian users are at risk of increasing if network neutrality, which bans companies from applying different pricing policies according to types of network usage, is approved, Brazilian telcos have warned.

The issue is one of the pillars of Brazil's Marco Civil da Internet (civil internet bill), a strategic project of the federal government, the final draft of which was presented this week. The text may still be subject to amendments before being voted on, however, which is expected to take place next week.

In chapter 3 ("On the provision of internet applications and connection"), section 1 ("On the traffic of data"), article nine, the Marco Civil states: "Those responsible for transmission, switching and routing must treat all data packets equally, regardless of content, origin and destination, service, terminal or application."

The only exceptions for data discrimination permitted in the bill are for emergency services and specific technicalities - but not pricing policies.

"This concept of neutrality, in our view, does not correspond to the reality of the internet today," João Moura, head of Brazil's competitive telcos association TelComp, told BNamericas.

"We are not seeking to write anybody off, or create privileges on the internet. Everybody can have access to all resources on the internet. But some things simply cost more. If this cannot be done and if people who demand more resources from the network won't pay more for them, then the cost will have to be "socialized" by everybody. It is what I have dubbed as a "cross-subsidy."

By "more resources," Moura is referring principally to video applications. For him, the arrival of video brought a new element to the internet that cannot be disregarded. Consequently, in his opinion telcos' should be able to manage the network, and not only with regard to speed.

"If price plans cannot treat differently things that are different, it will be a problem. And just reducing speed does not work. Because one can buy a low speed plan and spend the whole day downloading video - which many people in fact do - and that ends up consuming a lot more from the network than someone who is just browsing or checking email," said Moura.

Eduardo Cunha, the leader of the PMDB party in congress - the largest group in the ruling Working Party coalition - is also opposed to the network neutrality article.

"I'm not against net neutrality, provided it includes only the prohibition of a provider reducing speed in order to harm a competing provider. It's another thing to say everyone has access to the same speed, the same type of files," Cunha said in Brasília, according to federal news agency Agência Brasil.

"But why will I pay the same if you can watch movies all day and I cannot?" questioned the legislator. On his Twitter account, the lawmaker stressed: "Users will pay more for the internet. Whoever says otherwise is either mistaken or acting in bad faith."

Questioned by reporters in Brasília, communications minister Paulo Bernardo ruled out a potential increase in overall internet costs.

"It won't happen. Operators act in a highly competitive market, they fight for the consumer. The operators will not increase prices."