On January 27th this year, the Brazilian Ministry of Justice released the second phase of the online public debate about how the Marco Civil da Internet’ regulatory decree will be.

In this second phase, citizens are asked to give an opinion on a draft decree suggested by the Ministry of Justice, drawn from the more than 1,200 comments made during the first phase. The debate keep addressing how the Marco Civil’ general rules and obligations about net neutrality, privacy and data retention should be detailed and put into practice.

InternetLab produced a report about the this first phase. Our idea was to disclose what was at stake and what regulatory alternatives were being proposed by different participants on the online platform. Based on this first phase report we could analyze what were the choices made by the Ministry of Justice on its draft decree provided to the second phase and continue to reveal the controversies and conflicts of positions. The first issue we will address is network neutrality.

Network neutrality: exceptions, enforcement and zero rating

The approval of the Marco Civil da Internet’ net neutrality rule was seen by many observators as a major step regarding internet rights in Brazil. However, the debate about the application and enforcement of this rule was controversial during the first phase of the online debate about the regulatory decree, especially on how to define the exceptions to the rule, how to monitor compliance and whether or not zero rating plans are forbidden by the law. The controversy became clear between participants representing telecommunication companies and civil society organizations – scholars and other actors participated in a less confrontational way.

The two exceptions to net neutrality

During the first phase of the online debate we reported a conflict of arguments regarding this matter. On the one hand, telecommunications companies and their representatives advocated for freedom in network management, on the other hand, citizens, civil society organizations and some academics have called for stricter rules.

The two cases of exception to network neutrality, that is, situations in which it is permitted to treat differently data packets that travel over the internet, are already listed in the Marco Civil (article 9, paragraph 1): (i) technical requirements for adequate provision of services and applications and (ii) prioritization of emergency services. The decree that is being discussed have the task to explain and define such exceptions, written in broad terms.

First exception: technical requirements essential for the proper delivery of services and applications

The first exception address an everyday necessity: to perform certain level of traffic management to ensure network normal operation. This management enables, for example, that the internet infraestructure companies provide a minimum connectivity to their customers in cases of network congestion or even curb security problems as “denial of service attacks (DoS)” when there is an intentional overload in traffic with some purpose.

While the telecommunications industry defended the adoption of principles that could guide the enforcement, organized civil society have called for the decree to bring one “exhaustive list” of permitted behavior, that is, it expressly authorize what would be allowed as “technical requirements”. The draft placed under discussion by the Ministry of Justice is a mix of both – it exhaustively sets out situations in which the exception exists, but in generic terms.

This criticism of the generality of the hypothesis of “technical requirements” should not be unanimous, but has already made public. In a recent debate at Campus Party 2016 Veridiana Alimonti, from the Collective Intervozes, argued that the possibility of exception in case of “treatment of essential issues for the proper enjoyment of applications, in view of the user experience quality assurance” of the draft would be too open and generic, making room for violation of net neutrality – a position that has been endorsed by participants in this second phase.

Second exception: prioritizing emergency services

The second hypothesis of network neutrality exception was not a huge subject of controversy in the online platform during the first phase. However, participants highlighted some guidelines that should be followed by regulations like a better explanation on what would be an emergency service that allowed traffic management.

The draft decree addresses the issue and sets out the situations in which a communication service is considered “emergency”: “notices to providers of emergency services, as provided for the National Telecommunications Agency regulations; or communications necessary to inform the population on disaster risk situations of emergency or state of public calamity“.

How should be the net neutrality rule enforcement?

The enforcement of network neutrality rule generated great debate in the first phase of consultation. The controversy revolved around the centrality of the National Telecommunications Agency (ANATEL). While the telecommunications companies and some citizens defended the prevalence of ANATEL as the competent agency for enforcing the net neutrality rule, civil society organizations have suggested the construction of a “multi-institutional” system that encompass the agency, but also count on the participation of the Board of Economic Defense (CADE, which deals with competition issues), the National Consumer Office at the Ministry of Justice (SENACON) and Internet Steering Committee in Brazil, CGI.br. The argument was that the legal and administrative powers of ANATEL would not be enough to give out the function of monitoring the neutrality from the point of view of collective rights.

The draft of the Ministry of Justice rejected this suggestion and left the enforcement under the responsibility of ANATEL, but guarded to CGI.br the function of giving enforcement guidelines, especially because the Committee have been cited in the Marco Civil as a necessary participant in this process. The draft decree’Article 7, section I, also establ compliance with the rules of ANATEL as a requirement for discrimination due to the prioritization of emergency services.

At the same time, Articles 16 and 17 of draft decree make clear the space for performance of SENACON and CADE, within their respective scopes of activity. However the role of these bodies is not clear regarding net neutrality enforcement.

Zero rating plans

Despite the technical complexity of the subject, zero rating plans caused controversy in the first phase: the subject was the most discussed by the participants. One factor is the potential influence of this type of plan in the competitive context, the development of Internet-related businesses and in the very way the network works and is managed. This topic has divided opinions.

The debate revolved around two strategies to regulate free access to applications. One option, suggested by groups linked to telecommunications companies, pointed to a subsequent assessment of each type of plan, i.e., damage to competition and the consumer would be further processed by CADE or the judiciary. The argument would be that the regulation should not restrict the economic freedom of the companies to offer plans to its customers in the commercial context. According to these participants, differentiation does not happen within the data packet traffic, but in the commercial sphere.

The second position, supported by academic and civil society organizations, argued that this type of plan should be prohibited by the decree, since it is a violation of network neutrality. These participants argued that plans like these needed to be addressed immediately and a priori because they were already being offered in the market and a breach for a future disfigure of the Marco Civil’ network neutrality rule.

Despite the intense debate, the decree does not specifically address zero rating plans. If the draft is approved, the final decision regarding whether or not the practice is prohibited will be taken by the Judiciary or by the CADE board (in case of questions about anti-competitive conduct).

It can be argued that the draft decree text, by better defining the hypothesis of exception to network neutrality (Articles 5 and 7) and by referring to the preservation the unique and public internet (single paragraph, Article 4 and Article 8), points to the beforehand prohibition of zero rating plans. In this same line, by the way, it highlights the emphasis given in Article 5 of the decree to article 9, item IV  of the Marco Civil, which deals with the prohibition of discriminatory and anti-competitive business practices.

Article 8 of the decree, however, which concerns agreements between connection and application providers, only prohibits agreements entailing the discriminatory prioritization of data packets. In this sense, there could be room for the argument – already presented in the first phase of the consultation – that the ban would be only regarding discrimination related to data traffic, and not discrimination of the package price. Thus, for the defenders of this position, zero rating plans would not, in principle, violate the network neutrality rule.

By Francisco Brito Cruz and Jonas Coelho Marchezan