Kroes laid out her plans at a meeting on “guaranteeing competition and the open internet in Europe” on Tuesday morning. Here’s a breakdown:

• One size may not fit all — ISPs should be able to offer connections with guaranteed quality of service, with regular subscribers getting a “best efforts internet”.
• Transparency — People signing up to internet packages should be clearly told what is included, what is not, and what speed they can expect.
• Easier switching — It must be easier to switch provider. Barriers including “excessive charges, modem hire or email addresses” will be “removed”.
• No blocking/throttling — ISPs and carriers will not be able to deliberately degrade or block services that rival their own, such as VoIP or messaging services.

That last one is arguably the most important new proposal: for the first time, it will not be legal for a mobile carrier to block or throttle Skype usage, for example. However, it won’t answer all the concerns of net neutrality advocates.

The basics

Let’s remind ourselves first of what net neutrality means in practical terms: the idea that all services get treated equally on the internet. Some real die-hards will argue that it should mean the banning of traffic management, but that’s unworkable and frankly it clouds the debate. What we are really talking about is maintaining a truly open and competitive market for internet services.

Blocking and throttling services is a flagrant and very widespread abuse – European regulators have estimated that 236 million mobile subscribers in Europe are blocked from using Skype – so obviously it will be good to see that go. But what about more subtle attempts at favoring some services over others, such as Deutsche Telekom’s current ploy?

As we reported in April, Deutsche Telekom is introducing usage caps on its fixed-line internet services. The ISP’s own entertainment services, often bundled with its internet connectivity, do not count towards these caps. So, in effect, customers are being steered towards the use of these services and away from that of Netflix-style rivals, because the use of the latter services might mean hitting those caps and seeing a slowed-down connection as a result. This is a disincentive for startups that might want to set up new services in Germany to rival Deutsche Telekom’s in-house offering.

It’s far from clear that the European Commission’s new proposals would stop such behavior. Similarly, there is nothing in there to stop a different kind of net neutrality abuse: ISPs charging content providers for carrying their traffic. In fact, the acceptance of the idea of a two-speed internet – for this is what Kroes is in effect describing – makes this sort of development more likely.

If there’s a fast lane in place, carriers can go to content providers and ask: “Would you like to be part of that lane, or relegated to best efforts?” The result? Entrenched and deep-pocketed providers would be able to pay, while their newer, smaller rivals would not.

Cloud impact

One of the speakers at the Brussels meeting was James Waterworth, the vice-president of the Computer and Communications Industry Association (CCIA). He pointed out that it’s all very well to introduce transparency requirements for consumers, so that they understand what they’re signing up for, but that doesn’t do much for businesses:

“Because cloud services depends on network effects, transparency will not work. If you are the CIO of a company with a salesforce who move around, who go between 5-20 sites, possibly across different countries, if you want to deploy a productivity suite you’d have to know which productivity suites can or cannot be used on all the different connections your workforce will travel to. That’s impossible.”

And then there was the contribution of law professor Chris Marsden, of the University of Sussex. He suggested there was a fatal flaw in the argument of ISPs who want to bypass net neutrality – they say they need to place limitations on connectivity in order to deal with the “data explosion”, but there is in reality no such thing. Marsden noted that figures from Cisco itself – remember, a company trying to sell carriers kit to cope with this supposed explosion – indicated a manageable increase in the amount of data people are using:

“There is no data explosion on the European internet, so we shouldn’t be trying to make policy based on a fallacious assumption,” he said. “If we keep talking about data explosions, the thing that’s going to explode is the heads of the technical people who know there is no data explosion.”

Whether or not you agree with Marsden’s interpretation of Cisco’s figures, his point highlights an inherent logical contradiction in the carriers’ stance: if the “data explosion” is so severe as to necessitate the creation of fast lanes with guaranteed quality of service, doesn’t that mean the “best efforts” slow lanes will necessarily be slower than the equal-access lane we have today? And if that’s not the case, then why create divided classes of internet access? They can’t have it both ways.

U.S. comparison

Kroes’s proposals are not that dissimilar to those brought in by the U.S. Federal Communication Commission (FCC) a couple of years back (rules that are currently back in court due to the displeasure of Verizon). Those rules also mandate transparency and stop fixed-line providers from discriminating against certain types of traffic, although they are somewhat more lenient towards mobile providers – a distinction Kroes doesn’t appear to be making. And like the European Commission’s proposals, the FCC’s rules leave scope for a two-speed internet.

In short, the FCC’s rules were what the uncharitably-minded might call “a fudge” or, in kinder terms, “net neutrality lite”. It appears that Kroes is aiming for something similar, albeit without the short-sighted split between fixed and mobile connections.

In some ways it is understandable that she is doing so. The commissioner is desperate to introduce Europe’s first net neutrality legislation ahead of next year’s European Parliament elections, which threaten to fill the parliament with people who want to end the European project. She wants to show that the concerns of the ordinary person – particularly the younger ordinary person – are being taken into account.

The problem is, net neutrality is a relatively abstract concept that will never excite most people until it’s gone. The other part of Kroes’s big push – the abolition of mobile roaming premiums within the single market – is a much more sure-fire vote-winner.

If the proposals she is making don’t do the job, and if they’re not connected with winning the carriers’ acceptance of lower roaming fees, perhaps they shouldn’t be rushed.

Reuters reports that Pink Floyd’s Nick Mason and Radiohead’s Ed O’Brien are among the signatories of a letter that accuses European law-makers of selling out musicians in favor of copyright collection societies.

The number and outlook of these societies, which collect and manage royalties on behalf of artists, are blamed by many for stunting the growth of digital distribution in Europe. There are more than 250 societies in various countries which has turned the licensing process into a slow, bureaucratic affair. As the New York Times reports, iTunes is the only legitimate music service available in all 27 EU countries while digital revenue accounts for only 19 percent of the music industry’s total revenue in Europe. In America, digital royalties accounted for nearly half of such revenue in 2010.

In Wednesday’s announcement, the European Commission notes that “online access to cultural content .. does not recognise borders or national restrictions” and proposes measures to create a single licensing market and give rights owners’ more power over the collection process. (Full announcement can be found here).

The musicians, however, argue that the new law will only perpetuate bad elements of the current system.

“You thus legitimise one of the most problematic forms of embezzlement adopted by some collecting societies in Europe,” their letter reads.

Their accusations partly relate to rules that allow the societies to hold on to royalties for years at a time. In the past, some copyright societies have been accused of high overhead, placing musicians’ money in bad investments or even embezzling it altogether.

(Image by Dmitriy Shironosov via Shutterstock)

ACTA, the Anti-Counterfeiting Trade Agreement, is a multinational treaty aimed at curbing the global trade in counterfeit goods of all sorts, and has been the subject of frenzied negotiations (most of them secret) since at least 2008. Supporters say it is intended to harmonize copyright law across much of the world, but over the last few years, however, critics have been attacking for what they believe is a fundamental infringement of civil liberties, particularly when it comes down to digital copying.

Among its most egregious points, they argued, was the radical expansion of copyright law in ways that went far beyond existing national laws. ACTA’s concept of what constituted “commercial” copyright infringement had amazingly broad implications, and it would also make it illegal to circumvent DRM. Over time the proposals were watered down — the clause allowing border security to search your computer or iPod for copied music was dropped, for example — but many of the most controversial elements remained.

Championed by the European Commission, officials continued to work on the proposals and by the beginning of this year the European Union had already signed up in principle, along with countries like the United States and Japan. But as the moment drew closer when Europe would be asked to ratify the treaty — the move that would actually end up with it becoming law — concerns and criticism grew stronger and stronger.

In the wake of the successful SOPA protests in the US, many felt empowered and the movement really culminated in huge protests in Poland and elsewhere in January, where thousands turned out on the streets to make their feelings known.

That added to pressure from influential committees — and by the time the vote came around today, it was roundly rejected by EU parliamentarians.

Some of them celebrated their victory:

#ACTA biggest EVER legislative defeat for Commission in Parliament

— David Martin MEP (@davidmartinmep) July 4, 2012

But although the vote means that it’s unlikely that ACTA will rise again, it is worth realizing that it is not necessarily dead, either.

European trade commissioner Karel De Gucht — who had been lobbying hard to push the vote through in favor of the treaty — has already said he is so committed to getting ACTA working that he is prepared to come back with an altered version at a later date.

If you decide for a negative vote before the European Court rules, let me tell you that the Commission will nonetheless continue to pursue the current procedure before the Court, as we are entitled to do. A negative vote will not stop the proceedings before the Court of Justice.

And although Europe has reject the treaty, it could still end up being ratified by the other signatories — Australia, Canada, Japan, Morocco, New Zealand, Singapore, South Korea and the U.S. are all in the frame. Six of them would need to ratify the treaty in order to put it into effect.

Perhaps it’s worth heeding Dutch MEP Marietje Schaake’s thoughts:

#ACTA may be off the table but the struggle for #copyright reform and #digitalfreedom continues

— Marietje Schaake (@MarietjeD66) July 4, 2012

Photograph of Karel de Gucht used under Creative Commons license courtesy of World Economic Forum

A Committee of the European Parliament has voted to approve a report [PDF] that condemns some common online advertising practices, such as selling ads against search “keywords” that are also trademarks, and creating ads by scanning e-mails. While the report doesn’t mention Google-or any other company-by name, both practices are important features of Google’s advertising system.

The approval of the report’s recommendations, by a 30-1 vote, suggests that wide gap persists between U.S. and European views on what kind of data advertisers should be able to use in crafting targeted ads.

Google’s practice of selling advertising based on search keywords that are also trademarks has been challenged in numerous lawsuits, but the company has never lost a case in a U.S. court. It also won a key European court case over trademarked keywords in March. Since then, Google (NSDQ: GOOG) has expanded its policy of selling ads against trademarked keywords in Europe.

The 13-page report, which was approved by the Parliament’s Committee on the Internal Market and Consumer Protection on Nov. 8, pushes back against that decision, stating that “the sale by search engines of registered brand names as advertising keywords” should be “subject to prior authorization” by the brand owners in question.

Separately, the report also says that “the content of private e-mails” shouldn’t be used “for advertising purposes.” That would hobble the advertising system that supports Gmail, since Google uses automated scans of the contents of e-mails to power its Gmail ad system. The data collected while providing a service like e-mail must be “kept wholly separate from those [data] collected in the course of advertising activities,” the report suggests.

The proposals will be debated by the full European Parliament in December.

If European legislators take a position towards Google’s advertising practices as tough as the one adopted by this committee, the company’s series of court wins-which provide a strong legal basis for the profitable practice of auctioning off trademarked keywords-could be put into jeopardy.

The report [PDF] also suggests:

»  Distinguishing advertising cookies from other cookies

»  Introducing a voluntary EU label for websites that comply with EU data protection legislation

»  Prohibiting the indiscriminate sending of unsolicited advertising to mobile phones without prior consent

»  Inserting the words ‘behavioral advertisement’ into the relevant online advertisements, along with a brief explanation

In a later panel on mobile content DRM, however, Hewlett-Packard’s communications, media and entertainment VP and CTO Brian Levy panned the EC proposals, which came in Reding’s January plan to create a “single-market for content” – a document that tries to protect rightsholders but which many think has come too late. “Politicians really don’t understand the technology,” Levy said. “God, the politicians are going to tell us what standards we’re going to use on a device – that’s scary. P2P doesn’t equate to illegal content – some of the government people need to understand that.”

The big hurdle for the deal remains the EU, which may take as long as April before ruling. Beuc, a pan-European umbrella organizations for 41 consumer groups, lodged its objection to the deal this week. In a letter to commissioner Neelie Kroes, the group predicted that a Google “monopoly” would lead to reduced profits for ad-dependent publishers. It also warned that consumers would be harmed by increased prices and a loss of privacy. The organization is seen as influential given the EU’s sympathy to consumer rights. Full details at paidContent:UK. More after the break…

Update: FTC: “After carefully reviewing the evidence, we have concluded that Google

The EU’s move comes as a storm of protest has erupted against new behavioral marketing initiatives from Facebook. The social net has found itself targeted by MoveOn.org, a left-wing activist group that’s generally been focused on opposition to the war in Iraq, over Beacon, a feature of its SocialAds program. MoveOn charges that Beacon violates users’ privacy because Facebook members’ purchases made on the social net’s marketing partner sites are included in other members’ news feeds, News.com reported. Facebook defends the Beacon by saying that the information is only open to members’ Facebook friends and members can opt-out of the program. So far, Reuters (NSDQ: RTRSY) noted that over 13,000 users have signed MoveOn’s petition against Beacon.

While advertisers and agencies initially greeted the expanded behavioral targeting methods being offered with great enthusiasm, some are now expressing fear of a backlash. Just before the Thanksgiving holiday, I spoke with Tim Hanlon, EVP-ventures, for Publicis Groupe

Of these, Lindsay thinks an in-house build is the best option, and he lays out some of the details of what this would entail:

– Total capex requirement to get a system up and running would be around $250 million, which is based on estimated capex at other companies. DoubleClick, for example, is estimated to have spent $61 million annually in the 2002-2006. aQuantive’s spending was in the same ballpark, at $64 million, while ValueClick’s (NSDQ: VCLK) was a bit less, at $29 million, although it’s growth has been slower.

– Lindsay estimates that the company could have such a system built and populated with advertisers within two years, based on the rapid growth in the area and the depth of Google’s engineering talent. By of comparison, Right Media got to its level within three years of launch. While two years sounds like a long time, the company would have to expect another long regulatory wait if it were to buy another player, potentially making this option more attractive.

– The toughest part may be justifying a brand new player in this industry, though Lindsay believes that if it were to steal some market share while expanding the overall pie, it could be justified.

Undoubtedly Eric, Larry and Sergey have already run the numbers on this option and all the others, although the hope is that it all proves academic.