A Practical Assessment of Competition Regulation as a Viable Option for Protecting Net Neutrality in Nigeria
60 Pages Posted: 22 Mar 2019 Last revised: 15 May 2019
Date Written: March 1, 2019
Abstract
Since the introduction of the phrase “net(work) neutrality” by Professor Tim Wu in 2003, the last 15 years has seen telecommunications regulators trying to grasp the myriad of concerns associated with this telecommunications policy issue and crafting various regulatory solutions in response. In the European Union (EU), the European Parliament have responded by enacting EU Regulation 2015/2120 (the EU Net-Neutrality Rules) which lays out net-neutrality safeguards and Law Nº 20.453 establishes the principle of net-neutrality in Chile. These are just one of the few examples in other juisdictions, with the exception of the United States (US), where unfortunately, the Federal Communications Commission (FCC) has rolled-back the Open Internet Order 2015 despite the public outcry, legal challenges and intervention of the US Senate.
At a fundamental level, net-neutrality argues in favour of the non-discrimination of internet content (or traffic) because the internet is considered to be a “dumb network” that is neutral irrespective of the content an internet user is able to access, thus any traffic passing through an internet access service provider’s (IASP’s) network should be treated on a first-come, first-served basis. The underlying justification for supporters of the net-neutrality debate is to have an open internet where everyone has a non-discriminatory access to lawful content online, or is able to access the internet from whatever terminal device.
Interestingly, Nigeria appears to be the only country in Africa to have expressed a clear intention to codify the protection of net-neutrality, and recently released a draft Internet Industry Code of Practice (the Draft Code) that among other things provides net-neutrality provisions that in some parts comprises elements borrowed from EU Net-Neutrality Rules and FCC’s Open Internet Order 2015. This report sets forth with hypothetical scenarios the extent to which the substantive principles of traditional competition regulation can effectively respond to net-neutrality violations in Nigeria’s internet ecosystem. It also examines the competition implication of non-enforcing net-neutrality obligations. The object of this examination is not farfetched because economic theory presumes that under the right condition a vertically integrated IASP with market power in the retail internet access service market, has the commercial incentive and opportunity to discriminate against traffic (or internet content) that competes with its own retail (or downstream) service, or enter into an exclusive (or preferential) agreement with a content and application provider (CAP) that impedes the ability of other CAPs to compete effectively by excluding them from a downstream market. Another question this report will attempt to answer is, what then are the effects of such anti-competitive conducts that are also in violation of the net-neutrality principle.
While it is conceded that the concept of net-neutrality and competition regulation are very much in their infant stage in Nigeria, thus reference will be made to legal and regulatory proceedings that have helped shape net-neutrality and competition regulation in other jurisdictions, particularly developments in EU and US to which Nigeria can learn from. In this regards, it is worth mentioning that the Open Internet Order 2010 and Open Internet Order 2015 which are referred to in this report have both been repealed by the FCC and any reference to any of them is only to describe or illustrate a particular situation.
This report is not, and should not be read as an exhaustive resource about the whole spectrum of arguments concerning the net-neutrality debate, but rather views the net-neutrality issue from the prism of competition regulation and sets the tone for further engagement with policy makers, the relevant regulatory authority, internet users, IASPs and CAPs in Nigeria regarding an open internet, innovation and a competitive market in Nigeria’s internet ecosystem.
This report is organized into eight parts as follows;
I. Description of the Internet Ecosystem in Nigeria
This part will give a description of what the internet ecosystem looks like in Nigeria.
II. History of Net-Neutrality
This part will describe the concept of net-neutrality as well as its historical basis.
III. The Regulatory Framework for Net-Neutrality in Nigeria
This part will discuss the regulatory framework for net-neutrality, in particular it will review the various telecommunications license conditions, and the particular provisions of the Draft Internet Code of Practice that sets out net-neutrality obligations and measures.
IV. The Competition Framework applicable to Nigeria’s Telecommunications Market
This part will give the main features of the existing competition framework in Nigeria, and in particular the Nigerian Communications Act, and the Competition Practices Regulations issued by the Nigerian Communications Commission applicable only in Nigeria’s telecommunications sector, and the recently enacted Federal Competition and Consumer Protection Act 2019.
V. Competition Regulation as a Response to Net-Neutrality Violations
This part will provide a discussion of the range of conducts that are capable of undermining competition in the internet value chain/ecosystem as a result of net-neutrality violations and the non-enforcement of net-neutrality obligations, their effects on the relevant internet market, and how competition regulation may effectively respond to these conducts.
VI. Limitations of Competition Regulation
This part will discuss the limitation faced by existing competition frameworks in Nigeria in addressing net-neutrality violations.
VII. Recommendations
This part will make policy recommendations on how net-neutrality may be better protected in Nigeria
VIII. Conclusion
This part will set out the concluding remarks of this report
Keywords: network neutrality, competition law, antitrust law, Nigeria
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