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<DIV dir=ltr align=left><FONT size=2 face="Courier New"><SPAN
class=699113111-24062011></SPAN></FONT></DIV></DIV>
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<DIV class=story>
<DIV class=publication>The International <SPAN id=hitDiv1
class=hitText><B><FONT
style="BACKGROUND-COLOR: #ffff00">Herald</FONT></B></SPAN> <SPAN
id=hitDiv1 class=hitText><B><FONT
style="BACKGROUND-COLOR: #ffff00">Tribune</FONT></B></SPAN><SPAN
class=699113111-24062011><STRONG><FONT
style="BACKGROUND-COLOR: #ffff00">/NY
Times</FONT></STRONG></SPAN></DIV></DIV></TD></TR>
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<DIV class=story><SPAN id=hitDiv2 class=hitText><B><FONT
style="BACKGROUND-COLOR: #ffff00">June</FONT></B></SPAN> 23, 2011 Thursday
</DIV></TD></TR>
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<DIV class=story>FINANCE; Pg. 1 </DIV></TD></TR>
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<DIV class=story>1204 words</DIV></TD></TR>
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<TD><SPAN class=headline align="LEFT"><STRONG><FONT color=#0560bb size=2
face=Arial>Dutch ban extra Net phone fees; <BR>Under law, telecoms may no
longer charge for using services like Skype</FONT></STRONG></SPAN></TD></TR>
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<TD height=10><STRONG><FONT color=#0560bb size=2
face=Arial></FONT></STRONG></TD></TR>
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<TD>
<DIV class=story>BY KEVIN O'BRIEN</DIV></TD></TR>
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<TD height=10></TD></TR>
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<DIV class=story>BERLIN </DIV></TD></TR>
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<DIV class=story><BR><BR>ABSTRACT
<P></P>The Netherlands has become the first country in Europe to ban its
mobile operators from blocking or charging consumers extra for using
Internet-based services like Skype. <BR><BR>FULL TEXT
<P></P>The Netherlands on Wednesday became the first country in Europe,
and only the second in the world, to enshrine the concept of network
neutrality into national law by banning its mobile telephone operators
from blocking or charging consumers extra for using Internet-based
communications services like Skype or WhatsApp, a free text service.
<P></P>The measure, which was adopted with a broad majority in the lower
house of the Dutch Parliament, the Tweede Kamer, will prevent KPN, the
Dutch telecommunications market leader, and the Dutch units of Vodafone
and T-Mobile, from blocking or charging for Internet services. Its
sponsors said that the measure would pass a pro-forma review in the Dutch
Senate without hitches.
<P></P>Analysts said that the legal restrictions imposed in the
Netherlands could shape Europe's broader, evolving debate over network
neutrality, pushing more countries on the Continent to limit operators
from acting as self-appointed toll collectors of the mobile Internet.
<P></P>''I could also see some countries following the Dutch example,''
said Jacques de Greling, an analyst at Natixis, a French bank. ''I believe
there will be pressure from consumers to make it clear what they are
buying, whether it is the full Internet or Internet-light.''
<P></P>Advocates hailed the move as a victory for consumers, while
industry officials predicted that mobile broadband charges could rise in
the Netherlands to compensate for the new restrictions.
<P></P>''We support network neutrality,'' said Sandra de Jong, a
spokeswoman for Consumentenbond, the largest Dutch consumer organization,
based in The Hague. ''We don't think operators should be able to restrict
the Internet. That would be a bad precedent.''
<P></P>Luigi Gambardella, the chairman of the executive board of the
European Telecommunications Network Operators' Association, an industry
group based in Brussels, warned that the Dutch legislation could deter
operators from making needed investments in high-speed networks for fear
of building expensive but unprofitable infrastructure.
<P></P>''Any additional regulation should avoid deterring investment or
innovative business models, leading to a more efficient use of the
networks and to creating new business opportunities,'' Mr. Gambardella
said. He said operators needed the ability to charge different tariffs for
different levels of service, to recoup the costs of data-intensive
applications.
<P></P>Operators could still offer a range of mobile data tariffs with
different download speeds and levels of service, but they would not be
able to tie specific rates to the use of specific free Internet services.
<P></P>Under the law, Dutch operators could be fined up to 10 percent of
their annual sales for violations by the national telecommunications
regulator, OPTA.
<P></P>Patrick Nickolson, a spokesman for KPN, said that the measure could
lead to higher broadband prices in the Netherlands because operators would
be limited in their ability to structure differentiated data packages
based on consumption.
<P></P>''We regret that the Dutch Parliament didn't take more time to
consider this,'' Mr. Nickolson said. ''This will limit our ability to
develop a new portfolio of tariffs and there is at least the risk of
higher prices, because our options to differentiate will now be more
limited.''
<P></P>Stephen Collins, the head of government and regulatory affairs in
London for Skype, applauded the move by the Dutch lawmakers.
<P></P>''Skype welcomes the sensible and fair approach the Dutch
Parliament has adopted today,'' Mr. Collins said. ''It sets an example for
other countries in Europe and elsewhere to follow.''
<P></P>Bruno Braakhuis, a Dutch legislator from Haarlem who was the
original sponsor of the legislation, called the adoption a victory for
Dutch consumers.
<P></P>''For us, this is really a basic right,'' said Mr. Braakhuis, a
member of the GreenLeft party. ''We consider network neutrality to be as
important as freedom of the press, freedom of speech.''
<P></P>The Dutch restrictions on operators are the first in the 27-nation
European Union. The European Commission and European Parliament have
endorsed network neutrality guidelines but as yet have taken no legal
action against operators that block or impose extra fees on consumers
using services like Skype, the voice and video Internet service being
acquired by Microsoft, and WhatsApp, a mobile software maker which is
based in Santa Clara, California.
<P></P>Sanctions may be coming, however.
<P></P>In May, the European telecommunications commissioner, Neelie Kroes,
warned operators to stop blocking or charging extra for Skype or she would
take unspecified action this year. So far, only a few operators, like 3 UK
of Britain, a unit of the Hong Kong conglomerate Hutchison Whampoa, have
allowed their customers to have unfettered use of Internet services with
their flat-rate wireless data packages.
<P></P>Maxime Verhagen, the Dutch deputy prime minister who supported the
net neutrality restrictions, said that the new rules would ensure that
Internet services were never threatened.
<P></P>''The blocking of services or the imposition of a levy is a brake
on innovation,'' Mr. Verhagen said. ''That's not good for the economy.
This measure guarantees a completely free Internet which both citizens and
the providers of the online services can then rely on.''
<P></P>Besides the Netherlands, only one country, Chile, has written
network neutrality requirements into its telecommunications law. The
Chilean law, which was approved in July 2010, only took effect in May.
<P></P>In the United States, an attempt by the Federal Communications
Commission to impose a similar set of network neutrality restrictions on
U.S. operators, a bid to prevent them from blocking or imposing fees on
data-intensive services, has been tied up in legal challenges from the
industry.
<P></P>The debate over net neutrality in the Netherlands erupted in May
when Eelco Blok, the new chief executive of KPN, the former phone
monopoly, announced plans to create a new set of mobile data tariffs that
included charges on services like WhatsApp that allow smartphone users to
avoid operator charges for sending text messages.
<P></P>Use of the free text service has spread rapidly, eroding operator
text revenues.
<P></P>According to KPN, 85 percent of the company's customers who use a
Google Android phone downloaded WhatsApp onto their handsets from last
August through April. As a result, KPN's revenue from text messaging,
which had risen 8 percent in the first quarter of 2010 from a year
earlier, declined 13 percent in the first quarter of this year.
<P></P>At a presentation to investors in London on May 10, analysts
questioned where KPN had obtained the rapid adoption figures for WhatsApp.
A midlevel KPN executive explained that the operator had deployed
analytical software which uses a technology called deep packet inspection
to scrutinize the communication habits of individual users.
<P></P>The disclosure, widely reported in the Dutch news media, set off an
uproar that fueled the legislative drive, which in less than two months
culminated in lawmakers adopting the Continent's first net neutrality
measures with real teeth. </DIV></TD></TR></TBODY></TABLE></FONT></DIV><FONT
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