The Netherlands has become the first market in Europe – and only the second in the world – to introduce laws to fully protect the net neutrality principle, reports the New York Times. The proposal was passed by “a broad majority” in the country’s lower house and is expected to be signed into law soon by the Dutch Senate. The move effectively bans the country’s mobile operators – KPN, Vodafone and T-Mobile – from blocking or charging for Internet services such as Skype over their networks. Analysts say the Dutch move could shape the wider debate within the EU over the extent to which operators can act as “self-appointed toll collectors” of the mobile Internet. According to the report, the European Commission and European parliament have endorsed network neutrality guidelines but have not yet taken legal action against operators that block or impose extra fees on consumers.

Under the new Dutch law, local operators could be fined up to 10 percent of their annual sales for violations by the regulator, OPTA. 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. “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,” he said. 

The law was prompted by moves by KPN to levy charges on third-party services such as WhatsApp, a free messaging app, which is believed to be cutting into the operator’s SMS revenue. According to KPN, 85 percent of the company’s Android customers downloaded WhatsApp onto their handsets between August 2010 and April 2011. As a result, KPN’s text messaging revenue, 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.

Only one other country, Chile, has written network neutrality requirements into its telecoms law, notes the report. The Chilean law, which was approved in July 2010, took effect in May. In the US, an attempt by the FCC to impose a similar set of network neutrality restrictions on US operators has been tied up in legal challenges from the industry.