Toward more nuanced net neutrality regulation

The UK telecom regulator, Ofcom, has proposed to revise its guidance on how ‘net neutrality’ rules should apply, indicating that a more nuanced approach may be appropriate given the evolution of broadband technologies and the marketplace.

Since the current rules were put in place in 2016, there have been significant developments in the online world – including a surge in demand for capacity, the emergence of several large content providers such as Netflix and Amazon Prime, and evolving technology including the rollout of 5G. So Ofcom has carried out this review to ensure net neutrality continues to serve everyone’s interests.

Ofcom indicated that “the [current] net neutrality rules constrain the activities of the ISPs, [and] may be seen as restricting their ability to innovate, develop new services and manage their networks.” The regulator considered that this could lead to poor consumer outcomes, “including consumers not benefiting from new services as quickly as they should, or at all. These potential downsides might become more pronounced in the future, as people’s use of online services expands, traffic increases, and more demands are placed on networks.”

The consultation document [pdf, 1.5MB] is 139 pages long, plus an additional 62-page set of annexes [pdf, 917KB].

Ofcom is proposing:

  • most zero-rating offers will be allowed;
  • ISPs have flexibility to offer retail packages with different levels of quality;
  • ISPs can use traffic management measures to manage networks;
  • ISPs have more scope to develop specialised services, such as network slicing;
  • Ofcom will not prioritise enforcement action where there is clear public benefit, in relation to:
    • the prioritisation and zero-rating of all communications with the emergency services;
    • traffic management of internet services provided on transport;
    • the use of parental controls and other content filters involving the blocking of traffic; and
    • blocking access to fraudulent or scam content.

Ofcom has also proposed additional reporting from ISPs to allow monitoring the effects of the increased flexibility being provided.

Ofcom is also seeking comment on providing greater flexibility for ISPs in certain areas that could generate positive consumer outcomes, but are not permitted under the current legislation, including: allowing zero-rated content to be accessed after a customer’s data allowance has been exhausted; allowing retail offers which guarantee different quality levels for traffic associated with specific content; and allowing greater flexibility to apply traffic management to specific content to address congestion.

Finally, Ofcom has provided views on “the possibility of allowing ISPs to charge content providers for carrying traffic that might lead to more efficient use of networks.”

We acknowledge that in principle there could be benefits to a charging regime, particularly in improving the incentives on CAPs to deliver traffic efficiently. However, we also recognise the difficulties that designing an effective scheme raises, the risks and uncertainty such a change could create, and the unclear impact on consumers. A charging regime would be a significant step and we have not yet seen sufficient evidence that such an approach would support our objectives at this time. We also consider our other proposals provide flexibility that should help mitigate several issues identified by ISPs.

Comments are due January 13, 2023. Ofcom says that it expects to issue its decision and revised guidance by Autumn 2023.

“We want to make sure that as technology evolves and more of our lives move online, net neutrality continues to support innovation, investment and growth, by both content providers and ISPs. Getting this balance right will improve consumers’ experiences online, including through innovative new services and increased choice.”

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