November 24, 2023
Ofcom has recently completed its review of net neutrality rules and published updated guidance on how it will implement these rules in practice. Ofcom’s long running review commenced in 2021 and included a consultation process in 2022.
Net neutrality rules are at the core of so called ‘open internet’ principles that obligate communications network operators to treat data traffic carried across networks equally such that any particular content or service (whether originating from distributors or end users) is not prioritised or slowed in a way that favours some over others. Net neutrality is governed in the UK by the Open Internet Access (EU Regulation) Regulations 2016 which enacted the Open Internet Access (EU) Regulations 2016/607. They presently only apply to a narrow set of players in the internet ecosystem, predominantly ISPs, rather than wider players such as those who are slated to be deemed gatekeepers under the Digital Markets Act.
While many practices identified in Ofcom’s updated guidance have already been implemented in some shape or form, the guidance now clarifies that the following practices will not be considered inconsistent with net neutrality rules. This is supposed to allow operators to innovate and manage their networks more efficiently and ultimately for the benefit of end users:
- ‘Premium quality’ internet access offers. A typical distinction may be offering a low latency service at higher cost while users who mainly stream and browse the internet may be satisfied with a cheaper package. The guidance clarifies that ISPs must clearly set out to end users what they can expect from such premium services.
- ‘Specialised services’ optimised for specific content and applications that need to be optimised in a manner that isn’t supported by internet access. Current examples include new 5G standalone platforms and the ability to offer network slices to enterprise customers (noting that closed user group services would not be publicly available and therefore fall outside of the net neutrality framework), and other services optimised for critical business and industrial applications.
- Traffic management measures to manage networks to maintain QoS, including to distinguish between different traffic classes based on technical requirements e.g. managing traffic on transport or in public spaces where there are capacity constraints, or allocating network resources to mitigate the impact of congestion caused by heavy network usage by specific users to ensure a more equitable allocation of network resources.
- Certain zero-rating offers, where data usage is not counted towards a customer’s data allowance e.g. when accessing emergency services communications or to top up data allowances.
For any such offers or practices, operators must be transparent about any measures implemented so that end users can make informed choices. Operators must also ensure that such measures do not detriment the general quality of internet access services.
Communications operators have generally welcomed these clarifications, which will help operators manage scarce network resources, plan and manage traffic surges and innovate with new types of network services and pricing strategies. However, there is no sense of the European Commission adopting such moves at the EC level or Ofcom looking across the wider internet ecosystem to target players there.
Ofcom rejects fair share arguments for now
The debate continues regarding whether big tech platforms and content providers should be obligated to compensate communications operators for network capacity upgrades upon which they rely to meet end user demand.
In this latest guidance, Ofcom sets out the familiar arguments for and against whether big tech should shoulder (at least some of) network operators’ capex costs, including models considered in other markets.
While Ofcom concludes that there “could be benefits to a charging regime”, it has not seen sufficient evidence justifying such a leap and believes there is enough flexibility provided for operators in its other proposals set out in its updated guidance to mitigate several costs issues identified by operators.
Ofcom’s conclusion is broadly consistent with the view shared by other regulators across the Channel. In Belgium this month, the BIPT concluded that ‘the need for mandatory payments from Internet platforms to network operators in Belgium is not sufficiently demonstrated’. The Body of European Regulators for Electronic Regulations, the EU body which acts as a forum for national regulators and issues guidance on the implementation of the EU regulatory framework, also arrived at the same conclusion last year in its preliminary assessment of the issue, and doubled-down on its view again this year.
Any changes to UK net neutrality law, including the introduction of any charging regime, would most likely now rest with the UK Government and Parliament.
See here for more information on Ofcom’s net neutrality review.