Ofcom Attempts To Thread The Needle In Net Neutrality Update

Ofcom says it is trying to strike a balance between user freedom while allowing operators to protect their networks and still offer "premium" services at a higher price, according to updated guidance on net neutrality rules.

The Brit telecoms regulator said there were "significant developments" in the online world since the current rules were put in place in 2016, so it decided to conduct a review to ensure these were continuing to serve the best interests of all parties. However, the rules themselves are set out in legislation, so any actual changes to the law would have to be enacted by the UK Parliament.

The net neutrality rules have largely worked well, Ofcom believes, but said it has moved to provide more clarity in areas such as where internet service providers (ISPs) are allowed to offer premium packages and develop "specialized services," and also how they are permitted to use some traffic management measures to ensure service quality is maintained.

An overview of the net neutrality guidance is available here [PDF].

Net neutrality should mean that users of the internet are in control of what they can do online, rather than the network operator or ISP. The rules should ensure that network traffic is treated equally, rather than some content or services being prioritized or slowed compared with others.

This has proven highly controversial in the US, with the Trump administration removing any net neutrality rules on the grounds that providers should be able to charge what they like and the free market can decide what works best, while the Biden government has recently moved to reinstate net neutrality.

Between the two extremes, Ofcom seems to be trying to tread a pragmatic path.

"The net neutrality rules are designed to constrain the activities of broadband and mobile providers, however, they could also be restricting their ability to develop new services and manage their networks efficiently," Ofcom's director of connectivity, Selina Chadha, said in a statement.

Since the rules were laid down, content providers such as video streaming services Netflix and Amazon Prime have emerged, Ofcom noted, driving large increases in traffic. It cited the Disney+ service, which launched in the UK in March 2020 and grew to 7.1 million subscribers this year.

To address this, Ofcom said ISPs are allowed to offer premium quality packages tailored to better meet some customers' needs. This might mean that users wanting to use virtual reality applications can buy a premium quality service, while users who mainly browse the internet can buy a cheaper package, the regulator said. But ISPs must be sufficiently clear to customers about what to expect from the services on offer.

When it comes to traffic management, Ofcom said the net neutrality framework requires that networks treat all traffic equally when providing internet access, except for certain key exceptions.

This includes reasonable traffic management measures where the traffic within a particular category is treated the same and different categories of traffic are only treated differently according to their technical quality of service requirements.

Ofcom also said there may be some circumstances where reasonable traffic management is insufficient to halt undesirable levels of congestion. In these circumstances, ISPs have additional flexibility to go beyond reasonable traffic management in order to prevent congestion.

ISPs are "expected," however, to address congestion in the least intrusive manner and proportionate with the severity of the congestion, Ofcom said, and not be maintained for any longer than is necessary.

Providers must also be clear to subscribers about how traffic management is applied on their network, under which circumstances, and how this might impact the service they receive.

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Ofcom said it is likely that most zero-rating offers will be allowed. This is described as when the data used by particular websites or services is not counted towards a customer's overall data allowance, such as emergency services or official public health advice.

On the thorny subject of networks wanting to charge content providers such as Netflix or Amazon Prime, Ofcom seems to be less certain. It noted that there is no express prohibition in the net neutrality rules on networks charging content providers for carrying their traffic, but claimed they are effectively unable to impose charges based on content as there is no legal or regulatory obligation on content providers to negotiate this.

Earlier this year, the EU started a consultation on whether the big tech companies should pay for the networks that carry their traffic. This has already run into opposition from some quarters.

Ofcom said that although there are potential benefits to a charging regime, "we have not yet seen sufficient evidence that this is needed and believe there is enough flexibility provided for ISPs in our other proposals." Whether or not a charging regime should be introduced in the UK is a decision for government and Parliament, it added.

The new guidance has already been welcomed by one telco, BT, which said the changes are important and will help it to better manage its network.

BT Group Chief Security and Networks Officer Howard Watson said in a statement: "They've provided welcome clarity around what innovative solutions are permitted under 'specialized services' rules. This will give us greater certainty to develop and invest in exciting new ideas."

Ofcom has "acknowledged that ISPs and network owners are allowed to take some traffic management steps to contribute to network efficiency and prevent congestion on the network," he added.

However, hinting at charges for content providers, Watson said further reforms are needed. "Unless and until telecommunications companies have the necessary environment to negotiate on a level playing field with content providers, the challenges of meeting growing demand will remain reliant on telcos funding endless capacity upgrades," he said.

Telecoms analyst Paolo Pescatore at PP Foresight told us that the new guidance was "unsurprising" and pretty much consistent with earlier rulings. Most, if not all, key stakeholders should welcome the new guidance, he said.

"Inevitably there have been repeated calls from telcos to be able to charge for content and this will not go away," he warned.

"The market, along with behavioral patterns among users, has changed significantly with an explosion in data leading to more speeds and capacity. This does present an ongoing challenge for Ofcom which may have to recognize the need for greater flexibility to adapt based upon market dynamics," Pescatore said. ®