Industry backs Ofcom’s net neutrality proposals, but wants long-term certainty on fibre regulation to bolster the investment case
Déjà vu with net neutrality: On 29 March 2023, ISPA (the association for UK broadband providers) hosted its 16th annual ‘Parliament & Internet’ conference. Matt Warman MP chaired the first panel, noting the event had a ‘back to the future’ feel about it, with net neutrality the first issue up for discussion. Till Sommer (Head of Policy, ISPA) stated that net neutrality is not a “holy grail” that cannot be changed without harming innovation. In his view, this is an academic idea that is often misrepresented or misappropriated, backing Ofcom’s proposals for greater flexibility (e.g. with respect to traffic management). Clive Carter (Regulatory Affairs Director, BT) supported that move, considering that existing rules can constrain the types of commercial relationships the operator would like to have with content and application providers. He also highlighted a major network and investment challenge in the future movement of linear TV to all IP, which is made more acute amid flat sectoral revenue trends.
Non-discrimination as a principle that must be maintained: The key takeaway from Roslyn Layton (Strand Consult) was that ‘hard’ net neutrality rules are unnecessary, with ‘soft’ rules sufficient to protect end user rights and to encourage cross-industry partnerships. According to her research, the most innovative countries rely on guidelines or use competition law instead of ‘heavy-handed’, ex-ante regulation. Monica Horten (Policy Manager, Open Rights Group) sounded a note of caution, reminding the conference of the concept of non-discrimination that underpins net neutrality, which ensures telcos cannot choose what their customers see and interact with online. This must be retained in order to provide for freedom of expression and information. Sommer and Carter agreed that aspects of the UK’s regime should remain intact and in force, although Carter considered that it would be more economically efficient to have differentiation between different services or processes, for example gaming that might require ultra low latency and a standard software update.
Altnets call for tougher regulation of Openreach: The second session, chaired by Ben Lake MP, saw altnets spar with Openreach – particularly on the proposed Equinox 2 offer – while calling for regulatory reforms to enable fibre rollouts and support network competition. Brian Potterill (Director, Ofcom) believed it is obvious that broadband has to remain a political priority for the foreseeable future for reasons of social inclusion and economic activity. Both he and Catherine Colloms (Director, Corporate Affairs & Brand, Openreach) acknowledged work undertaken by Ofcom and the Government to ‘bust barriers’, which have made infrastructure deployments easier. While agreeing with Colloms that long-term certainty is needed to unlock investment, James Fredrickson (Director of Policy & Regulatory Affairs, Hyperoptic) was otherwise less complimentary about policymakers’ efforts to date. He stated that UK telecoms remains dominated by an incumbent that wants to leverage its market power, with measures such as the super-deduction only useful to large organisations like Openreach. Gareth Williams (CEO, Gigaclear) argued that Ofcom had done a poor job of regulating the incumbent and that it should do so ‘more aggressively’, particularly in the so-called final third.
At some point fibre rollouts will become unviable: Panellists were aligned on the role of coverage targets in that they can provide a useful focal point or guide for industry. In Fredrickson’s view, they have a ‘flag and ground effect’ that influences behaviours and thinking within the Government and regulator. According to Colloms, the UK will meet the 85% gigabit coverage target by 2025 – and that is thanks to many of the altnets present at the ISPA event. That said, the question for her and Ofcom was how far commercial fibre rollouts will eventually go (i.e. when they become unviable) and therefore the extent to which the country will turn to alternative technologies such as satellite. Williams raised the need for financial support in those areas where the economics ‘don’t work’, as well as for more migrant workers to ensure all operators can ‘build like fury’ (not just Openreach). Reflecting on the next general election and the prospect of a new Government, Fredrickson considered it would be risky to change course with broadband policy now, while Potterill urged the next Government to have a coherent plan already drawn up so as not to introduce delays to schedule fibre deployments.
