Ofcom backs greater network management and service innovation by operators, and signals it could support calls for a more hands-off approach in future
Ofcom tweaks guidance but remains unsold on ‘fair share’
On 26 October 2023, Ofcom revised its guidance on how net neutrality rules should apply in the UK. The regulator considers that the principle of net neutrality has been critical to promoting consumer choice online and enabling content and service providers to reach end users. However, it acknowledges significant changes in the market since the rules were implemented in 2016, e.g. the emergence of large streaming platforms. Ofcom is not amending the rules themselves (they are enshrined in law), but it is adjusting its guidance on how operators should follow them. The regulator’s statement also covers the fair share issue, reiterating its view in the October 2022 consultation that there is insufficient evidence to mean such a payment mechanism would be needed. This position appears to reflect developments in Europe, where the EC has kicked the matter into the long grass and instead promised a new ‘Digital Networks Act’ (likely as a compromise measure).
Enabling innovation and reasonable network management
Though Ofcom supports an open internet, it considers that the prevailing net neutrality rules may be restrictive in certain areas. At an event it hosted at the turn of the year, Ofcom also recognised there might have been ambiguity with what was possible under the current regime, potentially discouraging operators from looking to innovate for fear of breaking the rules. To incentivise investment and innovation, and to enable more efficient network management, the regulator has therefore provided more clarity in its guidance so that operators can:
Offer premium quality retail broadband or mobile packages to better meet some consumers’ needs (e.g. low latency for virtual reality applications);
Develop new ‘specialised services’ to deliver specific content and applications that need to be optimised, which might include real time communications or driverless vehicles;
Use ‘traffic management’ measures on their networks to maintain a good quality of service for consumers; and
Offer ‘zero-rating’ packages in most circumstances – a notable divergence in policy compared to the EU, which has taken a much stricter approach to the practice.
While taking into account stakeholder responses, Ofcom’s decisions largely see through the proposals it made last year. The regulator has also produced guidance on three ‘public interest exceptions’ (access to emergency services, parental controls, preventing scams), where operators would be exempt from traffic management rules. Citing broad stakeholder support, Ofcom’s statement again appears to align with the proposed measures outlined in the 2022 consultation.
Removing regulation will necessitate Government intervention
Ofcom’s tweaks to its guidance will likely represent a step in the right direction for many operators, which have previously voiced support for proposals for greater flexibility. The regulator also appears to have listened to stakeholder concerns about potential confusion stemming from references to BEREC’s net neutrality guidelines, which Ofcom is no longer required to take utmost account of since the UK left the EU. In response, Ofcom has reviewed the BEREC guidelines and incorporated them where appropriate in finalising its own guidance. Notably, the regulator seems to agree with some stakeholders (mainly operators) that a principles-based approach to net neutrality, for example through codes of practice as opposed to regulation, could deliver the good outcomes it has found to date under the current regime. Nevertheless, any wider legislative change, including Ofcom's powers and obligations, would be a matter for the Government to consider.
