As Ofcom’s net neutrality consultation closes, we summarise the main talking points from the regulator’s stakeholder event
A relatively subdued event but one with widespread praise for the regulator’s approach: Ofcom’s net neutrality consultation closed on 13 January 2023 (summarised here), and to coincide with that the regulator held a public event bringing together other regulators, telcos, and content and application providers. BT kicked things off, recognising that net neutrality can be an emotive debate. However this one was a fairly muted affair, with relatively few questions or interventions from the audience and certainly no heckling like we saw at the FT-ETNO conference last year. This could reflect the general sentiment there seemed to be in the room that Ofcom had produced a balanced, rational and evidence-based consultation.
Asking regulators to take a ‘leap of faith’: Ofcom came across as conscious of the need to be alive to the issues that allow networks to grow and be invested in for the future, however caveated this with the constraints it faces and the role of parliament in setting laws and being responsible for any bolder ideas (i.e. charging and developing deeper commercial relationships). Other regulators (the ACM) noted that the best efforts internet has stepped up to meet the demands placed on it and that it hasn’t seen any “burning buildings” so far, but stressed that it’s crucial to keep an open mind. This came in response to a point made by Ofcom that as an evidence-based regulator it was a big ask for it to take a leap of faith on the demands new services such as the metaverse may place on the open internet.
An appropriate distinction between fixed and mobile: There was general agreement that the best efforts lane has, must, and probably will continue to improve (with Meta suggesting the best efforts internet is fine for any service they’re planning to deliver). Although there was a recognition that fixed and mobile networks are inherently different, with capacity constraints in mobile owing to finite spectrum resources. This was part of a wider debate on whether specialised services were needed at all. There were various interventions to suggest they weren’t (including from the BBC), although Enders rightly pointed out you don’t often see demand for products and services that don’t yet exist. Vodafone argued that a lot of the evidence presented (such as from Netflix) on network resilience comes from during the COVID-19 pandemic and from the fixed side (given most were at home in lockdown), and that there’s more of a problem in mobile where it’s possible to deliver quality of service, but not quality of experience and that being able to manage heavy users is a problem.
Hopes for the EC’s consultation to be ‘Ofcom like’ : The final panel was on the more contentious issue of charging content and application providers for the delivery of their traffic and the forthcoming EC consultation. Sky praised the way Ofcom has approached the issue as being evidence-based and rational and contrasted this to what is happening elsewhere in Europe as being “a proposal in search of a rationale”. Others (WIK Consult) noted the ‘fuzziness’ of that debate with the arguments being made so far not landing or gaining traction. The hope was for the EC consultation to be “more Ofcom like”. Those defending the EC’s push (GSMA) argued that charging was already happening in South Korea and that the model used in Australia for news media bargaining (explained here) could also be worth exploring. Perhaps the starkest intervention came from ITV which pointed out that mobile operators have already got a commercial relationship with their customers and that probably they aren’t charging them enough for their data.
Positive consumer outcomes will be the lens through which any changes are assessed: Across all three panels, there were considerations made to the consumer impact of changes to net neutrality, and/or the introduction of charging. BT argued that consumers are looking for simplicity and often don’t care about the sophistication of managing network capacity, but perhaps could be given a choice in the market for specialised services – the revenue from which could then be directed towards investment in networks (and improving that best efforts lane). Netflix pointed to a worsening consumer experience (in terms of network latency) in South Korea following the introduction of a charging regime and Akamai reminded us to give consumers credit for knowing what’s going on and the need for an appropriate level of transparency – “ultimately they can walk with their feet.”
Update (1 Feb 2023): Ofcom have since made available a recording of the event which can be viewed here.
