On 21 October, Ofcom announced that it was revising its guidance on net neutrality. Otherwise referred to as ‘open internet’ net neutrality is the principle that users of the internet should be in control of what they see and do online – rather than the providers. Rules on net neutrality enshrine this principle by ensuring traffic carried across networks (both broadband and mobile) is treated equally, and that content and services are not prioritised, slowed, or favoured over others.
The current rules on net neutrality are derived from the EU’s Open Internet Regulation (the “Regulation”). In 2019 Ofcom supplemented the Regulation with their own approach to assessing compliance from a UK perspective, which included items such as review of data and traffic management measures.
In 2021, Ofcom, as part of its role as regulator of UK networks commenced a review of the framework to allow internet service providers (“ISP”) to develop and innovate their services while ensuring those living in the UK are face no restrictions in the content they seek to access.
In this latest part of their review, Ofcom sets out its initial assessment of several issues that have been raised with the current environment and propose a revised and more liberal set of guidance on how the rules surrounding net neutrality should be applied.
This article summarises the primary take aways of the consultation and how feedback on the published guidance can be provided.
In their proposals, Ofcom recognises that it remains of significant importance that consumer choice is supported, and therefore propose their new guidance on the following:
Offering premium quality retail packages
At present, the position on whether premium quality retail packages can be offered may be subject to interpretation. Ofcom seeks to clarify this in their new guidance by stating that, subject to certain restrictions (including transparency and minimum service provision) ISPs do have the flexibility to offer different levels of quality packages to consumers.
Where this is done, the ISP would be expected to routinely collect and store information demonstrating:
- that the different levels of service apply independently of the content and services accessed;
- compliance with the requirements concerning transparency and quality of service; and
- details on any traffic management applied.
Where ISPs need to apply traffic management to their network to do so, this is also permitted to the extent it does not breach the wider guidance provided by Ofcom.
Developing specialised services
Specialised services are those optimised for specific content, applications, or services to which the main provisions of net neutrality do not generally apply (permitted by Article 3(5) of the Regulation).
These typically include services where:
- optimisation is necessary to meet required quality levels;
- the services are not usable or offered as a replacement for internet access services;
- network capacity is sufficient to provide these services in addition to any internet access service offered; and
- they are not detrimental to the availability or general quality of internet access services for end users.
In their latest approach, Ofcom acknowledges a lack of flexibility in the current understanding of these rules. They therefore propose to clarify their position on what is deemed a specialised service and adopt a more flexible approach that allows networks to use resources more efficiently. In particular, the guidance sets out:
- how services will be assessed against the revised optimisation criteria;
- how services will be assessed against the impact they have on the availability and quality of internet access; and
- guidance on definitions to make it easier for ISPs to determine whether their services will be subject to any specialised service rules or require application of the wider regime.
Using traffic management measures to manage networks
In Ofcom’s latest guidance, the rules on traffic management continue to be an important safeguard of an open web, given the “gatekeeper position” ISPs hold in their roles as providers of the service.
The current rules permit ISPs to apply certain measures above and beyond “reasonable traffic management” where circumstances require, such as during times of heavy congestion. These will allow ISPs to continue to monitor and regulate their network, and address any instances where congestion risks potential disruption to service. While Ofcom concedes that this may impact the customer experience at times, they express a hope that this will create a better and more cost-effective network in the long run.
”Zero-rating” describes a retail offer where data used by select websites or services is not counted towards a customer’s data allowance. It is of little surprise that this activity falls within the remit of net neutrality as it is, in effect, giving customers more favourable access to certain content by not reducing their overall allowance through its use. DLA Piper has blogged about zero-rating offerings many times before – the EU rules are, in our view, perverse in the way their effects impact organisations within the telecoms industry. A list of some of our blog posts on the topic can be accessed here.
The current approach, on paper, is to review each instance of zero-rating on a case-by-case basis, taking into account whether the offer:
- has the potential to limit/exclude end-user access to certain content;
- appears to have the ability to influence end-users; and
- could potentially materially restrict or adversely affect end-user choices in practice.
EU countries have used these rules to prevent services which might otherwise have, in our view, improved competition (see our blog piece about instances in the Netherlands and in Slovenia here) Ofcom seeks to replace these rules with new guidance, clearly distinguishing the factors they will consider on a case-by-case basis and clarifying that concern is only raised under limited circumstances.
To aid in this clarification, three types of zero-rate offerings are to be created:
- Type One – those where ISPs zero-rate access to information and services from public sector bodies (e.g. the NHS) that provide a public benefit and are not in competition with other suppliers. This type of offer is beneficial to consumers and is unlikely to have a detrimental impact on other content and application providers (“CAPs”).
- Type Two – those genuinely open to all CAPs of a particular class (e.g. an offer to zero-rate all music streaming services rather than one in particular). They are unlikely to reduce the choice of CAPs available to consumers, as any equivalent CAPs will be able to join should they wish.
- Type Three – all other offers that do not fit Type One or Two. These will be monitored to determine whether they warrant a formal investigation as to whether net neutrality may be breached.
Freedom of choice of equipment
Under the current rules on net neutrality, it is prohibited to restrict devices used to access the internet. Ofcom considers that ISPs have substantial flexibility to specify the technical characteristics of their services to suit device requirements and therefore there is little commercial benefit in permitting these restrictions, particularly when compared against the “erosion of consumers’ freedom to access the internet”.
Ofcom therefore proposes that consumers should be able to use technical equipment of their choice and that ISPs should treat all traffic equally, irrespective of device used.
Charging content and application providers
Under the current regulatory framework, there are no rules that expressly prohibit ISPs from charging CAPs for carrying traffic as part of an internet access service. However, in practice such charges do not usually apply because of the competitive position of CAPs and ISPs in the UK.
While there may be benefits of changing this position, such as creating greater incentive for CAPs to deliver traffic more efficiently or even prioritise certain traffic, Ofcom have noted that there is yet to be sufficient evidence to suggest that: i) such incentives are needed, and ii) that the wider benefits would outweigh the unseen risks to consumers this may have.
As Ofcom highlights, the introduction of a new ability to charge CAPs in this manner would also likely be in contravention of the Regulation and rules on net neutrality within the UK. Any attempt to amend these rules would therefore require new legislation to be enacted to repeal or amend these provisions as deemed appropriate.
An interesting aspect of this latest issued guidance is Ofcom’s recognition of the need for flexibility with respect to enforcement of the rules should circumstance dictate. This is particularly so with respect to enforcement where a clear public benefit is present.
For example, the guidance offers several proposals of how ISPs could prioritise and limit their access for the benefit of its users.
- Prioritisation and zero-rating for all communications with emergency services;
- Effective traffic management of internet services provided by transport, such as trains and aeroplanes;
- The use of parental controls and content filters to block certain media or traffic; and
- Specific blocking of access to undesirable content, such as those associated with fraudulent activity or scam sites.
How to get involved
Consultation responses will be accepted by Ofcom until 13 January 2023.
Feedback should be shared using the provided form and sent to: firstname.lastname@example.org.
Final procedures and guidance are expected to be published in Autumn 2023.
DLA Piper continues to monitor updates and developments to Ofcom’s work on net neutrality and the wider telecoms sector. For further information or if you have any questions please contact the authors or your usual DLA Piper contact.
 Ofcom. Net Neutrality Review: Consultation. 2022. 96.