Net neutrality debate goes global

10 November 2012 | David James

An increasingly broad constituency of supra-national bodies, national regulators and governments are now engaged in the net neutrality debate, often with different views on which course of action to take.

At least three countries have already statutorily guaranteed a neutral network, or enshrined the principle of net neutrality, while others are adopting a wait-and-see approach.

However, in almost all of the countries studied for a recent Ovum report, the regulator acknowledges that certain forms of traffic management can, and may have to be, carried out for reasons of network management and safety. Most regulation that is in place refers to “reasonable” traffic management and defines the scope of what is considered “reasonable”.

Agencies at both the regional and national levels highly value users’ awareness of ISPs’ traffic management practices. Ovum believes that the combination of this transparency and low switching costs can go some way to foster competition and bring significant benefits to consumers in the absence of more prescriptive rules.

In practice, while most ISPs have voiced their discontent at rules that explicitly prohibited blocking or discrimination, the issue is clearly more important in mobile networks because of the technological constraints around increasing capacity and characteristics of usage.

Some regulators have acknowledged this difference and, as has been the case with the FCC in the US, have opted for a more light-touch approach.

So far competition seems to have gone some way to discourage operators from anti-competitive blocking practices. In France, ARCEP has noted that the incumbent MNOs have significantly reduced the offers under which certain types of traffic is unavailable.

This could be a lesson to learn for other regulators, which may want to ensure that markets are sufficiently competitive rather than passing rigidly prescriptive measures.

Recent proposals from the ITU have suggested a new model for the internet that would offer operators better compensation for the ever-increasing traffic that floods their networks. However, the ITU’s plans have raised concerns with various parties.

The US House of Representatives believes that the internet does not need new international regulations which could restrict freedom and constrain development. Furthermore a number of digital rights groups have argued that the ITU is a non-transparent organisation that is making long-term decisions without the input of important NGOs.

The big content houses are still US-based and will most certainly wish to have a say in any attempt to alter the current regulation. What all this means is that although the net neutrality debate has gone global, the issue is still very much alive in the US and what happens there will be very important for the future regulation of the internet.

David James is a principal analyst of wholesale telecoms at Ovum.
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