Ofcom should wait before it pushes net neutrality rules

Ofcom should be cautious of pushing through any strong legislation over net neutrality, Ovum has said.

In its report, Ovum says the regulator should instead bide its time and wait until new European telecoms laws come into place by May 2011.
Charice Wang, Ovum analyst and author of the report, said: “The net neutrality debate began in the US and while it is in its early stages in the EU, it is gathering momentum. However, Ofcom and other European regulators should be careful not to rush through the implementation of strong net neutrality rules.
“They should first allow the new European telecoms framework, which is to be translated into national laws by May 2011, to come into effect. In addition, the European Commission is also due to publish its net neutrality principles this year, which will help regulators to be consistent in their approach to net neutrality.”

ISPs such as BT and TalkTalk have openly welcomed the prospect of giving commercial partners preferential bandwidth on their networks, effectively creating a two-tier internet.

However, Ovum believes that Ofcom and other regulators should begin to tackle net neutrality by assessing how transparent the market is and monitoring traffic management practices. This, it says, is because “transparency is fundamental and a lack of it harms consumers.”

Ovum therefore wants regulators to prioritise transparency as the most important subject “in the quest to improve consumers’ experience”. It added that transparency also minimises the risk of anti-competitive forms of discrimination.
According to Wang, reasonable traffic management is acceptable if the motives are acceptable and it is proportionate, necessary, non-discriminatory. She believes net neutrality should apply to both fixed and mobile networks. “However, regulators need to undertake a flexible approach to mobile traffic management due to its specific characteristics.” 

Ofcom, which is still pondering on the topic, was unable to comment specifically on Ovum’s report. However, we were directed to a speech made late last year by Ed Richards, chief exec at Ofcom.

He said at the time: “Where competition thrives, the case for a highly interventionist net neutrality policy is harder to justify on the grounds of consumer protection. But that only works when consumers know what they are being offered and what is being denied to them.

“As we move into implementation of the Framework’s requirements we now need to consider together whether greater transparency of traffic management policies will be sufficient, and will accord with how people actually make choices in the marketplace.

“This will require both transparency and ease of switching.

“We expect the evolution of the internet economy to remain under close scrutiny.  Legislators will want to be satisfied that the deployment of traffic management and the emergence of a new market for ‘managed services’ such as IPTV with guaranteed quality of service is not to the detriment of the ‘best efforts’ internet, with its vast capacity for innovation and low entry barriers.

“If the European Commission’s vision of an “open and neutral net” is in any way under threat, we can expect the politicians to return with more dramatic proposals.”