• UK regulator Ofcom has completed its review of net neutrality rules
• It has provided ‘clarity’ on some of the specifics to help network operators address data traffic challenges
• Changes are positive but more reform are needed, say UK telcos
• Ofcom also looked at, and has dismissed, the notion of so-called fair share payments by big tech players

Following a lengthy review of the UK’s net neutrality rules, which were formulated in 2016, national regulator Ofcom has provided “clarity” on how the rules can now be interpreted in an effort to provide network operators with greater flexibility on infrastructure management and service innovation, a move that has been welcomed by telcos such as BT. But it’s not all good news for the network operators – as part of its review, Ofcom also examined the growing call by telcos for so-called ‘fair share’ capex contributions from the major content traffic generators such as Amazon, Google and Netflix and decided the introduction of such fees is not justified. 

The overview of Ofcom’s new guidance, which it says takes into account the “​​surge in demand for capacity, the emergence of several large content providers such as Netflix and Amazon Prime, and evolving technology including the rollout of 5G” in recent years, can be found here, where there is also a link to the regulator’s extensive 181-page report on the current state of net neutrality rules, which, as Ofcom notes, “make sure that the traffic carried across broadband and mobile networks is treated equally and particular content or services are not prioritised or slowed down in a way that favours some over others.” 

While Ofcom cannot change the rules – which, because they are enshrined in legislation, can only be amended by the UK parliament – the regulator is responsible for monitoring and ensuring compliance with eth rules while also offering guidance on how they can be interpreted by network operators/internet service providers (ISPs). The watchdog believes the rules have so far worked well, but also identified “specific areas” that required “more clarity” so that operators could “innovate and manage their networks more efficiently” for the ultimate benefit of end users. 

These are the key areas of clarity provided by Ofcom:

• ISPs can offer premium quality retail offers: Allowing ISPs to provide premium quality retail packages means they can better meet some consumers’ needs. For example, people who use high quality virtual reality applications may want to buy a premium quality service, while users who mainly stream and browse the internet can buy a cheaper package. Our updated guidance clarifies that ISPs can offer premium packages, for example offering low latency, as long as they are sufficiently clear to customers about what they can expect from the services they buy.
• ISPs can develop new ‘specialised services’: New 5G and full fibre networks offer the opportunity for ISPs to innovate and develop their services. Our updated guidance clarifies when they can provide ‘specialised services’ to deliver specific content and applications that need to be optimised, which might include real time communications, virtual reality and driverless vehicles.
• ISPs can use traffic management measures to manage their networks: Traffic management can be used by ISPs on their networks, so that a good quality of service is maintained for consumers. Our updated guidance clarifies when and how ISPs can use traffic management, including the different approaches they can take and how they can distinguish between different categories of traffic based on their technical requirements.
• Most zero-rating offers will be allowed: Zero-rating is where the data used by certain websites or apps is not counted towards a customer’s overall data allowance. Our updated guidance clarifies that we will generally allow these offers, while setting out the limited circumstances where we might have concerns.

Two of the key areas of concern for UK operators with regards to net neutrality have been the impact of the rules on how they can plan and deal with massive data traffic surges on their networks and how net neutrality rules limits what services they can offer with the capabilities afforded to them by new 5G standalone (SA) core platforms – a specific case in point here has been the ability to develop and offer network slices to enterprise users. 

The issue related to traffic management was highlighted by BT Group Chief Security and Networks Officer Howard Watson in this blog published in response to the Ofcom report. He is generally positive about the regulator’s clarifications but, of course, not totally satisfied and hinted at frustration over the fair share issue. 

“These changes are welcome and important and will help us to manage our network in the short term,” noted Watson. “But they are the start of further reforms that are needed, so we can face into the future with confidence. Unless and until telecommunications companies have the necessary environment to negotiate on a level playing field with content providers, the challenges of meeting growing demand will remain reliant on telcos funding endless capacity upgrades,” he added (and we’ll swing back to that topic in a moment…).

BT also addressed the slicing opportunity in comments shared with TelecomTV. A spokesperson for the operator noted: “The benefits of the changes can be felt immediately given [that net neutrality] is technology agnostic, but with the advent of 5G SA operating over a new core, we expect there will be new innovations in the network that we can deploy that take advantage of – or are enabled by – 5G Standalone. This includes network slicing, allowing us to, for example, provide (i) premium quality internet access, (ii) services optimised for specific content or applications with quality requirements which are not supported by internet access and (iii) services supporting business and industrial applications.” 

Indeed, Ofcom clarifies on page 143 of its report, which delves into network slicing use cases, that “services supporting business and industrial applications (e.g. services provided to closed user groups including factory and campus networks)... are typically not publicly available and would therefore fall outside the scope of the net neutrality framework.” In addition, “services optimised for specific content or applications with quality requirements which are not supported by internet access… would be classified as specialised services under the net neutrality framework. ISPs must ensure that such services are not to the detriment of the availability or general quality of internet access services.” 

So there is certainly some wiggle room for operators on multiple fronts, but the telcos want more, a position set out by Mobile UK, an industry lobby group that represents the UK’s four cellular infrastructure players. ​​Hamish MacLeod, the body’s CEO, noted in a statement: “Mobile UK welcomes Ofcom’s updated guidance on net neutrality. The revised guidance gives extra clarity, which should assist in the design of new services and tariffs. However, as Ofcom acknowledged during its consultation, they are constrained by the law and this was as far as they could go within existing rules. We now ask the government to remove the regulations which are hindering investment and innovation, and replace them with a principles-based code which protects basic freedoms but promotes innovation.” It’s a familiar demand from the operators, of course. 

As for individual views from the other operators, Virgin Media O2, Three and Vodafone UK and currently gathering their thoughts and we’ll be sure to share as and when we hear from them. 

And on the issue of fair share payments, Ofcom’s report goes into some detail on the pros and cons of allowing network operators to charge the major content players a fee as a way of contributing towards their capex budgets, and identifies various models used in other markets. 

But the UK’s telcos should not get their hopes up that the regulator is about to come down in favour of fair share contributions. Ofcom notes: “While we acknowledge that in principle there could be benefits to a charging regime, introducing such a regime would be a significant step and we have not seen sufficient evidence that such an approach would support our objectives at this time. Further, the changes we are making to our guidance in relation to other aspects of the rules, including traffic management and specialised services, provide flexibility that could help mitigate several issues identified by ISPs as potential justifications for a charging regime.” 

It’s likely that, for the network operators, the new net neutrality guidance will hardly scratch the surface on what they are seeking from the large traffic generators: No doubt, Ofcom will continue to hear from the UK’s telcos on this matter for some time to come, especially as there is still a lack of clarity (to say) on how the European Commission plans to deal with the issue – see EC’s fair share ruling is MIA.

- Ray Le Maistre, Editorial Director, TelecomTV