With the revised guidance being in place for over a year, Ofcom published its Net Neutrality Annual Monitoring Report ("Report") earlier this year. The Report provides an overview of almost two years of data collected by Ofcom from fixed and mobile ISPs and their efforts to comply with accessibility under the Regulations. In this blog we take a closer look at the Report, and how ISPs are reacting to Ofcom's latest guidance on net neutrality.
What has Ofcom done to date?
Net neutrality is governed by the Open Internet Access (EU) Regulations 2016/607 ("Regulations"), which require internet service providers ("ISPs") to treat all internet traffic equally, without blocking or slowing access to specific sites. While ISPs can manage traffic for legal or operational reasons, they cannot use this to gain a commercial advantage. Ofcom oversees compliance and provides guidance on how ISPs may innovate and manage their networks of efficiently.
In October 2023, following the implementation in April 2016 of the net neutrality rules via the Regulations, Ofcom reported that net neutrality generally had been working well. However, there were specifically identified areas that required further attention and guidance to enable ISPs to manage their networks more efficiently and to improve consumer outcomes. We previously considered in a blog, the updated net neutrality guidance proposed by Ofcom in October 2023, following its review in of the rules and regulations in 2021 and challenges ISPs faced due to unclear regulation. The revised guidance contemplated how they expected ISPs to comply with the Regulations and how it would approach assessing compliance.
Ofcom subsequently conducted a thorough information gathering exercise from some of the larger ISPs operating within the UK (both fixed and mobile) including BT Group, Sky and TalkTalk. Ofcom requested a wide range of data from these providers: general network performance and approached to traffic management and terminal equipment; retail offers, zero-rating packages and optimised services (also known as 'specialised services').
On the basis of this data, covering the period from 1 January 2023 to 1 September 2024, Ofcom published its assessment of compliance with the Regulations in the Report.
Key takeaways from the Report
The Report contains a number of key observations around net neutrality and compliance with the Regulations.
1. Quality of internet access services. The investigation revealed that that, overall, the quality of internet access is improving in the UK. In respect of fixed ISPs, coverage of gigabit-capable broadband continues to expand. This is largely due to the increase in coverage of full-fibre broadband and the government subsidies such as Project Gigabit and R100 voucher schemes. Broadband speed is also improving, with a 31% increase in the average maximum download speed of premises in the UK.
2. Traffic management and safeguarding open internet access. Traffic management is required under the Regulations and crucial for managing network capacity. The regulations specify that ISPs can use either reasonable or exceptional traffic management measures to contribute to efficient network use and to prevent congestion. Ofcom noted that these management tools were used in limited fashion by ISPs, particularly in wireless environments with constrained capacity (eg. for commuters, whether by rail or road, travellers in airports, and high-density public events such as stadiums, sports events and festivals). This is presumably due to a combination of technical limitations, regulatory concerns and lack of incentive. As data consumption continues to increase (through streaming, gaming and other data-hungry services), the need to alleviate congestion remains and a more dynamic approach and policies in relation to traffic management could be implemented by ISPs in constrained environments to improve access and consumer experience on their network.
3. Retail offers. In this area, Ofcom was not particularly concerned. Investigation into the data received from ISPs shows that most ISPs only offered retail packages differentiated on data allowance and speed. These sorts of packages are established within the market and meet the principles of the Regulation.
4. Specialised services. The Regulations permit ISPs to offer services other than internet access that optimise traffic to support quality of service requirements. Ofcom found that this permission has not been used significantly by the ISPs.
Outcomes
Ofcom concluded that annual reporting is a successful monitoring method to assess ISPs' compliance with the Regulations. However, the Report did flag the possibility of asking for different data sets in future investigations.
In reaching the goals of Project Gigabit, the Report certainly demonstrated then when it came to broadband speed and the quality and extent of access provided by fixed ISPs, providers are moving forward to achieving the project's goals. However, as identified by the Report, minimal implementation of traffic management may impact practical internet access, further steps could still be taken to enhance net neutrality and make networks more efficient.
As this was Ofcom's first attempt to closely review the implementation of its 2023 updated guidance, it would be safe to assume that further investigations will be made to ensure the rules set out in the Regulations are met.
If you have questions on the application of net neutrality or the requirements imposed on ISPs, please get in touch with Martin Sloan or Jennifer Murphy.
