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Code of Practice on the Open Internet: The best of two worlds

The recent publication of the UK’s revised self-regulatory Code of Practice on the Open Internet sees us achieve the best of both worlds; the flexibility and innovation allowed under self-regulation along with a hard regulatory backstop of legislation.

Whilst we may not have attracted the same headlines as in the United States, the UK has long led the world in having a serious and considered debate on the issues that surround the Open Internet. Back in 2011, Minister Ed Vaizey and I agreed that the term “net neutrality” was not appropriate to the UK and that the term “Open Internet” was much better. I still believe this to be right but the issue at its heart is the risk of internet service providers using traffic management practices to block or throttle content providers for competitive reasons.

The reason we have avoided global headlines is that the UK have managed to avoid this situation coming about. We have managed to do so because of our highly competitive market, high levels of transparency and self-regulation.

High competitiveness

In the UK, we benefit from a high level of service level competition which incentivises operators to support the Open Internet. This is unlike the facilities-based competition model that has led to a duopoly in much of the United States. The functional/operational separation of BT by Ofcom in 2005 may not be perfect, but it has led to 500 plus internet service providers using Openreach infrastructure, providing consumers with a large choice of broadband providers.

Given this plethora of service level competition, and the very effective switching processes put in place by Ofcom, the end user is able to switch to other providers if not satisfied with the current provider in relation to Open Internet issues. In the USA this is not so easily the case.

Of course, consumers can’t change if they aren’t aware that the problems they are faced with are to do with a ISPs traffic management policies. That is where transparency comes in.

Following discussions with industry, Government and regulator the Broadband Stakeholder Group facilitated the creation of the Open Internet Forum. Forum members include both network providers such as BT or Vodafone and Over-The-Top (OTT) players like the BBC and ITV. This has led to a far greater understanding of the concerns of content providers on the behalf of communication providers and vice versa.

Key Fact Indicators

So at this stage we had competition and transparency – the vital ingredients. But we, industry, Government and regulator, recognised that understandable and justified concerns remained. This led us to facilitate the creation of the Open Internet Code. This committed signatories, representing over 90 per cent of fixed and mobile subscriptions to not use traffic management on the basis of commercial rivalry. This has resulted in significant benefits to UK consumers who have access to the widest range of music and video OTT players in OECD countries.

The EU intervention

We have now produced an update Code that consolidates these pieces of work and brings them into line with the Connected Continent Regulation. Whilst the UK was clearly in a strong position when it comes to the Open Internet it is understandable why the EU felt it needed to intervene more directly – even if we would have preferred it to be less prescriptive. This is because not every EU Member State has the level of competition that we benefit from. This means that the incentives for network providers to negatively discriminate are greater and necessitate some level of regulation.

The new Code continues to preserve the concept of an Open Internet – one in which users can access all lawful content without providers discriminating on the basis of commercial rivalry. It also ensures that traffic management practices employed by communication providers to manage their network are compliant with the new EU Connected Continent Regulation. In addition, the signatories to the Code will maintain the transparency that they already have in place around these practices by ensuring that these are communicated to the user effectively – arguably above and beyond what is required under the Regulation.

The Regulation means that there is now a final, legislative, backstop that underpins our own Code of Practice. The two complement each other. The Regulation will ultimately provide certainty whilst our self-regulatory approach firstly encourages a consensus approach to issues around the Open Internet and secondly allows us in the UK to address challenges and risks far more quickly than we can with European legislation alone.

Richard Hooper CBE, Chair of the Broadband Stakeholder Group