Scrap EU regulations to “give the UK a competitive edge”
- Net neutrality regulatory reform represents a significant Brexit opportunity that could deliver meaningful benefits in a crucial part of our lives: the internet.
- Net neutrality is the principle that internet service providers (ISPs), like BT or Vodafone, must treat all web traffic equally.
- However, net neutrality rules, which are derived from the EU’s Open Internet Access Regulations 2015, limit the ability of ISPs to manage their networks in ways that could be helpful to users.
- This could become a bigger problem when decisions need to be made in future about whether to prioritise data-intensive time-sensitive applications, such as hazard and collision information for self-driving cars or emergency services.
- The rules around treating traffic equally also prevent mobile and fixed broadband providers from developing innovative products. For example, in 2018, Vodafone was unable to offer an unlimited mobile streaming package with compressed video.
- Diverging from net neutrality would allow telecommunications companies to begin charging content providers, including Netflix, for express access. This would provide greater resources for network maintenance and upgrades, helping to accelerate the rollout of 5G and full fibre and combat Britain’s digital divide.
- The Rt Hon Jacob Rees-Mogg MP, former Secretary of State for Business, Energy and Industrial Strategy, said: “This is a thoughtful and persuasive report from the Institute of Economic Affairs… The EU’s internet regulations were misguided and unnecessary… Removing these regulations, or allowing them to sunset under the Retained EU Law Bill, will allow us to restore our more flexible regulatory environment which we enjoyed until 2015.”
A new report, Expanding the Web: The case against net neutrality, published by the Institute of Economic Affairs and authored by Head of Public Policy Matthew Lesh, makes the case for divergence from EU rules on net neutrality.
Net neutrality is the principle that internet service providers (ISPs) should treat all web traffic equally – which means, in general, ISPs may not block, slow down or speed up the transmission of any content or services. It was designed to allow users to access all content and services while enabling new innovative web applications, but in practice is unnecessary and damaging.
Prior to the introduction of net neutrality, the UK relied on competition between ISPs, transparency and self-regulation to safeguard an open internet. This arrangement was acknowledged at the time, by the government, Ofcom and independent reviewers, to be effective.
Divergence from EU rules is supported by ISPs including BT, Three and Virgin Media/O2. Content providers such as Google, Amazon and Netflix have opposed reform and, in particular, being forced to pay ISPs for access to users.
The possibility of ISPs adopting differing practices would lead to greater competition, innovation and new approaches more beneficial to consumers.
Net neutrality advocates have expressed concern over anti-competitive behaviour by ISPs, such as blocking or slowing content or overcharging for faster access.
But ordinary competitive pressures should be expected to prevent such behaviour, and if that fails, it could be controlled by ex post competition enforcement by Ofcom and the Competition and Markets Authority. There is no requirement for ex ante net neutrality regulation.
Innovation, investment and consumer interest would be served by a substantial abandonment of net neutrality regulations.
The Rt Hon Jacob Rees-Mogg, MP for North East Somerset and former Secretary of State for Business, Energy and Industrial Strategy, said:
“This is a thoughtful and persuasive report from the Institute of Economic Affairs.
“The EU’s internet regulations were misguided and unnecessary and limited innovation in the British telecommunications sector and online economy. Removing these regulations, or allowing them to sunset under the Retained EU Law Bill, will allow us to restore our more flexible regulatory environment which we enjoyed until 2015.
“This will encourage more private capital into the telecoms sector, helping urban and rural internet connectivity alike, as well as helping the United Kingdom gain a competitive edge in new technologies which require the fastest possible internet connections, like artificial intelligence and self-driving cars.”
Matthew Lesh, IEA Head of Public Policy and author of ‘Expanding the Web’, said:
“The UK’s net neutrality rules are not only unnecessary but actively detrimental. Prior to the regulations coming into force in 2016 the internet was flourishing – with competitive pressures ensuring users were able to access whatever they liked. The regulations sought to solve a problem that simply did not exist.
“The rules have limited the ability of internet service providers to manage their networks. They have been prevented from developing more innovative product offerings, be it in relation to zero-rating or special packages for gaming and virtual reality. Nor can they recoup network costs from content providers to expand their networks and invest in upgrades across the country.”