Summary

• Net neutrality is the principle that internet service providers (ISPs)
  should treat all web traffic equally. This means, in general, that ISPs
  may not block, slow down or speed up the transmission of any content
  or services. This is meant to promote an ‘open internet’: allowing users
  to access all content and services while ensuring low barriers to entry
  for innovative and new web applications.


• The UK’s net neutrality rules derive from the European Union’s Open Internet Access Regulation 2015, which came into force in 2016 and has been retained in UK law post-Brexit. These rules mandate net neutrality with exceptions for technical, security and legal requirements.


• Prior to the EU regulation, 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. Acting of its own accord, the UK is unlikely to have introduced net neutrality regulations independently of the EU.


• Net neutrality rules limit the ability of ISPs to: (1) effectively manage traffic when the network is congested; (2) develop innovative offerings for consumers and emerging technologies; or (3) reach deals with major content providers, such as Netflix, to contribute to network maintenance
  and expansion in exchange for priority access.


• There is evidence that net neutrality reduces investment in telecommunications infrastructure. In addition to harming consumers,
  this undermines the government’s gigabit broadband and ‘levelling
  up’ goals.


• An alternative to net neutrality is net diversity: allowing ISPs to decide
  how they operate their networks for their customers; enabling greater experimentation in product offerings and business models; and allowing
  ISPs to reach deals with large content providers to enable more
  investment in infrastructure. The possibility of ISPs adopting differing
  practices would allow for greater competition, innovation and the
  discovery of the approach most beneficial to consumers.


• Divergence from EU rules is supported by ISPs including BT, Three
  and Virgin Media/O2 while content providers such as Google, Amazon
  and Netflix have opposed reform and, in particular, being forced to pay
  ISPs for access to users.


• Net neutrality advocates object that its abandonment could lead to
  anticompetitive behaviour by ISPs, such as blocking or slowing content
  or overcharging for faster access. 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
  CMA. There is no requirement for ex ante net neutrality regulation.


• Ofcom is reviewing the UK’s net neutrality framework in response to
  growing internet demand, new technologies and congestion-sensitive
  applications that may justify prioritisation. Although Ofcom has proposed
  new guidance, the underlying rules are a matter for the government
  and Parliament.


• Innovation, investment and consumer interest would be served by a
  substantial abandonment of net neutrality regulations.

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