After much acrimonious debate, the US has codified their their rules surrounding net neutrality, but does US net neutrality matter here in the UK?
There are key differences between the US and the UK and Europe which means there are good arguments that there is very little relevance but, as ever, this isn’t the full picture.
The European broadband market is very different to the US in one key way. The US market is dominated by vertically integrated network operators – your choice of network operator equates to your choice of service provider. In Europe, many major network operators offer a range of wholesale services allowing service providers to develop retail packages over other organisations physical networks – your choice of operator may influence but rarely dictates your choice of service provider.
Net neutrality became a key issue in the US because a single monolithic organisation unilaterally controlled how customers enjoyed services over the internet. If your local operator had a video streaming service, that could affect how you enjoyed commercial offerings like Netflix. And you could do very little about it.
In Europe, if your ISP unilaterally decided to reduce the performance of the services your care about and flatters their own services instead, you typically have the option of moving to a different ISP on the same infrastructure.
Net neutrality as framed in the US rarely affects European internet customers but that’s not t say the Europe doesn’t have some potentially similar issues to deal with.
The first is relatively easy to deal with – transparency. At the moment its not always clear what traffic management any given ISP implements, so customers are rarely in a position to decide if the way a particular ISP manages their network would meet their needs or if it might not serve their needs. In a European net neutrality debate, transparency will need to be a key word.
The second is a hard nut to crack. Some of Europe’s regulators have defined the scope of service competition very narrowly, and the advent of VDSL/FttC has arguably narrowed this still further. This has led to massive consolidation in the UK service provider market, for example, resulting a small group of very, very large ISP holding in excess of 90% market shares, with a fairly large group of smaller “niche” providers that try to offer something different. For the most part, competition is based on brand and pricing with few other tools for differentiation.
If Europe were to have a sensible debate about net neutrality, the nature of what services are available to the the market and the kind of competitive landscape it creates will be central.
It is possible that by increasing the scope for competition it may create a richer diversity in the market with greater scope for innovation and differentiations, but it may also ironically increase the cost of delivering services if done without care.
In parallel with this, Europe is seeing greater fragmentation of infrastructure with new entrant fibre and wireless operators competing at the physical level. Many of these new operators have opted for some flavour of open access allowing other service providers to use their network, but in markets that have previously seen considerable ISP consolidation delivering an open access environment is far from simple. There is a risk that if left untended, this could lead to a US-style net neutrality issue – not because these new operators necessarily want to be vertically integrated but because the scale ISP haven’t found ways to engage with anyone other than the equally large incumbents.
I’m not going to suggest that all the answers are readily to hand, but without a debate about a European net neutrality the risk is that we drift towards a market that will be incredibly hard to reconfigure as competitive wrinkles become embedded in the new infrastructures.