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Thursday, November 24, 2011

My thoughts on Ofcom's Net Neutrality statement

Ofcom has finally put out its statement on how it views Net Neutrality today. I'm quite impressed - it seems like a sensible compromise between a ton of vested interests and ideologies. If I'm honest, I'm also quite pleased because it has a broadly similar tone to my own submission to the consultation last year and my proposed "code of conduct" on this blog.

Some highlights:

  • The distinction between vanilla best-efforts "Internet Access" and "Managed Services", which can be prioritised
  • "If a service does not provide full access to the Internet, we would not expect it to be marketed as Internet Access"
  • The stipulation that the Internet Access portion should remain neutral, unless absolutely necessary for traffic management - in other words, Internet Access as a product means "The Real Internet" (TM)
  • Sensible discussion of two-sided business models
  • Recognition of the value of the "open Internet"
  • General view that competition seems to work quite well in broadband access, as long as it remains easy enough to switch between providers
  • Ofcom has seemingly booting the idea of generalised two-sided "traffic tax" out of consideration. (Luckily, the ludicrous telco-sponsored ATKearney report on a "viable future model of the Internet" seems to have been laughed out of court - pure #telcowash that ATK should have been ashamed of)
  • Making the point that any traffic management applied to Internet Access should be non-discriminatory between similar services (eg throttle one source of video, throttle them all). This is similar to the situation the Israeli regulator on my panel at the BBTM conference last week was expounding (ie "fair" rather than "reasonable" traffic management).
  • That traffic management practices need to be made very clear at point of sales and ongoing
  • Reservation of capacity for managed services should not unnecessarily impede the QoS of best-efforts Internet Access. No hard-and-fast rules, but a clear "we're watching you" with an implicit threat of more specific regulation if operators misbehave.
  • Marketing should be based on average speeds rather than theoretical peaks
  • It seems that traffic management is deemed OK for dealing with congestion, but not for dealing with variable costs on uncongested networks ("traffic management may be necessary in order to manage congestion on networks"). That means that various of the video optimisation use cases I discussed in my post this morning would be forbidden.
  • Ofcom has washed its hands of dealing with "public service" content and how that should be dealt with. Basically, that's kicking the problem of the massively successful BBC iPlayer upstairs, for the politicians to decide about.
One thing to note here is that I expect all operators to have to sell "Internet Access" as part of their offers, if not by law then in practical terms. If I buy a phone contract from an 18yo trainee on a Saturday morning and ask "does it come with Internet access?" then I'll have grounds for complaints about mis-selling if it subsequently turns out that I've been sold "processed Internet-like substitute", or "I can't believe it's not Internet". Ofcom's left it a bit vague about selling Internet Access with caveats, which suggests that burying the detail in the fine print won't be acceptable either.

Overall, this strikes me as a good compromise. If operators' and vendors' QoS systems can genuinely improve on what today's best-effort Internet can do, without damaging the utility of that vanilla Internet Access for other customers, then it's entirely reasonable for them to monetise it. Making operators sell the vanilla service in terms of average speeds (ideally average latency as well) means that the minimum QoS floor is defined when the customer buys the service. If I buy an average 2Mbit/s connection, then I don't really care if someone else gets 5Mbit/s priority turbo-boosts or whatever.

That said, as always the Devil will be in the detail. An average 2Mbit/s is pretty useless if it's really spiky. But Ofcom has reserved the right to give harder targets for QoS in future, which will likely be punitive if operators transgress what's reasonable. It seems to suggest that enough capacity to watch Internet video - and therefore, implicitly, VoIP - is likely a reasonable compromise for best-effort access.

This fits with my general view that operators are not going to be able to "monetise" stuff that works perfectly well now, just by putting a tollgate in the way. They'll have to add value and make it better - implicitly meaning that network QoS has to fight its corner for content companies and developers, against other options like better software/codecs/UI. In other words, if operators want a revenue-share from Google or Facebook, they're going to have to help them earn MORE money than they're already doing, not try and take a share of their existing business.

I suspect that the disparaging term "OTT" might finally disappear when T-Mobile's account director sits down with his YouTube counterpart to agree a new affiliate deal....

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